PARTICIPATION AGREEMENT
-----------------------
AMONG
SECURITY BENEFIT LIFE INSURANCE COMPANY,
SECURITY DISTRIBUTORS, INC.,
AND
AMERICAN CENTURY INVESTMENT SERVICES, INC.
THIS AGREEMENT, dated as of the 1st day of July, 2001, by and among
Security Benefit Life Insurance Company, ("SBL"), a stock life insurance company
organized under the laws of the State of Kansas, on its own behalf and on behalf
of each segregated asset account of SBL set forth on Schedule A hereto, as may
be amended from time to time (each an ("Account"), Security Distributors, Inc.,
a Kansas corporation and a registered broker/dealer ("SDI" and collectively with
SBL, the ("Company") and American Century Investment Services, Inc. (the
"Distributor"), a Missouri corporation.
WHEREAS, American Century Mutual Funds, Inc., American Century Capital
Portfolios, Inc. and American Century World Mutual Funds, Inc. (collectively,
the "Issuers") are each registered as an open-end management investment company
under the Investment Company Act of 1940 (the "1940 Act") and offer series of
shares representing an interest in a particular managed portfolio of securities
(the "Funds"), which are registered under the Securities Act of 1933, as amended
(the "1933 Act"); and
WHEREAS, Distributor serves as principal underwriter of each of the
Funds and is duly registered as a broker/dealer with SEC; and
WHEREAS, American Century Investment Management, Inc., which serves as
investment advisor to the Fund, is duly registered as an investment advisor
under the Investment Advisers Act of 1940, as amended; and
WHEREAS, the Company has issued or will issue certain variable annuity
contracts supported wholly or partially by the Account (the "Contracts"), and
said Contracts are listed in Schedule A hereto, as it may be amended from time
to time by mutual written agreement; and
WHEREAS, the Account is duly established and maintained as a segregated
asset account, duly established by the Company, on the date shown for such
Account on Schedule A hereto, to set aside and invest assets attributable to the
aforesaid Contracts; and
WHEREAS, the Company intends to purchase shares of the Advisor Class of
the Funds listed in Schedule A hereto, as it may be amended from time to time by
mutual written agreement (the "Designated Funds"), on behalf of the Account to
fund the aforesaid Contracts; and
WHEREAS, the Distributor desires to retain the Company to perform
certain services and the Company is willing and able to furnish such services.
04/22/10
NOW, THEREFORE, in consideration of their mutual promises, the Company,
and Distributor agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. Subject to Article IX hereof, the Distributor agrees to cause the
Issuers to make available to the Company for purchase on behalf of the Account,
shares of the Designated Funds, such purchases to be effected at net asset value
in accordance with Section 1.3 of this Agreement. Notwithstanding the foregoing,
(i) the Funds (other than those listed on Schedule A) in existence now or that
may be established in the future will be made available to the Company only as
the Issuer may so provide, and (ii) the Board of Directors of the Funds (the
"Board") may suspend or terminate the offering of shares of any Designated Fund
or class thereof, if such action is required by law or by regulatory authorities
having jurisdiction or if, in the sole discretion of the Board acting in good
faith and in light of its fiduciary duties under federal and any applicable
state laws, suspension or termination is necessary and in the best interests of
the shareholders of such Designated Fund.
1.2. The Distributor shall cause the Funds to redeem, at the Company's
request, any full or fractional Designated Fund shares held by the Company on
behalf of the Account, such redemptions to be effected at net asset value in
accordance with Section 1.3 of this Agreement. Notwithstanding the foregoing,
any Fund may delay redemption of Fund shares of any Designated Fund to the
extent permitted by the 1940 Act, and any rules, regulations or orders
thereunder.
1.3. Purchase and Redemption Procedures
(a) The Distributor hereby appoints the Company as an agent of the
Funds for the limited purpose of receiving and accepting purchase and redemption
requests on behalf of the Account (but not with respect to any Fund shares that
may be held in the general account of the Company) for shares of those
Designated Funds made available hereunder, based on allocations of amounts to
the Account or subaccounts thereof under the Contracts and other transactions
relating to the Contracts or the Account. Receipt and acceptance of any such
request (or relevant transactional information therefor) on any day the New York
Stock Exchange is open for trading and on which a Designated Fund calculates its
net asset value (a "Business Day") pursuant to the rules of the Securities and
Exchange Commission ("SEC"), by the Company as such limited agent of the Fund
prior to the time that the Fund ordinarily calculates its net asset value as
described from time to time in the Fund's prospectus shall constitute receipt
and acceptance by the Designated Fund on that same Business Day, provided that
the Fund receives notice of such request by 9:30 a.m. Eastern Time on the next
following Business Day.
(b) The Company shall pay for shares of each Designated Fund on the
same Business Day that it notifies the Fund of a purchase request for such
shares. Payment for Designated Fund shares shall be made in federal funds
transmitted to the Fund or other designated person by wire to be received by
3:00 p.m. Eastern Time on the Business Day the Fund is notified of the purchase
request for Designated Fund shares (unless the Fund determines and so advises
the Company that sufficient proceeds are available from redemption of shares of
other Designated Funds effected pursuant to redemption requests tendered by the
Company on behalf of the Account, or unless the Fund otherwise determines and so
advises the Company to delay the date of payment, to the extent the Fund may do
so under the 1940 Act). If federal funds are not received on time, such funds
will be invested, and Designated Fund shares purchased thereby will be issued,
as soon as practicable and the Company shall promptly, upon the Fund's request,
reimburse the Fund for any charges, costs, fees, interest or other expenses
incurred by the Fund in connection with any advances to, or borrowing or
overdrafts by, the Fund, or any similar expenses incurred by the Fund, as a
result of Fund transactions effected by the Fund
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based upon such purchase request. Upon receipt of federal funds so wired, such
funds shall cease to be the responsibility of the Company and shall become the
responsibility of the Fund.
(c) Payment for Designated Fund shares redeemed by the Account or the
Company shall be made by the Fund in federal funds transmitted by wire to the
Company or any other designated person. The Funds shall use reasonable efforts
to wire such funds by 3 p.m. Eastern Time on the same Business Day the Fund is
properly notified of the redemption order of such shares (unless redemption
proceeds are to be applied to the purchase of shares of other Designated Funds
in accordance with Section 1.3(b) of this Agreement), except that the Fund
reserves the right to delay payment of redemption proceeds to the extent
permitted under Section 22(e) of the 1940 Act and any rules thereunder, and in
accordance with the procedures and policies of the Fund as described in the
then-current prospectus.
(d) Any purchase or redemption request for Designated Fund shares held
or to be held in the Company's general account shall be effected at the net
asset value per share next determined after the Fund's receipt and acceptance of
such request, provided that, in the case of a purchase request, payment for Fund
shares so requested is received by the Fund in federal funds prior to close of
business for determination of such value, as defined from time to time in the
Fund's prospectus.
