Document:

SECOND AMENDMENT TO RIGHTS AGREEMENT

     This Second Amendment (the "Amendment"), dated as of October 28, 2002,
between MGIC Investment Corporation, a Wisconsin corporation (the "Company"),
and Wells Fargo Bank Minnesota, National Association ("Wells Fargo"), to the
Rights Agreement between the Company and Wells Fargo (as successor Rights Agent
to U.S. Bank National Association ("U.S. Bank") (as successor to Firstar Bank
Milwaukee, N.A.)), dated as of July 22, 1999 and as amended by the First
Amendment to Rights Agreement, dated as of October 28, 2002 (as so amended, the
"Rights Agreement").

                               W I T N E S S E T H

     WHEREAS, the Company and U.S. Bank previously entered into the Rights
Agreement, pursuant to which U.S. Bank was appointed to serve as the Rights
Agent; and

     WHEREAS, in addition to serving as Rights Agent, U.S. Bank served as
transfer agent for the Company's Common Shares prior to the date hereof; and

     WHEREAS, Section 21 of the Rights Agreement provides that, if the Rights
Agent and the transfer agent of the Common Shares are the same Person, the
appointment of a successor transfer agent for the Common Shares shall without
further action be the appointment of such Person as successor Rights Agent; and

     WHEREAS, as of the date hereof, the Company is appointing Wells Fargo as
transfer agent for the Company's Common Shares and is discharging U.S. Bank from
such duties and, as a result, Wells Fargo has become the Rights Agent under the
Rights Agreement by operation of Section 21 thereof; and

     WHEREAS, pursuant to Section 27 of the Rights Agreement, under
circumstances set forth therein, (i) the Company may supplement or amend any
provision of the Rights Agreement without the approval of any holders of
certificates representing Common Shares of the Company, and (ii) upon the
delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the terms
of Section 27 of the Rights Agreement, the Rights Agent shall execute such
supplement or amendment; and

     WHEREAS, the Company desires to amend the Rights Agreement as set forth
herein and direct Wells Fargo as Rights Agent to execute this Amendment.

     NOW, THEREFORE, in consideration of the promises and the mutual agreements
herein set forth, the parties hereby agree as follows:

<PAGE>

     Section 1. Direction to Rights Agent. The Company hereby directs Wells
Fargo, in its capacity as Rights Agent and in accordance with the terms of
Section 27 of the Rights Agreement, to execute this Amendment.

     Section 2. Certification of Appropriate Officer. The undersigned officer of
the Company, being duly authorized on behalf of the Company, hereby certifies on
behalf of the Company to Wells Fargo that (a) he is an "appropriate officer" as
such term is used in Section 27 of the Rights Agreement, and (b) this Amendment
is in compliance with Section 27 of the Rights Agreement.

     Section 3. Amendment of Rights Agreement. The Rights Agreement shall be
amended as follows:

          (a)  "Wells Fargo Bank Minnesota, National Association" shall be
     substituted throughout the Rights Agreement and Exhibits thereto for
     "Firstar Bank Milwaukee, N.A.," including substituting all abbreviations
     therefor.

          (b)  Section 1(a) of the Rights Agreement is amended by deleting "15%"
     wherever it appears in Section 1(a) and substituting "the Designated
     Percentage" in place thereof.

          (c)  Section 1(c) of the Rights Agreement is amended by deleting
     Section 1(c) and substituting the following in place thereof:

               "(c)  A Person shall be deemed the "Beneficial Owner" of and
          shall be deemed to "beneficially own" any securities:

                    (i) which such Person or any of such Person's Affiliates or
               Associates beneficially owns, directly or indirectly;

                    (ii) which such Person or any of such Person's Affiliates or
               Associates has (A) the right to acquire (whether such right is
               exercisable immediately or only after the passage of time)
               pursuant to any agreement, arrangement or understanding (other
               than customary agreements with and between underwriters and
               selling group members with respect to a bona fide public offering
               of securities), or upon the exercise of conversion rights,
               exchange rights, rights (other than these Rights), warrants or
               options, or otherwise; provided, however, that a Person shall not
               be deemed the Beneficial Owner of, or to beneficially own,
               securities tendered pursuant to a tender or exchange offer made
               by or on behalf of such Person or any of such Person's Affiliates
               or Associates until such tendered securities are accepted for
               purchase or exchange; or (B) the right to vote pursuant to any
               agreement, arrangement or understanding; provided, however, that
               a Person shall not be deemed the Beneficial Owner of, or to
               beneficially own, any

