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A Member of The Security ▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
Benefit Group of Companies ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
NEA VALUEBUILDER
MARKETING ORGANIZATION AGREEMENT
ANNUALIZATION AMENDMENT
NEA Valuebuilder Variable Annuity TSA (the "Contract")
Marketing Organization:
Marketing Organization Number:
Effective Date of Annualization Amendment:
WHEREAS, Security Benefit Life Insurance Company and Security Distributors, Inc.
(collectively referred to herein as "SBL"), and Marketing Organization are
parties to the NEA Valuebuilder Marketing Organization Agreement (the
"Agreement"), relating to the sale of the variable annuity contracts specified
above (the "Contract"); and
WHEREAS, the parties wish to amend the Agreement as of the Effective Date set
forth above, on the terms and conditions set forth herein;
NOW, THEREFORE, the parties agree to amend the Agreement by adding the
following:
1. SBL agrees to advance one hundred percent (100%) of the first year
commissions, according to the formula set forth in paragraph 5 below, upon
receipt at its Home Office of an application for a Contract to be issued
pursuant to Section 403(b) of the Internal Revenue Code.
2. SBL agrees to advance one hundred percent (100%) of one year's commissions
on any increase in purchase payments for any Contract issued pursuant to
Section 403(b) of the Internal Revenue Code; provided that Marketing
Organization worked with the Contract Ownr to effect said increase.
Increase is defined as any increase in purchase payments made by the
Contract Owner which is made as a result of direct interaction of the
Marketing Organization with the Contract Owner and not as a result of any
payroll increase. For example, if a Contract Owner is making monthly
purchase payments of $50 and increases that monthly payment to $75 after
meeting with a representative of Marketing Organization, the increase
amount would be $25, and SBL would advance commissions on $300 (12 months
multiplied by the increase amount of $25). Marketing Organization shall
submit an increase form to SBL in connection with any such increase. Upon
receipt of the increase and an increase form in proper order, SBL agrees to
advance 100% of commissions for the 12 months from the date of increase
according to the formula set forth in paragraph 5 below.
3. The amount of the commissions advanced to Marketing Organization pursuant
to this Amendment will be a liability of the Marketing Organization in
favor of SBL. Such liability to SBL shall be reduced by purchase payments
applied to the Contract for which the commission was advanced in the manner
set forth herein.
4. The amount of the commissions to be advanced is determined by multiplying
(i) the planned premium or increase amount, by (ii) the mode factor, and
(iii) the commission rate. For example, a monthly purchase payment of $50,
assuming a commission rate of 4%, would result in a first year commission
of $24, determined as follows: $50 X 12 X 4% = $24. Commission advances are
available only with respect to purchase payments to be made at regular
intervals to a Contract and are not payable on Rev. Rul. 90-24 Transfers.
The commission rate is set forth in the applicable commission schedule.
5. The amount of the advance paid to Marketing Organization is maintained on
SBL's books as a liability of the Marketing Organization and is reduced by
the commission attributable to each purchase payment with respect to which
the advance was paid as received. The amount remaining on SBL's books is
referred to herein as the "unearned commissions." For example, in paragraph
4 above, the amount paid to the Marketing Organization is $24. The
Marketing Organization earned $2 in commissions (the first $50 purchase
payment multiplied by a 4% commission rate) and so the amount of "unearned
commissions" on SBL's books after the first purchase payment is $22 ($24 in
commissions advanced, less the $2 in commission earned). If the next
monthly purchase payment is also $50, the amount of unearned commissions on
SBL's books would be $20.
6. If purchase payments under a Contract, with respect to which commissions
have been advanced, do not continue as planned for any reason during the
first Contract year or first year of any increase, as applicable, SBL, at
its option, may (i) reduce any subsequent advancing of commissions to
Marketing Organization which would otherwise have occurred by an amount
equal to the unearned commissions outstanding, or (ii) declare all unearned
commissions immediately due and payable, in which case Marketing
Organization shall pay all unearned commissions to SBL within 15 days of
SBL's request for such payment. Marketing Organization agrees that SBL, in
its sole discretion, may set-off any unearned commission against (i) any
other commissions or payments which SBL may owe Marketing Organization
under the Agreement, and/or (ii) any other amounts which SBL, or any of its
affiliates or subsidiaries, may owe Marketing Organization.
7. In the event that either the Agreement or this Amendment is terminated, all
unearned commissions shall be payable to SBL immediately. Marketing
Organization agrees that SBL's right of set-off as set forth in paragraph 6
above shall also apply in respect of any unearned commissions attributable
to the termination of the Agreement or this Amendment.
8. SBL shall have the right at any time, and without prior notice, to
terminate this Amendment entirely or with respect to any particular
Contract.
9. Any failure by SBL to insist upon strict compliance with the terms and
conditions of this Amendment shall not be construed as a waiver thereof,
except as may be provided for in each instance by SBL in writing. This
Amendment shall be binding upon heirs, executors, administrators,
successors and assigns of Marketing Organization.
10. Marketing Organization's acceptance of payment from SBL after receipt of
this Amendment shall constitute the Marketing Organization's acceptance of
its terms.
SIGNED this __________ day of ____________________, 2001.
SECURITY DISTRIBUTORS, INC. SECURITY BENEFIT LIFE INSURANCE COMPANY
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: President Title: Senior Vice President