(e) If transactions in Fund shares are to be settled through the
National Securities Clearing Corporation's Mutual Fund Settlement, Entry, and
Registration Verification (Fund/SERV) system, the terms of the Fund/SERV and
Networking Agreement between the Company and American Century Services
Corporation, an affiliate of Distributor, will apply and supersede the
provisions set forth in this Section 1.3.
1.4. The Fund shall use reasonable efforts to make the net asset value per
share for each Designated Fund available to the Company by 6:30 p.m. Eastern
Time each Business Day, and in any event, as soon as reasonably practicable
after the net asset value per share for such Designated Fund is calculated, and
shall calculate such net asset value in accordance with the Fund's prospectus.
If any Fund provides the Company with materially incorrect share net asset value
information, the Company on behalf of the Account, shall be entitled to an
adjustment to the number of shares purchased or redeemed to reflect the correct
share net asset value. Any material error in the calculation of the net asset
value per share, dividend or capital gain information shall be reported promptly
to the Company upon discovery. In the event that any such material error is the
result of the gross negligence of the Fund, or its designated agent for
calculating the net asset value, any administrative or other costs or losses
incurred for correcting underlying Contract owner accounts shall be at the
Distributor's expense. Whether such an error is material shall be determined by
the Fund in accordance with the policy adopted by each fund's Board of
Directors.
1.5. The Fund shall use reasonable efforts to furnish notice (by wire or
telephone followed by written confirmation) to the Company of any income
dividends or capital gain distributions payable on any Designated Fund shares by
the record date, but in no event later than 6:30 p.m. Eastern Time on the
ex-dividend date. The Company, on its behalf and on behalf of the Account,
hereby elects to receive all such dividends and distributions as are payable on
any Designated Fund shares in the form of additional shares of that Designated
Fund. The Company reserves the right, on its behalf and on behalf of the
Account, to revoke this election and to receive all such dividends and capital
gain distributions in cash. The Fund shall notify the Company promptly of the
number of Designated Fund shares so issued as payment of such dividends and
distributions.
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1.6. Issuance and transfer of Fund shares shall be by book entry only.
Share certificates will not be issued to the Company or the Account. Purchase
and redemption orders for Fund shares shall be recorded in an appropriate ledger
for the Account or the appropriate subaccount of the Account.
1.7.(a) The parties hereto acknowledge that the arrangement contemplated
by this Agreement is not exclusive; the Fund's shares may be sold to other
parties, including insurance companies and the cash value of the Contracts may
be invested in other investment companies.
(b) The Company shall not, without prior notice to the Distributor
(unless otherwise required by applicable law), take any action to operate the
Account as a management investment company under the 1940 Act.
(c) The Company shall not, without prior notice to the Distributor
(unless otherwise required by applicable law), induce Contract owners to change
or modify a Fund or change a Fund's investment advisor.
(d) The Company shall not, without prior notice to a Fund, induce
Contract owners to vote on any matter submitted for consideration by the
shareholders of such Fund in a manner other than as recommended by the Board.
1.8 (a) The Company covenants and agrees that all orders accepted and
transmitted by it hereunder will be based upon instructions that it received
from the Account owners, in proper form prior to the Close of Trading of the
Exchange on that Business Day. The Company shall time stamp all orders or
otherwise maintain records that will enable the Company to demonstrate
compliance with this provision.
(b) The Company covenants and agrees that all orders transmitted to the
Issuers, whether by telephone, telecopy, or other electronic transmission
acceptable to Distributor, shall be sent by or under the authority and direction
of a person designated by the Company as being duly authorized to act on behalf
of the owner of the Accounts, and is "an appropriate person" as used in Sections
8-107 and 8-401 of the Uniform Commercial Code. For purposes of this paragraph,
persons "duly authorized to act on behalf of the owner of the Accounts" shall
mean those persons set forth in Schedule B to this Agreement as it may be
amended from time to time.
ARTICLE II. Administrative Services. The Company shall be the sole
shareholder of Fund shares purchased for the Account pursuant to this Agreement
(the "Record Owner"). The Record Owner shall properly complete any applications
or other forms required by Distributor or the Issuers from time to time. The
Company agrees to provide all administrative services for the investors in the
Account, including but not limited to those services specified in Schedule C the
"Administrative Services"). Neither Distributor nor the Issuers shall be
required to provide Administrative Services for the benefit of investors in the
Account. The Company agrees that it will maintain and preserve all records as
required by law to be maintained and preserved in connection with providing the
Administrative Services, and will otherwise comply in all material respects with
all laws, rules and regulations applicable to the provision of the
Administrative Services. Upon request, the Company will provide Distributor or
its representatives reasonable information regarding the quality of the
Administrative Services being provided and its compliance with the terms of this
Agreement.
ARTICLE III. Representations and Warranties
3.1. The Company represents and warrants that the Contracts (a) are, or
prior to issuance will be, registered under the 1933 Act, or (b) are not
registered because they are properly exempt from
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registration under the 1933 Act or will be offered exclusively in transactions
that are properly exempt from registration under the 1933 Act. The Company
further represents and warrants that the Contracts will be issued and sold in
compliance in all material respects with all applicable federal securities and
state securities and insurance laws. The Company further represents and warrants
that it is an insurance company duly organized and in good standing under
applicable law, that it has legally and validly established the Account as a
segregated asset account under Kansas insurance laws, and that it (a) has
registered or, prior to any issuance or sale of the Contracts, will register the
Account as a unit investment trust in accordance with the provisions of the 1940
Act to serve as a segregated investment account for the Contracts, or
alternatively (b) has not registered the Account in proper reliance upon an
exclusion from registration under the 0000 Xxx.
3.2. The Distributor represents and warrants that Designated Fund shares
sold pursuant to this Agreement shall be registered under the 1933 Act, shall be
duly authorized for issuance and sold in compliance with applicable state and
federal securities laws and that each is and shall remain registered under the
1940 Act. The Distributor shall cause the Funds to amend the registration
statements for their 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 and
shall cause the Funds to 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 Funds.
3.3. The Distributor represents that each Issuer is lawfully organized and
validly existing under the laws of the state in which it is registered and that
they do and will comply in all material respects with the 1940 Act.
3.4. The Company represents and warrants that (a) this Agreement has been
duly authorized by all necessary corporate action and, when executed and
delivered, shall constitute the legal, valid and binding obligation of the
Company, enforceable in accordance with its terms; and (b) the activities of the
Company contemplated by this Agreement comply in all material respects with all
provisions of federal and state securities laws applicable to such activities.
3.5. The Distributor represents and warrants that (a) this Agreement has
been duly authorized by all necessary corporate action and, when executed and
delivered, shall constitute the legal, valid and binding obligation of the
Distributor, enforceable in accordance with its terms; and (b) the activities of
the Distributor and the Funds contemplated by this Agreement comply in all
material respects with all provisions of federal and state securities laws
applicable to such activities.
