PARTICIPATION AGREEMENT (VARIABLE ANNUITY) FOR RETAIL MUTUAL FUNDS
THIS AGREEMENT, dated as of the 20th day of January 2006, by and among
Security Benefit Life Insurance Company, (the "Company"), a stock life insurance
company organized under the laws of the State of Kansas, on its own behalf and
on behalf of each segregated asset account of the Company set forth on Schedule
A hereto, as may be amended from time to time (each an "Account"), and Xxxxxxxxx
Xxxxxx Management Inc. (the "Adviser"), a New York corporation, on behalf of the
Xxxxxxxxx Xxxxxx Investor Class shares of the Xxxxxx Brothers Core Bond Fund, a
series of Xxxxxxxxx Xxxxxx Income Funds (the "Fund").
WHEREAS, the shares of beneficial interest/common stock of the Fund are
divided into several series of shares, each representing the interest in a
particular managed portfolio of securities and other assets (each a
"Portfolio"); and
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940 (the "1940 Act") and shares of
the Portfolios are registered under the Securities Act of 1933, as amended (the
"1933 Act"); and
WHEREAS, the Adviser, which serves as administrator and investment
adviser to the Fund, is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended; and
WHEREAS, the Company has issued or will issue certain variable annuity
contracts supported wholly or partially by the Account (the "Contracts"), and
said Contracts are listed in Schedule A hereto, as it may be amended from time
to time by mutual written agreement; and
WHEREAS, the Account is duly established and maintained as a segregated
asset account, duly established by the Company, on the date shown for such
Account on Schedule A hereto, to set aside and invest assets attributable to the
aforesaid Contracts; and
WHEREAS, the Company intends to purchase shares in the Portfolios
listed in Schedule A hereto, as it may be amended from time to time by mutual
written agreement (the "Designated Portfolios"), on behalf of the Account to
fund the aforesaid Contracts;
NOW, THEREFORE, in consideration of their mutual promises, the Company
and the Adviser agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. Subject to Article IX hereof, the Adviser agrees to make available to
the Company for purchase on behalf of the Account, shares of the Designated
Portfolios, such purchases to be effected at net asset value in accordance with
Section 1.3 of this Agreement. Notwithstanding the foregoing, (i) the Portfolios
(other than those listed on Schedule A) in existence now or that may be
established in the future will be made available to the Company only as the
Adviser may so provide, and (ii) the Board of Trustees of the Fund (the "Board")
may suspend or terminate the offering of shares of any Designated Portfolio or
class thereof, if such action is required by law or by regulatory authorities
having jurisdiction or if, in the sole discretion of the Board acting in good
faith and in light of its fiduciary duties under federal and any applicable
state laws, suspension or termination is necessary and in the best interests of
the shareholders of such Designated Portfolio.
1.2. The Adviser shall cause the Fund to redeem, at the Company's request,
any full or fractional Designated Portfolio shares held by the Company on behalf
of the Account, such redemptions to be effected at net asset value in accordance
with Section 1.3 of this Agreement. Notwithstanding the foregoing, the Fund may
delay redemption of Fund shares of any Designated Portfolio to the extent
permitted by the 1940 Act, and any rules, regulations or orders thereunder.
1.3. Purchase and Redemption Procedures
(a) The Adviser hereby appoints the Company as an agent of the Fund for
the limited purpose of receiving and accepting purchase and redemption requests
on behalf of the Account (but not with respect to any Fund shares that may be
held in the general account of the Company) for shares of those Designated
Portfolios made available hereunder, based on allocations of amounts to the
Account or subaccounts thereof under the Contracts and other transactions
relating to the Contracts or the Account. Receipt and acceptance of any such
request (or relevant transactional information therefor) on any day the New York
Stock Exchange is open for trading and on which a Designated Portfolio
calculates its net asset value (a "Business Day") pursuant to the rules of the
Securities and Exchange Commission ("SEC"), by the Company as such limited agent
of the Fund prior to the time that the Fund ordinarily calculates its net asset
value as described from time to time in the Fund's prospectus shall constitute
receipt and acceptance by the Designated Portfolio on that same Business Day,
provided that the Adviser receives notice of such request by 9:30 a.m. Eastern
Time on the next following Business Day.
(b) The Company shall pay for shares of each Designated Portfolio on
the same Business Day that it notifies the Adviser of a purchase request for
such shares. Payment for Designated Portfolio shares shall be made in federal
funds transmitted to the Adviser or other designated person by wire to be
received by 3:00 p.m. Eastern Time on the Business Day the Adviser is notified
of the purchase request for Designated Portfolio shares (unless the Adviser
determines and so advises the Company that sufficient proceeds are available
from redemption of shares of other Designated Portfolios effected pursuant to
redemption requests tendered by the Company on behalf of the Account, or unless
the Adviser otherwise determines and so advises the Company to delay the date of
payment, to the extent the Fund may do so under the 1940 Act). If federal funds
are not received on time, such funds will be invested, and Designated Portfolio
shares purchased thereby will be issued, as soon as practicable and the Company
shall promptly, upon the Adviser's request, reimburse the Fund for any charges,
costs, fees, interest or other expenses incurred by the Adviser or the Fund in
connection with any advances to, or borrowing or overdrafts by, the Adviser or
the Fund, or any similar expenses incurred by the Adviser or the Fund, as a
result of portfolio transactions effected by the Fund based upon such purchase
request. Upon receipt by the Adviser of federal funds so wired, such funds shall
cease to be the responsibility of the Company and shall become the
responsibility of the Adviser.
(c) Adviser shall cause payment for Designated Portfolio shares
redeemed by the Account or the Company to be made by the Fund in federal funds
transmitted by wire to the Company or any other designated person by 3 p.m.
Eastern Time on the same Business Day the Adviser is properly notified of the
redemption order of such shares (unless redemption proceeds are to be applied to
the purchase of shares of other Designated Portfolios in accordance with Section
1.3(b) of this Agreement), except that the Fund reserves the right to delay
payment of redemption proceeds to the extent permitted under Section 22(e) of
the 1940 Act and any rules thereunder, and in accordance with the procedures and
policies of the Fund as described in the then-current prospectus.
