PARTICIPATION AGREEMENT
AMONG
SECURITY BENEFIT LIFE INSURANCE COMPANY,
SECURITY DISTRIBUTORS, INC.,
XXXXXXX XXXXX ASSET MANAGEMENT, X.X
XXXXXXX SACHS TRUST, AND
XXXXXXX XXXXX & CO.
THIS AGREEMENT, dated as of the 13th day of October, 2006, by and among
Security Benefit Life Insurance Company, (the "Company"), a stock life insurance
company organized under the laws of the State of Kansas, on its own behalf and
on behalf of each segregated asset account of the Company currently in existence
or hereafter created (each an "Account"), Security Distributors, Inc., a Kansas
corporation ("SDI") Xxxxxxx Sachs Trust (the "Trust"), a registered open-end
management investment company organized under the laws of Delaware, Xxxxxxx
Xxxxx & Co. (the "Distributor"), a New York limited partnership, and Xxxxxxx
Sachs Asset Management, L.P., a Delaware limited partnership (the "Adviser").
WHEREAS, the shares of beneficial interest/common stock of the Trust 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 Trust is registered as an open-end management investment
company under the Investment Company Act of 1940 as amended (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 Trust, is
duly registered as an investment adviser under the Investment Advisers Act of
1940, as amended (the "Advisers Act") and any applicable state securities law;
and
WHEREAS, the Distributor, which serves as distributor of the Trust, is duly
registered as a broker-dealer under the Securities and Exchange Act of 1934, as
amended; and
WHEREAS, the Company has issued or will issue certain annuity contracts,
supported wholly or partially by the Account (the "Contracts"), designated by it
to be offered solely to certain qualified retirement plans under the Internal
Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, the Account is duly established and maintained as a segregated
asset account, duly established by the Company under the insurance laws of the
State of Kansas to set aside and invest assets attributable to the aforesaid
Contracts; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the various Portfolios of
the Trust on behalf of the Account to fund the aforesaid Contracts, and the
A-1
Distributor is authorized to sell such shares to unit investment trusts such as
the Accounts at net asset value;
WHEREAS, SDI is the distributor of the Contracts;
NOW, THEREFORE, in consideration of their mutual promises, the Company,
SDI, the Trust, the Distributor and the Adviser agree as follows:
ARTICLE I. Sale of Trust Shares
1.1. (a) Subject to Article IX hereof, the Trust agrees to make available
to the Company for purchase on behalf of the Account, shares of the Designated
Portfolios (defined below), 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 a Portfolio that constitutes a Designated
Portfolio as of the date of his Agreement) in existence now or that may be
established in the future may be made available to the Company on terms
different than those set forth herein as the Trust may so provide to the Company
in writing, and (ii) the Board of Trustees of the Trust (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.
(b) It is agreed that the Company, on behalf an Account has access under
this Agreement to all Portfolios of the Trust and all share classes thereof
(including Portfolios and share classes created in the future) and that, except
on an annual basis, it shall not be necessary to list the Account, the
Contracts, the Portfolios or the share classes on Schedule A. It is further
agreed that a Portfolio of the Trust shall become a "Designated Portfolio"
hereunder as of the date an Account of the Company first invests in such
Portfolio. The parties may, in their discretion and for convenience and ease of
reference, include one or more Accounts, Contracts and Designated Portfolios on
Schedule A from time to time.
1.2. The Trust 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
Trust may delay redemption of Trust 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
In addition to the terms identified in this Section 1.3, the Trust and
Company may also execute orders according to the terms of the NSCC Operating
Agreement (or other agreed upon means including via NSCC).
(a) The Trust hereby appoints the Company as an agent of the Trust for the
limited purpose of receiving and accepting purchase and redemption requests on
behalf of the Account (but not with respect to any Trust 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 Trust
prior to the time that the Trust ordinarily calculates its net asset value as
described from time to time in the Trust's prospectus shall constitute receipt
and acceptance by the Designated Portfolio on that same Business Day, provided
that the Trust 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 Trust of a purchase request for such
shares. Payment for Designated Portfolio shares shall be made in federal funds
transmitted to the Trust or other designated person by wire to be received by
3:00 p.m. Eastern Time on the Business Day the Trust is notified of the purchase
request for Designated Portfolio shares (unless the Trust 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 Trust otherwise
determines and so advises the Company to delay the date of 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 Trust'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 the Trust.
