PARTICIPATION AGREEMENT
AMONG
X. XXXX PRICE EQUITY SERIES, INC.,
X. XXXX PRICE INVESTMENT SERVICES, INC.,
AND
SECURITY BENEFIT LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into as of this 28th day of September,
1999 by and among Security Benefit Life Insurance Company (hereinafter, the
"Company"), a Kansas insurance company, 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 account hereinafter referred to as the
"Account"), and the undersigned funds, each, a corporation organized under the
laws of Maryland (each hereinafter referred to as the "Fund") and X. Xxxx Price
Investment Services, Inc. (hereinafter the "Underwriter"), a Maryland
corporation.
WHEREAS, the Fund engages in business as an open-end management investment
company and is or will be available to act as the investment vehicle for
separate accounts established for variable life insurance and variable annuity
contracts (the "Variable Insurance Products") to be offered by insurance
companies which have entered into participation agreements with the Fund and
Underwriter (hereinafter "Participating Insurance Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into several
series of shares, each designated a "Portfolio" and representing the interest in
a particular managed portfolio of securities and other assets; and
WHEREAS, the Fund has obtained an order from the Securities and Exchange
Commission ("SEC") granting Participating Insurance Companies and variable
annuity and variable life insurance separate accounts exemptions from the
provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company
Act of 1940, as amended, (hereinafter the "1940 Act") and Rules 6e-2(b)(15) and
6e-3(T) (b)(l5) thereunder, to the extent necessary to permit shares of the
Fund to be sold to and held by variable annuity and variable life insurance
separate accounts of both affiliated and unaffiliated life insurance companies
(hereinafter the "Shared Funding Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and shares of the Portfolios are registered under the
Securities Act of 1933, as amended (hereinafter the "1933 Act"); and
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WHEREAS, T Xxxx Price Associates, Inc. and Xxxx Xxxxx-Xxxxxxx
International, Inc. (each hereinafter referred to as the "Adviser") are each
duly registered as an investment adviser under the Investment Advisers Act of
1940, as amended, and any applicable state securities laws; and
WHEREAS, the Company has registered or will register certain variable life
insurance or variable annuity contracts supported wholly or partially by the
Account (the "Contracts") under the 1933 Act, 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, established by resolution of the Board of Directors of the
Company or by the Executive Committee of the Board, 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 has registered or will register the Account as a unit
investment trust under the 1940 Act; and
WHEREAS, the Underwriter is registered as a broker dealer with the SEC
under the Securities Exchange Act of 1934, as amended (hereinafter the "1934
Act"), and is a member in good standing of the National Association of
Securities Dealers, Inc., (hereinafter "NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, 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, and the Underwriter is authorized to sell such shares to
unit investment trusts such as the Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Fund and the Underwriter agree as follows:
ARTICLE I SALE OF FUND SHARES
1.1 The Underwriter agrees to sell to the Company those shares of the
Designated Portfolios which the Account orders, executing such orders on a daily
basis at the net asset value next computed after receipt by the Fund or its
designee of the order for the shares of the Designated Portfolios.
1.2 The Fund agrees to make shares of the Designated Portfolios
available for purchase at the applicable net asset value per share by the
Company and the Account on those days on which the Fund calculates its net asset
value pursuant to rules of the SEC, and the Fund shall use its best efforts to
calculate such net asset value on each day which the New York Stock Exchange is
open for trading. Notwithstanding the foregoing, the Board of Directors of the
Fund (hereinafter the "Board") may refuse to sell shares of any Designated
Portfolio to any person, or suspend or terminate
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the offering of shares of any Designated Portfolio if such action is required by
law or by regulatory authorities having jurisdiction, or is, in the sole
discretion of the Board acting in good faith and in light of their fiduciary
duties under federal and any applicable state laws, necessary in the best
interests of the shareholders of such Designated Portfolio.
1.3 The Fund and the Underwriter agree that shares of the Fund will be
sold only to Participating Insurance Companies and their separate accounts. No
shares of any Designated Portfolios will be sold to the general public. The Fund
and the Underwriter will not sell Fund shares to any insurance company or
separate account unless an agreement containing provisions substantially the
same as Articles I, III and VII of this Agreement is in effect to govern such
sales.
1.4 The Fund agrees to redeem, on the Company's request, any full or
fractional shares of the Designated Portfolios held by the Company, executing
such requests on a daily basis at the net asset value next computed after
receipt by the Fund or its designee of the request for redemption, except that
the Fund reserves the right to suspend the right of redemption or postpone the
date of payment or satisfaction upon redemption consistent with Section 22(e) of
the 1940 Act and any sales thereunder, and in accordance with the procedures and
policies of the Fund as described in the then current prospectus.
1.5 For purposes of Sections 1.1 and 1.4, the Company shall be the
designee of the Fund for receipt of purchase and redemption orders from the
Account, and receipt by such designee shall constitute receipt by the Fund;
provided that the Company receives the order by 4:00 p.m. Baltimore time and the
Fund receives notice of such order by 9:30 a.m. Baltimore time on the next
following Business Day. "Business Day" shall mean any day on which the New York
Stock Exchange is open for trading and on which the Fund calculates its net
asset value pursuant to the rules of the SEC.
1.6 The Company agrees to purchase and redeem the shares of each
Designated Portfolio offered by the then current prospectus of the Fund and in
accordance with the provisions of such prospectus.
1.7 The Company shall pay for Fund shares one Business Day after receipt
of an order to purchase Fund shares is made in accordance with the provisions of
Section 1.5 hereof Payment shall be in federal funds transmitted by wire by 3:00
p.m. Baltimore time. If payment in Federal Funds for any purchase is not
received or is received by the Fund after 3:00 p.m. Baltimore time on such
Business Day, the Company shall promptly, upon the Fund's request, reimburse the
Fund for any charges, costs, fees, interest or other expenses incurred by the
Fund in connection with any advances to, or borrowings or overdrafts by, the
Fund, or any similar expenses incurred by the Fund, as a result of portfolio
transactions effected by the Fund based upon such purchase request. For purposes
of Section 2.8 and 2.9 hereof, upon receipt by the Fund of the federal funds so
wired, such funds shall cease to be the responsibility of the Company and shall
become the responsibility of the Fund.
1.8 Issuance and transfer of the Fund's shares will be by book entry
only Stock certificates will not be issued to the Company or any Account. Shares
ordered from the Fund will be recorded in an appropriate title for each Account
or the appropriate subaccount of each Account.
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1.9 The Fund shall furnish same day notice (by wire or telephone,
followed by written confirmation) to the Company of any income, dividends or
capital gain distributions payable on the Designated Portfolios' shares The
Company hereby elects to receive all such income, dividends, and capital gain
distributions as are payable on Designated Portfolio shares in additional shares
of that Portfolio The Company reserves the right to revoke this election and to
receive all such income dividends and capital gain distributions in cash, The
Fund shall notify the Company of the number of shares so issued as payment of
such dividends and distributions.
1.10 The Fund shall make the net asset value per share for each
Designated Portfolio available to the Company on a daily basis as soon as
reasonably practical after the net asset value per share is calculated (normally
by 6:30 p.m. Baltimore time) and shall use its best efforts to make such net
asset value per share available by 7 p.m. Baltimore time If the net asset value
is materially incorrect through no fault of the Company, the Company on behalf
of each Account, shall be entitled to an adjustment to the number of shares
purchased or redeemed to reflect the correct net asset value in accordance with
Fund procedures Any material error in the net asset value shall be reported to
the Company promptly upon discovery Any administrative or other costs or losses
incurred for correcting underlying Contract owner accounts shall be at Company's
expense.
1.11 The Parties hereto acknowledge that the arrangement contemplated by
this Agreement is not exclusive; the Fund's shares may be sold to other
insurance companies (subject to Section 1.3 and Article VI hereof) and the cash
value of the Contracts may be invested in other investment companies.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1 The Company represents and warrants that the Contracts are or will
be registered under the 1933 Act; that the Contracts will be issued and sold in
compliance in all material respects with all applicable federal and state 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 and that it has legally and validly established the Account
prior to any issuance or sale thereof as a segregated asset account under the
Kansas insurance laws and 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.