(d) Any purchase or redemption request for Designated Portfolio shares
held or to be held in the Company's general account shall be effected at the net
asset value per share next determined after the Adviser's receipt and acceptance
of such request, provided that, in the case of a
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purchase request, payment for Fund shares so requested is received by the
Adviser in federal funds prior to close of business for determination of such
value, as defined from time to time in the Fund's prospectus.
1.4. The Adviser shall use its best efforts to make the net asset value per
share for each Designated Portfolio available to the Company by 6:30 p.m.
Eastern Time each Business Day, and in any event, as soon as reasonably
practicable after the net asset value per share for such Designated Portfolio is
calculated, and shall calculate such net asset value in accordance with the
Fund's prospectus. If the Adviser provides the Company with materially incorrect
share net asset value information, the Company on behalf of the Account, shall
be entitled to an adjustment to the number of shares purchased or redeemed to
reflect the correct share net asset value. Any material error in the calculation
of the net asset value per share, dividend or capital gain information shall be
reported promptly to the Company upon discovery. In the event that any such
material error is the result of the gross negligence of the Adviser, or its
designated agent for calculating the net asset value, any administrative or
other costs or losses incurred for correcting underlying Contract owner accounts
shall be at the Adviser's expense.
1.5. The Adviser shall use its best efforts to furnish notice (by wire or
telephone followed by written confirmation) to the Company of any income
dividends or capital gain distributions payable on any Designated Portfolio
shares by the record date, but in no event later than 6:30 p.m. Eastern Time on
the ex-dividend date. The Company, on its behalf and on behalf of the Account,
hereby elects to receive all such dividends and distributions as are payable on
any Designated Portfolio shares in the form of additional shares of that
Designated Portfolio. The Company reserves the right, on its behalf and on
behalf of the Account, to revoke this election and to receive all such dividends
and capital gain distributions in cash. The Adviser shall notify the Company
promptly of the number of Designated Portfolio shares so issued as payment of
such dividends and distributions.
1.6. Issuance and transfer of Fund shares shall be by book entry only.
Share certificates will not be issued to the Company or the Account. Purchase
and redemption orders for Fund shares shall be recorded in an appropriate ledger
for the Account or the appropriate subaccount of the Account.
1.7.(a) The parties hereto acknowledge that the arrangement contemplated
by this Agreement is not exclusive; the Fund's shares may be sold to other
insurance companies and the cash value of the Contracts may be invested in other
investment companies.
(b) The Company shall not, without prior notice to the Adviser (unless
otherwise required by applicable law), take any action to operate the Account as
a management investment company under the 1940 Act.
(c) The Company shall not, without prior notice to the Adviser (unless
otherwise required by applicable law), induce Contract owners to change or
modify the Fund or change the Fund's investment adviser.
(d) The Company shall not, without prior notice to the Adviser and the
Fund, induce Contract owners to vote on any matter submitted for consideration
by the shareholders of the Fund in a manner other than as recommended by the
Board.
1.8 The parties may agree, in lieu of the procedures set forth above in
this Article 1, to place and settle trades for Fund shares through a clearing
corporation. In the event that such a clearing corporation is used, the parties
agree to abide by the rules of the clearing corporation.
ARTICLE II. Representations and Warranties
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2.1. The Company represents and warrants that the Contracts (a) are, or
prior to issuance will be, registered under the 1933 Act, or (b) are not
registered because they are properly exempt from registration under the 1933 Act
or will be offered exclusively in transactions that are properly exempt from
registration under the 1933 Act. The Company further represents and warrants
that the Contracts will be issued and sold in compliance in all material
respects with all applicable federal securities and state securities and
insurance laws. The Company further represents and warrants that it is an
insurance company duly organized and in good standing under applicable law, that
it has legally and validly established the Account as a segregated asset account
under Kansas insurance laws, and that it (a) has registered or, prior to any
issuance or sale of the Contracts, will register the Account as a unit
investment trust in accordance with the provisions of the 1940 Act to serve as a
segregated investment account for the Contracts, or alternatively (b) has not
registered the Account in proper reliance upon an exclusion from registration
under the 0000 Xxx.
2.2. The Adviser represents and warrants that Designated Portfolio shares
sold pursuant to this Agreement shall be registered under the 1933 Act, shall be
duly authorized for issuance and sold in compliance with applicable state and
federal securities laws and that the Fund is and shall remain registered under
the 0000 Xxx. The Fund shall amend the registration statement for its shares
under the 1933 Act and the 1940 Act from time to time as required in order to
effect the continuous offering of its shares. The Fund shall register and
qualify the shares for sale in accordance with the laws of the various states
only if and to the extent deemed advisable by the Fund.
2.3. The Adviser represents and warrants that the Fund is lawfully
organized and validly existing under the laws of the State of Delaware and that
the Fund does and will comply in all material respects with the 1940 Act,
including, without limitation, Rule 38a-1 under the 1940 Act.
2.4. The Adviser represents and warrants that it is registered as an
investment adviser with the SEC and that it does and will comply in all material
respects with the Investment Advisers Act of 1940, including, without
limitation, Rule 206(4)-7 under the Investment Advisers Act.
2.5. The Adviser, on its own behalf and on behalf of the Fund, represents
and warrants that all of the trustees/directors, officers, employees, and other
individuals or entities dealing with the money and/or securities of the Fund are
and shall continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund in an amount not less than the
minimum coverage as required currently by Rule 17g-1 of the 1940 Act or related
provisions as may be promulgated from time to time. The aforesaid bond shall
include coverage for larceny and embezzlement and shall be issued by a reputable
bonding company.
2.6. The Company represents and warrants that all of its directors,
officers, employees, and other individuals/entities employed or controlled by
the Company dealing with the money and/or securities of the Account are covered
by a blanket fidelity bond or similar coverage for the benefit of the Account,
in an amount not less than $5 million. The aforesaid bond includes coverage for
larceny and embezzlement and is issued by a reputable bonding company.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. The Adviser shall provide the Company with as many printed copies of
the current prospectus, current Statement of Additional Information ("SAI"),
supplements, proxy statements, and annual or semi-annual reports of each
Designated Portfolio (for distribution to Contract owners with value allocated
to such Designated Portfolios) as the Company may reasonably request to deliver
to existing Contract owners. If requested by the Company in lieu thereof, the
Adviser shall provide such documents (including a "camera-ready" copy of such
documents as set in type, a diskette in the form sent to the financial printer,
or
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an electronic copy of the documents in a format suitable for posting on the
Company's website, all as the Company may reasonably request) and such other
assistance as is reasonably necessary in order for the Company to have
prospectuses, SAIs, supplements and annual or semi-annual reports for the
Contracts and the Fund printed together in a single document or posted on the
Company's web-site or printed individually by the Company if it so chooses. The
expenses associated with printing and providing such documentation shall be as
set forth in Article V.
