PARTICIPATION AGREEMENT
AMONG
SECURITY BENEFIT LIFE INSURANCE COMPANY,
CALAMOS INVESTMENT TRUST,
AND
CALAMOS ASSET MANAGEMENT, INC.
THIS AGREEMENT, dated as of the 1st day of July, 2001, 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"), Calamos
Investment Trust (the "Fund"), a Massachusetts business trust, and Calamos Asset
Management, Inc. (the "Adviser"), an Illinois Corporation.
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 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,
the Fund and the Adviser agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. Subject to Article IX hereof, the Fund 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 Fund
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 Fund shall 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 Fund 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 as of which the Fund calculates its net asset
value for that day 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 Fund 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 Fund of a purchase request for
such shares. Payment for Designated Portfolio shares shall be made in federal
funds transmitted to the Fund or other designated person by wire to be received
by 3:00 p.m. Eastern Time on the Business Day the Fund is notified of the
purchase request for Designated Portfolio shares (unless the Fund 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 Fund 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 Fund's request, reimburse the Fund for any charges, costs, fees,
interest or other expenses incurred by the Fund in connection with any advances
to, or borrowing or overdrafts by, the Fund, or any similar expenses incurred by
the Fund, as a result of portfolio transactions effected by the Fund based upon
such purchase request. Upon receipt of federal funds so wired, such funds shall
cease to be the responsibility of the Company and shall become the
responsibility of the Fund.
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(c) Payment for Designated Portfolio shares redeemed by the
Account or the Company shall 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 Fund 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 Fund's receipt and
acceptance of such request, provided that, in the case of a purchase request,
payment for Fund shares so requested is received by the Fund 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 Fund 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 Fund 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 Fund, 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 Fund shall furnish notice (by wire or telephone followed by
written confirmation) to the Company as soon as reasonably practicable of any
income dividends or capital gain distributions payable on any Designated
Portfolio shares, but in no event later than 6:30 p.m. Eastern Time on the
payable 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 Fund 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.
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(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 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 Company acknowledges that shares of the Fund are currently
sold, and will continue to be sold, to the general public; and that the Fund
will not limit the purchase of the shares to insurance companies offering
variable life or variable annuity contracts or other tax-qualified entities.
1.9 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
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 Fund 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 Fund represents that it is lawfully organized and validly
existing under the laws of the Commonwealth of Massachusetts and that it does
and will comply in all material respects with the 1940 Act.
2.4. The Adviser represents and warrants that it is registered as an
investment adviser with the SEC.
2.5. The Fund and the Adviser represent and warrant that all of their
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.
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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 Fund shall provide the Company with as many printed copies of
the current prospectus, current Statement of Additional Information ("SAI"),
supplements, 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 Fund 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 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 Fund 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. The Fund will pay or cause to be paid the expenses associated with
text composition, printing, mailing, distributing, and tabulation of proxy
statements and voting instruction solicitation materials to Contract owners with
respect to proxies related to the Fund, consistent with applicable provisions of
the 1940 Act.
3.5. When the Fund submits proposals to shareholders, the Company
shall, 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, follow
one of the two procedures outlined below:
(a) If the Company chooses to solicit Contract owners itself, it
shall:
(i) solicit voting instructions from owners of or
participants in the Contract;
(ii) vote the Fund shares in accordance with instructions
received from owners of or participants in the
Contract; and
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(iii) vote Fund shares for which no instructions have been
received in the same proportion as Fund shares of
such Fund for which instructions have been received.
(b) If the Company chooses to work with the Fund's proxy service
provider, the Company shall 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 facilitate the Fund's solicitation of voting instructions from
Contract owners. 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.
The Company reserves the right to vote Fund shares held in any segregated asset
account in its own right, as well as any shares held in its general account, in
each case, to the extent permitted by law.
ARTICLE IV. Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished, to the
Fund 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 Fund 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 Fund 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 Fund 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 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 Fund or its designee, except with the
permission of the Fund or its designee.