                                       2
<PAGE>

               security if the agreement, arrangement or understanding to vote
               such security (1) arises solely from a revocable proxy or consent
               given to such Person in response to a public proxy or consent
               solicitation made pursuant to, and in accordance with, the
               applicable rules and regulations of the Exchange Act and (2) is
               not also then reportable on Schedule 13D under the Exchange Act
               (or any comparable or successor report); or

                    (iii) which are beneficially owned, directly or indirectly,
               by any other Person with which such Person or any of such
               Person's Affiliates or Associates has any agreement, arrangement
               or understanding (other than customary agreements with and
               between underwriters and selling group members with respect to a
               bona fide public offering of securities) for the purpose of, or
               with respect to, acquiring, holding, voting (except to the extent
               contemplated by the proviso to Section 1(c)(ii)(B)) or disposing
               of any securities of the Company. It is understood that if such
               Person is an Investment Adviser, securities that are held in the
               portfolio of an Investment Company managed by that Investment
               Adviser shall be deemed to be covered by such an agreement,
               arrangement or understanding and shall be deemed to be
               beneficially owned by such Investment Adviser. "Investment
               Adviser" shall mean an investment adviser registered under the
               Investment Advisers Act of 1940, as amended (or any successor to
               such Act), and principally engaged in the business of managing
               investment funds for Persons other than that Investment Adviser,
               and a broker-dealer registered under the Exchange Act (or any
               successor to such Act) which is not required to register under
               such Investment Advisers Act. "Investment Company" shall mean an
               investment company registered under the Investment Company Act of
               1940, as amended (or any successor to such Act).

               Notwithstanding anything in this definition of Beneficial
          Ownership to the contrary,

               (x) the phrase "then outstanding," when used with reference to a
          Person's Beneficial Ownership of securities of the Company, shall mean
          the number of such securities then issued and outstanding together
          with the number of such securities not then actually issued and
          outstanding which such Person would be deemed to own beneficially
          hereunder;

               (y) an Investment Adviser and the Affiliates of that Investment
          Adviser shall not be deemed to beneficially own securities owned by
          their Associates unless the Associate is also their Affiliate; and

               (z) (A) for so long as the Conditions (as hereinafter defined)
          are satisfied, (I) an Affiliate of an Investment Adviser shall not be
          deemed to beneficially own securities beneficially owned by that
          Investment Adviser; and (II) giving effect to clause (I), an
          Investment Adviser shall not be deemed to beneficially own securities
          beneficially owned by an Affiliate of that Investment Adviser.  It is
          understood that if an Investment Company managed by an Investment
          Adviser is an Affiliate of that Investment Adviser, clause (II) shall
          not affect the provisions of Section 1 (c) (iii), which are that such
          Investment Adviser shall be deemed to beneficially own securities that
          are held in the portfolio of such Investment Company.

               (B) As used in this Section 1 (c) (z) and in Section 1 (f) (1):