3.6. The Distributor represents and warrants that all of their
trustees/directors, officers, employees, and other individuals or entities
dealing with the money and/or securities of the Funds are and shall continue to
be at all times covered by a blanket fidelity bond or similar coverage for the
benefit of the Funds in an amount not less than the minimum coverage as required
currently by Rule 17g-1 of the 1940 Act or related provisions as may be
promulgated from time to time. The aforesaid bond shall include coverage for
larceny and embezzlement and shall be issued by a reputable bonding company.
3.7. The Company represents and warrants that all of its directors,
officers, employees, and other individuals/entities employed or controlled by
the Company dealing with the money and/or securities of the Account are covered
by a blanket fidelity bond or similar coverage for the benefit of the Account,
in an amount not less than $5 million. The aforesaid bond includes coverage for
larceny and embezzlement and is issued by a reputable bonding company.
3.8. The Distributor represents and warrants that it is duly registered as
a broker/dealer with the SEC and is a member in good standing of the NASD.
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ARTICLE IV. Prospectuses and Proxy Statements; Voting
4.1. The Distributor shall provide the Company with as many printed copies
of the current prospectus, current Statement of Additional Information ("SAI"),
supplements, proxy statements, and annual or semi-annual reports of each
Designated Fund (for distribution to Contract owners with value allocated to
such Designated Funds) as the Company may reasonably request to deliver to
existing Contract owners. If requested by the Company in lieu thereof, the
Distributor shall provide such documents (including a "camera-ready" copy of
such documents as set in type, a diskette in the form sent to the financial
printer, or an electronic copy of the documents in a format suitable for posting
on the Company's web-site, all as the Company may reasonably request) and such
other assistance as is reasonably necessary in order for the Company to have
prospectuses, SAIs, supplements and annual or semi-annual reports for the
Contracts and the Fund printed together in a single document or posted on the
Company's web-site or printed individually by the Company if it so chooses. The
expenses associated with printing and providing such documentation shall be as
set forth in Article V.
4.2. Each Fund's prospectus shall state that the current SAI for the Fund
is available.
4.3. The Distributor shall provide the Company with information regarding
each Fund's expenses, which information may include a table of fees and related
narrative disclosure for use in any prospectus or other descriptive document
relating to a Contract. The Company agrees that it will use such information
substantially in the form provided. The Company shall provide prior written
notice of any proposed modification of such information, which notice will
describe the manner in which the Company proposes to modify the information, and
agrees that it may not modify such information in any way without the prior
consent of the Fund, which consent shall not be unreasonably withheld.
4.4. The Distributor will pay or cause to be paid the expenses associated
with text composition, printing, mailing, distributing, and tabulation of proxy
statements and voting instruction solicitation materials to Contract owners with
respect to proxies related to the Fund, consistent with applicable provisions of
the 1940 Act.
4.5. So long as, and to the extent the SEC continues to interpret the 1940
Act to require pass-through voting privileges for variable contract owners, or
to the extent otherwise required by law, the Company shall provide a list of
Contract owners with value allocated to a Designated Fund as of the record date
to the Fund or its agent in order to facilitate the Fund's solicitation of
voting instructions from Contract owners. The Company shall also provide such
other information to the Fund as is reasonably necessary in order for the Fund
to properly tabulate votes for Fund initiated proxies. The Company reserves the
right to vote Fund shares held in its general account in its own right, to the
extent permitted by applicable laws.
4.6. The Company represents and warrants that in the event it chooses to
post any Fund's prospectus, periodic report or other information on its
web-site, it will promptly update such information and will not post outdated
prospectuses, reports or information at any time. If a prospectus is
supplemented at any time, the Company will promptly post such supplement with
the prospectus.
ARTICLE V. Sales Material and Information
5.1 The Company shall furnish, or shall cause to be furnished, to the
Distributor or its designee, each piece of sales literature or other promotional
material that the Company develops and in which the Issuer (or a Designated Fund
thereof) or the Distributor is named. No such material shall be used until
approved by the Distributor or its designee, and the Distributor will use its
best efforts for it or its designee to review such sales literature or
promotional material within ten (10) Business Days after
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receipt of such material. The Distributor or its designee reserves the right to
reasonably object to the continued use of any such sales literature or other
promotional material in which the Issuer (or a Designated Fund thereof) or the
Distributor is named, and no such material shall be used if the Distributor or
its designee so objects.
5.2 The Company shall not give any information or make any representations
or statements on behalf of a Fund or concerning a Fund or the Distributor 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
Distributor or its designee, except with the permission of the Distributor or
its designee.
5.3 The Distributor or its designee, shall furnish, or cause to be
furnished, to the Company, each piece of sales literature or other promotional
material that it develops and in which the Company, and/or the Account, is
named. No such material shall be used until approved by the Company, and the
Company will use its best efforts to review such sales literature or promotional
material within ten (10) Business Days after receipt of such material. The
Company reserves the right to reasonably object to the continued use of any such
sales literature or other promotional material in which the Company and/or its
Account is named, and no such material shall be used if the Company so objects.
5.4 The Distributor shall not give any information or make any
representations on behalf of the Company or concerning the Company, the Account,
or the Contracts other than the information or representations contained in a
registration statement, prospectus (which shall include an offering memorandum,
if any, if the Contracts issued by the Company or interests therein are not
registered under the 1933 Act), or SAI for the Contracts, as such registration
statement, prospectus, or SAI may be amended or supplemented from time to time,
or in published reports for the Account which are in the public domain or
approved by the Company for distribution to Contract owners, or in sales
literature or other promotional material approved by the Company, except with
the permission of the Company.
5.5 The Distributor will provide to the Company at least one complete copy
of all registration statements, prospectuses, SAIs, reports, proxy statements,
sales literature and other promotional materials, and all amendments to any of
the above, that relate to the Designated Funds or their shares, promptly after
the effectiveness of such document(s) filed with the SEC or other regulatory
authorities.
5.6 The Company will provide to the Distributor at least one complete copy
of all registration statements, prospectuses (which shall include an offering
memorandum, if any, if the Contracts issued by the Company or interests therein
are not registered under the 1933 Act), SAIs, reports, solicitations for voting
instructions, sales literature and other promotional materials, and all
amendments to any of the above, that relate to the Contracts or the Account,
promptly after the filing of such document(s) with the SEC or other regulatory
authorities. The Company shall provide to the Distributor any complaints
received from the Contract owners pertaining to the Fund or a Designated Fund.
5.7 The Distributor will provide the Company with as much notice as is
reasonably practicable of any proxy solicitation for any Designated Fund, and of
any material change in the Fund's registration statement, particularly any
change resulting in a change to the registration statement or prospectus for any
Account. The Distributor will work with the Company so as to enable the Company
to solicit proxies from Contract owners, or to make changes to its prospectus or
registration statement, in an
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orderly manner. The Distributor will make reasonable efforts to attempt to have
changes affecting Contract prospectuses become effective simultaneously with the
annual updates for such prospectuses.