(c) Payment for Designated Portfolio shares redeemed by the Account or the
Company shall be made by the Trust 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 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 the Trust reserves the right to delay payment of
redemption proceeds to the extent permitted under Section 22(e) of the 1940 Act
and any rules thereunder, and in accordance with the procedures and policies of
the Trust 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 Trust's receipt and acceptance
of such request, provided that, in the case of a purchase request, payment for
Trust shares so requested is received by the Trust in federal funds prior to
close of business for determination of such value, as defined from time to time
in the Trust's prospectus.
1.4. The Trust shall use its best efforts to make the net asset value per
share for each Designated Portfolio available to the Company by 7:00p.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 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. 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 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 the Adviser's expense.
1.5. The Trust shall use its best efforts to furnish notice (by fax or
e-mail) 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. The Trust
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 Trust shares shall be by book entry only.
Share certificates will not be issued to the Company or the Account. Purchase
and redemption orders for Trust 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 Trust's shares may be sold to other
insurance companies and the cash value of the Contracts may be invested in other
investment companies.
(b) The Company shall not, without prior notice to the Adviser (unless
otherwise required by applicable law), take any action to operate the Account as
a management investment company under the 1940 Act.
(c) The Company shall not, without prior notice to the Adviser (unless
otherwise required by applicable law), induce Contract owners to change or
modify the Trust or change the Trust's investment adviser.
(d) The Company shall not, without prior notice to the Trust, induce
Contract owners to vote on any matter submitted for consideration by the
shareholders of the Trust in a manner other than as recommended by the Board.
1.8 The parties may agree, in lieu of the procedures set forth above in
this Article 1, to place and settle trades for Trust 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
THE COMPANY AND SDI
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 0000 Xxx.
2.2. The Company 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.
2.3. The Company 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.
2.4. The Company's entering into and performing its obligations under this
agreement does not and will not violate its charter documents or by-laws, rules
or regulations, or any agreement to which it is party.
2.5. The Company acknowledges that the Trusts are retail Trusts and are not
insurance dedicated assets.
2.6. The Company represents that the Contracts and Accounts are permitted
to invest in the Trust.
2.7. The Company acknowledges that the Adviser and Trust are not assuming
any responsibility to ensure that the Trust is managed in a manner that
satisfies any legal or regulatory requirements (including tax and insurance
requirements) that are applicable to the Company, the Contracts and/or the
Accounts.
2.8. The Company will notify the Adviser promptly if for any reason it is
unable to perform its obligations under this Agreement.
2.9. The Company represents and warrants that all of its directors,
officers, employees, investment adviser 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.
2.10. State Insurance Restrictions. The Company acknowledges and agrees
that it is the responsibility of the Company to determine the appropriateness of
offering the Trusts through its Contracts and that neither the Adviser nor the
Trust shall bear any responsibility to the Company, the Contracts or Accounts
for any such determination or the correctness of such determination.
2.11 SDI represents and warrants that it is a corporation duly organized
and in good standing under Kansas law and that it is registered as a
broker/dealer with the Securities and Exchange Commission and is a member in
good standing of the National Association of Securities Dealers.
THE TRUST
2.12 The Trust 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 Trust is and shall remain registered under
the 1940 Act. The 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. The 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 the Trust.
2.13 The Trust represents and warrants that it is lawfully organized and
validly existing under the laws of the State of Delaware and that it does and
will comply in all material respects with the 1940 Act, including, without
limitation, Rule 38a-1 under the 1940 Act.
THE DISTRIBUTOR AND THE ADVISER
2.14 The Adviser represents and warrants that it is registered as an
investment adviser with the SEC and that it does and will comply in all material
respects with the Advisers Act as amended, including, without limitation, Rule
206(4)-7 thereunder.
2.15 The Distributor represents and warrants that it is a limited
partnership duly organized and in good standing under New York law, that it is
registered as a broker/dealer with the Securities and Exchange Commission, is a
member in good standing of the National Association of Securities Dealers and
will comply in all material respects with all applicable laws in connection with
the distribution of interests in the Trust.