                                       3
<PAGE>

               "Conditions" shall mean that (I) the securities covered by
          Section 1 (c) (z) (A) were not acquired and are not held with a
          purpose or the effect of changing or influencing control (within the
          meaning of Rule 12b-2 under the Exchange Act) of the Company, or in
          connection with or as a participant in any transaction having that
          purpose or effect, (II) giving effect to Section 1 (c) (z) (A), the
          aggregate amount of securities beneficially owned by an Investment
          Adviser and by all Investment Advisers the investment advisory
          activities of which are commonly managed shall be less than 17.5% of
          the Common Shares of the Company then outstanding, and (III)
          disregarding Section 1 (c) (z) (A), the aggregate amount of securities
          beneficially owned by all Affiliates of an Investment Adviser shall be
          less than 20% of the Common Shares of the Company then outstanding. If
          the Condition in clause (I) is initially satisfied but ceases to be
          satisfied, or if the Conditions in either of clauses (II) or (III) are
          not satisfied, and as promptly as practicable after the first of such
          Conditions ceases to be satisfied, a sufficient number of Common
          Shares is divested by the Affiliate of the Investment Adviser or the
          Investment Adviser so that none of such Persons is an Acquiring Person
          any longer, then none of such Persons shall be deemed to have been an
          Acquiring Person as a result of the failure to satisfy such
          Conditions. The Conditions shall be applied separately to each
          Investment Adviser and its Affiliates so that if another Investment
          Adviser which is not an Affiliate of the first Investment Adviser
          fails to satisfy the Conditions, such failure shall not affect the
          satisfaction of the Conditions by the first Investment Adviser and its
          Affiliates.

          For purposes of Condition (II), the investment advisory activities of
          Investment Advisers are "commonly managed" if any person (i) that is a
          member of the investment committee or group that determines general
          investment advise to be given to, or (ii) who determines general
          investment advise to be given to, clients of one Investment Adviser,
          is also a (i) member of the investment committee or group that
          determines general investment advise to be given to, or (ii)
          determines general investment advise to be given to, clients of
          another Investment Adviser."

          (d)  A new Section 1(f)(1) is hereby added to read in its entirety as
     follows:

                                       4
<PAGE>

          "(f) (1) "Designated Percentage" shall mean 15%, except that in the
          case of an Investment Adviser and any Investment Company (as such
          terms are defined in Section 1 (c) (iii) hereof) advised by that
          Investment Adviser, for so long as the Conditions (including the
          penultimate and final sentences of the definition of Conditions and
          the immediately succeeding paragraph which determines when Investment
          Advisers are "commonly managed") are satisfied, "Designated
          Percentage" shall mean 17.5%. It is understood that for purposes of
          this Section 1 (f) (1) the reference in Condition (I) to Section 1 (c)
          (z) (A) shall be deemed to refer to securities beneficially owned by
          such Investment Adviser or Investment Company, and that the
          divestiture provisions of the penultimate sentence of the definition
          of Conditions shall also apply to an Investment Company."

          (e)  Section 26 (b) of the Rights Agreement is hereby amended by
     deleting the address for notice or demand to be given to the Rights Agent
     by the Company or by the holder of any Right Certificate and substituting
     in lieu therefor the following:

          Wells Fargo Bank Minnesota, National Association
          Attn:  Wells Fargo Shareowner Services
                 Manager of Account Administration
          161 North Concord Exchange
          South St. Paul, Minnesota  55075-1139

          (f)  Section 27 of the Rights Agreement is hereby amended by deleting
     "15%" in the second sentence and substituting "the Designated Percentage"
     in place thereof.

     Section 4. Effectiveness and Continued Effectiveness. In accordance with
the resolutions of the Company's Board of Directors adopted on October 24, 2002,
the amendments to Section 1 of the Rights Agreement set forth in Sections 3 (b),
(c), (d) and (f) above are effective as of the time at which such resolutions
were adopted. The parties hereto hereby acknowledge and agree that, except as
specifically supplemented and amended, changed or modified in Section 3 above,
the Rights Agreement, as previously amended to the date hereof, shall be
unaffected by this Amendment and remain in full force and effect in accordance
with its terms.

     Section 5. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
one and the same instrument.

     Section 6. Defined Terms. Except as otherwise expressly provided herein, or
unless the context otherwise requires, all terms used but not defined herein
have the meanings assigned to them in the Rights Agreement.

     Section 7. Governing Law. This Amendment shall be deemed to be a contract
made under the laws of the State of Wisconsin and for all purposes shall be
governed by and construed in accordance with the laws of such State applicable
to contracts to be made and performed entirely within such State.

                            [Signature Page Follows]

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<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year above written.

