AMENDMENT NO. 1 TO PARTICIPATION AGREEMENT
THIS AMENDMENT NO. 1 TO PARTICIPATION AGREEMENT is made as of July 1, 2003, by
and among SECURITY BENEFIT LIFE INSURANCE COMPANY (the "Company"), and PIMCO
ADVISORS FUND MANAGEMENT LLC ("PAFM").
WITNESSETH
WHEREAS, Company and PAFM have entered into a Participation Agreement
dated April 25, 2002 (the "Agreement"); and
WHEREAS, the parties wish to amend the Agreement to add new Portfolios to
the Agreement;
NOW, THEREFORE, in consideration of the mutual promises set forth herein,
the parties hereto agree as follows;
1. SCHEDULE A. Effective July 1, 2003, Schedule A is hereby deleted in its
entirety and replaced by the Schedule A attached hereto.
2. CONFLICTS AND ENTIRE AGREEMENT. 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.
3. AMENDMENTS. Except as expressly supplemented, amended or consented to
hereby, all of the representations, warranties, terms, covenants and conditions
of the Agreement shall remain unamended and shall continue to be in full force
and effect.
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment
No. 1 to be executed in its name and on its behalf by its duly authorized
representative as of the date first above written.
Security Benefit Life
Insurance Company
By: /s/
--------------------------------------
Title: Senior Vice President & CMO
-----------------------------------
PIMCO Advisors Fund Management LLC
By: /s/
--------------------------------------
Title: Managing Director
-----------------------------------
July 1, 2003
SCHEDULE A
ACCOUNT(S) CONTRACT(S) DESIGNATED PORTFOLIO(S)
SBL Variable Annuity V6029 PIMCO Funds: Pacific
Account XIV Investment Management
Series- High Yield Fund,
Class A shares
PIMCO Funds: Pacific
Investment Management
Series- Real Return Fund,
Class R shares
PIMCO Funds: Pacific
Investment Management
Series- Total Return Fund,
Class R shares
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P I M C O PIMCO ADVISORS DISTRIBUTORS LLC
--------------- 0000 Xxxxxxxx Xxxxxx
X X X X X X X X Xxxxxxxx, Xxxxxxxxxxx 00000
203.352.4900
January 03, 0000
Xxxxxxx Xxxxxxxx, Xxx.
Security Benefit Life Insurance Company
One Security Benefit Place
Topeka, Kansas 66636
Dear Xx. Xxxxxxxx:
We refer to the Participation Agreement and the Services Agreement, each
dated April 25, 2002 (the "Agreements") between Security Benefit Life Insurance
Company ("Servicer") and Allianz Dresdner Asset Management of America L.P. (the
"Administrator).
Please be advised that effective September 30, 2002, the Administrator
assigned the Agreements to its affiliate PIMCO Funds Advisors LLC; and effective
October 31, 2002, PIMCO Funds Advisors LLC changed its name to PIMCO Advisors
Fund Management LLC ("PAFM").
In connection with such assignment, enclosed please find 3 execution
copies each of two Novation Agreements. All copies have been executed on behalf
of the Administrator and PAFM. Please have all copies executed on behalf of your
organization; keep one copy of each for your records and return two copies of
each to me.
Thank you.
Very truly yours,
/s/ Xxxxxx X. Xxxxxx, Xx.
-----------------------------
Xxxxxx X. Xxxxxx, Xx.
Managing Director
NBS/ym
NOVATION OF PARTICIPATION AGREEMENT
================================================================================
THIS NOVATION OF PARTICIPATION AGREEMENT is entered into this 30th day of
September 2002 among Allianz Dresdner Asset Management of America L.P. (formerly
PIMCO Advisors L.P.) ("XXXX"), a Delaware limited partnership; Security Benefit
Life Insurance Company, a Kansas Stock Life Insurance Company ("Servicer"); and
PIMCO Funds Advisors LLC ("PFA"), a Delaware limited liability company.
