PARTICIPATION AGREEMENT Among Security Benefit Life Insurance Company, RS Investment Trust, on behalf of its, RS Partners Fund series only and

 

Among

 

Security Benefit Life Insurance Company,

 

RS Investment Trust, on behalf of its,

 

RS Partners Fund series only

 

and

 

RS Investment Management, L.P.

THIS AGREEMENT, dated as of the 1st day of July, 2003, 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”), RS Investment Trust (the “Trust”) on behalf of its RS Partners Fund series (the “Fund”) only, and RS Investment Management, L.P. (the “Adviser”), a California partnership.

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 Adviser, which serves as investment adviser to the Fund, is duly registered as an investment adviser 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 in the Fund, on behalf of the Account to fund the aforesaid Contracts;

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

ARTICLE I.  Sale of Fund Shares

ARTICLE II.  Representations and Warranties

ARTICLE III.  Prospectuses and Proxy Statements; Voting

annual reports of each Fund (for distribution to Contract owners with value allocated to the Funds) as the Company may reasonably request to deliver to existing Contract owners. If requested by the Company in lieu thereof, the Fund shall provide such documents (including a “camera-ready” copy of such documents as set in type, a diskette in the form sent to the financial printer, or an electronic copy of the documents in a format suitable for posting on the Company’s website, all as the Company may reasonably request) and such other assistance as is reasonably necessary in order for the Company to have prospectuses, SAIs, supplements and annual or semi-annual reports for the Contracts and the 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.

ARTICLE IV.  Sales Material and Information

ARTICLE V.  Fees and Expenses

allocated to the Fund (regardless of whether such prospectuses are printed by the Fund or the Company; provided that, where such prospectuses are printed by the Company, the expense thereof must be an amount considered reasonable by the Fund).

ARTICLE VI.  Qualification

The Fund represents and warrants that it is, and intends to remain qualified as a regulated investment company (a “RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code,”) and that it will notify the Company immediately upon having a reasonable basis for believing that it has ceased to so qualify or that it might not so qualify in the future. If during any period the Fund fails to qualify as a RIC under Subchapter M, then the Adviser will indemnify the Company to the extent, but only to the extent, of the amount of any tax payable by the Fund in respect of such period, multiplied by the percentage obtained by dividing the number of shares of the Fund held by the Company at the time the amount of such tax is first deducted from the assets of the Fund shown on the Fund’s financial statements by the total number of shares of the Fund outstanding at such time. In addition, in any such case, the Adviser will indemnify the Company for all reasonable legal expenses incurred by the Company in the defense of any claim by Contract owners against it arising from the failure of the Fund to qualify as a RIC.

ARTICLE VII.  Indemnification

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

of the 1933 Act (collectively, the “Indemnified Parties” for purposes of this Section 7.2) against any and all losses, claims, damages, liabilities (including amounts paid in settlement with the written consent of the Adviser) or litigation expenses (including legal and other expenses) actually paid by the Indemnified Parties to Contract owners, regulatory authorities or any third-party claimaints, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements:

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

the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Adviser of any such claim shall not relieve the Adviser from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision. In case any such action is brought against the Indemnified Party, the Adviser 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 Adviser to such party of the Adviser’s election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Adviser 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 Fund’s indemnification obligations under this Section 7.3 are subject to applicable law.

Company or the Account, whichever is applicable. Further, the Fund shall not be liable (including by way of indemnification) for any exemplary, indirect, punitive, special or consequential damages. Notwithstanding the foregoing, no person shall be entitled to any indemnification under this Section 7.3 in respect of any failure of the Fund to qualify as a RIC for any period.

ARTICLE VIII.  Applicable Law

ARTICLE IX.  Termination

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

inquiry relating to this Agreement or the transactions contemplated hereby. Notwithstanding the generality of the foregoing, each party hereto further agrees to furnish the Kansas Insurance Commissioner with any information or reports in connection with services provided under this Agreement which such Commissioner may request in order to ascertain whether the variable insurance operations of the Company are being conducted in a manner consistent with the Kansas insurance laws and regulations and any other applicable law or regulations (the Company to pay any costs or expenses incurred by the Fund or the Adviser in connection therewith).

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.

 

July 1, 2003

 

THIS AMENDMENT NO. 1 TO THE PARTICIPATION AGREEMENT is made as of August 4, 2006, by and between Security Benefit Life Insurance Company (“Company”), and RS Investment Trust (the “Trust”) on behalf of its RS Partners Fund series (the “Fund”) and RS Investment Management, L.P. (“Adviser”). Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Agreement (defined below).

WHEREAS, the Company, the Trust and the Adviser are parties to a Participation Agreement dated July 1, 2003 (the “Agreement”); and

WHEREAS, terms of the Agreement contemplate that the Accounts eligible to purchase Funds of the Trust under the Agreement may be changed from time to time by amending Schedule A to the Agreement; and

WHEREAS, the parties wish to add certain Accounts to the Agreement by deleting the existing Schedule A and replacing it with the Schedule A attached hereto; and

WHEREAS, the Trust issues its shares in multiple series and the parties hereto desire to amend the definition of “Fund” such that it encompasses all series of the Trust; and

WHEREAS, all other terms of the Agreement shall remain in full force and effect;

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

1.  The defined term “Fund” in the Agreement from this date forward shall mean each series of the Trust set forth on Schedule A, as it may be amended from time to time. Schedule A attached to the Agreement is hereby deleted in its entirety and replaced with the Schedule A attached hereto.