3.2. The Fund's prospectus shall state that the current SAI for the Fund is
available.
3.3. The Adviser shall provide the Company with information regarding the
Fund's expenses, which information may include a table of fees and related
narrative disclosure for use in any prospectus or other descriptive document
relating to a Contract. The Company agrees that it will use such information
substantially in the form provided. The Company shall provide prior written
notice of any proposed modification of such information, which notice will
describe the manner in which the Company proposes to modify the information, and
agrees that it may not modify such information in any way without the prior
consent of the Fund, which consent shall not be unreasonably withheld.
3.4. So long as, and to the extent the SEC continues to interpret the 1940
Act to require pass-through voting privileges for variable contract owners, or
to the extent otherwise required by law, the Company shall, at the Company's
option, follow one of the two methods described below to provide pass-through
voting privileges to contract owners:
(a) Provide a list of Contract owners with value allocated to a
Designated Portfolio as of the record date to the Fund or its agent in order to
permit the Fund to send solicitation material and gather voting instructions
from Contract owners on behalf of the Company. The Company shall also provide
such other information to the Fund as is reasonably necessary in order for the
Fund to properly tabulate votes for Fund initiated proxies. In the event that
the Company chooses this option, the Fund shall be responsible for properly
"echo voting" shares of a Designated Portfolio for which no voting instructions
have been received.
(b) Solicit voting instructions from Contract holders itself and vote
shares of the Designated Portfolio in accordance with instructions received from
Contract holders. The Company shall vote the shares of the Designated Portfolios
for which no instructions have been received in the same proportion as shares of
the Designated Portfolio for which instructions have been received.
3.5. The Company reserves the right to vote Fund shares held in its general
account in its own right, to the extent permitted by applicable laws.
ARTICLE IV. Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished, to the
Adviser or its designee, each piece of sales literature or other promotional
material that the Company develops and in which the Fund (or a Designated
Portfolio thereof) or the Adviser is named. No such material shall be used until
approved by the Adviser or its designee, and the Fund will use its best efforts
for it or its designee to review such sales literature or promotional material
within five (5) Business Days after receipt of such material. The Adviser or its
designee reserves the right to reasonably object to the continued use of any
such sales literature or other promotional material in which the Fund (or a
Designated Portfolio thereof) or the Adviser is named, and no such material
shall be used if the Adviser or its designee so objects.
4.2. The Company shall not give any information or make any representations
or statements on behalf of the Fund or concerning the Fund or the Adviser in
connection with the sale of the Contracts
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other than the information or representations contained in the registration
statement or prospectus or SAI for the Fund shares, as such registration
statement and prospectus or SAI may be amended or supplemented from time to
time, or in reports or proxy statements for the Fund, or in sales literature or
other promotional material approved by the Adviser or its designee, except with
the permission of the Adviser or its designee.
4.3. The Adviser, or its designee, shall furnish, or cause to be furnished,
to the Company, each piece of sales literature or other promotional material
that it develops and in which the Company, and/or the Account, is named. No such
material shall be used until approved by the Company, and the Company will use
its best efforts to review such sales literature or promotional material within
five (5) Business Days after receipt of such material. The Company reserves the
right to reasonably object to the continued use of any such sales literature or
other promotional material in which the Company and/or its Account is named, and
no such material shall be used if the Company so objects.
4.4. The Adviser shall not give any information or make any representations
on behalf of the Company or concerning the Company, the Account, or the
Contracts other than the information or representations contained in a
registration statement, prospectus (which shall include an offering memorandum,
if any, if the Contracts issued by the Company or interests therein are not
registered under the 1933 Act), or SAI for the Contracts, as such registration
statement, prospectus, or SAI may be amended or supplemented from time to time,
or in published reports for the Account which are in the public domain or
approved by the Company for distribution to Contract owners, or in sales
literature or other promotional material approved by the Company, except with
the permission of the Company.
4.5. The Adviser will provide to the Company at least one complete copy of
all registration statements, prospectuses, SAIs, reports, proxy statements,
sales literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments to any of the above, that
relate to the Designated Portfolios or their shares, promptly after the filing
of such document(s) with the SEC or other regulatory authorities.
4.6. The Company will provide to the Fund at least one complete copy of all
registration statements, prospectuses (which shall include an offering
memorandum, if any, if the Contracts issued by the Company or interests therein
are not registered under the 1933 Act), SAIs, reports, solicitations for voting
instructions, sales literature and other promotional materials, applications for
exemptions, requests for no-action letters, and all amendments to any of the
above, that relate to the Contracts or the Account, promptly after the filing of
such document(s) with the SEC or other regulatory authorities. The Company shall
provide to the Adviser any complaints received from the Contract owners
pertaining to the Fund or a Designated Portfolio.
4.7. The Adviser will provide the Company with as much notice as is
reasonably practicable of any proxy solicitation for any Designated Portfolio,
and of any material change in the Fund's registration statement, particularly
any change resulting in a change to the registration statement or prospectus for
any Account. The Adviser will work with the Company so as to facilitate the
solicitation of proxies from Contract owners, or to make changes to its
prospectus or registration statement, in an orderly manner. The Adviser will
make reasonable efforts to attempt to have changes affecting Contract
prospectuses become effective simultaneously with the annual updates for such
prospectuses.
ARTICLE V. Fees and Expenses
5.1. The Adviser shall pay no fee or other compensation to the Company
under this Agreement, except that if the Fund or any Designated Portfolio adopts
and implements a plan pursuant to Rule 12b-1 to finance distribution expenses,
then the Fund may make payments to the Company or to the underwriter for the
Contracts if and in amounts agreed to by the Fund in writing.
