PARTICIPATION AGREEMENT FOR RETAIL MUTUAL FUNDS
BY AND AMONG
AIM GROWTH SERIES,
A I M DISTRIBUTORS, INC.,
AND
SECURITY BENEFIT LIFE INSURANCE COMPANY
TABLE OF CONTENTS
DEFINITION PAGE
ARTICLE I....................................................................4
SALE OF FUND SHARES.................................................4
ARTICLE II...................................................................5
REPRESENTATIONS AND WARRANTIES......................................5
ARTICLE III..................................................................6
PROSPECTUSES AND PROXY SOLICITATIONS................................6
ARTICLE IV...................................................................7
SALES MATERIAL AND INFORMATION......................................7
ARTICLE V....................................................................8
SERVICING FEES......................................................8
ARTICLE VI...................................................................9
EXPENSES............................................................9
ARTICLE VII..................................................................9
INDEMNIFICATION.....................................................9
ARTICLE VIII................................................................13
APPLICABLE LAW.....................................................13
ARTICLE IX..................................................................13
TERMINATION........................................................13
ARTICLE X...................................................................16
NOTICES............................................................16
ARTICLE XI..................................................................17
MISCELLANEOUS......................................................17
SCHEDULE A..................................................................20
SCHEDULE B..................................................................21
PARTICIPATION AGREEMENT FOR RETAIL MUTUAL FUNDS
BY AND AMONG
AIM GROWTH SERIES,
A I M DISTRIBUTORS, INC.,
AND
SECURITY BENEFIT LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into this 1st day of July, 2001 by and
among Security Benefit Life Insurance Company ("Insurer"), a Kansas corporation,
on its own behalf and on behalf of each segregated asset account of Insurer set
forth on Schedule "A" as may be amended from time to time (each such account
hereinafter referred to as the "Account"), and AIM Growth Series, on behalf of
its series portfolios set forth on Schedule "B" as may be amended from time to
time (the "Fund"), a Delaware trust, and A I M Distributors, Inc. (the
"Underwriter"), a Delaware corporation.
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940 (the "1940 Act") and its shares
are registered under the Securities Act of 1933, as amended (the "1933 Act");
and
WHEREAS, the Fund is available to act as the investment vehicle for (i)
separate accounts established for variable group annuity contracts offered to
pension and profit sharing plans, their sponsors and participants, under
Sections 401(a) and 401(k) of the Internal Revenue Code of 1986, as amended (the
"Code") and (ii) separate accounts established for variable annuity contracts
offered in connection with tax sheltered annuities and individual retirement
annuities under Code Section 403(b) and 408, respectively, to be offered by
Insurer; and
WHEREAS, Insurer may offer certain unregistered variable group annuity
contracts under Section 3(a)(2) of the 1933 Act and Section 3(c)(11) of the 1940
Act and/or variable annuity contracts that are registered under the 1933 Act and
the 1940 Act (collectively, the "Contracts"); and
WHEREAS, each Account is a duly organized, validly existing segregated
asset account, established by appropriate corporate resolution of the Insurer's
Board of Directors to set aside and invest assets attributable to one or more
annuity contracts; and
WHEREAS, the Underwriter is registered as a broker-dealer with the
Securities and Exchange Commission ("SEC") under the Securities Exchange Act of
1934, as amended, (the "1934 Act"), and is a member in good standing of the
National Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, Insurer intends to purchase shares in the Fund on behalf of each
Account to fund the various Contracts and the Underwriter is authorized to sell
such shares to each Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, Insurer, the
Fund and the Underwriter agree as follows:
ARTICLE I
SALE OF FUND SHARES
1.1 The Underwriter on behalf of the Funds agrees to sell to Insurer
those Fund shares which each 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 Fund. For purposes of this Section
1.1, Insurer shall be the designee of the Fund for receipt of such orders from
each Account and receipt by such designee shall constitute receipt by the Fund,
provided that the Fund receives notice of such order by 10:00 a.m. Eastern Time
on the next Business Day. Business Day shall mean any day on which the New York
Stock Exchange is open for trading which is also a "Business Day of the Fund" as
that term is defined in the Fund's prospectus.