ARTICLE VI. Fees and Expenses
6.1. All expenses incident to performance by the Funds under this Agreement
shall be paid by the Funds. The Distributor shall see to it that all Fund shares
are registered and authorized for issuance in accordance with applicable federal
law and, if and to the extent deemed advisable by the such Fund, in accordance
with applicable state laws prior to their sale. The Funds shall bear the
expenses for the cost of registration and qualification of the Funds' shares,
preparation and filing of the Funds' prospectuses and registration statements,
proxy materials and reports, setting the prospectuses 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 each Fund's shares. The Fund
shall bear the expenses of distributing the Fund's proxy materials and reports
to existing Contract owners.
6.2. The Company shall bear the expense of distributing all prospectuses
and reports to shareholders (whether for existing Contract owners or prospective
Contract owners). The Company shall bear the expense of printing copies of the
prospectus for the Contracts for use with prospective Contract owners. The
Company shall bear the expenses incident to (including the costs of printing)
sales literature and other promotional material that the Company develops and in
which the Issuer (or a Designated Fund thereof) is named.
6.3. Distributor acknowledges that it will derive a substantial savings in
administrative expenses, such as reduction in expenses related to postage,
shareholder communications and recordkeeping, by virtue of having a single
shareholder account per Fund for the Accounts rather than having each
Participant as a shareholder. In consideration of performance of the
Administrative Services by the Company, Distributor will pay the Company a fee
(the "Administrative Services Fee") of 25 basis points (0.25%) of the average
aggregate amount of Advisor Class shares of the Funds held in the Account under
this Agreement. Distributor will calculate the amount of the payment to be made
pursuant to this Section 6.3 at the end of each calendar quarter and will make
such payment to the Company within 30 days thereafter. The parties acknowledge
that the payments received by the Company under this Section 6.3 are for
administrative and shareholder services only and do not constitute payment in
any manner for investment advisory services or for costs of distribution.
6.4. In consideration of performance of the Distribution Services specified
on Schedule D by the Company, Distributor will pay the Company a fee (the
"Distribution Fee") of 25 basis points (0.25%) of the average aggregate amount
invested by the Company in Advisor Class shares of the Funds under this
Agreement. Distributor will calculate the amount of the payment to be made
pursuant to this Section 6.4 at the end of each calendar quarter and will make
such payment to the Company within 30 days thereafter.
6.5. For the purposes of computing the payment to the Company contemplated
by this Article 6, the average aggregate amount invested by the Account in the
Funds over a one month period shall be computed by totaling the Account's
aggregate investment (share net asset value multiplied by total number of shares
of the Funds held by the Account) on each Business Day during the month and
dividing by the total number of Business Days during such month.
6.6. Distributor will calculate the amount of the payment to be made
pursuant to this Article 6, at the end of each calendar quarter and will make
such payment to the Company within 30 days thereafter. The check for such
payment will be accompanied by a statement showing the calculation of
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the amounts being paid by Distributor for the relevant months and such other
supporting data as may be reasonably requested by the Company and shall be
mailed to:
Security Distributors, Inc.
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000 XX Xxxxxxxx
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Xxxxxx, XX 00000
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Attention: Xxxxx Xxxxxxxxxx - Finance
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Phone No.: (000) 000-0000
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Fax No.: (000) 000-0000
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ARTICLE VII. Qualification
The Distributor represents and warrants that the Funds are qualified as
regulated investment companies under Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Internal Revenue Code,") and that they will maintain
such qualification (under Subchapter M or any successor or similar provisions)
and that they will notify the Company immediately upon having a reasonable basis
for believing that they have ceased to so qualify or that they might not so
qualify in the future.
ARTICLE VIII. Indemnification
8.7. Indemnification by the Company
8.1(a). The Company agrees to indemnify and hold harmless each of the
Funds and the Distributor and each of their trustees/directors and officers, and
each person, if any, who controls the Fund or Distributor within the meaning of
Section 15 of the 1933 Act or who is under common control with the Fund or the
Distributor (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
otherwise, insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof) or settlements:
(i) arise out of or are based upon any untrue statement of any
material fact contained in the registration statement, prospectus (which
shall include a written description of a Contract that is not registered
under the 1933 Act), or SAI for the Contracts or contained in the Contracts
or sales literature for the Contracts (or any amendment or supplement to
any of the foregoing), or arise out of or are based upon the omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance upon
and in conformity with information furnished to the Company by or on behalf
of the Fund or the Distributor specifically for use in the registration
statement, prospectus or SAI for the Contracts or in the Contracts or sales
literature (or any amendment or supplement) or ; or
(ii) arise out of or as a result of statements or representations by
or on behalf of the Company (other than statements or representations
contained in the registration statement, prospectus, SAI, or sales
literature of the Fund not supplied by the Company
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or persons under its control) or wrongful conduct of the Company or its
agents or persons under the Company's authorization or control, with
respect to the sale or distribution of the Contracts, or
(iii) arise out of any untrue statement of a material fact contained
in a registration statement, prospectus, SAI, or sales literature of the
Fund or any amendment thereof or supplement thereto or the omission 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 specifically for use therein; or
(iv) arise as a result of any material failure by the Company to
provide the services and furnish the materials under the terms of this
Agreement; or
(v) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this Agreement or
arise out of or result from any other material breach of this Agreement by
the Company;
as limited by and in accordance with the provisions of Sections 8.1(b) and
8.1(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.
8.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Company of any
such claim shall not relieve the Company from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against an Indemnified Party, the Company shall be entitled to participate, at
its own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel reasonably satisfactory to
the party named in the action. After notice from the Company to such party of
the Company's election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
the Company will not be liable to such party under this Agreement for any legal
or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
8.1(d). The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Fund shares or the Contracts or the operation of the
Fund.
8.8. Indemnification by the Distributor
8.2(a). The Distributor agrees to indemnify and hold harmless the
Company and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 7.2)
-10-
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Distributor) or litigation
(including legal and other expenses) to which the Indemnified Parties may become
subject under any statute or regulation, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements:
(i) arise out of or are based upon any untrue statement of any
material fact contained in the registration statement or prospectus or SAI
or sales literature of the Fund (or any amendment or supplement to any of
the foregoing), or arise out of or are based upon the omission 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 was made in reliance upon and in conformity with information
furnished to the Distributor or a Fund by or on behalf of the Company for
use in the registration statement, prospectus or SAI for the Fund or in
sales literature (or any amendment or supplement) or
(ii) arise out of or as a result of statements or representations by
or on behalf of the Fund or the Distributor (other than statements or
representations contained in the registration statement, prospectus, SAI or
sales literature for the Contracts not supplied by the Fund or the
Distributor) or wrongful conduct of the Distributor or the Fund with
respect to the sale or distribution of the Contracts or Fund shares; or
(iii) arise out of any untrue statement of a material fact contained
in a registration statement, prospectus, SAI or sales literature covering
the Contracts, or any amendment thereof or supplement thereto, or the
omission 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 Distributor or the Fund specifically
for use therein; or
(iv) arise as a result of any failure by the Fund or the Distributor
to provide the services and furnish the materials under the terms of this
Agreement (including a failure of the Fund, whether unintentional or in
good faith or otherwise, to comply with the diversification and other
qualification requirements specified in Article VI of this Agreement); or
(v) arise out of or result from any material breach of any
representation and/or warranty made by or on behalf of the Distributor or
the Fund in this Agreement or arise out of or result from any other
material breach of this Agreement by or on behalf of the Distributor or the
Fund;
as limited by and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof.