2.16 The Distributor and the Adviser represent and warrant that all of
their trustees/directors, officers and employeesdealing with the money and/or
securities of the Trust are and shall continue to be at all times covered by a
blanket fidelity bond or similar coverage for the benefit of the Trust in an
amount not less than the minimum coverage as required currently by Rule 17g-1 of
the 1940 Act or related provisions as may be promulgated from time to time. The
aforesaid bond shall include coverage for larceny and embezzlement and shall be
issued by a reputable bonding company.
THE COMPANY, SDI, TRUST, DISTRIBUTOR AND ADVISER
2.17 Legal Authority. Each party represents and warrants that the execution
and delivery of this Agreement and the consummation of the transactions
contemplated herein have been duly authorized by all necessary corporate,
partnership or trust action, as applicable, by such party, and, when so executed
and delivered, this Agreement will be the valid and binding obligation of such
party enforceable in accordance with its terms.
2.18 The foregoing representations and warranties shall be made, by the
party hereto that makes the representation or warranty as of the date first
written above and at the time of each purchase and each sale of the Trust's
shares pursuant to this Agreement.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. If requested by the Company, the Trust shall provide the Company with
as many printed copies of the current prospectus, current Statement of
Additional Information ("SAI"), supplements, proxy statements, and annual or
semi-annual reports of each Designated Portfolio (for distribution to Contract
owners with value allocated to such Designated Portfolios) as the Company may
reasonably request to deliver to existing Contract owners. If requested by the
Company in lieu thereof, the Trust 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 Trust 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 Trust's prospectus shall state that the current SAI for the Trust
is available.
3.3. The Trust shall provide the Company with information regarding the
Trust'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 written consent of the Trust, which consent shall not
be unreasonably withheld.
3.4 If and to the extent required by law, the Company shall: (i) solicit
voting instructions from contract owners; (ii) vote the Trust shares in
accordance with the instructions received from contract owners; and (iii) vote
Trust shares for which no instructions have been received in the same proportion
as Trust shares of such share class for which instructions have been received;
so long as and to the extent that the Commission continues to interpret the 1940
Act to require pass-through voting privileges for variable contract owners. The
Company reserves the right to vote Trust shares held in any segregated asset
account in its own right, 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
Trust or its designee, each piece of sales literature or other promotional
material that the Company develops and in which the Trust (or a Designated
Portfolio thereof) or the Adviser is named. No such material shall be used until
approved by the Trust or its designee, and the Trust will use its commercially
reasonable efforts for it or its designee to review such sales literature or
promotional material within ten (10) Business Days after receipt of such
material. The Trust 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 Trust (or a Designated Portfolio thereof) or the Adviser is named, and
no such material shall be used if the Trust or its designee so objects.
4.2. The Company shall not give any information or make any representations
or statements on behalf of the Trust or concerning the Trust 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 Trust 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 Trust, or in sales literature or other promotional material approved by the
Trust or its designee, except with the permission of the Trust or its designee.
4.3. The Trust 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 Trust 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 Trust will provide to the Company at least one complete copy of
all registration statements, prospectuses, SAIs, reports, proxy statements,
sales literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments to any of the above, that
relate to the Designated Portfolios or their shares, promptly after the filing
of such document(s) with the SEC or other regulatory authorities.
4.6. The Company will provide to the Trust 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 Trust and the Adviser any complaints received from the Contract
owners pertaining to the Trust or a Designated Portfolio.
4.7. The Trust 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 Trust's registration statement, particularly
any change resulting in a change to the registration statement or prospectus for
any Account. The Trust will work with the Company so as to facilitate the
solicitation of proxies from Contract owners, or to make changes to its
prospectus or registration statement, in an orderly manner. The Trust will make
reasonable efforts to attempt to have changes affecting Contract prospectuses
become effective simultaneously with the annual updates for such prospectuses.