2.2 The Fund represents and warrants that Fund shares sold pursuant to
this Agreement shall be registered under the 1933 Act, duly authorized for
issuance and sold in compliance with the laws of the state of Kansas and all
applicable federal and state securities laws and that the Fund is and shall
remain registered under the 0000 Xxx. The Fund shall amend the Registration
Statement for its shares under the 1933 Act and the 1940 Act from time to time
as required in order to effect the continuous offering of its shares The Fund
shall register and qualify the shares for sale in accordance with the laws of
the various states only if and to the extent deemed advisable by the Fund or the
Underwriter.
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2.3 The Fund currently does not intend to make any payments to finance
distribution expenses pursuant to Rule 12b-l under the 1940 Act, although it may
make such payments in the future To the extent that it decides to finance
distribution expenses pursuant to Rule 12b-1, the Fund will undertake to have
the Board, a majority of whom are not interested persons of the Fund, formulate
and approve any plan pursuant to Rule 12b-1 under the 1940 Act to finance
distribution expenses.
2.4 The Fund makes no representations as to whether any aspect of its
operations, including but not limited to, investment policies, fees and
expenses, complies with the insurance and other applicable laws of the various
states, except that the Fund represents that the Fund's investment policies,
fees and expenses are and shall at all times remain in compliance with the laws
of the state of Kansas to the extent required to perform this Agreement.
2.5 The Fund represents that it is lawfully organized and validly
existing under the laws of the State of Maryland and that it does and will
comply in all material respects with the 1940 Act.
2.6 The Underwriter represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the SEC The
Underwriter further represents that it will sell and distribute the Fund shares
in accordance with the laws of the State of Kansas and any applicable state and
federal securities laws.
2.7 The Underwriter represents and warrants that the Adviser is and
shall remain duly registered under all applicable federal and state securities
laws and that the Adviser shall perform its obligations for the Fund in
compliance in all material respects with the laws of the State of Kansas and any
applicable state and federal securities laws.
2.8 The Fund and the Underwriter represent and warrant that all of their
directors, officers, employees, investment advisers, and other individuals or
entities dealing with the money and/or securities of the Fund are and shall
continue to be at all times covered by a blanket fidelity bond or similar
coverage for the benefit of the Fund in an amount not less than the minimum
coverage as required currently by Rule 17g-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.
2.9 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 Fund are covered by
a blanket fidelity bond or similar coverage in an amount not less than S5
million. The aforesaid bond includes coverage for larceny and embezzlement and
is issued by a reputable bonding company The Company agrees that any amounts
received under such bond in connection with claims that arise from the
arrangements described in this Agreement will be held by the Company for the
benefit of the Fund The Company agrees to make all reasonable efforts to see
that this bond or another bond containing these provisions is always in effect,
and agrees to notify the Fund and the Underwriter in the event that such
coverage no longer applies The Company agrees to exercise its best efforts to
ensure that other individuals/entities not employed or
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Controlled by the Company and dealing with the money and/or securities of the
Fund maintain a similar bond or coverage in a reasonable amount.
ARTICLE III. PROSPECTUSES, STATEMENTS OF ADDITIONAL INFORMATION, AND PROXY
STATEMENTS; VOTING
3.1 The Fund shall provide such documentation (including a final copy of
the current prospectus as set in type at the Fund's expense) and other
assistance as is reasonable necessary in order for the Company once each year
(or more frequently if the prospectus for the Fund is amended) to have the
prospectus for the Contracts and the Fund's prospectus printed together in one
document With respect to any prospectuses of the Designated Portfolios that are
printed in combination with any one or more Contract or portfolio prospectus
(the "Booklet"), the costs of printing Booklets for distribution to existing
Contract owners shall be prorated to and reimbursed by the Underwriter based on
(a) the ratio of the number of pages of the prospectuses for the Designated
Portfolios included in the Booklet to the number of pages in the Booklet as a
whole; and (b) the ratio of the number of Contract owners with Contract value
allocated to the Designated Portfolios to the total number of Contract owners;
PROVIDED, however, that the Company shall bear all printing expenses of such
combined documents where used for distribution to prospective purchasers or to
owners of existing Contracts not funded by the Designated Portfolios; and
PROVIDED FURTHER, that the Underwriter's reimbursement obligation for printing
expenses under this Section shall not exceed $5,000 per year. The Company shall
furnish a statement annually with its request for reimbursement showing how the
printing expenses were prorated and the number of Contract owners with Contract
value allocated to the Designated Portfolios.
3.2 The Fund's prospectus shall state that the current Statement of
Additional Information ("SAI") for the Fund is available from the Company (or,
in the Fund's discretion, from the Fund), and the Underwriter (or the Fund), at
its expense, shall print, or otherwise reproduce, and provide sufficient copies
of such SAI free of charge to the Company for itself, and for any owner of a
Contract who requests such SAI The Company shall send an SAI to any such
Contract owner within 3 business days of the receipt of a request.
3.3 The Fund, at its expense, shall provide the Company with copies of
its proxy material, reports to shareholders, and other communications to
shareholders in such quantity as the Company shall reasonably require for
distributing to Contract owners in the Fund. If requested by the Company in lieu
thereof, the Fund shall provide such documentation (which may include a final
copy of the Fund's annual and semi-annual reports as set in type or on diskette)
and other assistance as is reasonably necessary in order for the Company (at the
Company's expense) to print such shareholder communications for distribution to
Contract owners The Company shall send a copy of the Fund's annual or
semi-annual report within 3 business days of the receipt of a request by a
Contract owner .
3.4 The Company shall:
(i) solicit voting instructions from Contract owners;
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(ii) vote the Fund shares in accordance with instructions received
from Contract owners; and
(iii) vote Fund shares for which no instructions have been received
in the same proportion as Fund shares of such Designated
Portfolio for which instructions have been received,
so long as and to the extent that the SEC continues to interpret the 1940 Act to
require pass-through voting privileges for variable contract owners or to the
extent otherwise required by law The Company reserves the right to vote Fund
shares held in any segregated asset account in its own right, to the extent
permitted by law,
3.5 Participating Insurance Companies shall be responsible for assuring
that each of their separate accounts participating in a Designated Portfolio
calculates voting privileges as required by the Shared Funding Exemptive Order
and consistent with any reasonable standards that the Fund may adopt
3.6 The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders, and in particular the Fund will either provide for
annual meetings or comply with Section 16(c) of the 1940 Act (although the Fund
is not one of the trusts described in Section 16(c) of that Act) as well as with
Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in
accordance with the SEC's interpretation of the requirements of Section 16(a)
with respect to periodic elections of directors or trustees and with whatever
rules the SEC may promulgate with respect thereto.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1 The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee, each piece of sales literature or other promotional
material that the Company develops or uses and in which the Fund (or a Portfolio
thereof) or the Adviser or the Underwriter is named, at least ten calendar days
prior to its use No such material shall be used if the Fund or its designee
reasonably object to such use within ten calendar days after receipt of such
material. The Fund or its designee reserves the right to reasonably object to
the continued use of such material, and no such material shall be used if the
Fund or its designee so object
4.2 The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund in
connection with the sale of the Contracts other than the information or
representations contained in the registration statement or prospectus or SAI for
the Fund shares, as such registration statement and prospectus or SAI may be
amended or supplemented from time to time, or in reports or proxy statements for
the Fund, or in sales literature or other promotional material approved by the
Fund or its designee or by the Underwriter, except with the permission of the
Fund or the Underwriter or the designee of either.
4.3 The Fund, Underwriter, or its designee shall furnish, or shall cause
to be furnished, to the Company, each piece of sales literature or other
promotional material in which the Company
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and/or its Account, is named at least ten calendar days prior to its use No such
material shall be used if the Company reasonably objects to such use within ten
calendar days after receipt of such material The Company reserves the right to
reasonably object to the continued use of such material and no such material
shall be used if the Company so objects.
4.4. The Fund and the Underwriter 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, 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 or its
designee, except with the permission of the Company.
4.5 The Fund will provide to the Company at least one complete copy of
all registration statements, prospectuses, SAIs, 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 Fund or its shares, within a reasonable time after the filing of
such document(s) with the SEC or other regulatory authorities.
4.6 The Company will provide to the Fund at least one complete copy of
all registration statements, prospectuses, 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, within a
reasonable time after the filing of such document(s) with the SEC or other
regulatory authorities.