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5.2. The Adviser shall pay, or cause to be paid, all expenses incident to
the performance of the Adviser or Funds obligations under this Agreement. The
Adviser shall see to it that all its shares are registered and authorized for
issuance in accordance with applicable federal law and, if and to the extent
deemed advisable by the Fund, in accordance with applicable state laws prior to
their sale. The Adviser shall bear or cause the Fund to bear the expenses for
the cost of registration and qualification of the Fund's shares, preparation and
filing of the Fund's prospectus and registration statement, proxy materials and
reports, setting the prospectus in type, setting in type and printing the proxy
materials and reports to shareholders (including the costs of printing a
prospectus that constitutes an annual report), the preparation of all statements
and notices required by any federal or state law, and all taxes on the issuance
or transfer of the Fund's shares.
5.3. The Adviser 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 Fund, consistent with
applicable provisions of the 1940 Act. The Advisor shall also bear the expense
of printing and postage with respect to Fund prospectuses, annual and
semi-annual reports and all other Fund reports delivered to existing Contract
owners with value allocated to one or more Designated Portfolios (regardless of
whether such documents are printed by the Fund or the Company).
5.4. The Company shall bear the expense of distributing all prospectuses
and reports to shareholders (whether for existing Contract owners or prospective
Contract owners). The Company shall bear the expense of printing copies of the
prospectus for the Contracts for use with prospective Contract owners. The
Company shall bear the expenses incident to (including the costs of printing)
sales literature and other promotional material that the Company develops and in
which the Fund (or a Designated Portfolio thereof) is named.
ARTICLE VI. Qualification
The Adviser represents and warrants that the Fund is or will be
qualified as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Internal Revenue Code,") and that it will
maintain such qualification (under Subchapter M or any successor or similar
provisions) and that it will notify the Company immediately upon having a
reasonable basis for believing that it has ceased to so qualify or that it might
not so qualify in the future.
ARTICLE VII. Indemnification
7.1. Indemnification by the Company
7.1(a). The Company agrees to indemnify and hold harmless each of the
Fund and the Adviser and each of its trustees/directors and officers, and each
person, if any, who controls the Fund or Adviser within the meaning of Section
15 of the 1933 Act or who is under common control with the Fund or the Adviser
(collectively, the "Indemnified Parties" for purposes of this Section 7.1)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Company) or litigation (including
legal and other expenses), to which the Indemnified Parties may become subject
under any statute or regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
or settlements:
(i) arise out of or are based upon any untrue statement or
alleged untrue statements of any material fact contained in the
registration statement, prospectus (which shall include a written
description of a Contract that is not registered under the 1933 Act),
or SAI for the Contracts or contained in the Contracts or sales
literature for the Contracts (or any amendment or supplement to any of
the foregoing), or arise out
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of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified Party if
such statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with information furnished to
the Company by or on behalf of the Fund or the Adviser for use in the
registration statement, prospectus or SAI for the Contracts or in the
Contracts or sales literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the Contracts, or
(ii) arise out of or as a result of statements or representations
by or on behalf of the Company (other than statements or
representations contained in the registration statement, prospectus,
SAI, or sales literature of the Fund not supplied by the Company or
persons under its control) or wrongful conduct of the Company or its
agents or persons under the Company's authorization or control, with
respect to the sale or distribution of the Contracts, or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration statement,
prospectus, SAI, or sales literature of the Fund or any amendment
thereof or supplement thereto or the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading if such a
statement or omission was made in reliance upon information furnished
to the Fund by or on behalf of the Company; or
(iv) arise as a result of any material failure by the Company to
provide the services and furnish the materials under the terms of this
Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this Agreement
or arise out of or result from any other material breach of this
Agreement by the Company;
as limited by and in accordance with the provisions of Sections 7.1(b) and
7.1(c) hereof.
7.1(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of its obligations or duties under this Agreement.
7.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Company of any
such claim shall not relieve the Company from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against an Indemnified Party, the Company shall be entitled to participate, at
its own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel reasonably satisfactory to
the party named in the action. After notice from the Company to such party of
the Company's election to assume the defense
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thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Company will not be liable to such
party under this Agreement for any legal or other expenses subsequently incurred
by such party independently in connection with the defense thereof other than
reasonable costs of investigation.
7.1(d). The Indemnified Parties will promptly notify the Company of
the commencement of any litigation or proceedings against them in connection
with the issuance or sale of the Fund shares or the Contracts or the operation
of the Fund.
7.2. Indemnification by the Adviser
7.2(a). The Adviser agrees to indemnify and hold harmless the
Company and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 7.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Adviser) or litigation (including
legal and other expenses) to which the Indemnified Parties may be required to
pay or may become subject under any statute or regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
registration statement or prospectus or SAI or sales literature of the
Fund (or any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided that
this agreement to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged statement or
omission was made in reliance upon and in conformity with information
furnished to the Adviser or Fund by or on behalf of the Company for
use in the registration statement, prospectus or SAI for the Fund or
in sales literature (or any amendment or supplement) or otherwise for
use in connection with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations
by or on behalf of the Fund or the Adviser (other than statements or
representations contained in the registration statement, prospectus,
SAI or sales literature for the Contracts not supplied by the Fund or
the Adviser) or wrongful conduct of the Adviser or the Fund with
respect to the sale or distribution of the Contracts or Fund shares;
or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration statement,
prospectus, SAI or sales literature covering the Contracts, or any
amendment thereof or supplement thereto, or the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statement or statements therein not
misleading, if such statement or omission was made in reliance upon
information furnished to the Company by or on behalf of the Adviser or
the Fund; or
(iv) arise as a result of any failure by the Fund or the Adviser
to provide the services and furnish the materials under the terms of
this Agreement (including a failure of the Fund, whether unintentional
or in good faith or otherwise, to comply
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with the diversification and other qualification requirements
specified in Article VI of this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by or on behalf of the Adviser or
the Fund in this Agreement or arise out of or result from any other
material breach of this Agreement by or on behalf of the Adviser or
the Fund;
as limited by and in accordance with the provisions of Sections 7.2(b) and
7.2(c) hereof.
7.2(b). The Adviser shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance or such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
the Company or the Account, whichever is applicable.
7.2(c). The Adviser shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Adviser in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Adviser of any
such claim shall not relieve the Adviser from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Party, the Adviser will be entitled to participate, at
its own expense, in the defense thereof. The Adviser also shall be entitled to
assume the defense thereof, with counsel reasonably satisfactory to the party
named in the action. After notice from the Adviser to such party of the
Adviser's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Adviser will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.