8.2(b). The Distributor 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.
-11-
8.2(c). The Distributor 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 Distributor 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 Distributor of
any such claim shall not relieve the Distributor 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 Distributor will be entitled to participate,
at its own expense, in the defense thereof. The Distributor also shall be
entitled to assume the defense thereof, with counsel reasonably satisfactory to
the party named in the action. After notice from the Distributor to such party
of the Distributor's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by it,
and the Distributor will not be liable to such party under this Agreement for
any legal or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
8.2(d). The Company agrees promptly to notify the Distributor of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Contracts or the
operation of the Account.
8.9. After any party notifies the other parties of an action in which
indemnification under this Article 8 may be required, the parties will review
the action in question to determine (i) if it claims that an untrue statement or
omission of a material fact exists in documents created by Company or in a
Fund's registration statement, and (ii) if so, whether the party who created the
document in question is required to indemnify hereunder. Any such decision shall
not be an admission of liability but rather a determination of what party should
properly bear the costs of defense until the case is finally adjudicated. The
decision of a court with proper jurisdiction over the parties and the matter at
hand shall be determinative of who should bear such costs.
ARTICLE IX. Applicable Law
9.1. This Agreement shall be subject to the applicable provisions of the
1933 and 1940 Acts as well as the applicable provisions of the Exchange Act of
1934, and the rules and regulations and rulings thereunder, including such
exemptions from those statutes, rules and regulations as the SEC may grant, and
the terms hereof shall be interpreted and construed in accordance therewith.
ARTICLE 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 four (4) months advance written
notice delivered to the other parties; or
(b) termination by the Company by written notice to the other parties
based upon the Company's determination that shares of a Fund are
not reasonably available to meet the requirements of the
Contracts; or
(c) termination by the Company by written notice to the other parties
in the event any of the Designated Fund's shares are not
registered, issued or sold in accordance with applicable state
and/or federal law or such law precludes the use
-12-
of such shares as the underlying investment media of the
Contracts issued or to be issued by the Company; or
(d) termination by the Distributor in the event that formal
administrative proceedings are instituted against the Company by
the National Association of Securities Dealers, Inc. (the
"NASD"), the SEC, the Insurance Commissioner or like official of
any state or any other regulatory body regarding the Company's
duties under this Agreement or related to the sale of the
Contracts, the operation of any Account, or the purchase of the
Designated Funds' shares; provided, however, that the Fund or
Distributor 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 a Fund or
Distributor by the SEC or any state securities department or any
other regulatory body; provided, however, that the Company
determines in its sole judgment exercised in good faith, that any
such administrative proceedings will have a material adverse
effect upon the ability of the Fund or Distributor to perform its
obligations under this Agreement; or
(f) termination by the Company by written notice to the other parties
in the event that any Designated Fund ceases to qualify as a
regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, or if the Company reasonably believes that
any such Fund may fail to so qualify or comply; or
(g) termination by the Distributor by written notice to the other
parties, if the Distributor shall determine, in its sole judgment
exercised in good faith, that the Company has suffered a material
adverse change in its business, operations, financial condition,
or prospects since the date of this Agreement or is the subject
of material adverse publicity; or
(h) termination by the Company by written notice to the other
parties, if the Company shall determine, in its sole judgment
exercised in good faith, that a Fund or the Distributor has
suffered a material adverse change in its business, operations,
financial condition or prospects since the date of this Agreement
or is the subject of material adverse publicity; or
(i) termination by the Company upon any substitution of the shares of
another investment company or series thereof for shares of a
Designated Fund in accordance with the terms of the Contracts,
provided that the Company has given at least 45 days prior
written notice to the Fund and Distributor of the date of
substitution.
10.2. Notwithstanding any termination of this Agreement, the Fund and the
Distributor shall, at the option of the Company, continue to make available
additional shares of the Fund pursuant to the terms and conditions of this
Agreement, for all Contracts in effect on the effective date of termination of
this Agreement (hereinafter referred to as "Existing Contracts"), unless the
Company seeks an order pursuant to Section 26(b) of the 1940 Act to permit the
substitution of other securities for the shares of the Designated Funds.
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
-13-
additional purchase payments under the Existing Contracts (subject to any such
election by the Company).
10.3. 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 Company: Security Benefit Life Insurance Company
Attention General Counsel
000 XX Xxxxxxxx
Xxxxxx, Xxxxxx 00000 - 0001
If to the Funds or the Distributor: American Century Investment Services, Inc.
0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxx, Esq.
ARTICLE XII. Miscellaneous
12.1 All persons dealing with the Funds must look solely to the property of
the respective Designated Funds listed on Schedule A hereto for the enforcement
of any claims against the Fund. The parties agree that neither the Board,
officers, agents or shareholders of a Fund assume any personal liability or
responsibility for obligations entered into by or on behalf of a Fund.
12.2 Subject to the requirements of legal process and regulatory authority,
the Funds and the Distributor shall treat as confidential the names and
addresses of the owners of the Contracts. Each party shall treat as confidential
all information reasonably identified as confidential in writing by any other
party hereto and, except as permitted by this Agreement, shall not disclose,
disseminate or utilize such information without the express written consent of
the affected party until such time as such information has come into the public
domain.
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.
-14-
Notwithstanding the generality of the foregoing, each party hereto further
agrees to furnish the Kansas Insurance Commissioner with any information or
reports in connection with services provided under this Agreement which such
Commissioner may request in order to ascertain whether the variable insurance
operations of the Company are being conducted in a manner consistent with the
Kansas insurance laws and regulations and any other applicable law or
regulations.
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.
-15-
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative.
Security Benefit Life
Insurance Company By its authorized officer
By
-------------------------
Title:
---------------------
Security Distributors, Inc. By its authorized officer
By
-------------------------
Title:
---------------------
American Century Investment Services, Inc. By its authorized officer
By
-------------------------
Title:
---------------------
-16-
July 1, 2001
SCHEDULE A
----------
Account(s) Contract(s) Designated Fund(s)
SBL Variable Annuity V6029 American Century Heritage,
Account XIV Advisor Class
American Century Select,
Advisor Class
American Century Equity
Income, Advisor Class
American Century International
Growth, Advisor Class
A-1
SCHEDULE B
----------
Authorized contact persons: The following persons are authorized on
behalf of the Company to effect transactions in each Account:
Name: Xxxxx Xxxxxxxxx Phone: 000-000-0000
Name: Xxxxx Xxxx Phone: 000-000-0000
Name: Xxxx Xxxxx Phone: 000-000-0000
Name: Xxxxx Xxxxxxxxxx Phone: 000-000-0000
SCHEDULE C
Administrative Services
Pursuant to the Agreement to which this is attached, the Company shall
perform all administrative and shareholder services with respect to investors in
the Account, including, but not limited to, the following:
1. Maintain separate records for each investor, which records
shall reflect the shares purchased and redeemed and share balances of such
investors. The Company will maintain a single master account with each Fund on
behalf of the Account and such account shall be in the name of the Company (or
its nominee) as the record owner of shares owned by the Account.