4.3. The Fund and the Adviser, or their 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 Fund 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 Fund will provide to the Company at least one complete copy of
all registration statements, prospectuses, SAIs, shareholder reports, and proxy
statements as currently in
6
effect, 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 Fund and the Adviser any complaints received from the Contract
owners pertaining to the Fund or a Designated Portfolio.
4.7. The Fund 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 Fund will work with the Company so as to enable the Company to
solicit proxies from Contract owners, or to make changes to its prospectus or
registration statement, in an orderly manner.
ARTICLE V. Fees and Expenses
5.1. The Fund shall pay no fee or other compensation to the Company
under this Agreement.
5.2. All expenses incident to performance by the Fund under this
Agreement shall be paid by the Fund. The Fund 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 Fund shall 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 and reports to
shareholders in type, setting in type and printing the proxy materials, 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. The Fund shall
bear the expenses of distributing the Fund's proxy materials to existing
Contract owners as well as the costs associated with vote tabulation. The Fund
shall bear the expenses associated with Fund initiated proxies regardless of
which procedure is followed by the Company in Section 3.5.
5.3. The Company shall bear the expense of printing and distributing
Fund prospectuses (whether for existing Contract owners or prospective Contract
owners) and for distributing 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
current and prospective Contract owners, and 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 Fund represents and warrants that it has 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.
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ARTICLE VII. Indemnification
7.1. Indemnification by the Company
(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 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.
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(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.
(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 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.
(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
(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 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
9
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 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.
(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.
(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.
(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.
10
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:
(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
parties 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
parties 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 Fund or Adviser 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 Fund or Adviser determines in
its sole judgment exercised in good faith, that any such administrative
proceedings may have a material adverse effect upon the ability of the Company
to perform its obligations under this Agreement; or
(e) termination by the Company 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 may 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
parties 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 either the Fund or 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,
11
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
parties, 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
(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 Fund and
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
000 XX Xxxxxxxx
Xxxxxx, Xxxxxx 00000 - 0001
If to the Fund: Calamos Investment Trust
Attention: Secretary
0000 Xxxx Xxxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
If to Adviser: Calamos Asset Management, Inc.
Attention: General Counsel
0000 Xxxx Xxxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
ARTICLE XI. Miscellaneous
12
11.1. A copy of the declaration of trust of the Fund is on file with
the Secretary of the Commonwealth of Massachusetts. All persons dealing with the
Fund must look solely to the property of the respective Designated Portfolios
listed on Schedule A hereto as though each such Designated Portfolio had
separately contracted with the Company and the Adviser for the enforcement of
any claims against the Fund. The parties agree that neither the Board, officers,
agents or shareholders of the Fund assume any personal liability or
responsibility for obligations entered into by or on behalf of the Fund.
11.2. 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.
11.3. 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.
11.4. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
11.5. 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.
11.6. Each party hereto shall cooperate with each 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.
11.7. 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.
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.
13
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 Xxxx
------------------------
Title: Senior Vice President
------------------------
Calamos Investment Trust By its authorized officer
By: Xxxxxxx X. Xxxxxxx
------------------------
Title: Vice President
------------------------
Calamos Asset Management, Inc. By its authorized officer
By: Xxxxx X. Xxxxxx
------------------------
Title: Vice President
------------------------
14
July 1, 2001
SCHEDULE A
ACCOUNT(S) CONTRACT(S) DESIGNATED PORTFOLIO(S)
SBL VARIABLE ANNUITY ACCOUNT XIV V6029 CALAMOS CONVERTIBLE GROWTH &
INCOME A
CALAMOS GROWTH A
A-1
AMENDMENT NUMBER 1 TO PARTICIPATION AGREEMENT
THIS AMENDMENT NO. 1 TO THE PARTICIPATION AGREEMENT is made as of
November 27, 2006 by and between Security Benefit Life Insurance Company (the
"Company"), Calamos Investment Trust (the "Fund") and Calamos Advisors, LLC,
(the "Adviser"). Capitalized terms not otherwise defined herein shall have the
meaning ascribed to them in the Agreement (defined below).
