PARTICIPATION AGREEMENT Among Security Benefit Life Insurance Company, Security Distributors, Inc., ABN AMRO Funds, and

 

Among

 

Security Benefit Life Insurance Company,

 

Security Distributors, Inc.,

 

ABN AMRO Funds,

 

and

 

ABN AMRO Distribution Services (USA), Inc.

THIS AGREEMENT, dated as of the 29th day of September, 2006, by and among Security Benefit Life Insurance Company, (the “Company”), a stock life insurance company organized under the laws of the State of Kansas, on its own behalf and on behalf of each segregated asset account of the Company set forth on Schedule A hereto, as may be amended from time to time (each an “Account”),Security Distributors, Inc., (“SDI”), a registered broker-dealer organized under the laws of Kansas, ABN AMRO Funds (the “Trust”) a Delaware Business Trust, and ABN AMRO Distribution Services (USA), Inc. (the “Distributor”), a registered broker-dealer organized under the laws of Delaware.

WHEREAS, the shares of beneficial interest/common stock of the Trust are divided into several series of shares, each representing the interest in a particular managed Fund of securities and other assets (each a “Fund”) and listed in Schedule B hereto; and

WHEREAS, the Trust is registered as an investment management company under the Investment Company Act of 1940, as amended (the “1940 Act”) and shares of the Funds are registered under the Securities Act of 1933, as amended (the “1933 Act”); and

WHEREAS, the Distributor is duly registered as a broker-dealer 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, 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 B 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 to set aside and invest assets attributable to the aforesaid Contracts; and

WHEREAS, the Company intends to purchase shares in the Funds listed in Schedule B hereto, as it may be amended from time to time by mutual written agreement (the “Designated Portfolios”), on behalf of the Account to fund the aforesaid Contracts; and

WHEREAS, SDI is duly registered as a broker/dealer under the 1934 Act, is a member in good standing of the NASD and is the underwriter for the Contracts;

NOW, THEREFORE, in consideration of their mutual promises, the Company, the Trust and the Distributor agree as follows:

 

A-1

ARTICLE I.  Sale of Fund Shares

ARTICLE II.  Representations and Warranties

of the Fund 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.

ARTICLE III.  Prospectuses and Proxy Statements; Voting

ARTICLE IV.  Sales Material and Information

promptly after the filing of such document(s) with the SEC or other regulatory authorities. The Company shall provide to the Trust and the Distributor any complaints received from the Contract owners pertaining to the Fund or a Designated Portfolio.

ARTICLE V.  Fees and Expenses

ARTICLE VI.  Qualification

The Trust represents and warrants that each Designated Portfolio is currently qualified as a Regulated Investment Company under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code,”) and that each Designated Portfolio will maintain such qualification (under Subchapter M or any successor or similar provisions) as long as this Agreement is in effect and that it will notify the Company immediately or as soon as reasonably possible, if a Fund has ceased to qualify or that a Fund might cease to qualify in the future.

ARTICLE VII.  Indemnification

as limited by and in accordance with the provisions of Sections 7.1(b) and 7.1(c) hereof.

as limited by and in accordance with the provisions of Sections 7.2(b) and 7.2(c) hereof.

will be entitled to participate, at its own expense, in the defense thereof. The Adviser 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.

as limited by and in accordance with the provisions of Sections 7.3(b) and 7.3(c) hereof. The parties acknowledge that the Trust’s indemnification obligations under this Section 7.3 are subject to applicable law. The Company agrees that, in the event an obligation to indemnify exists pursuant to Section 7.3 as well as Section 7.2 hereof, it will seek satisfaction under the indemnification provisions of Section 7.2 before seeking indemnification under this Section 7.3.

ARTICLE VIII.  Applicable Law

ARTICLE IX.  Termination

and conditions of this Agreement, for all Contracts in effect on the effective date of termination of this Agreement (hereinafter referred to as “Existing Contracts”), unless the Company seeks an order pursuant to Section 26(b) of the 1940 Act to permit the substitution of other securities for the shares of the Designated Portfolios. Specifically, the owners of the Existing Contracts may be permitted to reallocate investments in the Fund, redeem investments in the Fund and/or invest in the Fund upon the making of additional purchase payments under the Existing Contracts (subject to any such election by the Company).

