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Exhibit 3
DISTRIBUTION AGREEMENT
THIS AGREEMENT, made and entered into on this 12th day of February, 1982,
by and between SECURITY FIRST LIFE INSURANCE COMPANY ("Security First Life"), a
life insurance company organized under the laws of the State of Delaware,
SECURITY FIRST LIFE SEPARATE ACCOUNT A ("Separate Account"), a separate account
established by Security First Life pursuant to Section 2932 of the Delaware
Insurance Code and SECURITY FIRST FINANCIAL, INC. ("First Financial"), a
corporation organized under the laws of the State of Delaware.
WITNESSETH:
WHEREAS, Security First Life proposes to issue to the public certain
variable annuity contracts ("Contracts") and has by resolution of its Board of
Directors on May 29, 1980 authorized the creation of one or more separate
investment accounts in connection therewith; and
WHEREAS, Security First Life has established the Separate Account for the
purpose of issuing the Contracts and is registering the Separate Account with
the Securities and Exchange Commission ("Commission") as a unit investment
trust under the Investment Company Act of 1940; and
WHEREAS, the Contracts to be issued by the Separate Account are presently
being registered with the Commission under the Securities Act of 1933 for offer
and sale to the public, and otherwise in compliance with all applicable laws;
and
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WHEREAS, First Financial, a broker-dealer registered under the Securities
Exchange Act of 1934 and a member of the National Association of Securities
Dealers, Inc., proposes to act as the Distributor on an agency basis in the
offering and sale of said Contracts; and
WHEREAS, Security First Life desires to obtain the services of First
Financial as the Distributor of such Contracts issued through the Separate
Account and registered with the Commission;
NOW THEREFORE, in consideration of the foregoing, and of the mutual
covenants and conditions set forth herein, and for other good and valuable
consideration, Security First Life, the Separate Account and First Financial
hereby agree as follows:
1. First Financial will serve as Distributor on an agency basis for the
Contracts which will be issued by Security First Life through the Separate
Account and will be registered with the Commission for offer and sale to
the public.
2. First Financial, as Distributor for the Contracts, will use its best
efforts to effect offers and sales of the Contracts to the public on a
continuing basis. First Financial shall not contract with any other entity
for the distribution of said Contracts unless specifically authorized in
writing to do so by Security First Life. First Financial shall be
responsible for compliance with the requirements of state broker-dealer
regulations and the Securities Exchange Act of 1934 as each
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applies to First Financial in connection with its duties as Distributor of said
Contracts. Moreover, First Financial shall conduct its affairs in accordance
with the rules of Pair Practice of the National Association of Securities
Dealers, Inc.
3. Subject to the written approval of Security First Life, First Financial may
contract with other broker-dealers registered under the Securities Exchange Act
of 1934 and authorized by applicable law to sell variable annuity contracts
issued by the Separate Account. Any such contractual arrangement is expressly
made subject to this Agreement, and First Financial will at all times be
responsible to Security First Life for the distribution of all Contracts issued
by the Separate Account.
4. Warranties
(a) Security First Life represents and warrants to First Financial that:
(i) A Registration Statement on Form S-6 under the Securities Act of
1933 (File No. 2-75533), with respect to the Contracts, and a
Registration Statement on Form N-8B-2 under the Investment Company Act
of 1940 (File No. 811-___), with respect to the Separate Account, have
been filed with the Commission in the form previously delivered to
First Financial and that copies of any and all amendments thereto will
be forwarded to First Financial at the time that they are filed with
the Commission;
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(ii) The Registration Statements and any further amendments or
supplements thereto will, when they become effective, conform in all
material respects to the requirements of the Securities Act of 1933,
the Investment Company Act of 1940 and the rules and regulations of
the Commission thereunder, and will not contain an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to Security
First Life by First Financial expressly for use therein;
(iii) Security First Life is validly existing as a stock life
insurance company in good standing under the laws of the State of
Delaware, with power (corporate or other) to own its properties and
conduct its business as described in the Prospectus, and has been
duly qualified for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns
or leases properties, or conducts any business, so as to require such
qualification;
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(iv) The Contracts to be issued by the Separate Account through First
Financial hereunder have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein,
will be duly and validly issued and will conform to the description
of such Contracts contained in the Prospectuses relating thereto;
(v) Those persons who offer and sell the Contracts are appropriately
licensed in a manner as to comply with the state insurance laws;
(vi) The performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any statute, any indenture, mortgage, deed of trust,
note agreement or other agreement or instrument to which Security
First Life is a party or by which Security First Life is bound,
Security First Life's Charter as a stock life insurance company or
By-laws, or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over Security First
Life or any of its properties; and no consent, approval,
authorization or order of any court or governmental agency or body is
required for the consummation by Security First Life of the
transactions contemplated by this Agreement, except
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such as may be required under the Securities Exchange Act of 1934 or state
insurance or securities laws in connection with the purchase and
distribution of the Contracts by First Financial; and
(vii) There are no material legal or governmental proceedings pending to
which Security First Life or the Separate Account is a party or of which
any property of Security First Life or the Separate Account is the subject,
other than as set forth in the Prospectus relating to the Contracts, and
other than litigation incident to the kind of business conducted by
Security First Life which, if determined adversely to Security First Life,
would individually or in the aggregate have a material adverse effect on
the financial position, surplus or operations of Security First Life.