                                             MGIC INVESTMENT CORPORATION

                                             By:
                                                 -------------------------------
                                                 Jeffrey H. Lane
                                                 Senior Vice President,
                                                 General Counsel and Secretary

                                             WELLS FARGO BANK MINNESOTA,
                                             NATIONAL ASSOCIATION

                                             By:
                                                 -------------------------------
                                             Its:
                                                 -------------------------------

                                       6Indemnification Agreement

  
 Exhibit 10.19 
  
 INDEMNIFICATION AGREEMENT 
  
 THIS
AGREEMENT is entered into as of February 4, 2002 between Variflex, Inc. a Delaware corporation (the “Company”), and Petar Katurich (“Indemnitee”). 
  
 RECITALS 
  
 WHEREAS, it is essential to the best
interests of the Company to attract and retain highly capable persons to serve as directors and/or officers of the Company; 
  
 WHEREAS, Indemnitee is or has been appointed or elected to be a director and/or officer of the Company; 
  
 WHEREAS, the Company and Indemnitee recognize the increased risk of litigation and other claims being asserted against directors and officers of corporations; and 
  
 WHEREAS, in recognition of Indemnitee s need for substantial protection against personal liability, in order to enhance Indemnitee s continued service to the
Company, and in order to induce Indemnitee to continue to provide services to the Company as a director and/or officer, the Company wishes to provide in this Agreement for the indemnification of and the advancement of expenses to Indemnitee to the
fullest extent permitted by law and as set forth in this Agreement, and to the extent applicable insurance is maintained, for the coverage of Indemnitee under the Company’s policies of directors’ and officers’ liability insurance.

  
 NOW THEREFORE, IN CONSIDERATION of the foregoing, the mutual covenants and promises contained herein and
of Indemnitee’s continuing to provide services to the Company the parties agree as follows: 
  
 SECTION
1.    Definitions. 
  
 a.  Board:    the board of directors of the Company. 
  
 b.  Change in Control:    a state of affairs that shall be deemed to have occurred if: 
  
 (i)  any person’s or entity’s beneficial ownership of the total voting power of the Company’s then outstanding voting securities
increases, either directly or indirectly, by twenty percent (20%); or 
  
 (ii)  during any
period of three (3) consecutive years, individuals who, at the beginning of such period, constituted the Board, together with any new director whose election by the Board or nomination for election by the Company’s shareholders was approved by
a vote of at least two-thirds (2/3) of the directors then in office who either were directors at the

 

 
beginning of the three (3) year period, or whose election or nomination was previously so approved, cease for any reason to constitute a majority of the Board; or 
  
 (iii)  the shareholders of the Company approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation that would result in the outstanding voting securities of the Company immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least eighty percent (80%) of the total outstanding 
 voting power represented by the
voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation. 
  
 c.  Expenses: 
  
 (i)  any costs, expenses, fees or losses
actually and reasonable incurred, including, but not limited to, attorneys’ fees, judgments, fines, damages, penalties and amounts paid or to be paid in settlement; 
  
 (ii)  any interest, assessments, or other charges imposed on any of the items in part (i) of this subsection (c); and 
  
 (iii)  any federal, state, local or foreign taxes imposed as a result of the actual or deemed receipt of any
payments under this Agreement that are paid or incurred in connection with investigating, defending, being a witness in. or participating in (including on appeal) or preparing for any of the foregoing in any Proceeding relating to an Indemnifiable
Event, as defined herein below. 
  
 d.  Indemnifiable Event:    any Proceeding
that takes place either before or after the execution of this Agreement and that is related to or arises out of: 
  
 (i)  the fact that Indemnitee is or was a director and/or officer of the Company or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise; or 
  
 (ii)  actions taken or not taken by
Indemnitee in his capacity as a director and/or officer (subject to Section 2b. hereof). 
  
 e.  Independent Counsel:    the person or body described in Section 4. 
  
 f.  Potential Change in Control:    a state of affairs that shall be deemed to exist if: 
  
 (i)  the Company enters into an agreement or arrangement, the consummation of which would result in the occurrence of a Change in Control; or

 
 2 

  
 (ii)  any person or entity announces an intention to
take or to consider taking actions that, if consummated, would constitute a Change in Control; or 
  
 (iii)  the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred. 
  
 g.  Proceeding:    any threatened, pending, or completed action, suit, or proceeding, or any injury, hearing, or investigation, whether conducted by the Company or
any other party, that an Indemnitee in good faith believes might lead to the institution of any such action, suit, or proceeding, whether civil, criminal, administrative, investigative or other. 
  
 h.  Reviewing Party:    the person or body appointed in accordance with Section 4.

  
 i.  Voting Securities:    any securities of the Company that have the
right to vote generally in the election of directors. 
  