4.7 For purposes of this Article IV, the phrase "sales literature and
other promotional materials" includes, but is not limited to, any of the
following that refer to the Fund or any affiliate of the Fund: 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, or other public media), sales
literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, reports,
market letters, form letters, seminar texts, reprints or excerpts of any other
advertisement, sales literature, or published article), educational or training
materials or other communications distributed or made generally available to
some or all agents or employees, and registration statements, prospectuses,
SAIs, shareholder reports, proxy materials, and any other communications
distributed or made generally available with regard to the Funds, the Company,
the Contracts or the Account .
ARTICLE V. FEES AND EXPENSES
5.1 The Fund and the Underwriter shall pay no fee or other compensation
to the Company under this Agreement, except that if the Fund or any Portfolio
adopts and implements a plan pursuant to Rule 12b-l to finance distribution
expenses, then the Underwriter may make payments to the Company or to the
underwriter for the Contracts if and in amounts agreed to by the
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Underwriter in writing, and such payments will be made out of existing fees
otherwise payable to the Underwriter, past profits of the Underwriter, or other
resources available to the Underwriter No such payments shall be made directly
by the Fund. Currently, no such payments are contemplated.
5.2 All expenses incident to performance by the Fund under this
Agreement shall be paid by the Fund, except as otherwise provided herein. The
Fund shall see to it that all its shares are registered and authorized for
issuance in accordance with applicable federal law and, if and to the extent
deemed advisable by the Fund, in accordance with applicable state laws prior to
their sale The Fund shall bear the expenses for the cost of registration and
qualification of the Fund's shares, preparation and filing of the Fund's
prospectus and registration statement, proxy materials and reports, setting the
prospectus in type, setting in type and printing the proxy materials and reports
to shareholders (including the costs of printing a prospectus that constitutes
an annual report), the preparation of all statements and notices required by any
federal or state law, and all taxes on the issuance or transfer of the Fund's
shares
5.3 The Fund (or the Underwriter) shall bear the expenses of printing
the Fund's prospectus for existing owners of the Contracts issued by the Company
as provided in Section 3.1 The Company shall bear the expenses of distributing
the Fund's prospectus, proxy materials, and reports to Contract owners and
prospective Contract owners.
ARTICLE VI. DIVERSIFICATION AND QUALIFICATION
6.1 The Fund will invest the assets of each Designated Portfolio in such
a manner as to ensure that the Contracts will be treated as annuity, endowment,
or life insurance contracts, whichever is appropriate, under the Internal
Revenue Code of 1986, as amended (the "Code") and the regulations issued
thereunder (or any successor provisions). Without limiting the scope of the
foregoing, each Designated Portfolio of the Fund has complied and will continue
to comply with Section 817(h) of the Code and Treasury Regulation ss.1 817-5,
and any Treasury interpretations thereof, relating to the diversification
requirements for variable annuity, endowment, or life insurance contracts, and
any amendments or other modifications or successor provisions to such Section or
Regulations, In the event of a breach of this Article VI by the Fund, it will
take all reasonable steps (a) to notify the Company of such breach as promptly
as possible and (b) to adequately diversify the Fund so as to achieve compliance
within the grace period afforded by Regulation 817 5
6.2 The Fund represents that each Designated Portfolio is or will be
qualified as a Regulated Investment Company under Subchapter M of the Code, and
that it will make every effort to 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
6.3 The Company represents that the Contracts are currently, and at the
time of issuance shall be, treated as life insurance, endowment contracts, or
annuity insurance contracts, under applicable provisions of the Code, and that
it will make every effort to maintain such treatment, and that it will notify
the Fund and the Underwriter immediately upon having a reasonable basis for
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believing the Contracts have ceased to be so treated or that they might not be
so treated in the future The Company agrees that any prospectus offering a
contract that is a "modified endowment contract" as that term is defined in
Section 7702A of the Code (or any successor or similar provision), shall
identify such contract as a modified endowment contract.
ARTICLE VII. POTENTIAL CONFLICTS
7.1 The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Fund, An irreconcilable material conflict may
arise for a variety of reasons, including: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretative letter, or any similar action by insurance,
tax, or securities regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the investments of
any Portfolio are being managed; (e) a difference in voting instructions given
by variable annuity contract and variable life insurance contract owners; or (f)
a decision by an insurer to disregard the voting instructions of contract owners
The Board shall promptly inform the Company if it determines that an
irreconcilable material conflict exists and the implications thereof.
7.2 The Company will report any potential or existing conflicts of which
it is aware to the Board The Company will assist the Board in carrying out its
responsibilities under the Shared Funding Exemptive Order; by providing the
Board with all information reasonably necessary for the Board to consider any
issues raised. This includes, but is not limited to, an obligation by the
Company to inform the Board whenever Contract owner voting instructions are
disregarded.
7.3 If it is determined by a majority of the Board, or a majority of its
disinterested members, that a material irreconcilable conflict exists, the
Company and other Participating Insurance Companies shall, at their expense and
to the extent reasonably practicable (as determined by a majority of the
disinterested Board members), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including: (1),
withdrawing the assets allocable to some or all of the separate accounts from
the Fund or any Portfolio and reinvesting such assets in a different investment
medium, including (but not limited to) another Portfolio of the Fund, or
submitting the question whether such segregation should be implemented to a vote
of all affected contract owners and, as appropriate, segregating the assets of
any appropriate group (i.e., annuity contract owners, life insurance contract
owners, or variable contract owners of one or xxxx Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
contract owners the option of making such a change; and (2), establishing a new
registered management investment company or managed separate account.
7.4 If a material irreconcilable conflict arises because of a decision
by the Company to disregard contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Fund's election, to withdraw the affected Account's
investment in the Fund and terminate this Agreement with respect to such Account
provided, however, that such withdrawal and termination shall be limited to the
extent required by the foregoing material irreconcilable conflict as determined
by a majority of the
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disinterested members of the Board Any such withdrawal and termination must take
place within six (6) months after the Fund gives written notice that this
provision is being implemented, and until the end of that six month period the
Fund shall continue to accept and implement orders by the Company for the
purchase (and redemption) of shares of the Fund.
7.5 If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
affected Account's investment in the Fund and terminate this Agreement with
respect to such Account within six months after the Board informs the Company in
writing that it has determined that such decision has created an irreconcilable
material conflict; provided, however, that such withdrawal and termination shall
be limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested members of the Board
Until the end of the foregoing six month period, the Fund shall continue to
accept and implement orders by the company for the purchase (and redemption) of
shares of the Fund.
7.6 For purposes of Section 7.3 through 7.6 of this Agreement, a
majority of the disinterested members of the Board shall determine whether any
proposed action adequately remedies any irreconcilable material conflict, but in
no event will the Fund be required to establish a new funding medium for the
Contracts The Company shall not be required by Section 7.3 to establish a new
funding medium for the Contract if an offer to do so has been declined by vote
of a majority of Contract owners materially adversely affected by the
irreconcilable material conflict In the event that the Board determines that any
proposed action does not adequately remedy any irreconcilable material conflict,
then the Company will withdraw the Account's investment in the Fund and
terminate this Agreement within six (6) months after the Board informs the
Company in writing of the foregoing determination; provided, however, that such
withdrawal and termination shall be limited to the extent required by any such
material irreconcilable conflict as determined by a majority of the
disinterested members of the Board.
7.7 If and to the extent Rule 6e-2 and Rule 6e-3(T) are amended, or Rule
6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act
or the rules promulgated thereunder with respect to mixed or shared funding (as
defined in the Shared Funding Exemptive Order) on terms and conditions
materially different from those contained in the Shared Funding Exemptive Order,
then (a) the Fund and/or the Participating Insurance Companies, as appropriate,
shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T),
as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable;
and (b) Sections 3.4, 3.5, 3.6, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement
shall continue in effect only to the extent that terms and conditions
substantially identical to such Sections are contained in such Rule(s) as so
amended or adopted.
