SECURITY DISTRIBUTORS, INC.
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A MEMBER OF THE SECURITY ONE SECURITY BENEFIT PLACE
BENEFIT GROUP ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
MARKETING ORGANIZATION AGREEMENT
(THIRD PARTY)
PRODUCT AUTHORIZATION
FSBL Variable Products
Effective Date:
1. This Agreement is made among Security Distributors, Inc. ("SDI"),
("Marketing Organization"), and each of the agencies listed on Exhibit
"A," attached hereto (collectively referred to herein as "General
Agent"). SDI hereby authorizes Marketing Organization and those
persons associated with General Agent who are registered
representatives of Marketing Organization and licensed agents of First
Security Benefit Life Insurance and Annuity Company of New York to
solicit and service variable annuity contracts and variable life
insurance policies issued under First Security Benefit Life Insurance
and Annuity Company of New York's ("FSBL") several Variable Annuity
Accounts, which have been registered as securities under the
Securities Act of 1933 with Security Distributors, Inc. (a member of
the National Association of Securities Dealers, Inc.) having been
designated Principal Underwriter thereof. Said variable annuity
contracts and variable life insurance policies are referred to herein
as "variable products."
2. General Agent is hereby authorized to solicit, and to recommend for
appointment subagents (referred to herein as "Agents") to solicit
sales of FSBL variable products, to deliver the contracts, and to
service the business. General Agent may organize, train, and maintain
an agency force; however, FSBL may at its option, refuse to contract
with any proposed Agent and may at any time terminate any Agreement
with any Agent.
General Agent agrees to abide by the terms and conditions of this
Agreement and any sales manuals and/or rules and practices of FSBL and
SDI and agrees that its Agents will not (i) solicit or submit
applications, (ii) receive any compensation based on transactions in
securities or the provision of securities advice, or (iii) engage in
any other securities activities, unless such Agents are properly
licensed under applicable insurance laws and are "associated persons"
of the Marketing Organization within the meaning of "associated person
of a broker or dealer," as that term is used in Section 3(a)(18) of
the Securities Exchange Act of 1934. Marketing Organization agrees to
be responsible for the training, supervision and control of Agents as
required under the 1934 Act and other applicable law. General Agent
agrees to abide by all applicable local, state and federal laws and
regulations in conducting business under this Agreement. General Agent
and Marketing Organization undertake and agree to hold FSBL and SDI
harmless against any loss of whatever kind or nature arising out of
any claim made by any of said Agents for compensation.
General Agent shall endeavor to promote FSBL's and SDI's interests and
those mutual interests of General Agent and FSBL and SDI as
contemplated by this Agreement and shall at all times conduct itself,
and see that those Agents assigned to or appointed by General Agent or
its employees conduct themselves, so as not to adversely affect the
business reputation or good standing of either General Agent, FSBL or
SDI. The primary General Agent agrees to provide the affiliated
General Agents listed on Exhibit "A" attached hereto (if any), with a
copy of this agreement and insure compliance with its terms by each
General Agent.
General Agent shall be responsible to FSBL and SDI for the acts of the
Agents assigned to or appointed by General Agent or its employees and
shall indemnify and hold harmless from any and all expenses, costs,
causes of action, and/or damages resulting from or growing out of any
unauthorized act by General Agent or any of its Agents or employees.
In addition, the primary General Agent shall be responsible to FSBL
and SDI for the acts of each of the affiliated General Agents (if any)
listed on Exhibit "A," attached hereto, and shall indemnify and hold
harmless from any and all expenses, costs, causes of action, and/or
damages resulting from or growing out of any unauthorized act by
General Agent or any of its Agents or employees.
3. Marketing Organization hereby accepts authorization to solicit and
service FSBL variable products and confirms that Marketing
Organization is properly licensed to solicit and service such variable
products for FSBL and is a member in good standing of the National
Association of Securities Dealers, Inc., hereinafter called "NASD,"
and further agrees to notify SDI if it ceases to be a member of NASD.