4.8 For purposes of this Article IV, the phrase "sales literature or other
promotional material" includes, but is not limited to, advertisements (such as
material published, or designed for use in a newspaper, magazine, or other
periodical, radio, television, telephone or tape recording, videotape display,
signs or billboards, motion pictures, Internet, or other public media), sales
literature (i.e. any written communication distributed or made generally
available to customers or the public, including brochures, circulars, research
reports, market letters, form letters, electronic mail, seminar texts, reprints
or excerpts of any other advertisement, sales literature, or published article),
educational or training material or other communications distributed or made
generally available to some or all SBL agents, registration statements,
disclosure documents, prospectuses, statements of additional information,
shareholder reports, and proxy materials.
4.9 The Company agrees and acknowledges that the Company has no right,
title or interest in the names and marks of the Trust and that all use of any
designation comprised in whole or part or such names or marks under this
Agreement shall inure to the benefit of the Trust and the Adviser. The Company
shall not use any such names or marks on its own behalf or on behalf of
anAccount in connection with marketing the Contracts without prior written
consent of the Trust and the Adviser. Upon termination of this Agreement for any
reason, the Company shall cease all use of any such names or marks.
4.10 The Trust and the Adviser agrees and acknowledges that each has no
right, title or interest in the names and marks of the Company, and that all use
of any designation comprised in whole or part or such names or marks under this
Agreement shall inure to the benefit of the Company. The Trust and the Adviser
shall not use any such names or marks on its own behalf or on behalf of a Trust
in connection with marketing the Trust without prior written consent of the
Company. Upon termination of this Agreement for any reason, the Trust and the
Adviser shall cease all use of any such names or marks
except that the Company may continue to use such names or marks in connection
with Existing Contracts as contemplated in Section 9.2.
4.11 Customer Complaints. The Company shall promptly address all customer
complaints and resolve such complaints consistent with high ethical standards
and principles of ethical conduct.
4.12 Complaints and Proceedings
(a) The Company shall immediately notify the Adviser of: (i) any
action or circumstances affecting the Trust that may prevent the lawful
offer or sale of the Contracts or any class of Contracts in any state or
jurisdiction, including, without limitation, any circumstances in which
such Contracts are not registered, qualified and approved, and, in all
material respects, issued and sold in accordance with applicable state and
federal laws. The Company will make every reasonable effort to prevent the
issuance of any such stop order, cease and desist order or similar order
and, if any such order is issued, to obtain the lifting thereof at the
earliest possible time.
(b)The Company shall provide to the Adviser any complaints it has
received from Contract owners pertaining to the Adviser or a Trust, and the
Adviser shall provide the Company any complaints it has received from
Contract owners relating to the Contracts.
4.13 Cooperation. Each party hereto shall cooperate with the other parties
and all appropriate government authorities (including without limitation the SEC
, the NASD and state securities and insurance regulators) and shall permit such
authorities reasonable access to its books and records in connection with any
investigation or inquiry by any such authority relating to this Agreement or the
transactions contemplated hereby. However, such access shall not extend to
attorney-client privileged information.
ARTICLE V. Fees and Expenses
5.1 The Trust shall pay the fees and expenses provided for in the attached
Schedule B.
5.2 The Trust shall pay no fee or other compensation to the Company under
this Agreement, except that if the Trust or any Designated Portfolio adopts and
implements a plan pursuant to Rule 12b-1 to finance distribution expenses, then
the Trust may make payments to the Company or to SDI as distributor for the
Contracts if and in amounts agreed to by the Trust in writing.
5.3 All expenses incident to performance by the Trust under this Agreement
shall be paid by the Trust. The Trust 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 Trust, in accordance with
applicable state laws prior to their sale. The Trust shall bear the expenses for
the cost of registration and qualification of the Trust's shares, preparation
and filing of the Trust's prospectus and registration statement, proxy materials
and reports, setting the prospectus in type, setting in type and printing the
proxy materials and reports to shareholders (including the costs of printing a
prospectus that constitutes an annual report), the preparation of all statements
and notices required by any federal or state law, and all taxes on the issuance
or transfer of the Trust's shares.