W I T N E S S E T H
WHEREAS, XXXX and Servicer have entered into a Participation Agreement
dated April 25, 2002 (the "Agreement"); and
WHEREAS, XXXX desires to affect a novation of the Agreement so that PFA is
substituted for XXXX as a party to such agreement and XXXX is released from its
obligations under the Agreement, PFA desires to accept the novation thereof, and
Servicer desires to consent to such novation;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto agree as follows:
1. NOVATION AND ACCEPTANCE. Subject to the terms and conditions
contained herein, XXXX hereby affects a novation of the Agreement to
substitute PFA for XXXX as party to such agreement (the "Novation"),
Servicer hereby consents to such Novation and hereby releases XXXX
from all of its duties and obligations under the Agreement, and PFA
hereby accepts the Novation and hereby releases XXXX from all of its
duties and obligations under the Agreement and assumes all rights,
duties and obligations of XXXX under the Agreement. Any procedures
established from time to time by agreement between XXXX and Servicer
shall be assigned to PFA, subject to the terms and conditions
contained herein and subject to amendment by mutual agreement of PFA
and Servicer.
2. TERM. The Novation shall become effective on the date hereof and
shall extend for so long as the terms specified in the Agreement are
satisfied or until terminated in accordance therewith.
3. NO TERMINATION. The parties agree that the Novation shall not
constitute an "assignment" of the Agreement for purposes of the
Agreement or the Investment Company Act of 1940, and that the
Agreement, as so novated, shall remain in full force and effect
after the Novation.
IN WITNESS WHEREOF, the parties hereto have caused this Novation Agreement
to be executed as of the day and year first above written.
Novation of Participation Agreement
XXXX/Sec. Xxx. Life Insurance/PFA
Page 2
ALLIANZ DRESDNER ASSET MANAGEMENT OF AMERICA L.P.
By: /s/ Xxxxxxx Xxxxxxxx
----------------------------------------------
Name: Xxxxxxx Xxxxxxxx
--------------------------------------------
Title: Managing Director
-------------------------------------------
SECURITY BENEFIT LIFE INSURANCE COMPANY
By: /s/ Xxx Xxxx, Xx.
----------------------------------------------
Name: Xxx Xxxx, Xx.
--------------------------------------------
Title: Senior Vice President
-------------------------------------------
PIMCO FUNDS ADVISORS LLC
By: /s/ Xxxxxx X.Xxxxxx, Xx.
----------------------------------------------
Name: Xxxxxx X.Xxxxxx, Xx.
--------------------------------------------
Title: Managing Director
-------------------------------------------
NBS/ym
11/27/02
PARTICIPATION AGREEMENT
AMONG
SECURITY BENEFIT LIFE INSURANCE COMPANY,
AND
ALLIANZ DRESDNER ASSET MANAGEMENT OF AMERICA, L.P
THIS AGREEMENT, dated as of the 25th day of April, 2002, 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 Allianz
Dresdner Asset Management of America L.P. ("ADAMA"), a Delaware limited
partnership.
WHEREAS, ADAMA performs and procures the performance of various services
for PIMCO Funds: Multi-Manager Series ("MMS"), a Massachusetts business trust,
and PIMCO Funds: Pacific Investment Management Series ("PIMS"), a Massachusetts
business trust (MMS and PIMS are each sometimes referred to as a "Trust" and,
collectively, as the "Trusts"); and
WHEREAS, MMS is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"), and
offers Class A shares of beneficial interest ("MMS shares") in separate series
of funds ("MMS Funds"), each with its own investment objective or objectives and
investment policies; and
WHEREAS, PIMS is registered as an open-end management investment company
under the 1940 Act, and offers Class A shares of beneficial interest ("PIMS
shares") in separate series of funds ("PIMS Funds"), each with its own
investment objective or objectives and investment policies. (The MMS shares and
PIMS shares are sometimes hereinafter collectively referred to as the "shares"
and MMS Funds and PIMS Funds are sometimes hereinafter collectively referred to
as the "Portfolios" or individually, as a "Portfolio"); and
WHEREAS, shares of the Portfolios are registered under the Securities Act
of 1933, as amended (the "1933 Act"); and
WHEREAS, ADAMA, which serves as investment adviser to the Trusts, 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
ADAMA agree as follows:
ARTICLE I. SALE OF FUND SHARES
1.1. Subject to Article IX hereof, the ADAMA agrees to make
available, or cause to be made 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 ADAMA may so provide, and (ii) the Board
of Trustees of each Trust (each a "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 applicable 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. ADAMA shall cause the applicable Trust 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, either Trust may delay redemption of its 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) ADAMA hereby appoints, or shall cause the Company to
be appointed as an agent of each Trust for the limited purpose of receiving and
accepting purchase and redemption requests on behalf of the Account (but not
with respect to any Portfolio 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 each Trust prior to the time that such
Trust ordinarily calculates its net asset value as described from time to time
in such Trust's prospectus shall constitute receipt and acceptance by the
Designated Portfolio on that same Business Day, provided that such Trust
receives notice of such request by 9:00 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 ADAMA of a purchase request
for such shares. Payment for Designated Portfolio shares shall be made in
federal funds transmitted to the applicable Trust or other designated person by
wire to be received by 3:00 p.m. Eastern Time on the Business Day the applicable
Trust is notified of the purchase request for Designated Portfolio shares
(unless the ADAMA 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 ADAMA otherwise determines and so advises the Company to
delay the date of
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payment, to the extent the Trust 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 ADAMA's request, reimburse the Trust for any charges,
costs, fees, interest or other expenses incurred by the Trust in connection with
any advances to, or borrowing or overdrafts by, the Trust, or any similar
expenses incurred by the Trust, as a result of portfolio transactions effected
by the Trust 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 ADAMA.