4. Marketing Organization shall have the authority to recruit, train and
supervise registered representatives for the sale of variable products
of FSBL. Such training and supervision shall be conducted by the
Marketing Organization in accordance with the Securities Exchange Act
of 1934, the NASD's Conduct Rules and other applicable law. SDI
reserves the right to require termination of any registered
representative's right to sell FSBL variable products. Marketing
Organization shall be responsible for any registered representative
appointed hereunder complying with the terms, conditions and
limitations as set forth in this Agreement.
5. Commissions on purchase payments or premiums accepted by FSBL or SDI
on behalf of an annuitant, participant, or policyholder of a variable
product covered by this Agreement will be in accordance with the
Schedule of Commissions made part of this Agreement, and are in full
consideration of all services rendered and expenses incurred hereunder
by the General Agent and Marketing Organization or their
representatives. SDI will pay General Agent commissions as described
in the attached Commission Schedule(s) for policies sold by Agents
assigned to Marketing Organization. Neither General Agent nor
Marketing Organization is authorized to deduct commissions prior to
forwarding any remittance received to FSBL. All checks or drafts
received by the General Agent or Marketing Organization in regards to
any variable product shall be made payable to FSBL. All compensation
payable hereunder shall be subject to a first lien and may be reduced
or set off as to any indebtedness owed by the General Agent or
Marketing Organization to FSBL or SDI. Any commissions paid to a third
party at the request of the General Agent or Marketing Organization
shall be deducted from the commissions payable hereunder. In the event
this agreement is executed by one or more affiliated insurance
agencies listed on Exhibit "A", it is understood and agreed that the
primary agency will collect and disburse said commissions to the
soliciting General Agency.
6. General Agent and Marketing Organization agree to be bound by the
terms, conditions and limitations set forth in this Agreement and the
rules and practices of SDI and FSBL that are now and hereafter in
force. Marketing Organization agrees not to solicit or submit
applications for variable products to FSBL unless they and their
registered representatives are properly licensed, and further agrees
that it will conform to all applicable state, federal and local laws
and regulations in conducting business under this Agreement. Both SDI
and Marketing Organization hereby agree to abide by the applicable
NASD Conduct Rules, which Rules are incorporated herein as if set
forth in full. The signing of this Agreement and the purchase of
variable products pursuant thereto is a representation to SDI and FSBL
that Marketing Organization is a properly registered Marketing
Organization under the Securities Exchange Act of 1934.
7. Neither the General Agent, Marketing Organization nor their
representatives are authorized to make any representations concerning
the variable products, their sponsor (FSBL), the principal underwriter
(SDI) or the underlying mutual funds except those contained in the
applicable current prospectuses and in the printed information
furnished by FSBL. General Agent and Marketing Organization agree not
to use any other advertising or sales material relating to the
variable products unless specifically approved in writing by FSBL and
SDI.
8. General Agent and Marketing Organization are not authorized and have
no authority (a) to make, alter or discharge any contract for or on
behalf of FSBL, (b) endorse any check or draft payable to FSBL, (c) to
accept any variable product consideration after the initial
remittance, (d) to waive or modify any prospectus, contract, policy or
application provision, condition or obligation, (e) to extend the time
for payment of any variable product consideration or accept payment of
any past due variable product consideration.
9. This Agreement shall not create or be construed as creating an
Employer-Employee or Master-Servant relationship between General Agent
and FSBL and SDI or Marketing Organization and FSBL and SDI.
10. General Agent agrees to keep accurate records on all business written
and moneys received under this Agreement. Such records may be examined
by FSBL, SDI or their representatives at any reasonable time.
11. General Agent and Marketing Organization agree to be responsible for
any county or municipal occupational or privilege fee, tax or license
which may be required of General Agent, Marketing Organization or its
representatives as a result of business submitted under this
Agreement.
12. Marketing Organization will maintain books and records relating to the
sale of the variable products and the receipt and disbursement of
insurance commissions and fees thereon. Such books and records will be
maintained and preserved in conformity with the requirements of
Section 17(a) of the Securities Exchange Act of 1934 and the rules
thereunder, to the extent applicable, and will at all times be
compiled and maintained in a manner that permits inspection by the
supervisory personnel of Marketing Organization, the Securities and
Exchange Commission, the NASD, and other appropriate regulatory
authorities.
13. The receipt of commissions and fees relating to the variable products
by General Agent will be reflected in the quarterly FOCUS reports
filed by the Marketing Organization and in its fee assessment reports
filed with the NASD.