ARTICLE X.  Notices

Any notice shall be sufficiently given when sent by registered or certified mail to the other party at the address of such party set forth below or at such other address as such party may from time to time specify in writing to the other party.

 

ARTICLE XI.  Miscellaneous

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.

Schedule A

 

FEE PAYOUT:

*1.

For Class N and Class S, Distributor will pay 0.25% annually of the Fund’s average daily net assets and for Class R, Distributor will pay 0.50% annually of the Fund’s average daily net assets, as maintained and serviced by SDI pursuant to the Plan adopted and maintained pursuant to Rule 12b1 under the 1940 Act. Distributor will pay zero fees on Class I shares.

**2.	Trust will pay or cause to pay Company 0.10% annually of the Fund’s Class N average daily net assets.

PLAN PARAMETERS:

The payment to SDI and the Company, respectively, shall be calculated by the Distributor and/or the Trust at the end of each calendar quarter. All payments are made quarterly for purchases settling prior to the last business day of the quarter and are payable within thirty (30) days following the respective quarter end. Payment will be accompanied by a statement showing the calculation of the quarterly amounts payable by the Trust or Distributor and such other supporting data as may be reasonably requested by SDI or the Company. Minimum check to be paid to a servicing agent is $10.00.

 

Schedule C

PRICING CONTACTS AT PFPC, INC.

PFPC Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇

Fund Administration & Accounting Contacts:

▇▇▇▇▇ ▇▇▇▇▇ – VP/Director Fund Administration & Accounting

Phone:  ▇▇▇-▇▇▇-▇▇▇▇

Fax:  ▇▇▇-▇▇▇-▇▇▇▇

e-mail:  ▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇.▇▇▇

▇▇▇ ▇▇▇▇▇▇ – Manager Fund Administration & Accounting

Phone:  ▇▇▇-▇▇▇-▇▇▇▇

Fax:  ▇▇▇-▇▇▇-▇▇▇▇

e-mail:  ▇▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇.▇▇▇

 

 

FIRST AMENDMENT TO THE PARTICIPATION AGREEMENT

THIS FIRST AMENDMENT TO THE PARTICIPATION AGREEMENT (the “Amendment”) is entered into effective July 1, 2012, by and between Security Benefit Life Insurance Company (the “Company”), Security Distributors, Inc. (“SDI”), Aston Funds (formerly, ABN AMRO Funds) (the “Trust”), Foreside Funds Distributors LLC (formerly, BNY Mellon Distributors Inc.) (the “Distributor”) and Aston Asset Management, LP (the “Adviser”).

WHEREAS, the Company, SDI, Trust and Distributor are parties to that certain Participation Agreement dated September 29, 2006 (the “Agreement”); and

WHEREAS, the Adviser is a registered investment adviser under the Investment Advisers Act of 1940, as amended, and serves as the investment adviser to the Trust.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto, intending to be legally bound, hereby agree to amend the Agreement as set forth herein:

1.

Capitalized terms used herein without definition shall have the meanings ascribed to them in the Agreement.

2.

The Adviser is hereby added as a party to the Agreement solely with respect to the payment of fees as set forth in Schedule B attached hereto.

3.

All references to “ABN AMRO Funds” in the Agreement are hereby deleted and “Aston Funds” is hereby inserted in lieu thereof in all places. All references to the “Trust” in the Agreement shall be references to “Aston Funds.”

4.

All references to “ABN AMRO Distribution Services (USA), Inc.,” or “BNY Mellon Distributors Inc.” in the Agreement are hereby deleted and “Foreside Funds Distributors LLC” is hereby inserted in lieu thereof in all places. All references to the “Distributor” in the Agreement shall be references to “Foreside Funds Distributors LLC.”

5.

Section 2.5 is hereby amended and restated in its entirety as follows:

“2.5. The Trust represents and warrants that it maintains and shall continue to maintain at all times during the term of this Agreement a blanket fidelity bond or similar coverage in compliance with Rule 17g-1 of the 1940 Act or such 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.”

6.

Section 4.1 is hereby deleted in its entirety by inserting a placeholder in its place as follows:

“4.1

RESERVED”

7.

Section 4.2 is hereby amended by deleting the phrase “or in sales literature or other promotional material approved by the Trust or its designee,” and inserting the phrase “or in sales literature or other promotional material provided by the Trust or its designee,” in lieu thereof.