WHEREAS, the Company, the Fund, and the Adviser are parties to a
Participation Agreement dated July 1, 2001 (the "Agreement"); and
WHEREAS, the parties wish to change the definition of the terms,
"Account," "Contracts," and "Designated Portfolios" in such a way that the
Accounts, Contracts and Designated Portfolios need not be listed on Schedule A
to the Agreement, but nonetheless, for convenience the parties may determine to
list them on Schedule A; and
NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Fund and Adviser agree as follows:
1. "Account" shall mean each segregated asset account of the Company
that invests in a Portfolio of the Fund and shall become subject to the
terms hereof as of the date such Account first invests in a Portfolio
of the Fund.
2. "Contracts" shall mean those variable annuity and variable life
insurance contracts issued by the Company supported wholly or partially
by an Account.
3. "Designated Portfolio" shall mean a Portfolio of the Fund in which
an Account invests. A Portfolio of the Fund shall become a "Designated
Portfolio" hereunder as of the date an Account of the Company first
invests in such Portfolio.
4. It is agreed that Company, on behalf of an Account, has access under
this Agreement to all Portfolios of the Fund and all share classes
thereof (including Portfolios and share classes created in the future).
It shall not be necessary to list the Accounts, the Contracts, the
Portfolios or the share classes on Schedule A. Notwithstanding the
foregoing, a Portfolio that may be established in the future may be
made available to the Company on terms different than those set forth
herein as the Fund may so provide in writing to the Company.
Notwithstanding the fact that Accounts, Contracts and Designated
Portfolios need not be listed on Schedule A, the parties may, in their
discretion and for convenience and ease of reference only, include one
or more Accounts, Contracts and Designated Portfolios on Schedule A
from time to time.
5. In order to reflect the intent of this Amendment regarding Schedule
A, Section 11.1 of the Agreement is deleted and replaced with the
following:
2
11.1 A copy of the declaration of trust of the Fund is on file
with the Secretary of the Commonwealth of Massachusetts. All
persons dealing with the Fund must look solely to the property of
the respective Designated Portfolios as though each such
Designated Portfolio had separately contracted with the Company
and the Adviser for the enforcement of any claims against the
Fund. The parties agree that neither the Board, officers, agents
or shareholders of the Fund assume any personal liability or
responsibility for obligations entered into by or on behalf of the
Fund.
6. Schedule A is deleted in its entirety and replaced with the
accompanying Schedule A.
7. All obligations of the Fund, the Portfolios and the Designated
Portfolios under this Agreement are several and not joint.
8. In the event of a conflict between the terms of this Amendment No. 1
and the Agreement, it is the intention of the parties that the terms of this
Amendment No. 1 shall control and the Agreement shall be interpreted on that
basis. To the extent the provisions of the Agreement have not been amended by
this Amendment No. 1, the parties hereby confirm and ratify the Agreement. The
Agreement dated July 1, 2001 and this Amendment No. 1 constitute the entire
agreement among the parties with respect to the arrangements described herein.
9. This Amendment No. 1 may be executed in two or more counterparts,
each of which shall be an original and all of which together shall constitute
one instrument.
IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 1
as of the date first above written.