1.2 The Fund agrees to make its shares available indefinitely for
purchase at the applicable net asset value per share by Insurer and its Accounts
on each Business Day and the Fund shall use reasonable efforts to calculate such
net asset value on each Business Day.
1.3 The Fund agrees to redeem, on Insurer's request, any full or
fractional shares of the Fund held by Insurer or the Accounts, executing such
requests on a daily basis at the net asset value next computed after the Fund or
its designee receives the redemption request. For purposes of this Section 1.3,
Insurer shall be the designee of the Fund for receipt of redemption requests
from each Account and receipt by such designee shall constitute receipt by the
Fund provided that the Fund receives notice of such redemption request by 10:00
a.m. Eastern Time on the next Business Day. Insurer agrees to use its best
efforts to notify the Fund in advance of any large anticipated redemptions in
order to avoid any unnecessary disruption or burden in the management of the
Fund's assets.
1.4 Insurer shall pay for Fund shares on the next Business Day after an
order to purchase Fund shares is effected in accordance with the provisions of
Section 1.1. Payment shall be in federal funds transmitted by wire. Fund shall
pay Insurer for Fund shares redeemed on the next Business Day after an order to
redeem is effected in accordance with the provisions of Section 1.3, provided
however that the Fund reserves the right to delay payment to the extent
permitted by Section 22(e) of the 1940 Act. Payment shall be in federal funds
transmitted by wire.
1.5 Issuance and transfer of the Fund's shares will be by book entry
only. Stock certificates will not be issued to Insurer or any Account. Shares
ordered from the Fund will be recorded in an appropriate title for each Account.
1.6 The Fund shall use its best efforts to furnish notice by facsimile
or telephone, (if by telephone, it must be followed by written confirmation) to
Insurer of any income, dividends or capital gain distributions payable on the
Fund's shares by the record date, but in no event later than 6:30 p.m. Eastern
Time on the ex-dividend date. Insurer hereby elects to receive all such income
dividends and capital gain distributions in additional shares of that Fund.
Insurer reserves the right to revoke this election and to receive all such
income dividends and capital gain distributions in cash. The Fund shall notify
Insurer of the number of shares so issued as payment of such dividends and
distributions.
1.7 The Fund shall make the net asset value per share for each Fund
available to Insurer on each Business Day as soon as reasonably practical after
the net asset value per share is calculated and shall use its best efforts to
make such net asset value per share available by 6:30 p.m. Eastern Time.
1.8 The parties may agree, in lieu of the procedures set forth above in
this Article 1, to place and settle trades for Fund shares through a clearing
corporation. In the event that such a clearing corporation is used, the parties
agree to abide by the rules of the clearing corporation.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Insurer represents and warrants that the Contracts (i) are, or
prior to issuance will be, registered under the 1933 Act, or (ii) are exempt
from registration under Section 3(a)(2) under the 1933 Act. Insurer further
represents and warrants 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 all applicable
state insurance laws and regulations. Insurer further represents and warrants
that it is an insurance company duly organized and in good standing under the
laws of the State of Kansas and that it has legally and validly established each
Account prior to any issuance or sale thereof as a segregated asset account
under K.S.A. 40-436. Insurer represents and warrants with respect to each
Account that it (i) has registered or, prior to any issuance or sale of the
Contracts, will register the Account as a unit investment trust under the 1940
Act, or alternatively (ii) has not registered the Account in proper reliance
upon an exclusion from registration under the ▇▇▇▇ ▇▇▇.
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 all applicable federal and state securities
laws and that the Fund is and shall remain registered under the ▇▇▇▇ ▇▇▇. 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.
2.3 The Fund represents that it is currently qualified as a regulated
investment company under Subchapter M of the Code and that it will maintain such
qualification (under Subchapter M or any successor or similar provision) and
that it will notify Insurer 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.