5.4 The Trust will pay or cause to be paid the expenses associated with
printing, mailing, distributing, solicitation and tabulation of proxy materials
to Contract owners with respect to proxies related to the Trust, consistent with
applicable provisions of the 1940 Act. The Trust shall also bear the expense of
printing and postage with respect to Trust prospectuses, annual and semi-annual
reports and all other Trust reports delivered to existing Contract owners with
value allocated to one or more Designated Portfolios (regardless of whether such
documents are printed by the Trust or the Company).
5.5 The Company shall bear the expense of distributing all prospectuses and
reports to shareholders (whether for existing Contract owners or prospective
Contract owners). The Company shall bear the expense of printing copies of the
prospectus for the Contracts for use with prospective Contract owners. The
Company shall bear the expenses incident to (including the costs of printing)
sales literature and other promotional material that the Company develops and in
which the Trust (or a Designated Portfolio thereof) is named.
ARTICLE VI. Qualification
The Trust represents and warrants that the Designated Portfolios will be
qualified as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Internal Revenue Code,") and that it will
maintain such qualification (under Subchapter M or any successor or similar
provisions) and that it will notify the Company immediately upon having a
reasonable basis for believing that it has ceased to so qualify or that it might
not so qualify in the future.
ARTICLE VII. Indemnification
7.1 Indemnification by the Company and SDI
7.1(a). The Company and SDI agrees to indemnify and hold harmless each
of the Trust, the Distributor and the Adviser and each of its
trustees/directors and officers, and each person, if any, who controls
the Trust or Adviser within the meaning of Section 15 of the 1933 Act
or who is under common control with the Trust 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 and SDI) 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 or SDI by or on behalf of the Trust, the
Distributor 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 or SDI (other than statements or
representations contained in the registration statement, prospectus,
SAI, or sales literature of the Trust not supplied by the Company or
SDI or persons under their control) or willful misfeasance of the
Company or SDI or their agents or persons under the Company's or SDI'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 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 the Trust
by or on behalf of the Company or SDI; or
(iv) arise as a result of any material failure by the Company or SDI
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 or SDI in this
Agreement or arise out of or result from any other material breach of
this Agreement by the Company or SDI;
as limited by and in accordance with the provisions of Sections 7.1(b) and
7.1(c) hereof.
7.1(b). Neither the Company nor SDI shall 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). Neither the Company nor SDI shall 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 and/or SDI,
as applicable, 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 and/or SDI of any such claim shall not relieve the Company or
SDI, as applicable, 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 and/or SDI, as applicable, shall be entitled to
participate, at its own expense, in the defense of such action. The Company
and/or SDI, as applicable, 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 or SDI to such party of the Company's election, or SDI's
election as applicable, to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
the Company or SDI, as applicable, 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 and/or
SDI, as applicable, of the commencement of any litigation or proceedings against
them in connection with the issuance or sale of the Trust shares or the
Contracts or the operation of the Trust.
7.2 Indemnification by the Adviser and Distributor
7.2(a). The Adviser and Distributor 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 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 the Adviser, the Distributor or Trust by or on
behalf of the Company or SDI for use in the registration statement,
prospectus or SAI for the Trust or in sales literature (or any amendment or
supplement) or otherwise for use in connection with the sale of the
Contracts or Trust shares; or
(ii) arise out of or as a result of statements or representations by or on
behalf of the Trust, the Distributor or the Adviser (other than statements
or representations contained in the registration statement, prospectus, SAI
or sales literature for the Contracts not supplied by the Trust, the
Distributor or the Adviser) or willful misfeasance of the Adviser, the
Distributor or the Trust with respect to the sale or distribution of the
Contracts or Trust 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 or
SDI by or on behalf of the Adviser, the Distributor or the Trust; or
(iv) arise as a result of any failure by the Trust, the Distributor or the
Adviser to provide the services and furnish the materials under the terms
of this Agreement (including a failure of the Trust, whether unintentional
or in good
faith or otherwise, to comply with the 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, the Distributor or the
Trust in this Agreement or arise out of or result from any other material
breach of this Agreement by or on behalf of the Adviser, Distributor or the
Trust;
as limited by and in accordance with the provisions of Sections 7.2(b) and
7.2(c) hereof.
7.2(b). Neither the Adviser nor the Distributor shall 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 SDI, the Company or the Account, whichever is
applicable.