2. Disburse or credit to the investors all proceeds of
redemptions of shares of the Funds and all dividends and other distributions not
reinvested in shares of the Funds.
3. Prepare and transmit to the investors as required by law
periodic statements showing the total number of units owned by the investors as
of the statement closing date, purchases and redemptions of Fund shares by the
investors during the period covered by the statement and the dividends and other
distributions paid during the statement period (whether paid in cash or
reinvested in Fund shares), and such other information as may be required, from
time to time, by the investors.
4. Transmit purchase and redemption orders to the Funds on
behalf of the investors in the Account in accordance with the procedures set
forth in the Agreement.
5. Distribute to the investors copies of the Funds'
prospectus, proxy materials, periodic fund reports to shareholders and other
materials that the Funds are required by law or otherwise to provide to their
shareholders or prospective shareholders.
6. Maintain and preserve all records as required by law to be
maintained and preserved in connection with providing the Administrative
Services for the Account.
3
Schedule D
Distribution Services
Pursuant to the Agreement to which this is attached, the Company shall
perform distribution services for Advisor Class shares of the Funds, including,
but not limited to, the following:
1. Receive and answer correspondence from prospective shareholders,
including distributing prospectuses, statements of additional
information, and shareholder reports.
2. Provide facilities to answer questions from prospective investors about
Fund shares.
3. Assist investors in completing application forms and selecting dividend
and other account options.
4. Provide other reasonable assistance in connection with the distribution
of Fund shares.
4
AMENDMENT NO. 1 TO PARTICIPATION AGREEMENT
THIS AMENDMENT NO. 1 TO PARTICIPATION AGREEMENT is made as of June 24,
2002, by and among SECURITY BENEFIT LIFE INSURANCE COMPANY ("SBL"), SECURITY
DISTRIBUTORS, INC. ("SDI" and collectively with SBL, the "Company") and AMERICAN
CENTURY INVESTMENT SERVICES, INC. ("Distributor"). Capitalized terms not
otherwise defined herein shall have the meaning ascribed to them in the
Agreement (defined below).
RECITALS
WHEREAS, the Company and the Distributor are parties to a certain
Participation Agreement dated July 1, 2001 (the "Agreement") in connection with
the participation by the Funds in various variable annuity contracts on behalf
of the Account;
WHEREAS, the parties wish to add one or more of the Investor Class
Shares of the Fund to those which the Company may make available to the
Contracts under the Agreement; and
WHEREAS, in connection with the addition of one or more Investor Class
Shares of the Fund as investment options under the Contracts, the parties agree
to revise the compensation section of the Agreement; and
WHEREAS, the parties now desire to modify the Agreement as provided
herein;
NOW, THEREFORE, in consideration of the mutual promises set forth
herein the parties hereto agree as follows:
1. ADDITION OF CLASS. The first "Whereas" clause of the Agreement is
hereby deleted in its entirety and the following paragraph is substituted in
lieu thereof:
"WHEREAS, the Company wishes to make available as investment
options under the Contracts one or more of the Investor and
Advisor Class funds made available by Distributor from time to time
(the "Funds"), each of which is a series of mutual fund shares
registered under the Investment Company Act of 1940, as amended, and
issued by a registered investment company (collectively, the
"Issuers"); and"
In connection with the addition of the Investor Class Funds, the sixth
"Whereas" clause of the Agreement is hereby deleted in its entirety and the
following paragraph is substituted in lieu thereof:
"WHEREAS, the Company intends to purchase one or more shares
of the Investor and Advisor Class Funds, on behalf of the Account to
fund the aforesaid Contracts; and"
2. DESIGNATED FUNDS. After the date of this amendment, all references
to "Designated Funds" in the Agreement shall be deemed to refer to the "Funds."
3. SCHEDULE A. Schedule A is hereby deleted in its entirety and is
replaced by
Schedule A, attached hereto.
-5-
4. FEES AND EXPENSES. The second sentence of Section 6.3 is hereby
amended by adding the phrase "Investor and" before the phrase "Advisor Class
shares of the Funds."
5. CONFLICTS AND ENTIRE AGREEMENT. In the event of a conflict between
the terms of this Amendment No. 1 and the Agreement, it is the intention of the
parties that the terms of this Amendment No. 1 shall control and the Agreement
shall be interpreted on that basis. To the extent the provisions of the
Agreement have not been amended by this Amendment No. 1, the parties hereby
confirm and ratify the Agreement. The Agreement, along with this Amendment No.
1, constitutes the entire agreement among the parties with respect to the
arrangements described herein.
6. COUNTERPARTS. This Amendment No. 1 may be executed in two or more
counterparts, each of which shall be an original and all of which together shall
constitute one instrument.
7. AMENDMENTS. Except as expressly supplemented, amended or consented
to hereby, all of the representations, warranties, terms, covenants and
conditions of the Agreement shall remain unamended and shall continue to be in
full force and effect.
IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 1
as of the date first above written.
SECURITY BENEFIT LIFE INSURANCE COMPANY
By: Xxx X. Xxx
Name: Xxx X. Xxx
Title: Vice President, Associate General Counsel & Asst. Secretary
AMERICAN CENTURY INVESTMENT
SERVICES, INC.
By: Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
SECURITY DISTRIBUTORS, INC.
By: Xxx X. Xxx
Name: Xxx X. Xxx
Title: Secretary
-6-
(ii) AMENDMENT NUMBER 2
(iii) TO PARTICIPATION AGREEMENT
THIS AMENDMENT NO. 2 TO THE PARTICIPATION AGREEMENT ("Amendment") is
effective as of the 2nd day of April 2007, by and between SECURITY BENEFIT LIFE
INSURANCE COMPANY ("SBL"), SECURITY DISTRIBUTORS INC. ("SDI" and collectively
with SBL, the "Company"), and AMERICAN CENTURY INVESTMENT SERVICES, INC. (the
"Distributor").
WHEREAS, Security Benefit Life Insurance Company, Security
Distributors, Inc. and American Century Investment Services, Inc. are parties to
a Participation Agreement dated July 1, 2001, as amended June 24, 2002 (the
"Agreement"); and
WHEREAS, the Agreement currently only permits the Company to offer the
Investor and Advisor Class of the Funds and the parties wish to modify the
agreement to make all current and future classes of shares of the Funds
available for purchase under the Agreement; and
WHEREAS, the parties wish to change the use of the terms "Account" and
"Contract" in such a way that the Accounts and Contracts need not be listed on
Schedule A to the Agreement, but nonetheless, for convenience the parties may
determine to list them on Schedule A; and
WHEREAS, the parties now desire to further modify the Agreement as
provided herein.