(b) First Financial represents and warrants to Security First Life that:
(i) It is a broker-dealer duly registered with the Commission pursuant to
the Securities Exchange Act of 1934 and a member in good standing of the
National Association of Securities Dealers and in compliance with the
securities laws in those states in which it conducts business as a
broker-dealer;
(ii) It shall permit the offer and sale of Contracts only by and through
persons who are appropriately licensed under both the securities laws and
state insurance laws;
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(iii) The performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a breach or violation
of any of the terms or provisions of or constitute a default under, any
statute, any indenture, mortgage, deed of trust, note agreement or other
agreement or instrument to which First Financial is a party or by which
First Financial is bound, the Certificate of Incorporation or By-laws of
First Financial, or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over First Financial or its
property;
(iv) No offering, sale or other disposition of any Contracts will be made
until First Financial is notified by Security First Life that the subject
Registration Statement has been declared effective and that the Contracts
have been released for sale by Security First Life; and such offering, sale
or other disposition shall be limited to those jurisdictions that have
approved or otherwise permit the offer and sale of the Contracts by
Security First Life.
(v) To the extent that any statements or omissions made in the Form S-6
Registration Statement with respect to the Contracts, or any amendment or
supplement thereto are made in reliance upon and in conformity with written
information furnished to Security First Life by First Financial expressly
for
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use therein, such Registration Statement and any amendments or
supplements thereto will, when they become effective or are filed with
the Commission, as the case may be, conform in all material respects
to the requirements of the Securities Act of 1933 and the rules and
regulations of the Commission thereunder and will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading.
5. First Financial shall keep, in a manner and form prescribed or approved by
Security First Life and in accordance with Rules 17a-3 and 17a-4 under the
Securities Exchange Act of 1934 correct records and books of account as
required to be maintained by a registered broker-dealer acting as Distributor
of all transactions entered into on behalf of Security First Life and with
respect to variable annuity business it conducts for Security First Life. First
Financial shall make such records and books of account available for inspection
by the Commission, and Security First Life shall have the right to inspect,
make copies of or take possession of such records and books of accounts at any
time on demand.
6. Subsequent to having been authorized to commence with the offering
contemplated herein, First Financial will utilize the currently effective
Prospectus relating to the subject Contracts in connection with its selling
efforts. As to the other types of sales material, First Financial agrees that
it will use only
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sales materials as have been authorized for use by Security First Life and
which conform to the requirements of federal and state laws and regulations,
and which have been filed where necessary with the appropriate regulatory
authorities, including the National Association of Securities Dealers.
7. First Financial will not use any Prospectus, sales literature, or any
other printed matter or material in the offer or sale of any Contract if, to
the knowledge of First Financial, any of the foregoing misstates the duties,
obligation or liabilities of Security First Life, the Separate Account or First
Financial.
8. First Financial, as Distributor, shall be entitled to such remuneration
for its services and for the services of its salaried employees and such
reimbursement for its charges and expenses as will be contained in such
Schedules of Remuneration as may be adopted from time to time. Said Schedules
of Remuneration may be amended from time to time at the mutual consent of the
undersigned parties.
9. If any purchase payment premiums shall be returned by Security First Life
or should Security First Life become liable for the return thereof for any
cause other than surrenders or withdrawals by Contract Owners pursuant to the
terms of the Contracts either before or after termination of this agreement,
First Financial agrees to pay Security First Life the amount of remuneration
previously paid over to it by Security First Life with respect to such premiums.
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10. First Financial makes no representation or warranties regarding the number
of Contracts to be sold or the amount to be paid thereunder. First Financial
does, however, represent that it will actively market such Contracts on a
continuous basis while there is an effective registration thereof with the
Commission.