2.4 Insurer represents that the Contracts are currently treated as life
insurance, endowment or annuity contracts, under applicable provisions of the
Code and that it will maintain such treatment and that it will notify the Fund
and the Underwriter immediately upon having a reasonable basis for believing
that the Contracts have ceased to be so treated or that they might not be so
treated in the future.
2.5 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 under the
1934 Act. The Underwriter further represents that it will sell and distribute
the Fund shares in accordance with all applicable state and federal securities
laws and regulations, including the 1933 Act, the 1934 Act, and the 1940 Act and
the Rules promulgated thereunder.
2.6 The Fund represents that it is lawfully organized and validly
existing under the laws of the State of Delaware and that it does and will
comply in all material respects with the 1940 Act and the Rules promulgated
thereunder.
2.7 The Fund and Underwriter represent and warrant that all of their
directors, trustees, officers, employees, investment advisers, and other
individuals/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 in an amount not less than the minimal coverage as required
currently by Rule 17g-1 of the 1940 Act or related provisions as may be
promulgated from time to time. Such bond shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding company.
2.8 Insurer represents and warrants that all of its directors,
officers, employees, investment advisers, and other individuals/entities dealing
with the money and/or securities of the Account are and shall continue to be at
all times covered by a blanket fidelity bond or similar coverage for the benefit
of the Account, in an amount not less than $5 million. Such bond shall include
coverage for larceny and embezzlement and shall be issued by a reputable bonding
company.
ARTICLE III
PROSPECTUSES AND PROXY SOLICITATIONS
3.1 The Underwriter shall provide Insurer with as many copies of the
Fund's current prospectus (and any supplements thereto) as Insurer may
reasonably request. If requested by Insurer in lieu thereof, the Fund shall
provide such documentation (including a final copy of the current prospectus as
set in type at the Fund's expense a diskette in the form sent to the financial
printer, or an electronic copy in a format suitable for posting on Insurer's
website) and other assistance as is reasonably necessary in order for Insurer
once each year (or more frequently if the prospectus for the Fund is amended) to
have the disclosure memoranda for the Contracts and the Fund's prospectus
printed simultaneously or posted on the Insurer's website or printed
individually by the Insurer if it so chooses. Such documentation shall be
provided in a timely manner.
3.2 The Fund's prospectus shall state that the Statement of Additional
Information ("SAI") for the Fund is available from the Underwriter (or in the
Fund's discretion, the Prospectus shall state that such SAI is available from
the Fund), and the Underwriter (or the Fund), at its expense, shall print and
provide such SAI to Insurer and to any owner/participant of a Contract or
prospective owner/participant who requests such SAI.
3.3 The Fund, at its expense, shall provide Insurer with copies of its
proxy material, reports to stockholders and other communications to stockholders
in such quantity as Insurer shall reasonably require for distributing to
Contract owners/participants.
3.4 When the Fund submits proposals to shareholders, Insurer shall, if
and to the extent required by law:
(i) solicit voting instructions from owners of or
participants in the Contract;
(ii) vote the Fund shares in accordance with instructions
received from owners of or participants in the
Contract; and
(iii) vote Fund shares for which no instructions have been
received in the same proportion as Fund shares of
such Fund for which instructions have been received
(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).
Insurer 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 The Fund will comply with all provisions of the 1940 Act requiring
voting by shareholders.
ARTICLE IV
SALES MATERIAL AND INFORMATION
4.1 Insurer will provide to the Fund at least one (1) complete copy of
all prospectuses, disclosure memoranda, reports, sales literature and other
promotional materials, applications for exemptive relief, requests for no action
letters, and all amendments, if any in which the Fund or Underwriter is named.
No such material shall be used until approved by the Fund or its designee, and
the Fund will use its best efforts for it or its designee to review such
material within five (5) Business Days after receipt. The Fund or its designee
reserves the right to reasonably object to the continued use of any such sales
literature or other promotional material in which the Fund or the Underwriter is
named, and no such material shall be used if the Fund or its designee so
objects.
