[SDI LOGO] SECURITY DISTRIBUTORS, INC.
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A MEMBER OF THE SECURITY ONE SECURITY BENEFIT PLACE
BENEFIT GROUP OF COMPANIES TOPEKA, KANSAS 66636-0001
MARKETING ORGANIZATION AGREEMENT
SECURITY DISTRIBUTORS, INC.
PRODUCT AUTHORIZATION
Variable Products |_|
MARKETING ORGANIZATION:
This Agreement is entered into between Security Distributors, Inc. ("SDI")
(solely in its capacity as underwriter of the Variable Products issued by the
insurance company(s) (each referred to herein as "insurance company") identified
in the Commission Schedule(s)), and the undersigned, referred to herein as the
"Marketing Organization."
I. APPOINTMENTS AND DUTIES
A. APPOINTMENT. Subject to the terms and conditions of this contract,
Marketing Organization is appointed to solicit, and to recommend for
appointment Agents/Representatives (referred to herein as
"Marketer(s)") to solicit applications for the variable annuity and
variable life insurance contracts ("Variable Products") more
specifically described in the Commission Schedule(s) attached hereto
from time to time and incorporated by reference, to deliver the
contracts, to collect the initial premiums thereon, and to service the
business.
Marketing Organization hereby accepts such appointment and confirms
that it will abide by the terms and conditions of this Agreement and
any sales manuals and/or rules and practices of SDI. Marketing
Organization will endeavor to promote SDI's interests and those mutual
interests of Marketing Organization and SDI as contemplated by this
Agreement and shall at all times conduct itself, and insure that its
employees and Marketers conduct themselves so as not to adversely
affect the business reputation or good standing of either the
Marketing Organization or SDI.
B. SALES FORCE. Marketing organization shall have the authority to
recruit, train and supervise Marketers for the sale of the Variable
Products. Appointment of any Marketer shall be subject to prior
approval of SDI. SDI reserves the right to require termination of any
Marketer's right to sell any of the Variable Products and to cancel
the appointment of any Marketer. Marketing Organization shall be
responsible for any Marketer appointed hereunder complying with the
terms, conditions, and limitations as set forth in this Agreement and
any sales manuals and/or rules and practices of SDI.
Any and all agreements with Marketers shall be made between the
Marketing Organization and its Marketers, provided however, that SDI
reserves the right to require any Marketer to sign an agreement
acknowledging that no compensation is payable by SDI to the Marketer.
C. INDEPENDENT CONTRACTOR. Marketing Organization shall be an independent
contractor and nothing contained herein shall be construed as creating
the relationship of employer-employee between SDI and Marketing
Organization. Marketing Organization will be acting as an independent
contractor only, and not as a partner, associate, or affiliate of SDI.
Marketing Organization will be free to exercise its own judgment as to
the time and manner of performing the services authorized by this
Agreement subject to such rules and regulations as may be adopted from
time to time by SDI.
D. LIMITATIONS OF AUTHORITY. Marketing Organization's authority shall
extend no further than as is stated in this Agreement. Marketing
Organization shall not (1) make, alter, modify, waive or change any
question, statement or answer on any application for insurance, the
terms of any receipt given thereon, or the terms of any policy or
contract; (2) extend or waive any provision of any policy or contract
or the time for payment of premiums; (3) guarantee dividends; (4)
deliver any policy unless the applicant is at the time in good health
and insurable condition; (5) incur any debts or liability for or
against SDI; or (6) receive any money for SDI except as herein stated.
E. COLLECTION OF MONEY. Marketing Organization is not authorized to
accept any premium for SDI except initial policy premiums, unless SDI
provides otherwise in writing. All customer checks should be made
payable directly to the insurance company issuing the Variable
Product. Receipts for premiums must be on the forms furnished by SDI
for that purpose. Marketing Organization shall immediately remit to
the insurance company all money received or collected on the insurance
company's behalf, and such money shall be considered as the insurance
company's funds held in trust by Marketing Organization. SDI will not
accept premium payments in the form of checks drawn on Marketing
Organization or Marketer accounts.
F. RECORDS. Marketing Organization agrees to maintain proper records and
accounts of business transacted under this Agreement, including but
not limited to, records of all written sales proposals made,
applications taken, money collected, policies issued and delivered,
and all service to policy owners on SDI's behalf. All such records
shall be made available to SDI or SDI's representatives, with or
without prior notice, during business hours.