ARTICLE VIII. INDEMNIFICATION
8.1 INDEMNIFICATION BY THE COMPANY
8.l(a) The Company agrees to indemnify and hold harmless the Fund
and the Underwriter and each of their officers and directors
and each person, if any, who controls the Fund
12
or the Underwriter within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.1)
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 other-wise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
or settlements are related to the sale or acquisition of the Fund's shares or
the Contracts and:
(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in
the Registration Statement, prospectus, or statement of
additional information ("SAI") for the Contracts or contained
in the Contracts or sales literature or other promotional
material for the Contracts (or any amendment or supplement to
any of the foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged statement
or omission was made in reliance upon and in conformity with
information furnished to the Company by or on behalf of the
Fund for use in the Registration Statement, prospectus or SAI
for the Contracts or in the Contracts or sales literature or
other promotional material (or any amendment or supplement)
or otherwise for use in connection with the sale of the
Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
Registration Statement, prospectus or sales literature or
other promotional material of the Fund not supplied by the
Company or persons under its control) or wrongful conduct of
the Company or persons under its authorization or control,
with respect to the sale or distribution of the Contracts or
Fund Shares; or
(iii) arise out of any untrue statement or alleged untrue statement
of a material fact contained in a Registration Statement,
prospectus, SAI, or sales literature or other promotional
material of the Fund or any amendment thereof or supplement
thereto or the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to
make the statements therein not misleading if such a
statement or omission was made in reliance upon information
furnished to the Fund by or on behalf of the Company; or
(iv) arise as a result of any material failure by the Company to
provide the services and furnish the materials under the
terms of this Agreement (including a failure whether
unintentional or in good faith or otherwise, to comply with
the qualification requirements specified in Article VI of
this Agreement); or
13
(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 8.1(b) and
8.l(c) hereof
8.1(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 or
to the Fund, whichever is applicable.
8.l(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 satisfactory to the party
named in the action and to settle the claim at its own expense; provided,
however, that no such settlement shall, without the Indemnified Parties' written
consent, include any factual stipulation referring to the Indemnified Parties or
their conduct 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.
8.l(d). The Indemnified Parties will promptly notify the Company of
the commencement of any litigation or proceedings against them in connection
with the issuance or sale of the fund Shares or the Contracts or the operation
of the Fund.
8.2 INDEMNIFICATION BY THE UNDERWRITER
8.2(a). The Underwriter agrees to indemnify and hold harmless the
Company and each of it 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 8 2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Underwriter) 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
14
in respect thereof) or settlements are related to the sale or acquisition of the
Fund's shares or the Contracts; and
(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 or other promotional material of the Fund (or any
amendment or supplement to any of the foregoing), or arise
out of or are based upon the omission or the alleged omission
to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, provided that this agreement to indemnify shall
not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in
reliance upon and in conformity with information furnished to
the Underwriter or Fund by or on behalf of the Company for
use in the Registration Statement or prospectus for the Fund
or in sales literature or other promotional material (or any
amendment or supplement) or otherwise for use in connection
with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations contained in the
Registration Statement, prospectus or sales literature or
other promotional material for the Contracts not supplied by
the Underwriter or persons under its control) or wrongful
conduct of the Fund or Underwriter or persons under their
control, with respect to the sale or distribution of the
Contracts or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue statement
of a material fact contained in a Registration Statement,
prospectus, SAI, or sales literature or other promotional
material of the Contracts, or any amendment thereof or
supplement thereto, or the omission or alleged omission to
state therein a material fact required to be stated therein
or necessary to make the statement or statements therein not
misleading, if such statement or omission was made in
reliance upon information furnished to the Company by or on
behalf of the Underwriter or the Fund; or
(iv) arise as a result of any material failure by the Underwriter
or the Fund to provide the services and furnish the materials
under the terms of this Agreement (including a failure,
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
15
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Underwriter in
this Agreement or arise out of or result from any other
material breach of this Agreement by the Underwriter;
as limited by and in accordance with the provisions of Sections 8 2(b) and 8
2(c) hereof
8.2(b). The Underwriter 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.
8.2(c). The Underwriter 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 Underwriter 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 Underwriter of
any such claim shall not relieve the Underwriter 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 Underwriter will be entitled to participate,
at its own expense, in the defense thereof. The Underwriter also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action and to settle the claim at its own expense; provided,
however, that no such settlement shall, without the Indemnified Parties' written
consent, include any factual stipulation referring to the Indemnified Parties or
their conduct After notice from the Underwriter to such party of the
Underwriter'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 Underwriter 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.
8.2(d). The Company agrees promptly to notify the Underwriter 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.
8.3 INDEMNIFICATION BY THE FUND
8.3(a). The Fund 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 8 3) against any and all
losses, claims, expenses, damages, liabilities (including amounts paid in
settlement with the written consent of the Fund) or litigation (including legal
and other expenses) to which the Indemnified Parties may be required to pay or
may become subject under any statute
16
or regulation, at common law or otherwise, insofar as such losses, claims,
expenses, damages, liabilities or expenses (or actions in respect thereof) or
settlements, are related to the operations of the fund and:
(i) arise as a result of any material failure by the fund to
provide the services and furnish the materials under the
terms of this Agreement (including a failure, 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
(ii) arise out of or result from any material breach of any
representation and/or warranty made by the Fund in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Fund;
as limited by and in accordance with the provisions of Sections 8,3(b) and
8.3(c) hereof,
8.3(b). The fund 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 obligations and duties under this Agreement or to
the Company, the Fund, the Underwriter or the Account, whichever is applicable.
8.3(c). The Fund 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 Fund 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 Fund of any
such claim shall not relieve the Fund 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 Parties, the Fund will be entitled to participate, at
its own expense, in the defense thereof. The Fund also shall be entitled to
assume the expense thereof, with counsel satisfactory to the party named in the
action and to settle the claim at its own expense; provided, however, that no
such settlement shall, without the Indemnified Parties' written consent, include
any factual stipulation referring to the Indemnified Parties or their conduct.
After notice from the Fund to such party of the Fund'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 Fund 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
8.3(d). The Company and the Underwriter agree promptly to notify the
Fund of the commencement of any litigation or proceeding against it or any of
its respective officers or directors
17
in connection with the Agreement, the issuance or sale of the Contracts, the
operation of the Account, or the sale or acquisition of shares of the Fund
ARTICLE IX. APPLICABLE LAW
9.1 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Maryland.
9.2 This Agreement shall be subject to the provisions of the 1933, 1934
and 1940 Acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the SEC may grant
(including, but not limited to, any Shared Funding Exemptive Order) and the
terms hereof shall be interpreted and construed in accordance therewith
ARTICLE X. TERMINATION
10.1 This Agreement shall continue in full force and effect until the
first to occur of:
(a) termination by any party, for any reason with respect to some
or all Designated Portfolios, by six (6) months' advance
written notice delivered to the other parties; or
(b) termination by the Company by written notice to the Fund and
the Underwriter with respect to any Designated Portfolio
based upon the Company's determination that shares of the
Fund are not reasonably available to meet the requirements of
the Contracts; provided that such termination shall apply
only to the Designated Portfolio not reasonably available; or
(c) termination by the Company by written notice to the Fund and
the Underwriter in the event any of the Designated
Portfolio's shares are not registered, issued or sold in
accordance with applicable state and/or federal law or such
law precludes the use of such shares as the underlying
investment media of the Contracts issued or to be issued by
the Company; or
(d) termination by the Fund or Underwriter in the event that
formal administrative proceedings are instituted against the
Company by 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 Fund shares; provided,
however, that the Fund or Underwriter determines in its sole
judgment exercised in good faith, that any such
administrative proceedings will have a material adverse
effect upon the ability of the Company to perform its
obligations under this Agreement; or
(e) termination by the Company in the event that formal
administrative proceedings are instituted against the Fund or
Underwriter by the NASD, the
18
SEC, or any state securities or insurance department or any
other regulatory body; provided, however, that the Company
determines in its sole judgment exercised in good faith, that
any such administrative proceedings will have a material
adverse effect upon the ability of the Fund or Underwriter to
perform its obligations under this Agreement; or
(f) termination by the Company by written notice to the Fund and
the Underwriter in the event that any Designated Portfolio
ceases to qualify as a Regulated Investment Company under
Subchapter M or fails to comply with the Section 817(h)
diversification requirements specified in Article VI hereof,
or if the Company reasonably believes that any Designated
Portfolio may fail to so qualify or comply; or
(g) termination by the Fund or Underwriter by written notice to
the Company in the event that the Contracts fail to meet the
qualifications specified in Section 6.3 hereof; or if the
Fund or Underwriter reasonably believes that such Contracts
may fail to so qualify; or
(h) termination by either the Fund or the Underwriter by written
notice to the Company, if either one or both of the Fund or
the Underwriter respectively, shall determine, in their sole
judgment exercised in good faith, that the Company has
suffered a material adverse change in its business,
operations, financial condition, or prospects since the date
of this Agreement or is the subject of material adverse
publicity; or
(i) termination by the Company by written notice to the Fund and
the Underwriter, if the Company shall determine, in its sole
judgment exercised in good faith, that the Fund or the
Underwriter 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
10.2 EFFECT OF TERMINATION. Notwithstanding any termination of this
Agreement, the Fund and the Underwriter shall, at the option of the Company,
continue to make available additional shares of the Fund pursuant to the terms
and conditions of this Agreement, for all Contracts in effect on the effective
date of termination of this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, the owners of the Existing Contracts may be permitted
to reallocate investments in the Fund, redeem investments in the Fund and/or
invest in the Fund upon the making of additional purchase payments under the
Existing Contracts The parties agree that this Section 10.2 shall not apply to
any termination under Article VII and the effect of such Article VII termination
shall be governed by Article VII of this Agreement The parties further agree
that this Section 10 2 shall not apply to any termination under Section 10.1(g)
of this Agreement.