4.2 Insurer shall not give any information or make any representations
or statements regarding or on behalf of the Fund or the Underwriter or any of
its affiliates in connection with the sale of the Contracts other than
information or representations contained in the registration statement or
prospectus or SAI for the Fund shares, as such registration statement and
prospectus or SAI may be amended or supplemented from time to time, or in
reports or proxy statements for the Fund, or in sales literature or other
promotional material approved by the Fund or its designee, except with the
permission of the Fund or its designee.
4.3 The Fund, Underwriter, or their respective designee(s) shall
furnish, or shall cause to be furnished, to Insurer or its designee, each piece
of sales literature or other promotional material in which Insurer and/or its
separate account(s) is named. No such material shall be used until approved by
Insurer, and the Insurer will use its best efforts to review such material
within five (5) Business Days after receipt. The insurer reserves the right to
reasonably object to the continued use of any such sales literature or other
promotional material in which the Insurer or its separate accounts is named, and
no such material shall be used if the Insurer so objects.
4.4 The Fund and the Underwriter shall not give any information or make
any representations on behalf of Insurer or concerning Insurer, the Accounts, or
the Contracts other than the information or representations contained in the
prospectuses or disclosure memoranda for the Contracts, as such documents may be
amended or supplemented from time to time, or in published reports for each
Account which are in the public domain or approved by Insurer for distribution
to Contract owners, or in sales literature or other promotional material
approved by Insurer or its designee, except with the permission of Insurer.
4.5 Upon request, the Fund will provide to Insurer at least one (1)
complete copy of all registration statements, prospectuses, SAI, reports, proxy
statements, and all amendments to any of the above, that relate to the Fund or
its shares, contemporaneously with the filing of such document with the SEC or
other regulatory authorities.
4.6 For purposes of this Article IV, the phrase "sales literature or
other promotional material" includes, but is not limited to, advertisements
(such as material published or designed for use in a newspaper, magazine or
other periodical, radio, television, telephone or tape recording, videotape
display, signs or billboards, motion pictures, or other public media), sales
literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, research
reports, market letters, form letters, 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.
ARTICLE V
SERVICING FEES
The provisions of shareholder and administrative services to the
Contracts shall be the responsibility of Insurer and shall not be the
responsibility of Underwriter. The Insurer will be recognized as the sole
shareholder of Fund's shares purchased under this Agreement. It is further
recognized that there will be a substantial savings in administrative expense
and recordkeeping expenses by virtue of having one shareholder rather than
multiple shareholders. In consideration of the administrative savings resulting
from such arrangement, Underwriter agrees to pay to Insurer, on a quarterly
basis, a servicing fee in an amount equal to 0.20 basis points (0.20%) per annum
of the daily average aggregate net assets invested in the Fund through Insurer's
arrangements with Contracts in each calendar quarter. Underwriter will make such
payments to Insurer within thirty (30) days after the end of each calendar
quarter. Each payment will be accompanied by a statement showing the calculation
of the fee payable to Insurer for the quarter and such other supporting data as
may be reasonably requested by Insurer.
ARTICLE VI
EXPENSES
6.1 To the extent permitted under applicable law, all expenses incident
to performance by the Fund under this Agreement shall be paid by the Fund. The
Fund shall see to it that all of 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, registration statements and amendments thereto, proxy materials and
reports to shareholders, setting in type and printing the Fund's prospectus,
proxy materials and reports to shareholders, the preparation of all Fund
statements and notices required by any federal or state law, and all taxes on
the issuance or transfer of the Fund's shares.
6.2 It shall be the sole responsibility of Insurer to comply with
provisions of federal and state law applicable to the delivery of Fund
prospectuses. Insurer shall bear all costs related to any disclosure document to
be provided to owners or participants in the Contracts. Insurer shall bear all
costs of distributing Contract materials. The Fund and/or Underwriter shall bear
all costs of distributing Fund materials (including proxy materials and periodic
reports) to owners or participants in the Contracts.