14. Marketing Organization is not authorized to accept any purchase
payments for SDI except initial purchase payments, unless SDI provides
otherwise in writing. All customer checks should be made payable
directly to FSBL. Receipts for purchase payments must be on the forms
furnished by SDI for that purpose. Marketing Organization shall
immediately remit to FSBL's Administrative Agent at the address set
forth in the applicable prospectus all money received or collected on
FSBL's behalf, and such money shall be considered as FSBL's funds held
in trust by Marketing Organization. SDI will not accept purchase
payments in the form of checks drawn on Marketing Organization or
registered representative accounts. Marketing Organization will not
receive, accumulate or maintain custody of such customer funds.
15. Neither this Agreement nor the compensation payable hereunder shall be
assigned or pledged without the written consent of SDI. SDI reserves
the right to reject any assignment or pledge.
16. No consent or change in this Agreement shall be binding upon SDI
unless in writing and signed by the president, a vice president,
secretary or an assistant secretary of SDI. Any failure of SDI to
insist upon strict compliance with the provisions of this Agreement
shall not constitute or be construed as a waiver thereof.
17. FSBL shall have the right to decline or modify any application or to
refund any variable product consideration or any portion thereof, and
General Agent shall refund immediately upon request any commissions
received in connection therewith. All applications for variable
products are subject to acceptance by FSBL and become effective only
upon confirmation by FSBL. SDI will charge back 100% of commissions in
the event of a free look surrender of a variable product.
18. Variable products will be offered to the public at the price as
outlined in the applicable variable product's current prospectus. All
cash surrenders require the written request and consent of the
contract or policyowner and such surrenders will conform to the
provisions set forth in the applicable contract or policy.
19. FSBL has been and is designated Administrative Agent of Security
Distributors, Inc. to perform duties, including recordkeeping and
payment of commissions, necessary under this Agreement in connection
with the solicitation, sales and servicing of variable annuity
contracts sold and solicited hereunder.
20. SDI reserves the right to amend or terminate this agreement at any
time. In the event (i) Marketing Organization ceases to be a member in
good standing of the NASD; (ii) General Agent's license is revoked,
terminated or not renewed; or (iii) General Agent or Marketing
Organization files or, has filed on its behalf a petition for
bankruptcy, this Agreement shall terminate automatically without
notice. After termination General Agent and Marketing Organization
upon request, shall without delay pay in full any indebtedness owed to
FSBL or SDI and return all FSBL property to its Home Office. In the
event General Agent or Marketing Organization are doing business in
such manner that servicing is impossible, SDI reserves the right to
reassign the business and service fees to another party. Should
General Agent or Marketing Organization fail to comply with any of the
terms of this Agreement, SDI reserves the right to terminate this
Agreement and terminate vesting as to all commissions payable
hereunder.
21. General Agent and Marketing Organization agree to hold harmless and
indemnify SDI and FSBL against any and all claims, liabilities and
expenses which SDI and/or FSBL may incur from liabilities arising out
of or based upon any alleged or untrue statement other than statements
contained in the registration statement, prospectus or approved sales
materials of any contract.
22. If it should appear that any term of this contract is in conflict with
any applicable rule of law, statute, or regulation, then any such term
shall be deemed inoperative and null and void insofar as it may be in
conflict therewith and shall be deemed modified to conform to such
rule of law, statute, or regulation. The existence of any such
apparent conflict shall not invalidate the remaining provisions of
this contract.
23. This agreement may be executed in one or more counterparts, together
which shall be deemed a complete original.
24. This Agreement is effective as of the Effective Date set forth above
and replaces any previous Agreement between the parties relating to
variable products of FSBL except as to any commissions payable
thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the Effective Date set forth above.
SECURITY DISTRIBUTORS, INC. MARKETING ORGANIZATION:
By :_____________________________ By: __________________________________
Name: (Signature of Principal)
Title:
_______________________________________
(Name and Title of Principal)
PRIMARY GENERAL AGENT:
_______________________________ By: __________________________________
(Signature)
_______________________________________
(Name and Title)
EXHIBIT "A"
AFFILIATED GENERAL AGENTS
NAME TAX I.D. #