10.3 The Company shall not redeem Fund shares attributable to the
Contracts (as opposed to Fund shares attributable to the Company's assets held
in the Account) except (i) as necessary to implement Contract owner initiated or
approved transactions, (ii) as required by state and/or federal
19
laws or regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption"), or (iii) pursuant
to the terms of a substitution order issued by the SEC pursuant to Section 26(b)
of the 1940 Act. Upon request, the Company will promptly furnish to the Fund and
the Underwriter the opinion of counsel for the Company (which counsel shall be
reasonably satisfactory to the Fund and the Underwriter) to the effect that any
redemption pursuant to clause (ii) above is a Legally Required Redemption.
Furthermore, except in cases where permitted under the terms of the Contracts,
the Company shall not prevent Contract owners from allocating payments to a
Portfolio that was otherwise available under the Contracts without first giving
the Fund or the Underwriter 90 days notice of its intention to do so.
10.4 Notwithstanding any termination of this Agreement, each party's
obligation under Article VIII to indemnify the other parties shall survive.
ARTICLE XI. 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 Fund:
X. Xxxx Price Associates, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
If to the Company:
Security Benefit Life Insurance Company
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
If to Underwriter:
X. Xxxx Price Investment Services
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
20
ARTICLE XII. MISCELLANEOUS
12.1 All references herein to the Fund are to each of the undersigned
Funds as if this agreement were between such individual Fund and the Underwriter
and the Company All references herein to the Adviser relate solely to the
Adviser of such individual Fund, as appropriate. All persons dealing with a Fund
must look solely to the property of such Fund, and in the case of a series
company, the respective Designated Portfolio listed on Schedule A hereto as
though such Designated Portfolio had separately contracted with the Company and
the Underwriter for the enforcement of any claims against the Fund The parties
agree that neither the Board, officers, agents or shareholders assume any
personal liability or responsibility for obligations entered into by or on
behalf of the Fund.
12.2 Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and addresses
of the owners of the Contracts and 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 names and
addresses and other confidential information without the express written consent
of the affected party until such time as such information may come into the
public domain.
12.3 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.
12.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.5 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.
12.6 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 annuity
operations of the Company are being conducted in a manner consistent with Kansas
variable annuity laws and regulations and any other applicable law or
regulations.
12.7 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.
12.8 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.
21
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 and its seal to be hereunder affixed hereto as of the date
specified below.
COMPANY: SECURITY BENEFIT LIFE INSURANCE COMPANY
By its authorized officer
By:
---------------------------------------
Title: Vice President
---------------------------------------
Date: September 30, 1999
---------------------------------------
FUND: X. XXXX PRICE EQUITY SERIES, INC.
By its authorized officer
By:
---------------------------------------
Title: Vice President
---------------------------------------
Date: September 28, 1999
---------------------------------------
UNDERWRITER: X. XXXX PRICE INVESTMENT SERVICES, INC.
By its authorized officer
By:
---------------------------------------
Title: Vice President
---------------------------------------
Date: September 28, 1999
---------------------------------------
SCHEDULE A
Name of Separate Account and Contracts Funded by
Date Established by Board of Directors Separate Account Designated Portfolios
--------------------------------------------------------------------------------------------------------
Variable Annuity Account XI Scarborough Advantage X. XXXX PRICE EQUITY SERIES, INC.
Established October 26, 1998 Variable Annuity o X. Xxxx Price Mid-Cap Growth
GV6059 (6-99) Portfolio
VARIABLE INSURANCE FUNDS
NSCC SERVICES AMENDMENT
TO THE
PARTICIPATION AGREEMENT
AMONG
X. XXXX PRICE INVESTMENT SERVICES, INC.,
AND
SECURITY BENEFIT LIFE INSURANCE COMPANY
[For use with Mutual Fund/Insurance Services Members]
This Amendment (the "NSCC SERVICES AMENDMENT") is effective as of the 27th
day of April, 2004, between SECURITY BENEFIT LIFE INSURANCE COMPANY (the
"COMPANY") and T XXXX PRICE INVESTMENT SERVICES, INC. (the "UNDERWRITER").
WHEREAS, the Company, the Underwriter and the I Xxxx Price Equity Series,
Inc, T Xxxx Price Fixed Income Series, Inc. and X. Xxxx Price International
Series, Inc. (each, a "FUND" or collectively, the "FUNDS") are parties to that
certain Participation Agreement dated September 28, 1999 (the "AGREEMENT"); and
WHEREAS, the Company and the Underwriter have each entered into a
membership agreement with National Securities Clearing Corporation ("NSCC"),
which has developed a FUND/SERV system through which mutual fund purchase and
redemption orders and unit investment trust transactions can be processed and
settled ("NSCC SERVICES"); and
WHEREAS, the Company, on behalf of each Account, would like to utilize
NSCC Services to transmit orders for the purchase, redemption and transfer of
shares of the Funds (the "SHARES"); and
WHEREAS, the Company's orders relating to the purchase, redemption and
transfer of Shares on behalf of the Accounts will be placed through NSCC
Services and will be sent directly into the Funds' mainframe recordkeeping
system at DSI ("DST SYSTEM"); and
WHEREAS, the parties desire to amend certain provisions of the Agreement
related to the purchase, redemption and transfer of Shares through NSCC
Services;
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter contained, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows.
1
ARTICLE 1 ACCOUNT REGISTRATION/RECONCILIATION
SECTION 1.1 In connection with transactions effected under this
NSCC Services Amendment, the Company shall maintain a record of the Accounts
and/or Accounts' addresses, the Company's or Accounts' Tax I D.s and the number
of Shares held by each Account.
SECTION 1.2 The Company shall provide the Underwriter with all
information and documentation necessary or appropriate to establish and maintain
each NSCC Services transaction (and any subsequent changes to such information).
The Company hereby certifies, to the best of its knowledge, that all such
information and documentation is and shall remain true and correct. The Company
shall maintain adequate information and documentation required by the
Underwriter to effect NSCC Services transactions.
SECTION 1.3 The Company represents that the instructions maintained
by the Company relating to Account registrations with NSCC (including, without
limitation, the Accounts' Tax I.D.s) and the selection of options and privileges
received in connection with such registration are in accordance with
instructions from the Accounts and/or from holders of Contracts
("CONTRACTHOLDERS").
SECTION 1.4 The Company acknowledges that the shares of the Funds
will be sold only to Participating Insurance Companies and their Accounts as
specified in the Participation Agreement
SECTION 1.5 Upon receipt of a confirmation or other notice from
NSCC of a possible discrepancy regarding a NSCC order or transaction, it is the
duty and responsibility of the Company to reconcile any differences between the
Company's records and the Funds' records Upon reconciliation, the party causing
the discrepancy (including any discrepancy caused by its agents) shall be
responsible and liable for any loss incurred as a result of the discrepancy.
Notwithstanding anything in this NSCC Services Amendment to the contrary, the
Company must notify the Underwriter within five business days after receipt of a
confirmation or other notice from NSCC of any possible discrepancy.
ARTICLE 2 PURCHASE, REDEMPTION AND TRANSFER OF SHARES
SECTION 2.1 In the event that NSCC Services or the DST system fails
or is unavailable for any reason, the Underwriter shall accept, effect and
record Contract transactions outside of NSCC Services in a manner consistent
with Article I of the Agreement.