7.2(d). The Company agrees promptly to notify the Adviser of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of the Account.
ARTICLE VIII. Applicable Law
8.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Kansas,
without regard to the conflict of laws provisions thereof.
8.2. This Agreement shall be subject to the provisions of the 1933 and 1940
Acts as well as the Exchange Act of 1934, and the rules and regulations and
rulings thereunder, including such exemptions from those statutes, rules and
regulations as the SEC may grant, and the terms hereof shall be interpreted and
construed in accordance therewith.
ARTICLE IX. Termination
9.1. This Agreement shall continue in full force and effect until the first
to occur of:
-10-
(a) termination by any party, for any reason with respect to some or all
Designated Portfolios, by six (6) months advance written notice
delivered to the other parties; or
(b) termination by the Company by written notice to the other party based
upon the Company's determination that shares of the Fund are not
reasonably available to meet the requirements of the Contracts; or
(c) termination by the Company by written notice to the other party in the
event any of the Designated Portfolio's shares are not registered,
issued or sold in accordance with applicable state and/or federal law
or such law precludes the use of such shares as the underlying
investment media of the Contracts issued or to be issued by the
Company; or
(d) termination by the Adviser by written notice to the Company in the
event that formal administrative proceedings are instituted against
the Company by the National Association of Securities Dealers, Inc.
(the "NASD"), the SEC, the Insurance Commissioner or like official of
any state or any other regulatory body regarding the Company's duties
under this Agreement or related to the sale of the Contracts, the
operation of any Account, or the purchase of the Designated
Portfolios' shares; provided, however, that the Adviser determines in
its sole judgment exercised in good faith, that any such
administrative proceedings will have a material adverse effect upon
the ability of the Company to perform its obligations under this
Agreement; or
(e) termination by the Company by written notice to the other party in the
event that formal administrative proceedings are instituted against
the Fund or Adviser by the SEC or any state securities department or
any other regulatory body; provided, however, that the Company
determines in its sole judgment exercised in good faith, that any such
administrative proceedings will have a material adverse effect upon
the ability of the Fund or Adviser to perform its obligations under
this Agreement; or
(f) termination by the Company by written notice to the other party in the
event that any Designated Portfolio ceases to qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code of
1986, or if the Company reasonably believes that any such Portfolio
may fail to so qualify or comply; or
(g) termination by the Adviser by written notice to the other parties, if
either one or both the Fund and the Adviser, respectively, shall
determine, in their sole judgment exercised in good faith, that the
Company has suffered a material adverse change in its business,
operations, financial condition, or prospects since the date of this
Agreement or is the subject of material adverse publicity; or
(h) termination by the Company by written notice to the other party, if
the Company shall determine, in its sole judgment exercised in good
faith, that the Fund or the Adviser has suffered a material adverse
change in its business, operations, financial condition or prospects
since the date of this Agreement or is the subject of material adverse
publicity; or
-11-
(i) termination by the Company upon any substitution of the shares of
another investment company or series thereof for shares of a
Designated Portfolio of the Fund in accordance with the terms of the
Contracts, provided that the Company has given at least 45 days prior
written notice to the Fund and Adviser of the date of substitution.
9.2. Notwithstanding any termination of this Agreement, the Adviser shall,
at the option of the Company, continue to make available additional shares of
the Fund pursuant to the terms and conditions of this Agreement, for all
Contracts in effect on the effective date of termination of this Agreement
(hereinafter referred to as "Existing Contracts"), unless the Company seeks an
order pursuant to Section 26(b) of the 1940 Act to permit the substitution of
other securities for the shares of the Designated Portfolios. Specifically, the
owners of the Existing Contracts may be permitted to reallocate investments in
the Fund, redeem investments in the Fund and/or invest in the Fund upon the
making of additional purchase payments under the Existing Contracts (subject to
any such election by the Company).
9.3. Notwithstanding any termination of this Agreement, each party's
obligation under Article VII to indemnify the other parties shall survive.
ARTICLE X. Notices
Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at such
other address as such party may from time to time specify in writing to the
other party.
If to the Company: Security Benefit Life Insurance Company
Attention: General Counsel
One Security Benefit Place
Topeka, Kansas 66636 - 0001
If to Adviser: Xxxxxxxxx Xxxxxx Management Inc.
Attention: General Counsel
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ARTICLE XI. Miscellaneous
11.1. Subject to the requirements of legal process and regulatory
authority, the Fund and the Adviser shall treat as confidential the names and
addresses of the owners of the Contracts. Each party shall treat as confidential
all information reasonably identified as confidential in writing by any other
party hereto and, except as permitted by this Agreement, shall not disclose,
disseminate or utilize such information without the express written consent of
the affected party until such time as such information has come into the public
domain.
11.2. 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.
11.3. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
-12-
11.4. 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.
11.5. Each party hereto shall cooperate with the other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD, and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any investigation
or inquiry relating to this Agreement or the transactions contemplated hereby.
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the Kansas Insurance Commissioner with any information or
reports in connection with services provided under this Agreement which such
Commissioner may request in order to ascertain whether the variable insurance
operations of the Company are being conducted in a manner consistent with the
Kansas insurance laws and regulations and any other applicable law or
regulations.
11.6. 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.
11.8 This Agreement or any of the rights and obligations hereunder may not
be assigned by any party without the prior written consent of all parties
hereto.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative.
Security Benefit Life
Insurance Company By its authorized officer
By: Xxxxxx X. Xxxxx
---------------------
Title: Senior Vice President
---------------------
Date: January 23, 2006
------------------
Xxxxxxxxx Xxxxxx By its authorized officer
Management Inc.
By:
----------------------
Title: President
Date: January 26, 2006
-13-
January 20, 2006
SCHEDULE A
ACCOUNT(S) CONTRACT(S) DESIGNATED PORTFOLIO(S)
SBL VARIABLE ACCOUNT XIV V6029 x Xxxxxxxxx Xxxxxx Core Bond
Fund - Investor Class
CUSIP #000000000
A-1
AMENDMENT NO. 1
TO THE
PARTICIPATION AGREEMENT (VARIABLE ANNUITY) FOR RETAIL MUTUAL FUNDS
THIS AMENDMENT, dated as of April 21, 2006, between SECURITY BENEFIT
LIFE INSURANCE COMPANY (the "Company") and XXXXXXXXX XXXXXX MANAGEMENT INC. (the
"Adviser") is made to the Participation Agreement (Variable Annuity) for Retail
Mutual Funds, dated as of January 20, 2006, as amended, between the Company and
the Adviser (the "Agreement"). Terms defined in the Agreement are used herein as
therein defined.