ARTICLE VII
INDEMNIFICATION
7.1 INDEMNIFICATION BY INSURER
7.1(a) Insurer agrees to indemnify and hold harmless the Fund, its
affiliates (including the Underwriter and each of their directors, trustees and
officers and each person, if any, who controls the Fund or its affiliates within
the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" for purposes of this Section 6.1) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of Insurer) or litigation (including legal and other expenses), to which
the Indemnified Parties may become subject under any statute, regulation, at
common law or otherwise, 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 disclosure memorandum for the Contracts or
contained in the Contracts or sales literature for
the Contracts (or any amendment or supplement to any
of the foregoing), or arise out of or are based upon
the omission or the alleged omission to state therein
a material fact required to be stated therein or
necessary to make the statements therein not
misleading, provided that this agreement to indemnify
shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or
omission was made in reliance upon and in conformity
with information furnished to Insurer by or on behalf
of the Fund or the Underwriter for use in the
registration statement, prospectus or disclosure
memorandum for the Contracts or in the Contracts or
sales literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the
Contracts or Fund shares; or
(ii) arise out of or as a result of statements or
representations by or on behalf of the Insurer (other
than statements or representations contained in the
Registration Statement, prospectus or sales
literature of the Fund not supplied by Insurer or
persons under its control) or wrongful conduct of
Insurer or persons under its 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, or sales
literature of the Fund or any amendment thereof or
supplement thereto or the omission or alleged
omission to state therein a material fact required to
be stated therein or necessary to make the statements
therein not misleading if such a statement or
omission was made in reliance upon information
furnished to the Fund by or on behalf of Insurer; or
(iv) arise as a result of any failure by Insurer 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 Insurer in
this Agreement or arise out of or result from any
other material breach of this Agreement by Insurer,
as limited by and in accordance with the provisions
of Sections 6.1(b) and 6.1(c) hereof.
7.1(b) Insurer shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred
or assessed against an Indemnified Party as such may arise from 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 or duties under this Agreement or to the Fund,
whichever is applicable.
7.1(c) Insurer 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 Insurer 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 Insurer of any such claim shall not
relieve Insurer 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, Insurer shall be entitled to participate, at its own
expense, in the defense of such action. Insurer also shall be entitled to assume
the defense thereof, with counsel reasonably satisfactory to the party named in
the action. After notice from Insurer to such party of Insurer's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and Insurer will not be
liable to such party under this Agreement for any legal or other expenses
subsequently incurred by such party independently in connection with the defense
thereof other than reasonable costs of investigation.
7.1(d) The Indemnified Parties will promptly notify Insurer 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 with respect to the Account.
7.2. INDEMNIFICATION BY THE UNDERWRITER AND THE FUND
7.2(a) The Fund, to the extent permitted by law, and/or the Underwriter
each agree to indemnify and hold harmless Insurer and each of its directors and
officers and each person, if any, who controls Insurer within the meaning of
Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes
of this Section 6.2) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the Fund
and/or the Underwriter) or litigation (including legal and other expenses) to
which the Indemnified Parties may become subject under any statute, at common
law or otherwise, 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 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 sales literature of the Fund (or any amendment or
supplement to any of the foregoing), or arise out of
or are based upon the omission or the alleged
omission to state therein a material fact required to
be stated therein or necessary to make the statements
therein not misleading, provided that this agreement
to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged
statement or omission was made in reliance upon and
in conformity with information furnished to the
Underwriter or Fund by or on behalf of Insurer for
use in the Registration Statement or prospectus for
the Fund or in sales literature (or any amendment or
supplement to any of the foregoing) or otherwise for
use in connection with the sale of the Contracts or
Fund shares; or
(ii) arise out of or as a result of statements or
representations by or on behalf of the Fund or
Underwriter (other than statements or representations
contained in the Registration Statement or prospectus
or disclosure memoranda or sales literature for the
Contracts not supplied by the Fund, the Underwriter
or persons under their 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 the
Registration Statement or prospectus or disclosure
memoranda, or sales literature covering the
Contracts, or any amendment thereof or supplement
thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein
or necessary to make the statement or statements
therein not misleading, if such statement or omission
was made in reliance upon information furnished to
Insurer by or on behalf of the Fund or the
Underwriter; or
(iv) arise as a result of any failure by the Fund or the
Underwriter 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
Underwriter or the Fund in this Agreement or arise
out of or result from any other material breach of
this Agreement by the Underwriter or the Fund; as
limited by and in accordance with the provisions of
Sections 6.2(b) and 6.2(c) hereof.