SECTION 2.2 The Company shall be solely responsible for the
accuracy of each order placed by the Company or its agents and authorized by the
Account/Contractholder for the purchase, redemption or transfer of Shares
through NSCC Services ("NSCC SERVICES INSTRUCTIONS") and the issuance of any
NSCC Services Instruction will constitute the Company's representation and
warranty to the Underwriter and the Funds that the NSCC Services Instruction is
accurate, complete and issued as duly authorized by the Account/Contractholder
whose Shares are the subject of the NSCC Services Instructions The Company shall
adopt, implement and maintain procedures reasonably designed to ensure the
accuracy of all transmissions and to limit
2
the access to persons specifically authorized by the Company.
SECTION 2.3 NSCC Services Instructions will be transmitted by the
Company to NSCC in a timely manner sufficient for NSCC to forward the
instructions to the Underwriter by 6:00 a m Baltimore time ("CUT-OFF") on the
next Business Day after the Company receives such instructions from the
Account/Contractholders, provided such instructions are received by the Company
in good order prior to the closing of the New York Stock Exchange ("CLOSE OF
TRADING") (normally 4:00 p.m. Baltimore time), NSCC Services Instructions
received in proper form by the Underwriter after the Cut-Off on any Business Day
shall be treated as if received on the next following Business Day The Company
warrants that all NSCC Services Instructions the Company transmits to NSCC for
processing were received by the Company from Account/Contractholder by Close of
Trading. The Company shall transmit payment for purchase NSCC Services
Instructions to NSCC the next Business Day after receipt of NSCC Services
Instructions to purchase Shares is made in accordance with the provisions of
Section 2.3 hereof If Underwriter has not received payment by such date, the
purchase NSCC Services Instruction may be canceled and the Company shall be
responsible for any losses incurred by the Fund as a result of such
cancellation.
SECTION 2.4 Daily net asset value per share information will be
transmitted by the Funds on a best efforts basis to NSCC in a timely manner
sufficient for NSCC to forward such information to the Company by 7 p.m.
Baltimore time.
SECTION 2.5 The Underwriter and the Funds reserve the right, in
their sole discretion, to reject or cancel:
(a) any NSCC Services Instruction for the purchase of Shares,
including NSCC Services Instructions that have been confirmed through NSCC
Services consistent with the terms of the Agreement;
(b) any NSCC Services Instruction received: (a) in connection with
an Account if such account's registration is pending with NSCC; and (b) in
connection with an Account prior to receipt of such account's registration
information; and
(c) any NSCC Services transaction that is not executed for the
Company, or its Accounts, and the Company shall be responsible for any losses
incurred by the Underwriter and/or the Funds as a result of such cancellation.
Confirmation via NSCC Services that a NSCC Services Instruction has
been received does not constitute acceptance by the Underwriter or the Funds.
Any rejection or cancellation made by the Underwriter or the Funds will be done
pursuant to current NSCC rules and procedures and in accordance with the terms
of the Funds' current prospectus Transfers are limited to transfers among
identically registered accounts in the Funds. Fund shares purchased may not be
redeemed until the next Business Day after the Fund receives payment.
SECTION 2.6 In the event the Company seeks to correct or cancel a
previously placed NSCC Services Instruction after the Cut-Off (other than to
correct discrepancies in accordance with Section 1.5 herein), such cancellation
or correction must be approved by the
3
Underwriter and will be processed outside of NSCC Services The Underwriter shall
have complete and sole discretion as to whether or not to allow the cancellation
or correction to be made The Company agrees to promptly pay each Fund the amount
of any loss incurred by the Fund as a result of such cancellation or correction.
SECTION 2.7 The Company agrees to monitor its Contractholders'
accounts for market timing and excessive trading activity (as defined in the
Funds' prospectus) and agrees to work with the Underwriter to deter or block any
such activity.
SECTION 2.8 In the event there are net purchases on any Business
Day for any Fund, the Company will settle the net purchase in accordance with
current NSCC rules and procedures on settlement In the event there are net
redemptions for the day, the Underwriter will settle the net redemption in
accordance with current NSCC rules and procedures on settlement.
SECTION 2.9 On any Business Day when the Federal Reserve Wire
Transfer System is closed, settlement of purchases and redemptions will be
delayed until the next Business Day on which the Federal Reserve Wire Transfer
System is open The delayed settlement will not have any impact on the
transaction's original share price
SECTION 2.10 Except as provided for in Section 2.3, the Company
shall not seek a prior net asset value per share of a Fund after the Cut-Off.
SECTION 2.11 Notwithstanding anything to the contrary contained in
this NSCC Services Amendment or otherwise, the Company shall repay the Funds for
any duplicative or excessive payment, or credit any duplicate or excessive
shares, it or its Contractholders/Accounts have received within 30 days after
written notice thereof, if either (a) such payment or shares is in the Company's
custody, possession or control, or is in its Accounts custody, possession or
control or is in a Contract; or (b) such payment or share credit was due to an
error attributable to the Company The party responsible for the duplicative or
excessive payment or shares shall be responsible and liable for any loss
inclined as a result, pursuant to Section 1.5 herein.
The Company agrees to use reasonable efforts to obtain reimbursement
of any other duplicative or excessive payment or share credits made to its
Contractholder/Account that are no longer in the Company's custody or possession
and are the result of an error made by the Underwriter, and to remit any such
reimbursement to the Funds. The Company agrees to keep the Funds informed of the
status of any collection effort Any costs, fees or expenses incurred by the
Company in such collection efforts shall be at the Underwriter's expense, If the
Company, in its sole discretion, repays the amount of such overpayment on behalf
of a Contractholder/Account, the Company shall be fully subrogated to the
Underwriter rights against the Contractholder/Account
SECTION 2.12 The Underwriter shall have full authority to take such
action as it may deem advisable in respect of all matters pertaining to the
continuous offering of Shares through NSCC Services. The Underwriter reserves
the right in its discretion and without notice to the Company to suspend sales
or withdraw the offering of Shares of any Fund through NSCC Services or to
terminate an individual Fund's participation in NSCC Services at any time
without notice (redemptions for shares of these Funds would be required to take
place outside of NSCC
4
Services).
SECTION 2.13 To the extent feasible, the Company will cooperate with
the Underwriter with respect to any requests pertaining to the state of
residence as well as the state of domicile of the Accounts.
SECTION 2.14 Each party hereto will furnish the other parties (the
"REQUESTING PARTIES") with such information as it may reasonably request, and
will otherwise cooperate with the Requesting Parties and its designees
(including, without limitation, any auditors designated by the Requesting
Parties) in connection with the preparation of reports to the Requesting Parties
concerning this NSCC Services Amendment, as well as any other reports or filings
that may be required by law. Each party hereto will further maintain all records
required by law concerning this NSCC Services Amendment.
ARTICLE 3 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE UNDERWRITER
The Underwriter represents, warrants and covenants to the Company
that:
(a) It is a corporation duly organized, validly existing and in
good standing under the laws of the State of Maryland.
(b) It has entered into a membership agreement with NSCC and in
accordance therewith:
(1) it has the corporate power to execute, deliver and
perform such agreement;
(2) it has taken all necessary corporate action to authorize
the execution, delivery and performance of such agreement;
(3) such agreement has been duly executed by the Underwriter
and NSCC; and
(4) it has met all the requirements to participate in NSCC
Services.
(c) It has full power and authority under applicable law, and has
taken all action necessary, to enter into and perform this NSCC Services
Amendment, and the performance of its obligations hereunder does not and will
not violate or conflict with any governing documents or agreements of the
Underwriter or on behalf of the Funds.
(d) It has the necessary and adequate personnel, space, data
processing capacity or other operational capability, facilities and equipment to
perform its duties and obligations hereunder in accordance with the terms of
this NSCC Services Amendment, in a businesslike and competent manner, in
conformance with all laws, rules and regulations and the Funds' and Contracts'
prospectuses and SAIs, and customary industry standards.
(e) It shall perform any and all duties, functions, procedures and
5
responsibilities assigned under this NSCC Services Amendment and as otherwise
established by NSCC, including compliance with current NSCC rales and procedures
and with the terms and provisions of its membership agreement with NSCC.