WHEREAS, the Company and the Adviser desire to amend the Agreement
to make it applicable to the Trust Class and Advisor Class shares of all series
of Xxxxxxxxx Xxxxxx Equity Funds and Xxxxxxxxx Xxxxxx Income Funds, in addition
to the Investor Class shares of Xxxxxx Brothers Core Bond Fund (the "Funds").
NOW, THEREFORE, in consideration of the promises and mutual
covenants hereinafter contained, the parties agree as follows:
1. Schedule A of the Agreement is hereby deleted in its entirety and
replaced with Schedule A attached hereto.
2. Notwithstanding anything to the contrary contained in the Agreement,
the Adviser may from time to time update Schedule A to the Agreement, with a
copy to the Company in due course, to add a new fund or portfolio, delete an
inactive or terminated Fund or Portfolio, or reflect the change of name of a
Fund or Portfolio. The establishment by the Company of an account in any fund,
whether or not as yet reflected on an updated Schedule A, shall constitute the
agreement by the Company and the Adviser to be bound by the provisions of this
Agreement with respect to that fund.
3. Except as modified hereby, all other terms and conditions of the
Agreement shall remain in full force and effect.
4. This Amendment may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same Amendment.
-2-
Security Benefit Life Insurance Company XXXXXXXXX XXXXXX
By: Xxxxxxx X. Xxxxxx MANAGEMENT INC.
Name: Xxxxxxx X. Xxxxxx
Title: Vice President By: Xxxxxx Xxxxx
Name:Xxxxxx Xxxxx
Title: Senior Vice President
-3-
(a) April 21, 2006
(b)
(c)
(d) Schedule A
-------------------------------------------------------------------------------------------------------
(h)
(i) NASDAQ
SYMBOL OF
(j) NN DESIGNATED
ACCOUNT(S) CONTRACT(S) AME OF DESIGNATED CUSIP OF PORTFOLIO
PORTFOLIO AND CLASS DESIGNATED
PORTFOLIO
-------------------------------------------------------------------------------------------------------
SBL V6029 XXXXXXXXX XXXXXX
VARIABLE INCOME FUNDS, INVESTOR CLASS
ACCOUNT XIV
-------------------------------------------------------------------------------------------------------
Xxxxxx Brothers Core (r) (s)
Bond Fund, NB Investor Class 40915799 BCNX
-------------------------------------------------------------------------------------------------------
XXXXXXXXX XXXXXX
EQUITY FUNDS, TRUST CLASS
-------------------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 640917 NBFCX
Focus Fund Trust Class 506
-------------------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 640917 NBGT
Guardian Fund Trust Class 209 X
-------------------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 640917 12.
International Fund Trust Class 704
-------------------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 640917 NBMT
Manhattan Fund Trust Class 308 X
-------------------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 640917 NBMO
Millennium Fund Trust Class 803 X
-------------------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 640917 NBPTX
Partners Fund Trust Class 407
-------------------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx Real 000000 XXXXX
Xxxxxx Fund Trust Class 845
-------------------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 640917 NBREX
Regency Fund Trust Class 886
-------------------------------------------------------------------------------------------------------
-4-
------------------------------------------------------------------------------------------------
(h)
(i) NASDAQ
SYMBOL OF
(j) NN DESIGNATED
ACCOUNT(S) CONTRACT(S) AME OF DESIGNATED CUSIP OF PORTFOLIO
PORTFOLIO AND CLASS DESIGNATED
PORTFOLIO
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 640917 NBSTX
Socially Responsive Fund Trust 860
Class
-----------------------------------------------------------------------------------------------
XXXXXXXXX XXXXXX
INCOME FUNDS, TRUST CLASS
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 640916 NBLTX
Limited Maturity Bond Fund 201
Trust Class
-----------------------------------------------------------------------------------------------
(e) NNe
uberger Xxxxxx Equity Funds,
Advisor Class
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 641224 NBFVX
Xxxxxxxx Fund Advisor Class 837
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 64122 NBFAX
Focus Fund Advisor Class M209
-----------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
(n)
(o) NASDAQ
SYMBOL OF
(p) NN DESIGNATED
ACCOUNT(S) CONTRACT(S) AME OF DESIGNATED CUSIP OF PORTFOLIO
PORTFOLIO AND CLASS DESIGNATED
PORTFOLIO
-----------------------------------------------------------------------------------------------
(x) NNe
uberger Xxxxxx Equity Funds,
Advisor Class
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 64122 NBGU
Guardian Fund Advisor Class M308 X
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 00000 XXXX
Xxxxxxxxx Fund Advisor Class M407 X
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 641224 NBMV
Millennium Fund Advisor Class 829 X
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 64122 NBPBX
Partners Fund Advisor Class M506
-----------------------------------------------------------------------------------------------
-5-
AMENDMENT NO. 2
TO THE
PARTICIPATION AGREEMENT (VARIABLE ANNUITY) FOR RETAIL MUTUAL FUNDS
THIS AMENDMENT, dated as of August 2, 2006, between SECURITY BENEFIT
LIFE INSURANCE COMPANY (the "Company") and XXXXXXXXX XXXXXX MANAGEMENT INC. (the
"Adviser") is made to the Participation Agreement (Variable Annuity) for Retail
Mutual Funds, dated as of January 20, 2006, as amended April 21, 2006, between
the Company and the Adviser (the "Agreement"). Terms defined in the Agreement
are used herein as therein defined.
WHEREAS, the Company and the Adviser desire to amend the Agreement
add additional Accounts and Contracts that will purchase shares in the
Designated Portfolios listed in Schedule A.
NOW, THEREFORE, in consideration of the promises and mutual
covenants hereinafter contained, the parties agree as follows:
1. Schedule A of the Agreement is hereby deleted in its entirety and
replaced with Schedule A attached hereto.