II. COMPENSATION
A. COMPENSATION TO MARKETING ORGANIZATION. As full compensation, SDI will
pay Marketing Organization or its affiliated insurance agency (if
applicable) commissions as described in the attached Commission
Schedule(s) for policies sold by Marketers assigned to Marketing
Organization. There shall be no additional compensation or
reimbursement to Marketing Organization for services performed or
expenses incurred. Marketing Organization shall be responsible for and
shall pay all expenses Marketing Organization incurs in the
performance of this Agreement. Further, SDI may amend any Commission
Schedule at any time by giving Marketing Organization written notice
of such change. Any changes SDI may make to the Commission Schedule
will apply only to those policies issued on or after the effective
date of the changes.
The rate of commissions or right to receive compensation on any policy
or contract (1) not listed in this Agreement, (2) requiring special
underwriting, or (3) obtained through a lead furnished by SDI, shall
be governed by SDI's rules and practices in effect at that time and
shall eventually be covered by a separate agreement between Marketing
Organization and SDI, by written amendment to this Agreement, or by
written notice to Marketing Organization.
B. COMPENSATION TO MARKETERS. This Agreement is not intended to benefit
in any manner whatsoever the Marketers or any other entity as a
third-party beneficiary. SDI will pay no compensation to Marketers;
payment of compensation to Marketers, if any, will be made only
pursuant to the terms of a separate written Agreement between the
Marketing Organization and Marketer.
C. PROVISIONS RELATING TO COMPENSATION. Neither Marketing Organization
nor any Marketer assigned to Marketing Organization shall withhold
compensation from any premiums or contributions submitted to SDI or
the insurance company. No commissions will be payable on premiums or
contributions which shall be refunded for any reason, and Marketing
Organization shall refund to SDI any commission paid to Marketing
Organization on any such premiums or contributions. SDI shall not,
under any circumstances whatsoever, pay or allow any rebate of
commissions in any manner, directly or indirectly.
III. COMPLIANCE
A. GENERAL REQUIREMENTS. Marketing Organization agrees to abide by all
applicable local and state laws, federal laws and regulations, as well
as the rules and regulations of the National Association of Securities
Dealers, Inc. (NASD) and the Securities and Exchange Commission in
conducting business under this Agreement. Marketing Organization shall
insure that all of its Marketers comply with all such rules, laws, and
regulations.
B. LICENSING. Marketing Organization agrees that neither it nor its
Marketers will solicit or submit applications for any of the Products
unless Marketing Organization, its affiliated insurance agency (if
applicable), and its Marketers are properly licensed under all
applicable state insurance laws. Marketing Organization shall be
responsible for each Marketer becoming so licensed and shall notify
SDI if any Marketer ceases to be so licensed.
(1) Marketing Organization hereby confirms that it 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 the NASD, (2) Marketing Organization agrees
to abide by the applicable Conduct Rules of the NASD which rules are
incorporated herein as if set forth in full, (3) Marketing
Organization represents that the signing of this agreement is a
representation to SDI that Marketing Organization is a properly
registered Broker/Dealer under the Securities Exchange Act of 1934,
and (4) Marketing Organization shall insure that all Marketers
recruited by Marketing Organization to sell the Variable Products
shall be duly registered pursuant to applicable state and federal
securities laws and regulations and shall notify SDI if any Marketer
ceases to be so registered.
Marketing Organization will be responsible to secure and provide to
SDI adequate proof of any licenses, securities registration, bonds or
other requirements or qualifications as may be required by SDI or the
state or states where Marketing Organization and its affiliated
insurance agency (if applicable) is authorized to solicit insurance
and securities.
C. PRINTED MATTER. SDI will furnish Marketing Organization all
prospectuses, reports, applications and other printed matter necessary
to conduct the business anticipated hereunder with respect to SDI's
Products. Advertising material of any nature not supplied by SDI shall
be used by Marketing Organization only after Marketing Organization
has received SDI's written approval. Likewise, Marketing Organization
may use SDI's name and trademark, or those of any affiliated
companies, only with SDI's written approval.
IV. SDI'S RIGHT OF ACTION
A. CHANGES. SDI may at any time and from time to time (1) change or
modify this Agreement, (2) modify or amend any prospectus, policy
form, or contract, (3) change sales charges, (4) modify or alter the
conditions or terms under which any Variable Product may be sold or
regulate its sale in any way, (5) discontinue or withdraw any Variable
Product from any state, or (6) cease doing business in any state.