 SECTION 2.    General
Agreement; Prohibited Indemnification. 
  
 a.  General
Agreement.    In the event Indemnitee was, is, or is threatened to be made a participant in, an Indemnifiable Event, the Company shall indemnify Indemnitee from and against any and all Expenses to the fullest extent permitted
by law, including but not limited to Section 145 of the Delaware General Corporation Law, as the same exists or may hereafter be amended or interpreted (but in the case of any such amendment or interpretation, only to the extent that such amendment
or interpretation permits the Company to provide broader indemnification rights than were permitted prior to that amendment or interpretation). The parties to this Agreement intend that this Agreement shall provide for indemnification in excess of
that expressly permitted by statute, including, without limitation, any indemnification provided by the Company’s Articles of Incorporation, its Bylaws, a vote of its shareholders or disinterested directors or applicable law. The
indemnification provided under this Agreement shall continue for Indemnitee even though Indemnitee may have ceased to serve in such capacity at the time of any Proceeding. Notwithstanding anything in this Agreement to the contrary, Indemnitee shall
not be entitled to indemnification under this Agreement in connection with any Proceeding initiated by Indemnitee against the Company or any director or officer of the Company unless: 
  
 (i)  the Company has joined in or the Board has consented to the initiation of the Proceeding; or 
  
 (ii)  the Proceeding is one to enforce indemnification rights or any other terms under this Agreement.

 
 3 

  
 b.  Prohibited Indemnification.    The
following shall not be Indemnifiable by the Company: 
  
 (i)  A Proceeding in which
judgement is rendered against Indemnitee for an accounting or profits made from the purchase or sale by lndemnitee of securities of the Company under the provisions of Section 16(b) of the Securities Exchange Act, or similar provision of any
federal, state or local laws; 
  
 (ii)  Any breach of the director’s duty of loyalty
to the Company or its shareholders; 
  
 (iii)  Acts or omissions not in good faith or which
involve intentional misconduct or a knowing and violation of law; 
  
 (iv)  Unlawful
payment of dividends or unlawful stock purchase or redemption pursuant to Section 174 of the Delaware General Corporation Law; and 
  
 (v)  Any transaction from which the director derived an improper personal benefit. 
  
 SECTION 3.    Indemnification Process. 
  
 a.  Defense of Action.    Indemnitee shall notify the Company in writing within a reasonable amount of time of becoming aware of the commencement of an Indemnifiable Event (the “Event
Notice”). The Event Notice shall also set forth whether Indemnitee desires to be indemnified by the Company and whether Indemnitee desires the Company to defend the Indemnifiable Event. The Company shall defend the Indemnifiable Event with
counsel reasonably satisfactory to Indemnitee, provided. however, Indemnitee reserves the right to appoint separate counsel in the event of a conflict of interest with the interests of Indemnitee or in the event the Company fails to timely and
adequately defend the Indemnifiable Event. In the event Indemnitee elects to defend the Indemnifiable Event, such election shall not constitute a waiver by Indemnitee of his rights against the Company for Expenses or to later demand that the Company
assume the defense of Indemnitee. Counsel defending the Indemnifiable Event on behalf of either party shall diligently defend the matter and shall keep the other parties fully informed of its status including all pertinent facts and information
pertaining to the Indemnifiable Event and the strategy to be followed. The Company shall not settle any Proceeding in any manner without Indemnitee’s written consent.