(f) In the event that the Underwriter ceases to have any authority
contemplated by the warranties, representations and covenants set forth in this
NSCC Services Amendment, or any other authority contemplated by this NSCC
Services Amendment, the Underwriter shall notify the Company in writing within
two business days after such authority is terminated
(g) In the event that the membership agreement between the
Underwriter and NSCC is (i) approved by NSCC on a temporary or conditional
basis; (ii) amended (including requalifying the agreement on a temporary or
conditional basis); (iii) suspended; or (iv) terminated, the Underwriter shall
notify the Company in writing within two business days of such change in
membership status
(h) In the event that NSCC commences litigation or proceedings
against the Underwriter, places the Underwriter on surveillance, or disciplines
the Underwriter by expulsion, suspension, limitation of or restriction on
activities, functions and operations, fine or censure or any other sanction, the
Underwriter shall notify the Company in writing within two business days after
receipt of such information
(i) In the event that any litigation or proceedings are brought
against the Underwriter in connection with NSCC Services, the Underwriter shall
notify the Company in writing within two business days after receipt of notice
of such litigation or proceedings.
ARTICLE 4 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
The Company represents, warrants and covenants to the Underwriter
that:
(a) It has entered into a membership agreement with NSCC and in
accordance therewith:
(1) it has the corporate power to execute, deliver and
perform such agreement;
(2) it has taken all necessary corporate action to
authorize the execution, delivery and performance of such agreement;
(3) such agreement has been duly executed by the Company
and NSCC; and
(4) it has met all the requirements to participate in NSCC
Services
(b) It has full power and authority under applicable law, and has
taken all action necessary, to enter into and perform this NSCC Services
Amendment, and the performance of its obligations hereunder does not and will
not violate or conflict with any
6
governing documents or agreements of the Company or on behalf of the Accounts.
(c) It has the necessary and adequate personnel, space, data
processing capacity or other operational capability, facilities and equipment to
perform its duties and obligations hereunder in accordance with the terms of
this NSCC Services Amendment, in a businesslike and competent manner, in
conformance with all laws, rules and regulations and the Funds' and Contracts'
prospectuses and SAIs, and customary industry standards.
(d) It shall perform any and all duties, functions, procedures and
responsibilities assigned under this NSCC Services Amendment and as otherwise
established by NSCC, including compliance with current NSCC rules and procedures
and with the terms and provisions of its membership agreement with NSCC.
(e) It has full authority to act on behalf of
Contractholders/Accounts in the manner contemplated by this NSCC Services
Amendment, and each time the Company so acts it shall be deemed to have restated
such warranty, representation and covenant.
(f) In the event that the Company ceases to have any authority
contemplated by the warranties, representations and covenants set forth in this
NSCC Services Amendment, or any other authority contemplated by this NSCC
Services Amendment, the Company shall notify the Underwriter in writing within
two business days after such authority is terminated.
(g) In the event that the membership agreement between the Company
and NSCC is (i) approved by NSCC on a temporary or conditional basis; (ii)
amended (including requalifying the agreement on a temporary or conditional
basis); (iii) suspended; or (iv) terminated, the Company shall notify the
Underwriter in writing within two business days of such change in membership
status.
(h) In the event that NSCC commences litigation or proceedings
against the Company, places the Company on surveillance, or disciplines the
Company by expulsion, suspension, limitation of or restriction on activities,
functions and operations, fine or censure or any other sanction, the Company
shall notify the Underwriter in writing within two business days after receipt
of such information.
(i) In the event that any litigation or proceedings are brought
against the Company in connection with NSCC Services, the Company shall notify
the Underwriter in writing within two business days after receipt of notice of
such litigation or proceedings.
ARTICLE 5 INDEMNIFICATION
SECTION 5.1 The Company shall indemnify and hold harmless each of
the Indemnified Parties, as that term is defined in Section 8 1 (a) of Article
VIII of the Agreement, against any and all demands, losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
the Company) or litigation (including reasonable attorney fees and other
expenses), to which the Indemnified Parties may become subject as a result of or
arising out of (a) any negligent act or omission or statement or representation
or wrongful conduct by the Company or its agents relating to a NSCC Services
Instruction; (b) any material
7
breach of the Company's representations, warranties or covenants contained in
this NSCC Services Amendment; (c) the failure of the Company to comply with any
of the terms of this NSCC Services Amendment; or (d) the actions of an
Indemnified Party acting upon a NSCC Services Instruction from the Company The
Company represents and warrants that at all times it shall have sufficient
financial resources, whether through a fidelity bond or otherwise, to meet all
of its indemnification obligations arising under Agreement, including
obligations under this NSCC Services Amendment.
SECTION 5.2 The Company's obligation to indemnify shall not apply
to any loss occasioned by any act or omission of the Indemnified Parties
resulting from negligence, willful misconduct or bad faith, including effecting
any NSCC Services Instruction properly issued by the Company in accordance with
this NSCC Services Amendment, provided the Company has acted without negligence,
willful misconduct or bad faith.
SECTION 5.3 The Underwriter shall indemnify and hold harmless each
of the Indemnified Parties, as that term is defined in Section 8.2(a) of Article
VIII of the Agreement, against any and all demands, losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
the Underwriter) or litigation (including reasonable attorney fees and other
expenses), to which the Indemnified Parties may become subject as a result of or
arising out of (a) any negligent act or omission or statement or representation
or wrongful conduct by the Underwriter or its agents relating to a NSCC Services
Instruction; (b) any material breach of the Underwriter representations,
warranties or covenants contained in this NSCC Services Amendment; or (c) the
failure of the Underwriter to comply with any of the terms of this NSCC Services
Amendment The Underwriter represents and warrants that at all times it shall
have sufficient financial resources, whether through a fidelity bond or
otherwise, to meet all of its indemnification obligations arising under
Agreement, including obligations under this NSCC Services Amendment.
SECTION 5.4 The Underwriter's obligation to indemnify shall not
apply to any loss occasioned by any act or omission of the Indemnified Parties
resulting from negligence, willful misconduct or bad faith, including effecting
any NSCC Services Instruction properly issued by the Company in accordance with
this NSCC Services Amendment, provided the Underwriter has acted without
negligence, willful misconduct or bad faith.
SECTION 5.5 In order that the indemnification provisions contained
herein shall remain in effect and apply, upon the assertion of a loss for which
a party may be required to indemnify another party, the party seeking
indemnification shall promptly notify the other party of such assertion of loss,
and shall keep the other party advised with respect to all developments
concerning such loss The party who may be required to indemnify shall have the
option to participate at its expense with the party seeking indemnification in
the defense of such loss The party seeking indemnification shall in no case
confess any claim or make any compromise in any case in which the other party
may be required to indemnify it except with the other party's prior written
consent.
ARTICLE 6 CONFIDENTIALITY
The patties agree that all non-public books, records, information
and data
8
pertaining to the business of the others or the Accounts that are exchanged or
received pursuant to the negotiation or the carrying out of the Agreement or
this NSCC Services Amendment shall remain confidential, and shall not be
voluntarily disclosed by any party without the prior written consent of the
other parties, except as may be required by law or by such party to carry out
the Agreement or this NSCC Services Amendment or an order of any court,
governmental agency or regulatory body of competent jurisdiction.
ARTICLE 7 FEES AND EXPENSES
SECTION 7.1 Except as otherwise provided herein, the Underwriter
and the Funds shall pay no fee or other compensation to the Company, and the
Company shall pay no fee or other compensation to the Underwriter or the Funds,
for services performed under this NSCC Services Amendment.
SECTION 7.2 Each party shall pay its own fees and expenses due
NSCC, as per the fee structure set forth in current NSCC rules and procedures,
except as otherwise provided herein.
ARTICLE 8 USE OF LOGO
Except for the use of each of the Fund's most current prospectus and
SAI, the Company shall not use, nor shall it allow its employees or agents to
use, the name or logo of X. Xxxx Price, any of the Funds, the Underwriter or any
of their affiliates or any products or services sponsored, managed, advised,
administered or distributed by X. Xxxx Price or the Underwriter, or any of their
affiliates, for advertising, trade or other commercial or noncommercial purposes
without the express prior written consent of the Underwriter or X. Xxxx Price.
ARTICLE 9 ASSIGNMENT
This NSCC Services Amendment shall inure to the benefit of and be
binding upon the parties and their respective permitted successors and permitted
assigns.
ARTICLE 10 TERMS AND TERMINATION
SECTION 10.1 This NSCC Services Amendment shall become effective on
the date first set forth above and shall continue in effect until terminated as
set forth below.
SECTION 10.2 This NSCC Services Amendment may be terminated by any
party hereto at any time upon at least thirty (30) days' written notice Articles
2,11, 5 and 6 shall continue in full force and effect after termination of this
NSCC Services Amendment The termination of this NSCC Services Amendment will not
in and off itself result in the termination of the Agreement. Termination of the
Agreement will result in the automatic termination of this NSCC Services
Amendment.