2. Notwithstanding anything to the contrary contained in the Agreement,
the Adviser may from time to time update Schedule A to the Agreement, with a
copy to the Company in due course, to add a new fund or portfolio, delete an
inactive or terminated Fund or Portfolio, or reflect the change of name of a
Fund or Portfolio. The establishment by the Company of an account in any fund,
whether or not as yet reflected on an updated Schedule A, shall constitute the
agreement by the Company and the Adviser to be bound by the provisions of this
Agreement with respect to that fund.
3. Except as modified hereby, all other terms and conditions of the
Agreement shall remain in full force and effect.
4. This Amendment may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same Amendment.
XXXXXXXXX XXXXXX
Security Benefit Life Insurance Company MANAGEMENT INC.
By: Xxxxxx Xxxxx
Name: Xxxxxx X. Xxxxx By:Xxxxx X. Xxxxxxx
Title: Senior Vice President Name: Xxxxx X. Xxxxxxx
Title: President
-6-
7
(a) August 2, 2006
(b)
(c)
(d) Schedule A
----------------------------------------------------------------------------------------------------
(gg)
(hh) NASDAQ
SYMBOL OF
(ii) NN DESIGNATED
ACCOUNT(S) CONTRACT(S) AME OF DESIGNATED CUSIP OF PORTFOLIO
PORTFOLIO AND CLASS DESIGNATED
PORTFOLIO
----------------------------------------------------------------------------------------------------------
SBL V6029 XXXXXXXXX XXXXXX
VARIABLE INCOME FUNDS, INVESTOR CLASS
ACCOUNT XIV GV6323
SBL VARIABLE
ACCOUNT XVI
----------------------------------------------------------------------------------------------------------
Xxxxxx Brothers Core (qq) (rr)
Bond Fund, NB Investor Class 40915799 BCNX
----------------------------------------------------------------------------------------------------------
XXXXXXXXX XXXXXX
EQUITY FUNDS, TRUST CLASS
----------------------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 640917 NBFCX
Focus Fund Trust Class 506
----------------------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 640917 NBGT
Guardian Fund Trust Class 209 X
----------------------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 640917 13.
International Fund Trust Class 704
----------------------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 640917 NBMT
Manhattan Fund Trust Class 308 X
----------------------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 640917 NBMO
Millennium Fund Trust Class 803 X
----------------------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 640917 NBPTX
Partners Fund Trust Class 407
----------------------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx Real 000000 XXXXX
Xxxxxx Fund Trust Class 845
----------------------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 640917 NBREX
Regency Fund Trust Class 886
----------------------------------------------------------------------------------------------------------
-8-
----------------------------------------------------------------------------------------------------
(gg)
(hh) NASDAQ
SYMBOL OF
(ii) NN DESIGNATED
ACCOUNT(S) CONTRACT(S) AME OF DESIGNATED CUSIP OF PORTFOLIO
PORTFOLIO AND CLASS DESIGNATED
PORTFOLIO
----------------------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 640917 NBSTX
Socially Responsive Fund Trust 860
Class
-----------------------------------------------------------------------------------------------
XXXXXXXXX XXXXXX
INCOME FUNDS, TRUST CLASS
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 640916 NBLTX
Limited Maturity Bond Fund 201
Trust Class
-----------------------------------------------------------------------------------------------
(e) NNe
uberger Xxxxxx Equity Funds,
Advisor Class
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 641224 NBFVX
Xxxxxxxx Fund Advisor Class 837
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 64122 NBFAX
Focus Fund Advisor Class M209
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
(n)
(o) NASDAQ
SYMBOL OF
(p) NN DESIGNATED
ACCOUNT(S) CONTRACT(S) AME OF DESIGNATED CUSIP OF PORTFOLIO
PORTFOLIO AND CLASS DESIGNATED
PORTFOLIO
---------------------- ------------------------------------- ----------------- ---------------
(x) NNe
uberger Xxxxxx Equity Funds,
Advisor Class
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 64122 NBGU
Guardian Fund Advisor Class M308 X
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 00000 XXXX
Xxxxxxxxx Fund Advisor Class M407 X
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 641224 NBMV
Millennium Fund Advisor Class 829 X
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 64122 NBPBX
Partners Fund Advisor Class M506
-----------------------------------------------------------------------------------------------
-9-
AMENDMENT NO. 3 TO THE
PARTICIPATION AGREEMENT (VARIABLE ANNUITY) FOR RETAIL MUTUAL FUNDS
THIS AMENDMENT, dated as of November 20, 2009, between SECURITY
BENEFIT LIFE INSURANCE COMPANY (the "Company") and XXXXXXXXX XXXXXX MANAGEMENT
LLC (formerly known as Xxxxxxxxx Xxxxxx Management Inc.) (the "Adviser") is made
to the Participation Agreement (Variable Annuity) for Retail Mutual FUNDS, dated
as of January 20, 2006, as amended, between the Company and the Adviser (the
"Agreement"). Terms defined in the Agreement are used herein as therein defined.
WHEREAS, the Company and the Adviser desire to amend the Agreement
to make it applicable to the Class A and Class R3 shares of all series of
Xxxxxxxxx Xxxxxx Equity Funds and Xxxxxxxxx Xxxxxx Income Funds (the "Funds").
WHEREAS, the Company intends to purchase Class R3 shares of all
series of the Funds for the benefit of retirement plans investing in the
Accounts.
WHEREAS, the Adviser desires that Class A and Class R3 Shares of the
Funds be available for purchase by the Company on behalf of its Accounts without
the imposition of a sales load;
NOW, THEREFORE, in consideration of the promises and mutual
covenants hereinafter contained, the parties agree as follows:
1. Schedule A of the Agreement is hereby deleted in its entirety and
replaced with Schedule A attached hereto.
2. Company acknowledges that certain Funds may offer multiple classes
of Shares and that certain classes are, or may become, closed to new investors.
Specifically, only investors or Plans who established accounts in Investor Class
Shares of a Fund prior to the offering of Class A or C Shares of such Fund and
who have continuously maintained an account in such Shares may purchase Investor
Class Shares. Additionally, Trust and Advisor class shares of Funds that also
offer Class A and R3 shares, respectively, are only available to Participants if
Security established an account in such Trust or Advisor class shares prior to
October 15, 2009, and continuously maintains an account in such shares. Adviser
shall provide 45 days written notice to Company when a Class of Shares is closed
to new investors.