 
 4 

  
 b.  Advance of Expenses.    If requested by
Indemnitee, the Company shall, in accordance with this Agreement and within ten (10) business days of a written request by Indemnitee, advance to Indemnitee the Expenses that are reasonably anticipated to be incurred by Indemnitee and reimburse
Indemnitee for the Expenses that are actually incurred by Indemnitee in connection with any claim asserted against or action brought by Indemnitee for: 
  
 (i)  indemnification by the Company under this Agreement, or any other agreement, or under applicable law, or the Company’s Articles of
Incorporation or Bylaws now or hereafter in effect relating to indemnification for Indemnifiable Events, and/or 
  
 (ii)  recovery under directors’ and officers’ liability insurance policies maintained by the Company. 
  
 c.  Prohibited Indemnification; Reimbursement to the Company. 
  
 To the
extent that a Reviewing Party determines that an Indemnitee is not permitted to be indemnified under applicable law and Section 2b. hereinabove, the Company shall be entitled to be reimbursed by Indemnitee for all Expenses advanced and/or incurred,
and Indemnitee hereby agrees to reimburse the Company promptly for the same, provided, however, that if Indemnitee has commenced legal proceedings in a court of competent jurisdiction to secure a determination that Indemnitee should be indemnified
under applicable law, as provided in Section 2d. hereinabove, any determination made by the Reviewing Party that Indemnitee would not be permitted to be indemnified under applicable law shall not be binding, and Indemnitee shall not be required to
reimburse the Company for any advance of Expenses until a final judicial determination is made with respect thereto and all rights of appeal therefore have been exhausted or have lapsed. Indemnitee’s obligation to reimburse the Company for
Expenses advances shall be unsecured and no interest shall he charged thereon. 
  
 d.  Indemnification
Enforcement Rights.    If Indemnitee has not received full indemnification within thirty (30) days after making a demand for Expenses, Indemnitee shall have the right to enforce its indemnification rights under this Agreement
by commencing litigation in any court in the State of California seeking an initial determination by the court or challenging any determination by the Reviewing Party or any aspect thereof. The Company hereby consents to service of process and to
appear in any such proceeding. Any determination by the Reviewing Party not challenged by Indemnitee shall be binding on the Company and lndemnitee. The remedy provided for in this section 2(d) shall be in addition to any other remedies available to
Indemnitee in law or equity. 
  
 e.  Company Defenses.    It shall be a defense
to any action brought by Indemnitee against the Company to enforce this Agreement (other than an action brought to enforce a claim for Expenses incurred in defending a Proceeding in advance of its final disposition) that it is not permissible, under
this Agreement or applicable law, for the Company to indemnify Indemnitee for the amount claimed. In connection with any such action, the burden of proving such a defense shall be on the Company. The failure of a Reviewing Party to have made an
Indemnification 

 
 5 

 Determination (as defined below) before the commencement of such action by Indemnitee that indemnification is proper under the circumstances
shall not be a defense to the action. For purposes of this Agreement, the termination of any Indemnifiable Event by judgment, order, settlement (whether with or without court approval), conviction or upon a plea of nolo contendere or its equivalent
(a “Termination Event”), shall not, of itself, create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court had determined that indemnification is not permitted by
applicable law. 
  
 SECTION 4.    Indemnification Review Procedure; Reviewing
Party. 
  
 a.  Indemnification Review Procedure.    Within five
(5) days of the occurrence of a Termination Event, Indemnitee shall provide written notice to the Company of the Termination Event (the “Termination Event Notice”). In the Event that Indemnitee has been successful on the merits or
otherwise in defense of the Indemnifiable Event, indemnification by the Company of Indemnitee shall be mandatory. In the event that lndemnitee loses a judgement on the merits or otherwise in defense of the Indemnifiable Event, or where there is no
judicial determination of the actual merits of the defense raised, whether due to settlement, dismissal of the Complaint before trial, or upon a plea of nolo contendere or its equivalent, the Company shall submit the Termination Event Notice to the
applicable Reviewing Party (as set forth below). The Reviewing Party shall make a determination whether or not Indemnitee is entitled to be indemnified pursuant to this Agreement and applicable law (the “Indemnification Determination”).
The Indemnification Determination shall be made within twenty-five (25) days of the receipt of the Termination Event Notice. In connection with any Indemnification Determination, the burden of proof shall be on the Company. 
  
 b.  Reviewing Party.    The Reviewing Party that shall make an Indemnification Determination shall
be, at Indemnitee’s option, either: 
  
 (i)  A majority of a quorum of the board of
directors of the Company consisting of directors who are not parties to the lndemnifiable Event (a “Quorum”); or 
  
 (ii)  An Independent Counsel. 
  