(c) ADAMA shall cause the applicable Trust to pay for
Designated Portfolio shares redeemed by the Account or the Company 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 such Trust is properly notified of
the redemption order of such shares (unless redemption proceeds are to be
applied to the purchase of shares of other Designated Portfolios in accordance
with Section 1.3(b) of this Agreement), except that each Trust reserves the
right to delay payment of redemption proceeds to the extent permitted under
Section 22(e) of the 1940 Act and any rules thereunder, and in accordance with
the procedures and policies of the applicable Trust as described in the
then-current prospectus. Neither Trust shall bear any responsibility whatsoever
for the proper disbursement or crediting of redemption proceeds to the Contract
by the Company: the Company alone shall be responsible for such action.
(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 applicable
Trust's receipt and acceptance of such request, provided that, in the case of a
purchase request, payment for shares so requested is received by the applicable
Trust in federal funds prior to close of business for determination of such
value, as defined from time to time in the applicable Trust's prospectus.
1.4. ADAMA shall use commercially reasonable efforts to make the
net asset value per share for each Designated Portfolio available to the Company
by 7:00 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 applicable Trust's prospectus. If the Trust 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 in accordance
with such Trust's procedures as in effect from time to time. 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 a
Trust, 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 ADAMA's expense.
1.5. ADAMA shall use commercially reasonable 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 7:00 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. ADAMA shall notify the Company
promptly of the number of Designated Portfolio shares so issued as payment of
such dividends and distributions.
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1.6. Issuance and transfer of shares shall be by book entry only.
Share certificates will not be issued to the Company or the Account. Purchase
and redemption orders for 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 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 ADAMA
(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
ADAMA. (unless otherwise required by applicable law), induce Contract owners to
change or modify the Trusts or change either Trust's investment adviser.
(d) The Company shall not, without prior notice to
ADAMA, induce Contract owners to vote on any matter submitted for consideration
by the shareholders of a Trust in a manner other than as recommended by the
Board of such Trust.
1.8. The parties may agree, in lieu of the procedures set forth
above in this Article 1, to place and settle trades for 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 and that the sale of the Contracts shall comply in all material
respects with state insurance suitability requirements. 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 1940 Act.
2.2. ADAMA 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 each Trust is and shall remain
registered under the 1940 Act. Each Trust 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. Each Trust 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 such Trust.
2.3. ADAMA represents that each Trust is lawfully organized and
validly existing under the laws of the Commonwealth of Massachusetts and that
each Trust does and will comply in all material respects with the 1940 Act.
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2.4. ADAMA represents and warrants that it is registered as an
investment adviser with the SEC.
2.5. ADAMA represents and warrants that it, each Trust, all of
their trustees/directors, officers, employees, and other individuals or entities
dealing with the money and/or securities of either Trust are and shall continue
to be at all times covered by a blanket fidelity bond or similar coverage for
the benefit of the applicable Trust in an amount not less than the minimum
coverage as required currently by Rule 17g-l 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. The Company agrees to hold for the benefit of the applicable
Trust and to pay to the applicable Trust, any amounts lost from larceny,
embezzlement or other events covered by the aforesaid bond to the extent such
amounts properly belong to the applicable Trust pursuant to the terms of this
Agreement. The Company agrees to make commercially reasonable efforts to see
that this bond or another bond containing these provisions is always in effect,
and agrees to notify the applicable Trust and ADAMA in the event such coverage
no longer applies.
ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS; VOTING
3.1. ADAMA 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, ADAMA
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 annually 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. Each Trust's prospectus shall state that the current SAI for
the such Trust is available.
3.3. ADAMA shall provide the Company with information regarding
each 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 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 ADAMA.
3.4. ADAMA will pay or cause to be paid the expenses associated
with text composition, printing, mailing, distributing, and tabulation of proxy
statements and voting instruction
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solicitation materials to Contract owners with respect to proxies related to the
Trusts, consistent with applicable provisions of the 1940 Act.
3.5. When either Trust 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 shares in accordance with
instructions received from owners of or participants
in the Contract; and
(iii) vote shares of the Trust for which no
instructions have been received in the same
proportion as shares of such Trust for which
instructions have been received.
(b) If the Company chooses to work with the Trust'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 ADAMA or its
agent in order to facilitate the Trust's solicitation of voting instructions
from Contract owners. The Company shall also provide such other information to
the Trust as is reasonably necessary in order for the Trust to properly tabulate
votes for Trust initiated proxies. The Company reserves the right to vote 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 ADAMA or its designee, each piece of sales literature or other promotional
material that the Company develops and in which a Trust (or a Designated
Portfolio thereof) or ADAMA is named. No such material shall be used until
approved by ADAMA or its designee, and ADAMA will use commercially reasonable
efforts for it or its designee to review such sales literature or promotional
material within seven (7) Business Days after receipt of such material. ADAMA
or its designee reserves the right to reasonably object to the continued use of
any such sales literature or other promotional material in which a Trust (or a
Designated Portfolio thereof) or ADAMA is named, and no such material shall be
used if ADAMA or its designee so objects.
4.2. The Company shall not give any information or make any
representations or statements on behalf of either Trust or concerning either
Trust or ADAMA 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 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 Trusts, or in sales literature or other promotional material
approved by ADAMA or its designee, except with the permission of the ADAMA or
its designee.
4.3. ADAMA 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 commercially reasonable efforts to review such sales literature
or promotional material
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within seven (7) 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. ADAMA 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. ADAMA 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 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 ADAMA 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, 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 ADAMA any complaints received from the
Contract owners pertaining to either Trust or a Designated Portfolio.
4.7. ADAMA 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 a Trust's registration statement, particularly any
change resulting in a change to the registration statement or prospectus for any
Account. ADAMA 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. ADAMA 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. ADAMA shall pay no fee or other compensation to the Company
under this Agreement.
5.2. All expenses incident to performance by ADAMA under this
Agreement shall be paid by ADAMA. ADAMA shall see to it that all shares are
registered and authorized for issuance in accordance with applicable federal law
and, if and to the extent deemed advisable by ADAMA, in accordance with
applicable state laws prior to their sale. ADAMA shall pay, or cause the
applicable Trust to pay the expenses for the cost of registration and
qualification of the shares, preparation and filing of the Trusts' 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 shares.
ADAMA shall pay, or cause the applicable Trust to pay the expenses of
distributing the Trust's proxy materials and reports to existing Contract
owners. The Fund shall also bear the expense of printing the Fund's prospectus
which is delivered to existing Contract owners with value allocated to one or
more Designated Portfolios.
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5.3. 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 a Trust (or a Designated Portfolio thereof) is named.
ARTICLE VI. QUALIFICATION
ADAMA represents and warrants that each Portfolio of each Trust 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 ADAMA will notify the Company immediately upon
having a reasonable basis for believing that any Portfolio 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 Trust, ADAMA and each of their trustees/directors and officers, and each
person, if any, who controls either Trust or ADAMA within the meaning of Section
15 of the 1933 Act or who is under common control with either Trust or ADAMA
(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 either Trust or ADAMA 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 Trusts 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
- 8 -
(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 either Trust 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 either Trust 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 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 shares or the Contracts or the
operation of either Trust.