7.2(c). Neither the Adviser nor Distributor shall 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 and/or
Distributor, as applicable, 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 and/or Distributor, as applicable, of
any such claim shall not relieve the Adviser and/or Distributor, as applicable,
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
and/or Distributor, as applicable, will be entitled to participate, at its own
expense, in the defense thereof. The Adviser and/or Distributor, as applicable,
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
and/or Distributor, as applicable, to such party of the Adviser's or
Distributor'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 and/or Distributor 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 and/or SDI, as applicable, agrees promptly to notify
the Adviser and/or Distributor 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 New York, without
regard to the conflict of laws provisions thereof.
8.2 This Agreement shall be subject to federal securities laws, 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 months advance written notice delivered
to the other parties; or
(b) termination by the Company and SDI by written notice to the other
parties based upon the Company's determination that shares of the
Trust are not reasonably available to meet the requirements of the
Contracts; or
(c) termination by the Company and SDI 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 Trust, the Distributor or Adviser by written notice
to the Company and SDI in the event that formal administrative
proceedings are instituted against the Company or SDI 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, or SDI'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 Trust, the Distributor or Adviser
determines in its sole judgment exercised in good faith, that any such
administrative proceedings will have a material adverse effect upon
the ability of the Company or SDI to perform its respective
obligations under this Agreement; or
(e) termination by the Company or SDI by written notice to the other
parties in the event that formal administrative proceedings are
instituted against the Trust, the Distributor or Adviser by the SEC or
any state securities department or any other regulatory body;
provided, however, that the Company or SDI determines in its sole
judgment exercised in good faith, that any such administrative
proceedings will have a material adverse effect upon the ability of
the Trust, the Distributor or Adviser to perform its respective
obligations under this Agreement; or
(f) termination by the Company or SDI 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 or SDI reasonably believes
that any such Portfolio may fail to so qualify or comply; or
(g) termination by either the Trust, the Distributor or the Adviser by
written notice to the other parties, if any of the Trust, the
Distributor or the Adviser, respectively, shall determine, in their
sole judgment exercised in good faith, that the Company or SDI 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 or SDI by written notice to the other
parties, if the Company or SDI shall determine, in its sole judgment
exercised in good faith, that the Trust, the Distributor 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 Trust in accordance with the terms of the
Contracts, provided that the Company has given at least 45 days prior
written notice to the Trust, the Distributor and Adviser of the date
of substitution.
9.2 Notwithstanding any termination of this Agreement, the Trust and the
Distributor shall, at the option of the Company, continue to make available
additional shares of the Trust 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 Trust, redeem investments in the Trust and/or
invest in the 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.
ARTICLE X. Notices
Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at such
other address as such party may from time to time specify in writing to the
other party.
If to the Company: Security Benefit Life Insurance Company
Attention General Counsel
One Security Benefit Place
Topeka, Kansas 66636 - 0001
If to SDI: Security Distributors, Inc.
Attention General Counsel
One Security Benefit Place
Topeka, Kansas 66636 - 0001
If to the Trust: Xxxxxxx Xxxxx Trust
Attention Xxxxx Xxxxxxx, Esq.
00 Xxx Xxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
If to Distributor: Xxxxxxx, Xxxxx & Co.
Attention Xxxxx X. XxXxxxxx
00 Xxx Xxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
If to Adviser: Xxxxxxx Xxxxx Asset Management, L.P
Attention:
00 Xxx Xxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
ARTICLE XI. Disruptive Trading.
(a) The Trust has adopted policies designed to prevent frequent
purchases and redemptions of any Trust shares in quantities great enough
to: (i) disrupt orderly management of the corresponding Portfolio, or (ii)
dilute the value of the outstanding Trust shares of that series
("Disruptive Trading Policies"). These policies are disclosed in the
Trust's prospectus. From time to time, the Distributor implements
procedures reasonably designed to enforce the Trust's Disruptive Trading
Policies and shall provide a written description of such procedures (and
revisions thereto) to the Company. As a procedure in furtherance of its
Disruptive Trading Policies, the Distributor may assess fees, to be paid by
Contract owners, upon redemption of one or more series or classes of Trust
shares within certain stated time periods after such shares have been
purchased. However, the Trust on behalf of a Designated Portfolio, agrees
to give Company at least 90 days advance written notice of the
implementation of a redemption fee applicable to variable annuity separate
accounts.