8.

The following language is added to the end of Section 5.1:

“SDI acknowledges that any compensation paid to it by Distributor will only derive from amounts paid to Distributor from the Trust. SDI also acknowledges and agrees that the Distributor shall not be responsible for the payment of any such fee unless and until Distributor has received such fee from the applicable Fund, and SDI agrees to waive payment of such fee unless and until Distributor has received payment from the applicable Fund.”

9.

Section 5.2 is hereby amended by deleting the phrase “The Trust” and inserting “The Trust or the Adviser” in lieu thereof.

10.

The following language is added to the end of Section 5.6:

“SDI acknowledges that any compensation paid to it by Distributor will only derive from amounts paid to Distributor from the Trust. SDI also acknowledges and agrees that the Distributor shall not be responsible for the payment of any such fee unless and until Distributor has received such fee from the applicable Fund, and SDI agrees to waive payment of such fee unless and until Distributor has received payment from the applicable Fund.”

11.

Section 5.7 is hereby amended and restated in its entirety as set forth below:

“5.7. Notwithstanding the termination of this Agreement, the Adviser and/or the Trust will continue to pay or cause to pay the Company the fee set forth, and in accordance with, Section 5.2 so long as net assets of the Accounts remain in a Designated Portfolio, provided such continued payment is permitted in accordance with applicable law, and the Company continues to comply with all of the terms and conditions of the Agreement, except for Section 9.1 of the Agreement. All of the other terms and provisions of the Agreement will continue in full force and effect with respect to all such assets

12.

The introductory paragraph to Section 7.1(a) is hereby amended and restated in its entirety as follows:

“7.1(a).  The Company agrees to indemnify and hold harmless each of the Trust, the Adviser, and the Distributor and each of their respective trustees/directors, officers, employees, and each person, if any, who controls the Trust or the Distributor within the meaning of Section 15 of the 1933 Act or who is under common control with the Trust or the Distributor (collectively, the “Indemnified Parties” for purposes of this Section 7.1) against any and all losses, claims, damages, liabilities (including amounts paid in settlement with the written consent of the Company) or litigation (including legal and other expenses), to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements:” Section 7.2(a) is hereby amended by deleting all references to “Adviser” and inserting “the Distributor” in lieu thereof in all places.

13.

Section 7.2(a)(i) through (v) are deleted and replaced in their entirety by the following:

“(i)

arise as a result of any failure by the Distributor to perform its duties and obligations under the terms of this Agreement; or

(ii)

arise out of or result from any material breach by the Distributor of any of its representations and/or warranties in this Agreement or arise out of or result from any other material breach of the terms of this Agreement by the Distributor.”

14.

Section 7.2(c) is hereby amended by deleting all references to “Adviser” and inserting “the Distributor” in lieu thereof in all places.

15.

Section 7.3(a) is hereby amended by deleting the following sentence:

“The Company agrees that, in the event an obligation to indemnify exists pursuant to Section 7.3 as well as Section 7.2 hereof, it will seek satisfaction under the indemnification provisions of Section 7.2 before seeking indemnification under this Section 7.3.”

16.

Section 7.3(a)(ii) is hereby amended by deleting the phrase “with respect to the sale or distribution of the Contracts or Funds shares” and inserting “with respect to the sale or distribution of Fund shares” in lieu thereof.

17.

Section 7.3(a)(iv) is hereby amended and restated in its entirety as follows:

                    “(iv) arise as a result of any material failure by the Trust to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether
                    unintentional or in good faith or otherwise, to comply with the qualification requirements specified in Article VI of this Agreement); or”

 

18.

Article X is hereby amended by amending and restating the notice addresses for the Trust and the Distributor as set forth below:

“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 or required by law, shall not disclose, disseminate or utilize such information without the express written consent of the affected party (which consent shall not be unreasonably withheld) until such time as such information has come into the public domain.”

20.

Schedule B to the Agreement is hereby amended and restated in its entirety as set forth in Schedule B attached hereto.

21.

Except to the extent modified by this Amendment, all terms of the Agreement shall remain in full force and effect. After the date hereof, all references in the Agreement to “this Agreement”, “hereof”, or words of similar effect referring to the Agreement shall be deemed to be references to the Agreement as amended by this Amendment. In the event of a conflict between the provisions of the Agreement and those of the Amendment, the Amendment shall control.