7.2. INDEMNIFICATION BY THE ADAMA
7.2(a). ADAMA 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:
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(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
either Trust (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 ADAMA or either Trust by or
on behalf of the Company for use in the registration statement,
prospectus or SAI for either Trust or in sales literature (or any
amendment or supplement) or otherwise for use in connection with the
sale of the Contracts or shares; or
(ii) arise out of or as a result of statements or
representations by or on behalf of either Trust or ADAMA (other than
statements or representations contained in the registration
statement, prospectus, SAI or sales literature for the Contracts not
supplied by either Trust or ADAMA) or wrongful conduct of ADAMA or
either Trust with respect to the sale or distribution of the
Contracts or 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 ADAMA or
either Trust; or
(iv) arise as a result of any failure by either Trust or
ADAMA to provide the services and furnish the materials under the
terms of this Agreement (including a failure of any Portfolio of
either Trust, 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 ADAMA or
either Trust in this Agreement or arise out of or result from any
other material breach of this Agreement by or on behalf of ADAMA or
either Trust;
as limited by and in accordance with the provisions of Sections 7.2(b) and
7.2(c) hereof.
7.2(b). ADAMA 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). ADAMA 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 ADAMA 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
- 10 -
notify ADAMA of any such claim shall not relieve ADAMA 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, ADAMA will be entitled to
participate, at its own expense, in the defense thereof. ADAMA also shall be
entitled to assume the defense thereof, with counsel reasonably satisfactory to
the party named in the action. After notice from ADAMA to such party of ADAMA's
election to assume the defense thereof, the Indemnified Party shall bear the
fees and expenses of any additional counsel retained by it, and ADAMA 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 ADAMA 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 Delaware,
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 four (4) months
advance written notice delivered to the other parties; or
(b) termination by the Company by written notice to ADAMA based
upon the Company's determination that shares of a Trust are
not reasonably available to meet the requirements of the
Contracts; or
(c) termination by the Company by written notice to ADAMA 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 ADAMA 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 ADAMA determines in its sole judgment
exercised in good faith, that any such
- 11 -
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 in the event that formal
administrative proceedings are instituted against either
Trust or ADAMA 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 ADAMA to perform
its obligations under this Agreement; or
(f) termination by the Company by written notice to ADAMA 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 ADAMA by written notice to the Company, if
ADAMA shall determine, in its 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 ADAMA, if
the Company shall determine, in its sole judgment exercised
in good faith, that either Trust or ADAMA 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 either Trust in
accordance with the terms of the Contracts, provided that
the Company has given at least 45 days prior written notice
to ADAMA of the date of substitution.
9.2. Notwithstanding any termination of this Agreement, ADAMA
shall, at the option of the Company, for a period not to exceed 2 years after
such termination, continue to make available additional shares of the Trusts
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, during such two-year period, to reallocate
investments in the applicable Trust, redeem investments in the applicable Trust
and/or invest in the applicable Trust 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.
- 12 -
ARTICLE X. NOTICES
Any notice shall be sufficiently given when sent by registered or
certified mail or by recognized overnight courier 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 ADAMA: Allianz Dresdner Asset Management of America
L.P.
0000 Xxxxxxxx Xx.- 0xx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention Chief Administrative Officer
ARTICLE XI. MISCELLANEOUS
11.1. All persons dealing with the either Trust 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 ADAMA for the enforcement of any claims against such Trust. The
parties agree that neither the Board, officers, agents or shareholders of either
Trust assume any personal liability or responsibility for obligations entered
into by or on behalf of any Trust.
11.2. Subject to the requirements of legal process and regulatory
authority, ADAMA 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 (i) without the express written consent of the affected
party until such time as such information has come into the public domain or
(ii) as required by law, court order or regulation or as requested by any
regulatory agency or governmental body or agency having jurisdiction over the
disclosing party.
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
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.
- 13 -
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 except that ADAMA , may assign this Agreement at any time
without consent to its affiliate PIMCO Funds Advisors, LLC ("PIMCO") provided,
(i) PIMCO and ADAMA are under common control at the time of such assignment and
(ii) by the terms of such assignment, ADAMA agrees to remain liable to the
Company for ADAMA's financial obligations under this Agreement.
- 14 -
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: /s/
-------------------------------------
Title: Senior Vice President & CMO
----------------------------------
Date: April 25, 2002
-----------------------------------
Allianz Dresdner Asset Management By its authorized officer
of America L.P.
By: /s/
-------------------------------------
Title: Managing Director
----------------------------------
Date: April 29, 2002
-----------------------------------
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April 25, 2002
SCHEDULE A
ACCOUNT(S) CONTRACT(S) DESIGNATED PORTFOLIO(S)
SBL Variable Annuity V6029 PIMCO Funds: Pacific
Account XIV Investment Management
Series- High Yield Fund,
Class A shares
A-1