3. Article V. Section 5.1 of the Agreement is hereby deleted in its
entirety and replaced with the following:
-10-
"5.1 With respect to Advisor, Investor and Trust Class Shares of the
Funds, the Adviser shall pay no fee or other compensation to the Company under
this Agreement, except that if the Fund or any Designated Portfolio adopts and
implements a plan pursuant to Rule 12b-1 under the 1940 Act to finance
distribution expenses, then the Fund may make payments to the Company or to the
underwriter for the Contracts if and in amounts agreed to by the Fund in
writing.
With respect to Class A shares and R3 shares, in consideration of
the services provided, expenses incurred and cost savings accruing to the
Adviser by virtue of having the Funds be made available for purchase by the
Company on behalf of its Accounts, the Adviser shall pay the fees (the "Fees")
set forth in Schedule B hereto. To the extent that a Fund has approved a plan
pursuant to Rule 12b-1 under the 1940 Act, all or part of the fee with respect
to that Fund may be payable from the proceeds of that plan."
4. Schedule B is hereby added to the Agreement in the form attached hereto.
5. Except as modified hereby, all other terms and conditions of the
Agreement shall remain in full force and effect.
6. This Amendment may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same Amendment.
NEUBERGER
BERMANMANAGEMENTLLC
Security Benefit Life Insurance Company
By: Xxxxxxx X. Xxxxx By Xxxxxx Xxxxx
Name: Xxxxxxx X. Xxxxx Name: Xxxxxx Xxxxx
Title: Vice President Title: President
-11-
Schedule A
---------------------------------------------------------------------------------------------
NASDAQ
SYMBOL OF
NAME OF DESIGNATED DESIGNATED
ACCOUNT(S) CONTRACT(S) PORTFOLIO AND CLASS CUSIP OF PORTFOLIO
DESIGNATED
PORTFOLIO
---------------------------------------------------------------------------------------------
SBL V6029 Xxxxxxxxx Xxxxxx Core
VARIABLE Bond Fund, Investor Class*
ACCOUNT XIV
---------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 640917506 NBFCX
Focus Fund Trust Class
---------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 640917209 NBGT
Guardian Fund Trust Class X
---------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 640917704 14.
International Fund Trust Class
---------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx Mid 640917308 NBMT
Cap Growth Fund Trust Class X
---------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 640917803 NBMO
Small Cap Growth Fund Trust X
Class
---------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 640917407 NBPTX
Partners Fund Trust Class
---------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx Real 641224845 NBRFX
Estate Fund Trust Class
---------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 640917886 NBREX
Regency Fund Trust Class
---------------------------------------------------------------------------------------------
-12-
-----------------------------------------------------------------------------------------------
NASDAQ
SYMBOL OF
NAME OF DESIGNATED DESIGNATED
ACCOUNT(S) CONTRACT(S) PORTFOLIO AND CLASS CUSIP OF PORTFOLIO
DESIGNATED
PORTFOLIO
---------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 640917860 NBSTX
Socially Responsive Fund Trust
Class
---------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 640916201 NBLTX
Short Duration Bond Fund Trust
Class
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 00000X000 NBFAX
Focus Fund Advisor Class
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 00000X000 NBGU
Guardian Fund Advisor Class X
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx Mid 00000X000 NBMB
Cap Growth Fund Advisor Class X
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 641224829 NBMV
Small Cap Growth Fund Advisor X
Class
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 00000X000 NBPBX
Partners Fund Advisor Class
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 641224563 NBEAX
Select Equities Fund, Class A
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 641224399 NLDA
Large Cap Disciplined Growth X
Fund, Class A
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx Core 00000X000 LBIAX
Bond Fund, Class A
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 00000X000 LBBAX
Strategic Income Fund, Class A
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 641224522 NBHA
Climate Change Fund, Class A X
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 641224522 NBHA
Equity Income Fund, Class A X
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 641224431 NEMA
Emerging Markets Equity Fund, X
Class A
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx Mid 641224266 NMGA
Cap Growth Fund, Class A X
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 641224340 NGDA
Guardian Fund, Class A X
-----------------------------------------------------------------------------------------------
-13-
-----------------------------------------------------------------------------------------------
NASDAQ
SYMBOL OF
NAME OF DESIGNATED DESIGNATED
ACCOUNT(S) CONTRACT(S) PORTFOLIO AND CLASS CUSIP OF PORTFOLIO
DESIGNATED
PORTFOLIO
---------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 641224175 NRAA
Socially Responsive Fund, X
Class A
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 641224225 NSNAX
Small Cap Growth Fund, Class A
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx High 00000X000 NHIAX
Income Bond Fund, Class A
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx Mid 641224233 NMGR
Cap Growth Fund, Class R3 X
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 641224316 NGDR
Guardian Fund, Class R3 X
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 641224142 NRAA
Socially Responsive Fund, Class X
R3
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 641224274 NBNR
International Large Cap Fund, X
Class R3
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 641224957 NLDR
Large Cap Disciplined Growth X
Fund, Class R3
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 641224183 NSNAX
Small Cap Growth Fund, Class
R3
-----------------------------------------------------------------------------------------------
Xxxxxxxxx Xxxxxx 00000X000 NHIRX
High Income Bond Fund, Class
R3
-----------------------------------------------------------------------------------------------
* CLOSED TO NEW INVESTORS.
-14-
SCHEDULE B
In consideration of the services provided by the Company, the
Adviser shall pay the Company an annualized fee of (i) 40 basis points for Class
A Shares and (ii) 65 basis points for Class R3 Shares based on the daily average
of the such Shares of the Funds held in each Account. These fees shall be billed
by Company quarterly in arrears on a calendar quarter basis. Adviser may request
information from Company to substantiate the daily average of the Shares of the
Funds held in each Account, used to determine the quarterly fees. The parties
agree to make a good faith effort to resolve all disputes as to the methodology
for determining the aggregate assets of such Shares in each Account for each
quarterly period and to apply such agreed upon methodology for subsequent
quarterly periods. Except for delay in payment due to a reasonable dispute all
payments will be paid to Company by wire within 30 days of receipt of the
invoice.
-15-