B. RIGHTS OF REJECTION AND SETTLEMENT. SDI on behalf of the insurance
company(s) reserves the right to reject any application or refund any
money submitted by Marketers assigned to Marketing Organization. In
the event of such rejection or refund, Marketing Organization's
commission on such shall be refunded as described previously by being
charged against Marketing Organization's earnings or, upon demand, by
payment directly to SDI. It is the intention of the parties to this
Agreement that Marketing Organization shall be entitled to receive
commissions only upon premiums or contributions received in cash and
retained by the insurance company.
C. RIGHT OF OFFSET OF INDEBTEDNESS. Any advance, loan, annualization of
compensation, or extension of credit from SDI to Marketing
Organization, or any loss or liability incurred by SDI as a result of
the actions of Marketing Organization or its affiliated insurance
agency (if applicable) shall constitute a general indebtedness of
Marketing Organization to SDI. The entire indebtedness, as shown in
SDI's ledger accounts, may be deemed due and payable at any time and
SDI may exercise any rights or remedies to collect such indebtedness,
including but not limited to, charging to Marketing Organization all
attorney's fees or other collection expenses, as permitted by law.
SDI may deduct any amounts Marketing Organization owes SDI now or in
the future, as a result of this or any other contract with SDI, from
any compensation due Marketing Organization. Marketing Organization
hereby assigns, transfers and sets over to SDI any monies that from
time to time may become due to Marketing Organization from SDI under
this contract or otherwise to secure any debt to SDI.
V. TERMINATION
A. VOLUNTARY TERMINATION. Either of the parties hereto may terminate this
Agreement, without stating any cause, by mailing to the other party at
their last known address a notice of termination which shall be
effective fifteen days from mailing.
B. AUTOMATIC TERMINATION. This Agreement terminates automatically (1) if
Marketing Organization is an individual, upon Marketing Organization's
death, (2) if a partnership, upon the death of any partner or change
in the partners composing the firm, or dissolution of the partnership
for any reason, (3) if a corporation, upon Marketing Organization's
dissolution or disqualification to perform the duties anticipated
hereunder, (4) upon revocation, termination, suspension or nonrenewal
of Marketing Organization's securities registration or insurance
licenses by any state in which Marketing Organization is required by
law to maintain such a license in order to perform its duties under
this Agreement, (5) upon Marketing Organization's ceasing to be an
NASD registered broker/dealer in good standing (this includes any
suspension of Marketing Organization's membership), or (5) upon
Marketing Organization's filing a petition for bankruptcy or one being
filed for Marketing Organization, upon Marketing Organization being
adjudged bankrupt, or upon Marketing Organization's executing a
general assignment for the benefit of creditors.
C. TERMINATION FOR CAUSE. Marketing Organization's rights under this
contract, including the right to any further payment of any type of
compensation, either during or after the termination of this contract,
shall automatically and completely cease if any of the following occur
at any time: (1) Marketing Organization violates any of the terms
hereof, (2) Marketing Organization violates any law or regulation
relating to the activities anticipated hereunder, (3) Marketing
Organization induces or attempts to induce any Marketer and/or person
under contract with SDI to terminate the contractual relationship or
cease doing business or producing for SDI, (4) Marketing Organization
initiates or induces any misappropriation or commingling of the funds
of Marketing Organization and SDI or the insurance company, or (5)
Marketing Organization engages in any fraudulent act or
misrepresentation. In determining cause for termination, SDI shall use
its sole discretion and shall notify Marketing Organization in writing
of SDI's decision.
D. RETURN OF SDI PROPERTY. Upon termination of this contract, Marketing
Organization agrees to return any equipment, supplies, printed
materials or other property, including, but not limited to,
policyholder lists and policyholder records SDI has furnished
Marketing Organization. Marketing Organization acknowledges that any
policyholder lists or records in Marketing Organization's possession
are SDI's property, and that SDI has a continuing proprietary interest
in the lists and records relating to the policyholders.
VI. THIRD PARTY COMPLAINTS AND LITIGATION
A. NOTIFICATION AND COOPERATION. SDI and Marketing Organization will
promptly notify the other if either of them becomes aware of any
arbitration, litigation, judicial proceeding, insurance department or
other governmental agency inquiry or complaint, regulatory or
administrative investigation or proceeding, or customer complaint or
demand, which directly or indirectly involves the rights and
obligations of the parties under this Agreement. SDI and Marketing
Organization each agree to cooperate fully with the other with respect
to any matter referred to in this Section VI.