NOW, THEREFORE, in consideration of the mutual promises set forth
herein, the parties hereto agree as follows:
1. The first paragraph of the Agreement is hereby deleted and replaced
with the following:
"THIS AGREEMENT, dated as of the 1st day of July, 2001 (as
subsequently amended), by and among Security Benefit Life Insurance Company,
("SBL"), a stock life insurance company organized under the laws of the State of
Kansas, on its own behalf and on behalf of each segregated asset account of SBL
currently in existence or hereafter created that invests in a Fund (each account
hereinafter referred to as an "Account"), Security Distributors, Inc., a Kansas
corporation and a registered broker/dealer ("SDI" and collectively with SBL, the
("Company") and American Century Investment Services, Inc. (the "Distributor"),
a Missouri corporation."
2. The first "WHEREAS" clause of the Agreement is hereby deleted in its
entirety and the following is substituted in lieu thereof:
"WHEREAS the Company wishes to make available as investment options
under the Contracts, one or more of the share classes of the funds made
available by Distributor from time to time (the "Funds"), each of which is a
series of mutual fund shares registered under the Investment Company Act of
1940, as amended, and issued by a registered investment company (collectively,
the "Issuers"); and"
-7-
3. The fourth "WHEREAS" clause of the Agreement is hereby deleted in
its entirety and the following is substituted in lieu thereof:
"WHEREAS, the Company has issued or will issue certain
variable annuity contracts supported wholly or partially by
the Account (the "Contracts"); and"
4. The fifth "WHEREAS" clause of the Agreement is hereby deleted in its
entirety and the following is substituted in lieu thereof:
"WHEREAS, the Account is duly established and maintained as a
segregated asset account, duly established by the Company, to
set aside and invest assets attributable to the aforesaid
Contracts; and"
5. The sixth "WHEREAS" clause of the Agreement is hereby deleted in its
entirety and the following is substituted in lieu thereof:
"WHEREAS, the Company intends to purchase shares of the Funds
made available by the Distributor from time to time, on behalf
of the Account to fund the aforesaid Contracts; and"
6. Section 1.1 of the Agreement is hereby deleted in its entirety and
the following is substituted in lieu thereof:
1.1 (a) ____Subject to Article IX hereof, the Distributor
agrees to cause the Issuer to make available to the Company for purchase on
behalf of the Account, shares of the Funds, such purchases to be effected at net
asset value in accordance with Section 1.3 of this Agreement. Notwithstanding
the foregoing, (i) the Funds in existence now or that may be established in the
future will be made available to the Company only as the Issuer may so provide,
and (ii) the Board of Directors of the Funds (the "Board") may suspend or
terminate the offering of shares of any Fund or class thereof, if such action is
required by law or by regulatory authorities having jurisdiction or if, in the
sole discretion of the Board acting in good faith and in light of its fiduciary
duties under federal and any applicable state laws, suspension or termination is
necessary and in the best interests of the shareholders of such Fund.
(b) It is agreed that Company, on behalf of an Account, has access
under this Agreement to all Funds of the Issuers and all share classes thereof
(including portfolios and share classes created in the future) and that it shall
not be necessary to list the Accounts, the Contracts, the Funds or the share
classes on Schedule A. Notwithstanding the fact that Accounts and Contracts need
not be listed on Schedule A, the parties may, in their discretion and for
convenience and ease of reference only, include one or more Accounts and
Contracts on Schedule A from time to time.
7. Section 6.3 of the Agreement is hereby deleted in its entirety and
the following is substituted in lieu thereof:
"6.3. Distributor acknowledges that it will derive a substantial
savings in administrative expenses, such as reduction in expenses related to
postage, shareholder communications and recordkeeping, by virtue of having a
single shareholder account per Fund for the Accounts rather
-8-
than having each Participant as a shareholder. In consideration of performance
of the Administrative Services by the Company, Distributor will pay the Company
a fee (the "Administrative Services Fee") of (i) 25 basis points (0.25%) of the
average aggregate amount of each class of shares of the Funds, except for
Institutional class, held in the Account under this Agreement; and (ii) 5 basis
points (0.05%) of the average aggregate amount of Institutional Class shares of
the Funds held in the Account under this Agreement. Distributor will calculate
the amount of the payment to be made pursuant to this Section 6.3 at the end of
each calendar quarter and will make such payment to the Company within 30 days
thereafter. The parties acknowledge that the payments received by the Company
under this Section 6.3 are for administrative and shareholder services only and
do not constitute payment in any manner for investment advisory services or for
costs of distribution."
8. The parties agree to delete the existing Schedule A to the Agreement
and replace it with the Schedule A attached hereto.
9. In the event of a conflict between the terms of this Amendment and
the Agreement, it is the intention of the parties that the terms of this
Amendment shall control and the Agreement shall be interpreted on that basis. To
the extent the provisions of the Agreement have not been amended by this
Amendment, the parties hereby confirm and ratify the Agreement.
10. This Amendment may be executed in two or more counterparts, each of
which shall be an original and all of which together shall constitute one
instrument.
11. Capitalized terms used but not defined herein shall have the
meaning given to them in the Agreement. Except as expressly supplemented,
amended or consented to hereby, all of the representations, warranties, terms,
covenants and conditions of the Agreement shall remain unchanged and continue to
be in full force and effect.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment #2 to the Agreement to be executed in its name and on its behalf by
its duly authorized representative.
Security Benefit Life
Insurance Company By its authorized officer
By: Xxxxxx X. Xxxxx
Title: Senior Vice President
---------------------
Security Distributors, Inc. By its authorized officer
By: Xxxxxxx X. Xxxxxx
-----------------
Title: President
---------
-9-
American Century Investment Services, Inc. By its authorized officer
By: Xxxxx X. Xxxxxx
---------------
Title: Vice President
--------------
-10-
April 2, 2007
SCHEDULE A
----------
Account(s) Contract(s)
SBL Variable Annuity Account XIV V6029
SBL Variable Annuity Account XVI V6323
-11-
AMENDMENT NO. 3 TO PARTICIPATION AGREEMENT
THIS AMENDMENT NO. 3 TO PARTICIPATION AGREEMENT ("Amendment")
is made as of this 1st day of October, 2009, by and between SECURITY BENEFIT
LIFE INSURANCE COMPANY ("SBL"), SECURITY DISTRIBUTORS, INC. ("SDI") ("SBL" and
"SDI", collectively referred to as the "Company") and AMERICAN CENTURY
INVESTMENT SERVICES, INC. ("Distributor"). Capitalized terms not otherwise
defined herein shall have the meaning ascribed to them in the Agreement (defined
below).