11. First Financial may render similar services or act as a Distributor or
Dealer for issuers other than the Separate Account or sponsors other than
Security First Life in the offering of their Contracts.
12. The Contracts shall be offered for sale on the terms described in the
currently effective Prospectus describing such Contracts.
13. Security First Life will use its best efforts to register for sale, from
time to time as necessary, additional dollar amounts of the Contracts under the
Securities Act of 1933 and, should it ever be required, under state Blue Sky
Laws and to file for approval under state insurance laws when necessary.
14. Security First Life reserves the right at any time to suspend or limit
the public offering of the subject Contracts upon one day's written notice to
First Financial.
15. Security First Life agrees to advise First Financial immediately:
(a) of any request by the Commission (i) for amendment of the Securities
Act Registration Statement relating to the Contracts or (ii) for
additional information;
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(b) of the issuance by the Commission of any stop order suspending the
effectiveness of its Registration Statement or the initiation of any
proceedings for that purpose; and
(c) of the happening of any material event, if known, which makes untrue
any statement made in its Registration Statement or which requires the
making of a change therein in order to make any statement made therein not
misleading.
16. Security First Life will furnish to First Financial such information with
respect to the Separate Account and the Contracts in such form and signed by
such of its officers as First Financial may reasonably request; and will
warrant that the statements therein contained when so signed will be true and
correct.
17. Each of the undersigned parties agrees to notify the other in writing upon
being apprised of the institution of any proceeding, investigation or hearing
involving the offer or sale of the subject Contracts.
18. Absent the prior written consent of Security First Life, this Agreement
will terminate automatically upon its assignment.
19. This Agreement shall terminate, without the payment of any penalty by
either party:
(a) at the option of Security First Life or of First Financial upon sixty
days' advance written notice to the other; or
(b) at the option of Security First Life upon institution of formal
proceedings against First Financial by the National Association of
Securities Dealers or by the Commission; or
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(c) at the option of Security First Life, if First Financial or any
representative thereof at any time (i) employs any device, scheme, or
artifice to defraud; makes any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements made, in
light of the circumstances under which they were made, not misleading; or
engages in any act, practice, or course of business which operates or would
operate as a fraud or deceit upon any person; (ii) fails to promptly
account and pay over to Security First Life money due it according to its
records; or (iii) violates the conditions of this Agreement.
20. Each notice required by this Agreement may be given by wire and confirmed
in writing.
21. Security First Life agrees to indemnify First Financial for any liability
that First Financial may incur to a Contract Owner or party-in-interest under a
Contract (i) arising out of any act omission in the course of, or in connection
with, rendering services under this Agreement, or (ii) arising out of the
purchase, retention or surrender of a Contract; provided however that Security
First Life will not indemnify First Financial for any such liability that
results from the willful misfeasance, bad faith or gross negligence of First
Financial, or from the reckless disregard, by First Financial, of its duties
and obligations arising under this Agreement.
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22. This Agreement shall be subject to the laws of the State of
California and construed so as to interpret the Contracts as insurance
products written within the business operation of Security First Life.
23. This Agreement covers and includes all agreements, verbal and
written, between First Financial and Security First Life with regard to
the offer and sale of the Contracts, and supersedes and annuls any and all
agreements between the parties with regards to the distribution of the
Contracts; except that this Agreement shall not affect the operation of
previous agreements entered into between First Financial and Security
First Life unrelated to the sale of the Contracts.
This Agreement, along with any Schedules of Remuneration attached hereto
and incorporated herein by reference, may be amended from time to time by the
mutual agreement and consent of the undersigned parties; provided that such
amendment shall not affect the rights of existing Contract Owners, and that
such amendment be in writing and duly executed.
This Agreement shall become effective upon the effective date of the Form
S-6 Registration Statement filed under the Securities Act of 1933 with respect
to the Contracts.
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IN WITNESS WHEREOF, the undersigned parties have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto affixed
and attested on the date first stated above.
Security First Life Insurance Company
Attest:
/s/ XXXXXXX XXXXX By: /s/ XXXXX X. XXXXXXXXXX
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Security First Life Separate Account A
By Security First Life Insurance Company
Attest:
/s/ XXXXXXX XXXXX By: /s/ XXXXX X. XXXXXXXXXX
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Security First Financial, Inc.
Attest:
/s/ XXXXX X. XXXXXXXXXX By: /s/ XXXXXX X. XXXXXX
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