(b) The Company agrees to use reasonable efforts to develop, adopt and
maintain policies regarding transactions in Account units reasonably
designed to complement the Adviser's Disruptive Trading Policies and, from
time to time, to implement procedures regarding transactions in Account
units reasonably designed to effectuate the the Trust's procedures for
preventing disruptive trading in Trust shares. In particular, in the event
that the Trust or the Distributor has identified a particular Contract
owner as having engaged in transactions in Account units that directly or
indirectly violate the Trust's Disruptive Trading Policies, the Company
agrees, at the written request of the Trust or the Distributor, to restrict
or prohibit further transactions in Account units by that Contract owner
which could result in additional purchases and redemptions of a specified
series and/or class of Trust in violation of the Trust's Disruptive Trading
Policies.
ARTICLE XII. Anti-Money Laundering.
The Company shall comply with all applicable laws and regulations designed
to prevent money "laundering", and if required by such laws or regulations, to
share with the Trust information about individuals, entities, organizations and
countries suspected of possible terrorist or money "laundering" activities in
accordance with Section 314(b) of the USA Patriot Act. However, it is recognized
that (a) anti-money laundering programs are risk-based and are permitted to take
into account the particular entities business and (b) the Contracts will only be
offered to certain types of tax qualified retirement plans. . The Company agrees
that:
o as part of processing an application for a Contract, it will verify
the identity of applicants and, if an applicant is not a natural
person, will verify the identity of prospective principal and
beneficial owners submitting an application for a Contract,
o as part of processing an application for a Contract, it will verify
that no applicant, including prospective principal or beneficial
Contract owners, is a "specially designated national" or a person from
an embargoed or "blocked" country as indicated by the Office of
Foreign Asset Control ("OFAC") list of such persons,
o as part of its ongoing compliance with the USA Patriot Act, it will,
from time to time, reverify that no Contract owner, including a
principal or beneficial Contract owners, is a "specially designated
national" or a person from an embargoed or "blocked" country as
indicated by the OFAC list of such persons, and
o if any of the foregoing cease to be true, the Trust or its agents, in
compliance with the USA Patriot Act or Bank Secrecy Act, may seek
authority to block transactions in Account units arising from accounts
of one or more such Contract owners with the Company or of one or more
of the Company's accounts with the Trust.
The Trust, Adviser and the Distributor shall comply with all applicable
laws and regulations designed to prevent money "laundering", and if required by
such laws or regulations, to share with the Company information about
individuals, entities, organizations and countries suspected of possible
terrorist or money "laundering" activities in accordance with Section 314(b) of
the USA Patriot Act.
ARTICLE XIII. Miscellaneous
13.1 All persons dealing with the 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 the
Adviser for the enforcement of any claims against the Trust. The parties agree
that neither the Board, officers, agents or shareholders of the Trust assume any
personal liability or responsibility for obligations entered into by or on
behalf of the Trust.
13.2 Subject to the requirements of legal process and regulatory authority,
the Trust , Adviser and Distributor 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.
13.3 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.
13.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
13.5 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.
13.6 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.
13.7 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.
13.8 This Agreement or any of the rights and obligations hereunder may not
be assigned by any party without the prior written consent of all parties
hereto.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and on its behalf by its duly authorized representative.