 If the Reviewing Party is an Independent
Counsel, such Independent Counsel shall be selected by Indemnitee and approved by the Company (which approval shall not be unreasonably withheld), and shall not have otherwise performed services for the Company or Indemnitee within the previous five
(5) years. An Independent Counsel shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or lndemnitee in an action to
determine Indemnitee’s rights under this Agreement. An Independent Counsel, among other things, shall render a written opinion to the Company and Indemnitee on whether and to what extent Indemnitee should be permitted to be indemnified under
applicable law. The Company agrees to pay the reasonable fees of an Independent Counsel and to fully indemnify an Independent Counsel against any and all expenses, including attorneys fees, claims, liabilities, losses and damages arising out of or
relating to this Agreement or the engagement of an Independent Counsel under this Agreement. 

 
 6 

  
 SECTION 5.    Establishment Of Trust.

  
 In the event of a Change in Control or a Potential Change in Control, the Company shall, on written request
by Indemnitee, create a trust for the benefit of Indemnitee (the “Trust”) and from time to time on written request of Indemnitee (a “Trust Request”), shall fund the Trust with an amount sufficient to satisfy any and all Expenses
reasonably anticipated to be incurred in connection with investigating, preparing for, participating in, and/or defending any Indemnifiable 
  
 Event. The individual selected to be trustee shall he agreed upon by both Indemnitee and the Company (the “Trustee”). The terms of the Trust shall provide that upon a Change in Control:

  
 a.  The Trust shall not be revoked or the principal invaded without the written consent
of Indemnitee; 
  
 b.  The Trust shall continue to be funded by the Company in accordance
with the funding obligation set forth in this Section 5; 
  
 c.  The Trustee shall promptly
pay to Indemnitee all amounts for which Indemnitee shall be entitled under this Agreement or otherwise and 
  
 d.  All unexpended funds in the Trust shall revert to the Company on a final determination by a Reviewing Party or a court of competent jurisdiction that Jndemnitee has been fully indemnified under the terms of this
Agreement. 
  
 Nothing in this Section 5 shall relieve the Company of any of its obligations under this
Agreement. The Company shall pay all costs of establishing and maintaining the Trust and shall indemnify the Trustee against any and all expenses. including attorneys’ fees, claims, liabilities, losses and damages arising out of or relating to
this Agreement or the establishment and maintenance of the Trust. 
  
 SECTION
6.    Nonexclusivity. 
  
 The rights of Indemnitee under this Agreement
shall be in addition to any other rights Indemnitee may have under the Company’s Articles of Incorporation, Bylaws, applicable law or otherwise. To the extent that a change in applicable law (whether by statute or judicial decision) permits
greater indemnification by agreement than would be afforded currently under the Company’s Articles of Incorporation, Bylaws, applicable law or this Agreement, it is the intent of the parties that Indemnitee enjoy by this Agreement the greater
benefits afforded by such change. 

 
 7 

  
 SECTION 7.    Liability Insurance.

  
 To the extent the Company maintains an insurance policy or policies providing directors’ and
officers’ liability insurance, Indemnitee shall he covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any Company director and/or officer. 
  
 SECTION 8.    Period Of Limitations. 
  
 No legal action shall be brought, and no cause of action shall be asserted, by or on behalf of the Company or any affiliate of the Company against Indemnitee,
Indemnitee’s spouse, heirs, executors or personal or legal representatives, after the expiration of two (2) years from the date of accrual of such cause of action, or such longer period as may be required by state law under the circumstances.
Any claim or cause of action of the Company or its affiliate shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such period; provided, however, that if any shorter period of limitations is
otherwise applicable to any such cause of action, the shorter period shall govern. 
  
 SECTION
9.    Amendment Of This Agreement; Waiver. 
  