2.  One or more new series of the Trust may be established (each a “New Fund”), not then represented on Schedule A hereto. Each such New Fund shall become subject to the provisions of the Agreement to the same extent as the existing Funds as reflected on Schedule A, except to the extent that such provisions may be modified with respect to each additional New Fund in writing by the parties at the time of the addition of the New Fund, and each such New Fund shall be added to Schedule A.

3.  All obligations of the Funds under this Agreement are several and not joint.

4.  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 dated July 1, 2003 and this Amendment No. 1 constitutes the entire agreement among the parties with respect to the arrangements described herein.

5.  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.

6.  Except as expressly supplemented, amended or consented to hereby, all of the representations, warranties, terms, covenants and conditions of the Agreement dated July 1, 2003 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.

 

August 4, 2006

 

THIS ASSIGNMENT AND AMENDMENT NO. 2 TO THE PARTICIPATION AGREEMENT is made as of February 22, 2007, by and between Security Benefit Life Insurance Company (“Company”), and RS Investment Trust (the “Trust”) on behalf of its constituent Funds (the “Funds”), RS Investment Management, L.P. (“Adviser”), and Guardian Investor Services LLC (“GIS”). Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Participation Agreement (defined below).

WHEREAS, the Company, the Trust and the Adviser are parties to a Participation Agreement dated July 1, 2003 (the “Agreement”), as amended; and

WHEREAS, GIS is a Delaware corporation registered as a broker-dealer under the Securities Exchange Act of 1934 and a member of the NASD;

WHEREAS, GIS has acquired a majority interest in RS Investment Management Co. LLC (RS); and

WHEREAS, as a result of this acquisition RS is a subsidiary of GIS and GIS has become principal distributor of the Funds; and

WHEREAS, the Trust and the Adviser wish to assign the Agreement to GIS;

NOW, THEREFORE, the Trust and the Adviser do hereby transfer and assign all of their right, title and interest in and obligations under said Agreement, effective as of October 9, 2006, to GIS and, by its signature below, Company does hereby consent to said assignment.

AMENDMENT NO. 2 TO AGREEMENT

In consideration of their mutual promises, the parties hereby amend the Agreement by adding the following provisions to Article XI:

11.9.  Information to be provided.

Company agrees that, in the event that it should come to its attention that any of its variable contract owners is engaging in a pattern of purchases, redemptions and/or exchanges of Funds that is inconsistent with the trading parameters established by the Trust and communicated to Company, Company shall immediately notify GIS of such pattern and shall cooperate fully with GIS in any investigation and, if deemed necessary or appropriate by GIS, terminating any such pattern of trading, including, without limitation, by refusing such owner’s orders to purchase shares of the Funds.

11.10

Anti Money Laundering Provisions.

(a)  Company represents and certifies that it has adopted and implemented, and agrees that it will maintain, policies, procedures, and internal controls reasonably designed to comply with the applicable provisions of the Bank Secrecy Act, as amended by the USA PATRIOT Act of 2001, its implementing regulations, Money Laundering Abatement Act, and any other Anti-Money Laundering law, rule or regulation applicable to it, including but not limited to, rules requiring it to implement an anti-money

laundering program and a customer identification program (“CIP”). Subject to legal restrictions, Company will, upon GIS’s request, promptly provide to GIS or the respective Fund, evidence of those policies and procedures and its compliance therewith and/or evidence establishing the identities and sources of funds for each purchase of shares of the Funds.

(b)  Further, Company will, upon GIS’s reasonable request, not more than once each year, certify to GIS that it remains in compliance with such rules; specifically, that it or its agents (i) provide notice of its CIP to all new customers, (ii) obtains required identifying data elements for each customer, (iii) reasonably verifies the identity of each new customer (using the data elements), (iv) takes appropriate action with respect to persons the identities of whom it can not verify, and (v) retains all records for required time periods, each at least to an extent required by relevant USA PATRIOT Act of 2001 regulation.

(c)  Company also hereby certifies to GIS that it is in compliance with the economic sanctions programs administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”), and has an OFAC compliance program that satisfies all applicable laws and regulations. Company understands that GIS will be relying on the foregoing certifications in administering the Funds’ anti-money laundering compliance program. Company hereby undertakes to notify GIS promptly if any of the foregoing certifications cease to be true and correct in any material respect.

11.11.  Privacy

(a)  Company agrees to comply with all applicable federal, state and/or local law or regulation related to privacy.

(b)  Each party represents and warrants to the other that it has implemented and currently maintains an effective information security program to protect customer information, which program includes administrative, technical and physical safeguards to ensure the security and confidentiality of the Nonpublic Personal Information, to protect against any threats or hazards to the security and integrity of the Nonpublic Personal Information, and to protect against unauthorized access to or use of the Nonpublic Personal Information.

11.12.  Certifications.

Company hereby certifies that to the best of its knowledge after reasonable inquiry, it is following all requirements, rules and regulations in connection with its handling of orders for transactions in the Funds, including, but not limited to,:

	Rule 22c-1(a) under the Investment Company Act of 1940 (the “1940 Act”), as amended;

	The provisions of Company’s agreement with GIS or its affiliates that relate to offering shares of the Funds in accordance with prospectus requirements and the placement of orders with GIS or the Funds’ transfer agent for purchases or redemptions of Fund shares;

	The Funds’ prospectus provisions regarding the purchase and redemption of Fund shares and market timing policies; and

	Company’s internal policies and procedures that it believes to be appropriate and sufficient with regard to the handling of Fund orders on a timely basis.

 

11.13.  Shareholder Information

11.13.a.

Agreement to Provide Information. Company agrees to provide the Fund, upon written request, the taxpayer identification number (“TIN”), the Individual/ International Taxpayer Identification Number (“ITIN”), or other government-issued identifier (“GII”), if known, of

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