Security Benefit Life
Insurance Company By its authorized officer
By: /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Title: VP_______________________________
Date: 10-13-06__________________________
Security Distributors, Inc. By its authorized officer
By: /s/Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Title: Pres_____________________________
Date: 10-13-06__________________________
Xxxxxxx Sachs Trust By its authorized officer
By: /s/Xxxxx X. XxXxxxxx
Xxxxx X. XxXxxxxx
Title: Managing Director________________
Date: 10-25-06__________________________
Xxxxxxx Xxxxx & Co. By its authorized officer
By: /s/ Xxxxx X. XxXxxxxx
Xxxxx X. XxXxxxxx
Title: Managing Director________________
Date: 10-25-06__________________________
Xxxxxxx Sachs Asset Management, L.P. By: /s/ Xxxxx X. XxXxxxxx
Xxxxx X. XxXxxxxx
Title: Managing Director
Date: 10-25-06
SCHEDULE A
--------------------------------------------------------------------------------
SEPARATE ACCOUNTS
--------------------------------------------------------------------------------
Each Separate Account established by resolution of the Board of
Directors of Company under the insurance laws of the State of Kansas to
set aside and invest assets attributable to the Contacts. Currently,
those Separate Accounts are as follows:
SBL Variable Annuity Account XIV
SBL Variable Annuity Account XVI
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
DESIGNATED PORTFOLIOS
--------------------------------------------------------------------------------
All Series of the Xxxxxxx Xxxxx Trust (Class A and Service Class only)
--------------------------------------------------------------------------------
SCHEDULE B
In consideration of services provided by Company and SDI, XXXXXXX SACHS
TRUST AND XXXXXXX, XXXXX & CO. agrees to pay (1) to the Company, the Sub-TA Fees
and the Additional Service Fees in respect of Class A shares in an amount equal
to the basis points per annum set forth in the table below on the average
aggregate amount invested by the Company's Separate Account(s) in each
Portfolio's Class A under this Agreement; (2) to the Company, the Additional
Service Fees and the Administrative Fees in respect of Service Class shares in
an amount equal to the basis points per annum set forth in the table below on
the average aggregate amount invested by the Company's Separate Account(s) in
each Portfolio's Service Class under this Agreement; (3) to SDI, the 12b-1 fees
in respect of Class A shares in an amount equal to the basis points per annum
set forth in the table below on the average aggregate amount invested by the
Company's Separate Account(s) in each Portfolio's Class A under this Agreement
and (4) to SDI the Service Fees in respect of Service Class shares in an amount
equal to the basis points per annum set forth in the table below on the average
aggregate amount invested by the Company's Separate Account(s) in each
Portfolio's Service Class under this Agreement. All such payments shall be paid
within 30 days of the end of each calendar quarter. The payment to the Company
shall be calculated by Xxxxxxx, Sachs & Co. and will be accompanied by a
statement showing the calculation of the amounts so paid together with such
other supporting data as may be reasonably requested by the Company.
Notwithstanding the termination of this Agreement, the fees set forth herein
shall continue to be paid so long as net assets of the Separate Accounts remain
in a Portfolio, provided that (1) the services are still being provided by
Company and SDI, as applicable, and (2) in the case of the 12b-1 Fees and in the
case of the Service Fees, the Trust's plans pursuant to which such payments are
made are still in force and effect.
------------------------------------------------ ----------------------------- -------------------------- -------------------------
Portfolio 12b-1 Fees Sub-TA Fees Additional Service Fees
------------------------------------------------ ----------------------------- -------------------------- -------------------------
All Class A Shares - Equity 0.25% 0.15% 0.10%
------------------------------------------------ ----------------------------- -------------------------- -------------------------
All Class A Shares - Fixed Income 0.25% 0.15% 0.05%
------------------------------------------------ ----------------------------- -------------------------- -------------------------
All Class A Shares - Asset Allocation 0.25% 0.15% 0.10%
------------------------------------------------ ----------------------------- -------------------------- -------------------------
All Class A Shares - Specialty 0.25% 0.15% 0.10%
------------------------------------------------ ----------------------------- -------------------------- -------------------------
-------------------------------------------- ----------------------------- ------------------------------- ------------------------
Portfolio Service Fees Additional Service Fees Administrative Fees
-------------------------------------------- ----------------------------- ------------------------------- ------------------------
All Service Class Shares - Equity 0.25% 0.10% 0.25%
-------------------------------------------- ----------------------------- ------------------------------- ------------------------
All Service Class Shares - Fixed Income 0.25% 0.05% 0.25%
-------------------------------------------- ----------------------------- ------------------------------- ------------------------
All Service Class Shares - Asset Allocation 0.25% 0.10% 0.25%
-------------------------------------------- ----------------------------- ------------------------------- ------------------------
All Service Class Shares - Specialty 0.25% 0.10% 0.25%
-------------------------------------------- ----------------------------- ------------------------------- ------------------------