7.2(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 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
Insurer or the Account, whichever is applicable.
7.2(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 Parties, 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 reasonably
satisfactory to the party named in the action. 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.
7.2(d) Insurer 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 each Account.
ARTICLE VIII
APPLICABLE LAW
8.1 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Delaware.
8.2 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.
ARTICLE IX
TERMINATION
9.1 This Agreement shall terminate:
(a) at the option of any party upon one hundred eighty (180)
days' advance written notice to the other parties; or
(b) at the option of Insurer to the extent that shares of Funds
are not reasonably available to meet the requirements of the
Contracts as determined by Insurer in its sole discretion;
or
(c) at the option of the Fund in the event that formal
administrative proceedings are instituted against Insurer by
the NASD, the SEC, any Insurance Commissioner, or any other
regulatory body regarding Insurer duties under this
Agreement or related to the sale of the Contracts, with
respect to the operation of any Account, or the purchase of
the Fund shares; provided, however, that the Fund determines
in its sole judgment exercised in good faith, that any such
administrative proceedings will have a material adverse
effect upon the ability of Insurer to perform its
obligations under this Agreement; or
(d) at the option of Insurer in the event that formal
administrative proceedings are instituted against the Fund
or Underwriter by the NASD, the SEC, any Insurance
Commissioner, or any other regulatory body regarding the
Fund's duties under this Agreement or related to the sale of
the Contracts; provided, however, that Insurer 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
(e) with respect to any Account that intends to change the
funding vehicle and such change would require approval of
the State Insurance Department, with written notice to the
Fund or the Underwriter contemporaneously with application
to the State Insurance Department, upon requisite approval
of the State Insurance Department and Contract owners, if
necessary; or
(f) at the option of Insurer, in the event any of the Fund'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 Insurer; or
(g) at the option of Insurer, if the Fund ceases to qualify as a
Regulated Investment Company under Subchapter M of the Code
or under any successor or similar provision, or if Insurer
reasonably believes that the Fund may fail to so qualify; or
(h) at the option of either the Fund or the Underwriter, if (i)
the Fund or the Underwriter, respectively, shall determine
in good faith that Insurer has suffered a material adverse
change in its business or financial condition or is the
subject of material adverse publicity and such material
adverse change or material adverse publicity will have a
material adverse impact upon the business and operations of
either the Fund or the Underwriter, (ii) the Fund or the
Underwriter shall notify Insurer in writing of such
determination and its intent to terminate this Agreement,
and (iii) after considering the actions taken by Insurer and
any other changes in circumstances since the giving of such
notice, such determination of the Fund or the Underwriter
shall continue to apply on the sixtieth (60th) day following
the giving of such notice, which sixtieth (60th) day shall
be the effective date of termination; or
(i) at the option of Insurer, if (i) Insurer shall determine in
good faith that either the Fund or the Underwriter has
suffered a material adverse change in its business or
financial condition or is the subject of material adverse
publicity and such material adverse change or material
adverse publicity will have a material adverse impact upon
the business and operations of Insurer, (ii) Insurer shall
notify the Fund and the Underwriter in writing of such
determination and its intent to terminate the Agreement, and
(iii) after considering the actions taken by the Fund and/or
the Underwriter and any other changes in circumstances since
the giving of such notice, such determination shall continue
to apply on the sixtieth (60th) day following the giving of
such notice, which sixtieth (60th) day shall be the
effective date of termination, or
(j) at the option of either the Fund or the Underwriter, if
Insurer gives the Fund and the Underwriter the written
notice specified in Section 8.1(a) hereof and at the time
such notice was given there was no notice of termination
outstanding under any other provision of this Agreement;
provided, however, any termination under this Section 8.1(j)
shall be effective forty-five (45) days after the notice
specified in Section 8.1(a) was given; or
(k) at the option of the Insurer, upon substitution of the
shares of another investment company or series thereof for
shares of the Fund in accordance with the terms of the
Contracts, provided that the Insurer has given at least 45
days prior written notice to the Fund and Underwriter of the
date of substitution.