SECTION 10.3 Notwithstanding termination of this NSCC Services
Amendment, the parties shall continue to be bound by the Amendment as to all
matters, orders and
9
transactions submitted through NSCC Services while the Amendment was in effect.
ARTICLE 11 ENTIRE AGREEMENT/CONFLICTS
If conflicts arise between the provisions of this NSCC Services
Amendment and those of the Agreement, such conflicts shall be controlled by the
terms of the Agreement This NSCC Services Amendment, the Agreement, and any
Appendices attached thereto set forth the entire agreement and understanding of
the parties relating to the use of NSCC Services to clear and settle
transactions for the Funds, and supersede all prior agreements, arrangements and
understandings, written or oral, among the parties, including any prior
agreements with respect to NSCC Services.
ARTICLE 12 AMENDMENTS; WAIVERS.
This NSCC Services Amendment may be amended, modified, superseded,
canceled, renewed or extended, and the terms or covenants hereof may be waived,
only by a written instrument executed by all of the parties affected thereby The
failure of any party at any time or times to require performance of any
provision hereof shall in no manner affect the right of such party at a later
time to enforce the same.
ARTICLE 13 NOTICES
All notices required or permitted under the NSCC Services Amendment
shall be in writing and shall be sent by personal delivery or registered,
certified or overnight mail to the persons and addresses designated below:
(a) If to Underwriter:
X. Xxxx Price Investment Services, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx Xxxxx
cc: Xxxxxxx Xxxxxx, Esq.
(b) If to Company:
Security Benefit Life Insurance Company
One Security Benefit Place
Iopeka, Kansas 66636
Attention: General Counsel
ARTICLE 14 TERMS; AGREEMENT; SEVERABILITY
SECTION 14.1 Unless indicated otherwise, terms used in this NSCC
Services Amendment shall have the meanings ascribed to them in the Agreement.
SECTION 14.2 The Agreement, as amended, shall remain in full force
and effect, and all of its provisions shall continue to apply to any matter
arising under this NSCC Services
10
Amendment, except as otherwise provided for herein.
SECTION 14.3 If any provision or portion of this NSCC Services
Amendment shall be determined to be invalid or unenforceable for any reason, the
remaining provisions and portions of this NSCC Services Amendment shall be
unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law.
ARTICLE 15 LEGAL RELATIONSHIP OF PARTIES
The parties hereto agree that they are independent contractors and
not partners or co-venturers or employees of each other, except that the
Underwriter appoints the Company, and the Company accepts appointment, as the
agent of the Underwriter for the limited purpose of placing NSCC Services
Instructions solely under the conditions set forth below.
ARTICLE 16 OTHER AGREEMENTS
The Underwriter may enter into other agreements similar to this
NSCC Services Amendment with any other person or persons without the Company's
consent.
IN WITNESS WHEREOF, each of the parties hereto has caused this NSCC Services
Amendment to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified above.
X. XXXX PRICE INVESTMENT SERVICES, INC. SECURITY BENEFIT LIFE INSURANCE
COMPANY
BY: /s/ Xxxxxxx X. Xxxxxx BY:
------------------------ -----------------------------
Name: Xxxxxxx X. Xxxxxx Name:
Title: Vice President Title: Vice President
11
NSCC NETWORKING CONVERSION CHECKLIST
(Please return this checklist with the Networking Agreement)
DATE: 4/29/04
CLIENT NAME: SECURITY BENEFIT LIFE
NSCC CLEARING#: 4527
(PIEASE CIRCLE THE APPROPRIATE RESPONSES)
1 DO YOU CURRENILY PARTICIPATE ON FUND/SERVWIIH I XXXX PRICE?
YES NO
2 PLEASE CIRCLE WHICH MATRIX LEVEL(S) YOU INTEND TO USE.
LEVEL 1: The financial institution handles all communications with the customer
Clients have limited privileges directly with the fund.
LEVEL 2: The financial institution handles all client communications, with the
exception of tax reporting, which is handled by the fund. Customers have
full privileges directly with the fund.
LEVEL 3: This level is controlled totally by the financial institution, which
handles all communications with the client Customers have no privileges
directly with the fund.
If Xxxxx 0, who will coordinate your media suppression? _________________
LEVEL 4: This level is controlled primarily by the fund company, which handles
all client communications. Customers have full privileges directly with
the fund, or can direct transactions through the broker. The financial
institution is informed by the fund of all customer account record changes
3 WHAT TYPE OF INITIAL CONVERSION ACTIVITY DO YOU WISH TO UTILIZE?
PLEASE CIRCLE ALL THAT WILL APPLY:
A) TRANFERS FROM OMNIBUS/HOUSE ACCOUNTS
B) TRANSFERS FROM EXISTING CUSTOMER NAME ACCOUNTS
C) MAINTENANCE
D) NEW BUSINESS VIA FUND/SERV TO BE NETWORKED
4 DO YOU PLAN TO NETWORK DAILY ACCRUAL/FIXED INCOME FUNDS?
YES NO
5 DO YOU HAVE ANY CERTIFICATES OUTSTANDING?
YES NO
6 DO YOU CURRENTLY UTILIZE LEVEL 0 CROSS REFERENCE FILES?
YES NO
7 WHEN WOULD YOU LIKE TO RECEIVE THE POSITION FILE TRANSMISSION?
DATE1: 1st Friday
DATE 2: 3rd Friday
(OR PLEASE ATTACH A POSITION FILE CALENDAR)
8 PLEASE PROVIDE US WITH YOUR WIRING INSTRUCTIONS ACCRUED DIVIDENDS FOR FULL
SHARE ACCOUNT CLOSEOUTS XXXX BE WIRED USING THESE INSTRUCTIONS:
BANK: UMB BANK N. A.
ABA: 000000000
ACCOUNT#: 9840848483
REGISTRATION: SECURITY BENEFIT LIFE
(IF YOU DO NOT INDICATE WIRING INSTRUCTIONS ABOVE WE WILL SEND CHECKS FOR
THESE AMOUNTS)
X. XXXX PRICE FUND/SERV WORKSHEET
CLIENT NAME: SECURITY BENEFIT LIFE
CONTACT NAME: XXXXXXX XXXXXXX
ADDRESS: SECURITY BENEFIT GROUP OF COMPANIES
XXX XX XXXXXXXX XXXXXXX XXXXX
XXXXXX XX 00000-0000
PHONE #: 000-000-0000
FAX #: 000-000-0000
NSCC ALPHA CODE: N7
PARTICIPANT NSCC/DIC CLEARING NUMBER: 4527
EXECUTING SYMBOL YOU WILL BE TRANSMITING WITH: _N/A_____________________(IF ANY)
WE WILL EXECUTE TRADES AS A BROKER_XX_ TRUST____________OR IPA________
WILL YOU BE SETTLING: I+1_XX__ OR I+3___________
WOULD YOU LIKE TO ENTER ORDERS USING YOUR OWN CUSTOMER ACCOUNT NUMBERS OR THE X.
XXXX PRICE ACCOUNT NUMBER? X. XXXX OMNIBUS ACCOUNT NUMBERS (PARTICIPANT WILL BE
RESPONSIBLE FOR PROVIDING AND UPDATING A LIST OF INTERNAL CUSTOMER ACCOUNT
NUMBERS NOT SEI UP VIA Fund/SERV IF YOU ELECT TO USE YOUR OWN CUSIOMER ACCOUNT
NUMBER).
DO YOU HAVE ANY ASSETS CURRENTLY IN OUR FUNDS? __YES_________
(IF YES, PLEASE ATTACH A LISTING OF FUND & ACCOUNT #'S, ALSO, IF YOU ANSWERED
"YOUR OWN ACCOUNT NUMBER" TO THE PREVIOUS QUESTION PLEASE INCLUDE YOUR ACCOUNT
NUMBER ON THIS LIST SO THAT WE CAN CROSS-REFERENCE.)
WHICH X. XXXX PRICE MUTUAL FUNDS WOULD YOU LIKE TO TEST WITH? (YOU ARE NOT
REQUIRED TO TEST. PLEASE IDENTIFY ONE EQUITY FUND AND ONE INCOME FUND
EQUITY: ___305-207133122-7________________
INCOME: __________________________________