SECURITY BENEFIT LIFE INSURANCE COMPANY
----------------------------------
By: Xxxxxx X. Xxxxx
Title: Senior Vice President, CFO and Treasurer
CALAMOS INVESTMENT TRUST CALAMOS ADVISORS, LLC
---------------------------------- ------------------------------------
By: Xxxxxxx X. Xxxxxxx By: Xxxxxx X. Xxxxxxxx, VI
Title: Vice President Title: Senior Vice President
3
November 27, 2006
SCHEDULE A
ACCOUNT(S) CONTRACT(S) DESIGNATED PORTFOLIO(S)
SBL VARIABLE ANNUITY ACCOUNT XIV V6029 CALAMOS CONVERTIBLE GROWTH &
INCOME A
CALAMOS GROWTH A
SBL VARIABLE ANNUITY ACCOUNT XVI V6323 CALAMOS HIGH YIELD FUND A
CALAMOS BLUE CHIP FUND A
CALAMOS VALUE FUND A
CALAMOS INTERNATIONAL GROWTH
FUND A
CALAMOS GLOBAL GROWTH AND INCOME
FUND A
CALAMOS MULTI-FUND BLEND A
CALAMOS MARKET NEUTRAL INCOME
FUND A
CALAMOS CONVERTIBLE FUND A*
*CLOSED TO NEW INVESTMENTS,
SUBJECT TO THE EXCEPTIONS
ENUMERATED IN THE PROSPECTUS.
4
AMENDMENT NO. 2 TO PARTICIPATION AGREEMENT
THIS AMENDMENT NO. 2 TO THE PARTICIPATION AGREEMENT (the
"Amendment") is made as of March 2, 2009, by and between Security Benefit Life
Insurance Company (the "Company"), Calamos Investment Trust (the "Fund") and
Calamos Advisors LLC, (the "Adviser"). Capitalized terms not otherwise defined
herein shall have the meaning ascribed to them in the Agreement (defined below).
WHEREAS, the Company, the Fund, and the Adviser are parties to
a Participation Agreement dated July 1, 2001, as amended (the "Agreement"); and
WHEREAS, the parties wish to amend Schedule A; and
NOW, THEREFORE, in consideration of the mutual agreements and
covenants contained herein, the Company, the Fund and the Adviser agree to the
following amendments to the Agreement:
(1) Schedule A is deleted in its entirety and replaced with the
attached Schedule A;
(2) All obligations of the Fund, the Portfolios and the Designated
Portfolios under the Agreement are several and not joint;
(3) In the event of a conflict between the terms of this Amendment
and the Agreement, it is the intention of the parties that the
terms of this Amendment shall control and the Agreement shall
be interpreted on that basis. All other provisions of the
Agreement shall remain in full force and effect and this
Amendment and the Agreement constitute the entire agreement
among the parties with respect to the arrangements described
herein; and
(4) This Amendment may be executed in two or more counterparts,
each of which shall be an original and all of which together
shall constitute one instrument.
IN WITNESS WEHREOF, the undersigned have executed this
Amendment as of the date first written above.
SECURITY BENEFIT LIFE CALAMOS INVESTMENT TRUST
INSURANCE COMPANY
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxxx Xxxxx
----------------------- -----------------------
Name: Xxxxx X. Xxxx Name: Xxxxxx Xxxxx
----------------------- -----------------------
Title: Vice President Title: Secretary
----------------------- -----------------------
CALAMOS ADVISORS LLC
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------
Name: Xxxxxxx Xxxxxxxxx
-----------------------
Title: Senior Vice President
-----------------------
5
SCHEDULE A
ACCOUNTS(S) CONTRACT(S)
SBL Variable Annuity Account V6029
XIV
SBL Variable Annuity Account V6323
XVI
DESIGNATED PORTFOLIO(S)
Calamos Convertible Fund A
Calamos Growth and Income Fund A
Calamos Market Neutral Income Fund A
Calamos Growth Fund A
Calamos Global Growth and Income Fund A
Calamos High Yield Fund A
Calamos Value Fund A
Calamos Blue Chip Fund A
Calamos International Growth Fund A
Calamos Multi-Fund Blend A
Calamos Global Equity Fund A
Calamos Total Return Bond Fund A
Calamos 130/30 Equity Growth Fund A
Calamos Evolving World Growth Fund A
6