 No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall operate as a waiver of any other
provisions of this Agreement (whether or not similar), nor shall such waiver constitute a continuing waiver. Except as specifically provided in this Agreement, no failure to exercise or delay in exercising any right or remedy under it shall
constitute a waiver of the right or remedy. 
  
 SECTION
10.    Subrogation. 
  
 In the event of payment under this
Agreement, the Company shall be subrogated to the extent of that payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the
execution of any documents necessary to enable the Company effectively to bring suit to enforce such rights. 
  
 SECTION 11.    No Duplication Of Payments. 
  
 The Company shall not be liable under this Agreement to make any payment in connection with any claim made against Indemnitee to the extent Indemnitee has otherwise
obtained payment (under any insurance policy, bylaw or otherwise) of the amounts otherwise indemnifiable under this Agreement. 

 
 8 

  
 SECTION 12.    Binding Effect.

  
 This Agreement shall be binding on and inure to the benefit of and be enforceable by the parties to it and
their respective successors (including any direct or indirect successor by purchase, merger, consolidation, or otherwise to all or substantially all of the Company’s business or assets or both), assigns, spouses, heirs, and personal and legal
representatives. The Company shall require and cause any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all, substantially all, or a substantial part, of the Company’s business or assets or both, by
written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken
place. 
  
 SECTION 13.    Severability. 
  
 If any term or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be determined to
be invalid, illegal or unenforceable under present or future laws effective during the term of this Agreement, then and, in that event: (A) the performance of the offending term or provision (but only to the extent its application is invalid,
illegal or unenforceable) shall be excused as if it had never been incorporated into this Agreement, and, in lieu of such excused provision, there shall be added a provision as similar in terms to such excused provision as may be possible and be
legal, valid and enforceable, and (B) the remaining part of this Agreement (including the application of the offending term or provision to persons or circumstances other than those as to which it is held invalid, illegal or unenforceable) shall not
be affected thereby and shall continue in full force and effect to the fullest extent provided by law. 
  
 SECTION
14.    Governing Law. 
  
 This Agreement and the rights and remedies of
each party arising out of or relating to this Agreement (including, without limitation, equitable remedies) shall be solely governed by, interpreted under, and construed and enforced in accordance with the internal laws of the state of Delaware,
without regard to conflicts of laws principles as if this Agreement were made, and as if its obligations are to be performed, wholly within the state of Delaware. 
  
 SECTION 15.    Consent To Jurisdiction. 
  
 Any action or proceeding arising out of or relating to this Agreement shall be filed in and heard and litigated solely before the state courts of California located within the county of Ventura. Each
party generally and unconditionally accepts the exclusive jurisdiction of such courts and waives any defense or right to object to venue in said courts based upon the doctrine of “forum non conveniens”. Each party irrevocably agrees to be
bound by any judgement rendered thereby in connection with this Agreement. 

 
 9 

  
 SECTION 16.     Notices. 

 
 All notices, demands, and other communications required or permitted under this Agreement shall be made in writing and shall be
deemed to have been duly given if delivered by hand, against receipt, or mailed, certified or registered mail, return receipt requested, and addressed to the Company at: 
  
 Varifiex, Inc. 
 5152 North Commerce Avenue

 Moorpark, California 93021 
 Attn: Mr. Raymond “Jay” H. Losi, II 
  
 and to counsel at: 
  
 O’Melveny & Myers LLP 
 1999 Avenue of the Stars 
 Los Angeles, California 90067 
 Atn: Allison Keller 
  
 and to Indemnitee
at:                                       
                      
  

 
 10 

  
 Notice of change of address shall be effective only when given in accordance with
this Section. All notices complying with this Section shall be deemed to have been received on the date of delivery.IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the date set forth above. 

 
 
	 Company:
  
 VARIFLEX, INC
     a Delaware Corporation
 
	 
	 By:
 	 	 

	  	 	 Raymond (Jay) H. Losi II,
 Chief Executive Officer and Chief Operating Officer
 

 
  
 
	 Indemnitee:
 
	 
	 By:
 	 	 

	  	 	 Petar Katurich
 

 

 
 11

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