9.2 It is understood and agreed that the right of any party hereto to
terminate this Agreement pursuant to Section 8.1(a) may be exercised for any
reason or for no reason.
9.3 NOTICE REQUIREMENT. No termination of this Agreement shall be
effective unless and until the party terminating this Agreement gives prior
written notice to all other parties to this Agreement of its intent to terminate
which notice shall set forth the basis for such termination. Furthermore:
(a) In the event that any termination is based upon the
provisions of Sections 8.1(a), 8.1(h), 8.1(i), 8.1(j) or
8.1(k) of this Agreement, such prior written notice shall be
given in advance of the effective date of termination as
required by such provisions; and
(b) In the event that any termination is based upon the
provisions of Sections 8.1(c) or 8.1(d) of this Agreement,
such prior written notice shall be given at least ninety
(90) days' before the effective date of termination.
9.4 EFFECT OF TERMINATION. Notwithstanding any termination of this
Agreement, the Fund and the Underwriter shall, at Insurer's option, continue to
make available additional Fund shares pursuant to the terms and conditions of
this Agreement, for all Contracts in effect on the effective date of termination
of this Agreement (the "Existing Contracts"), but not to new Contracts or
participants. Specifically, without limitation, the owners of the Existing
Contracts shall 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 unless the Insurer seeks an order
pursuant to Section 26 of the 1940 Act to permit the substitution of other
securities for the share of the Fund. Notwithstanding the foregoing, the Board
of Directors of the Fund may refuse to sell shares of any Fund to any person, or
suspend or terminate the offering of shares of the Fund if such action is
required by law or by regulatory authorities having jurisdiction or is, in the
sole discretion of the Board of Directors 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 Fund.
ARTICLE X
NOTICES
Any notice shall be sufficiently given when sent by registered or
certified mail to the applicable party at the address set forth below or at such
other address as may be specified in writing to the other parties.
IF TO THE FUND:
AIM Growth Series
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
IF TO THE UNDERWRITER:
A I M Distributors, Inc.
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
IF TO INSURER:
Security Benefit Life Insurance Company
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: General Counsel
ARTICLE XI
MISCELLANEOUS
11.1 All persons dealing with the Fund and the Underwriter must look
solely to the property of the Fund for the enforcement of any claims against the
Fund as neither the Board, officers, agents or shareholders of the Fund assume
any personal liability for obligations entered into on behalf of the Fund.
11.2 Subject to the requirements of legal process and regulatory
authority, the Fund and Underwriter 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, without the express
written consent of the affected party shall not disclose, disseminate or utilize
such confidential information until such time as it may come into the public
domain.
11.3 The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
11.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
11.5 If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Agreement
shall not be affected thereby.
11.6 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including 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. Each party hereto
further agrees to furnish any state insurance department with any information or
reports in connection with services provided under this Agreement if such state
so requests.
11.7 The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to under
state and federal laws.
11.8 No part of this Agreement may be assigned without the prior
written consent of the other parties. Such consent will not be unreasonably
withheld.
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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.
AIM GROWTH FUNDS
Attest: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------- -------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Secretary Title: President
A I M DISTRIBUTORS, INC.
Attest: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------- -------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Counsel Title: President
SECURITY BENEFIT LIFE INSURANCE COMPANY
Attest: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇ ▇▇▇▇
----------------------- -------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: 2nd VP & Asst. Counsel Title: Senior Vice President
SCHEDULE "A"
SEPARATE ACCOUNTS
SBL Variable Annuity Account XIV
SCHEDULE "B"
MUTUAL FUNDS
AIM Basic Value A
AIM Mid Cap Equity A
AIM Small Cap Growth A