22.

This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together are one and the same document.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date set forth above.

 

 

Schedule B

Funds and Fees

Funds

Aston Funds Class N shares

Aston Funds Class I shares

Aston Funds Class R shares

Fees

1.

The Distributor shall pay SDI the following 12b-1 fees:

a.

0.25% of Class N average daily net assets invested in the Funds;

b.

0.50% of Class R average daily net assets invested in the Funds;

c.

No Fee on Class I average daily net assets invested in the Funds.

SDI acknowledges that any compensation paid to it by Distributor will only derive from amounts paid to Distributor from the Trust. SDI also acknowledges and agrees that the Distributor shall not be responsible for the payment of any such fee unless and until Distributor has received such fee from the applicable Fund, and SDI agrees to waive payment of such fee unless and until Distributor has received payment from the applicable Fund.

2.

The Trust or the Adviser shall pay the Company the following Sub-TA fees, subject to the exceptions identified below:

d.

0.15% of Class N average daily net assets invested in the Funds, except:

i.

0.05% of Class N average daily net assets invested in fixed income Funds;

ii.

0.10% of Class N average daily net assets invested in the ASTON/Fairpointe Mid Cap Fund (CHTTX) and ASTON/TAMRO Small Cap Fund (ATASX);

e.

0.15% of Class I average daily net assets invested in the Funds, except:

i.

0.05% of Class I average daily net assets invested in fixed income Funds;

ii.

0.10% of Class I average daily net assets invested in the ASTON/Fairpointe Mid Cap Fund (ABMIX) and ASTON/TAMRO Small Cap Fund (ATSIX); and

f.

No Fee on Class R average daily net assets invested in the Funds, except 0.15% of the Class R average daily net assets invested in the ASTON/Montag & ▇▇▇▇▇▇▇▇ Growth Fund (MCRGX).

Plan Parameters:

The payment to SDI and the Company, respectively, shall be calculated by the Distributor and/or the Trust at the end of each calendar quarter. All payments are made quarterly for purchases settling prior to the last business day of the quarter and are payable within thirty (30) days following the respective quarter end. Payments will be accompanied by a statement showing the calculation of quarterly amounts payable by the Trust or the Distributor and such other supporting data as may be reasonably requested by SDI or the Company. Minimum check to be paid to a servicing agent is $10.00.

 

[LETTERHEAD]

 

 

TIME SENSITIVE – PLEASE SIGN AND RETURN BY [AUGUST 31, 2016]

CONSENT FORM

Reference is hereby made to the Participation Agreement dated September 29, 2006, as amended, between Foreside Funds Distributors LLC (successor-in-interest to BNY Mellon Distributors LLC) (“Distributor”), Aston Funds (the “Trust”), Aston Asset Management, LP, now known as Aston Asset Management, LLC (“Adviser”), Security Benefit Life Insurance Company (“Company”) and Security Distributors, Inc., now known as Security Distributors, LLC (“SDL”), pursuant to which Distributor performs certain activities with respect to the Trust, including those that may only be performed by a registered broker-dealer (the “Agreement”). The Company and SDL hereby consent to Distributor’s assignment of all of its duties and obligations under the Agreement to AMG Distributors, Inc. (“AMGDI”), and to the assumption of all such duties and obligations under the Agreement by AMGDI, effective on October 1, 2016 (the “Effective Date”).

The Company and SDL further agree that the Agreement is hereby amended to replace Distributor with AMGDI as a party thereto, effective as of the Effective Date, subject only to the appointment of AMGDI as the Funds’ principal underwriter by the Funds’ Board of Trustees prior to the Effective Date. After Effective Date, all references to “Distributor” in the Agreement shall be references to “AMG Distributors, Inc.” Except as set forth herein, all of the terms and provisions of the Agreement(s) will remain in full force and effect.

Please return a signed copy of this Consent Form promptly, but in any event no later than [August 31, 2016] by mail or e-mail to:

AMG Funds LLC

▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇

▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇

Attention: Chief Compliance Officer

E-mail: ▇▇▇▇▇▇▇@▇▇▇.▇▇▇