WHEREAS, the Company and Distributor are parties to a certain
Participation Agreement dated July 1, 2001, as amended, June 24, 2002, and April
2, 2007 (the "Agreement"); and
WHEREAS, the parties desire to amend the Agreement to make
additional Funds available as investment options under the Agreement; and
WHEREAS, in connection with the additional Funds made
available, the parties have agreed to revise the reimbursement terms as set
forth herein; and
WHEREAS, the parties now desire to further modify the
Agreement as provided herein.
NOW, THEREFORE, in consideration of the mutual promises set
forth herein, the parties hereto agree as follows:
1. FUNDS AVAILABLE. The first recital of the Agreement is
hereby deleted in its entirety and replaced with the following language:
"WHEREAS, the Company wishes to make available as investment
options under the Contracts, one or more of the funds identified in
EXHIBIT A attached hereto (the "Funds"), each of which is a series of
mutual fund shares registered under the Investment Company Act of 1940,
as amended, and issued by a registered investment company (each an
"Issuer" and collectively, the "Issuers"); and "
2. EXHIBIT A. Exhibit A is hereby added with Exhibit A attached hereto.
3. COMPENSATION AND EXPENSES. ARTICLE VI is hereby deleted in its
entirety and the following language is substituted in lieu thereof:
(6.1) All expenses incident to performance by the Funds under
this Agreement shall be paid by the Funds. The Distributor shall see to it that
all Fund shares are registered and authorized for issuance in accordance with
applicable federal law and, if and to the extent deemed advisable by the such
Fund, in accordance with applicable state laws prior to their sale. The Funds
shall bear the expenses for the cost of registration and qualification of the
Funds' shares, preparation and filing of the Funds' prospectuses and
registration statements, proxy
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materials and reports, setting the prospectuses 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 each Fund's shares. The Fund shall bear the
expenses of distributing the Fund's proxy materials and reports to existing
Contract owners.
(6.2) The Company shall bear the expense of distributing all
prospectuses and reports to shareholders (whether for existing Contract owners
or prospective Contract owners). The Company shall bear the expense of printing
copies of the prospectus for the Contracts for use with prospective Contract
owners. The Company shall bear the expenses incident to (including the costs of
printing) sales literature and other promotional material that the Company
develops and in which the Issuer (or a Designated Fund thereof) is named.
(6.3) Distributor acknowledges that it will derive a
substantial savings in administrative expenses, such as a reduction in expenses
related to postage, shareholder communications and recordkeeping, by virtue of
having a single omnibus account per class per Fund for the Accounts rather than
having each Participant as a shareholder. In consideration of performance of the
Administrative Services by the Company, Distributor will pay the Company a fee
(the "Administrative Services Fee") attached as EXHIBIT A under this Agreement.
Distributor will pay the Company a fee on omnibus by fund or omnibus by plan
accounts, where their assigned Dealer #4527 is indicated on accounts.
(6.4) In consideration of performance of the Distribution
Services specified on Schedule D by the Company, Distributor will pay the
Company a fee (the "Distribution Fee") of 25 basis points (0.25%) of the average
aggregate amount invested by the Company in Advisor and/or A Class shares and 50
basis points (0.50%) of the average aggregate amount invested in R Class shares
of the Funds under this Agreement. Distributor will calculate the amount of the
payment to be made pursuant to this Section at the end of each calendar quarter
and will make such payment to the company within 30 days thereafter.
(6.5) For the purposes of computing the payments to the
Company contemplated by this ARTICLE VI, the average aggregate amount invested
by the Company on behalf of the Accounts in the Funds over any period shall be
computed by totaling the Company's aggregate investment (share net asset value
multiplied by total number of Shares held by the Company) on each calendar day
during the period and dividing by the total number of calendar days during such
period. Distributor will calculate the amount of the payments to be made
pursuant to this ARTICLE VI at the end of each calendar quarter and will make
such payments to the Company within 30 days thereafter.
(6.6) The check for such payments will be accompanied by a
statement showing the calculation of the amounts being paid for the relevant
period and such other supporting data as may be reasonably requested by the
Company and shall be mailed to:
Security Distributors, Inc.
One Security Benefit Place
Topeka, KS 66636-0001
Attn: Revenue Sharing Payments - Finance
Phone: 000-000-0000
Fax: 000-000-0000
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(6.7) Other than those payments specifically set forth herein,
no dealer concessions or other service or distribution fees shall be paid to the
Company.
4. RATIFICATION AND CONFIRMATION OF AGREEMENT. In the event of
a conflict between the terms of this Amendment and the Agreement, it is the
intention of the parties that the terms of this Amendment shall control and the
Agreement shall be interpreted on that basis. To the extent the provisions of
the Agreement have not been amended by this Amendment, the parties hereby
confirm and ratify the Agreement.
5. COUNTERPARTS. This Amendment may be executed in two or more
counterparts, each of which shall be an original and all of which together shall
constitute one instrument.
6. FULL FORCE AND EFFECT. Except as expressly supplemented,
amended or consented to hereby, all of the representations, warranties, terms,
covenants and conditions of the Agreement shall remain unamended and shall
continue to be in full force and effect.
[Remainder of page intentionally left blank]
-14-
IN WITNESS WHEREOF, the undersigned have executed this
Amendment as of the date first above written.
SECURITY BENEFIT LIFE INSURANCE
COMPANY
By: Xxxxxxx X. Xxxxx
----------------
Name: Xxxxxxx X. Xxxxx
----------------
Title: Vice President
---------------
Date: December 8, 2009
----------------
SECURITY DISTRIBUTORS, INC.
By: Xxxx X. Xxxx
----------------
Name: Xxxx X. Xxxx
--------------
Title: President
-----------
Date: December 8, 2009
----------------
AMERICAN CENTURY INVESTMENT
SERVICES, INC.
By: Xxxxx X. Xxxxxxx
------------------
Name: Xxxxx X. Xxxxxxx
------------------
Title: Vice President, National Accounts
---------------------------------
Date: December 22, 2009
-----------------
-15-
EXHIBIT A
---------
FUNDS AVAILABLE AND APPLICABLE FEES
ADMIN
SERVICES
CLASS FUND NAME FEE
----- --------- ---------
INVESTOR /ADVISOR
AND/OR A CLASS LIVESTRONG 2015 Portfolio 35 bps
--------------
LIVESTRONG 2020 Portfolio
LIVESTRONG 2025 Portfolio
LIVESTRONG 2030 Portfolio
LIVESTRONG 2035 Portfolio
LIVESTRONG 2040 Portfolio
LIVESTRONG 2045 Portfolio
LIVESTRONG 2050 Portfolio
LIVESTRONG Income Portfolio
Equity Income Funds
Heritage Funds
Growth Funds
INVESTOR/ADVISOR/
A AND/OR R CLASS All other approved Investor/Advisor/A 25 bps
----------------
and/or R Class Funds
INSTITUTIONAL CLASS All approved Institutional Funds 5 bps
-------------------
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