B. DEFENSE OF ACTIONS. If any legal action is brought by a third party
against SDI or Marketing Organization, or both, which is based in
whole or in part on any alleged act, fault or failure of Marketing
Organization in connection with this Agreement, SDI may require
Marketing Organization to defend SDI in such action, or, SDI may
defend any such action and expend such sums, including attorneys'
fees, to be reimbursed by Marketing Organization in accordance with
Section VI.E. below.
C. SERVICE OF PROCESS. Marketing Organization shall transmit to the
attention of SDI's Legal Counsel at One Security Benefit Place,
Topeka, Kansas 66636, by certified mail within 24 hours after receipt,
any paper served upon Marketing Organization in connection with any
proceeding, hearing or action, whether legal or otherwise, by or
against SDI. Any failure on Marketing Organization's part to comply
with this provision which causes additional loss or expense to SDI
shall be reimbursed by Marketing Organization to SDI.
D. SETTLEMENT. SDI has the right to settle any claim against SDI, and any
claim made against SDI and Marketing Organization jointly, arising out
of this Agreement or any other agreement between SDI and Marketing
Organization now or hereafter existing, and SDI's determination as to
any such matter will be final and binding. In any action brought
jointly against SDI and Marketing Organization which is based in whole
or in part on any alleged act, fault or failure of Marketing
Organization, Marketing Organization shall not settle such action or
any portion thereof except with the express, written consent of SDI.
E. INDEMNIFICATION. Marketing Organization shall indemnify and hold SDI
harmless from any liability, loss, cost, claim or damaged caused by
the negligence or misconduct of Marketing Organization, its affiliated
insurance agency (if applicable), Marketers and/or either of their
officers, directors and employees. Marketing Organization shall
reimburse SDI for any legal or other expenses reasonably incurred by
SDI in connection with its investigation and defense of any such loss,
cost, claim, damage or liability, or of any proceeding or action
resulting from those matters. SDI shall indemnify and hold Marketing
Organization harmless from any liability, loss, cost, claim or damaged
caused by the negligence or misconduct of SDI, its affiliates, and/or
their officers, directors and employees. SDI shall reimburse Marketing
Organization for any legal or other expenses reasonably incurred by
Marketing Organization in connection with its investigation and
defense of any such loss, cost, claim, damage or liability, or of any
proceeding or action resulting from those matters.
VII. GENERAL PROVISIONS
A. CONFIDENTIALITY. Marketing Organization will treat all matters
relating to SDI's business as confidential information, and not
divulge any information in any way to other entities during or after
the term of this contract.
B. WAIVER. SDI's forbearance or failure to exercise any rights hereunder
or insist upon strict compliance herewith shall not constitute a
waiver of any right, condition, or obligation of Marketing
Organization under this Agreement.
C. PRIOR AGREEMENTS. This Agreement shall supersede any and all prior
agreement(s) between Marketing Organization and SDI after this
Agreement becomes effective in relation to sales of the Variable
Products described in the Commission Schedule(s) attached hereto; it
being understood, however, that all obligations to SDI previously
incurred or assumed by SDI and liens created in connection therewith
still exist and shall attach hereto.
D. ASSIGNMENT. Neither this Agreement nor any of the benefits to accrue
hereunder shall be assigned or transferred, either in whole or in
part, without SDI's prior written consent. Any assignments shall be
subject to a first lien to SDI for any indebtedness owed to SDI.
E. NOTICES. All notices required or permitted to be given under this
contract shall be in writing and shall be delivered personally or
mailed to an officer of the party receiving such notice at its home
office at the address set forth above.
F. GOVERNING LAW. This contract shall be construed to be in accordance
with the laws of the State of Kansas without regard to its conflicts
of law doctrine.
G. ENTIRE AGREEMENT. The foregoing provisions, the attached Commission
Schedules and bulletins issued by SDI in connection with this
Agreement constitute the entire agreement between the parties and SDI
shall not be bound by any other promise, agreement, understanding or
representation unless it is made by an instrument in writing, signed
by all of the parties or is in the form of a written notice from SDI
to Marketing Organization which expresses by its terms an intention to
modify this Agreement.
H. SEVERABILITY. If it should appear that any term of this Agreement is
in conflict with any rule of law, statute, or regulation in effect in
any state where Marketing Organization writes or solicits business for
SDI, 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.
I. EFFECTIVE DATE. This Agreement shall take effect on the date shown
below, if Marketing Organization has been duly licensed in the
appropriate jurisdiction(s) to perform the functions anticipated
herein.
MARKETING ORGANIZATION SECURITY DISTRIBUTORS, INC.
---------------------------------------------- By XXXXXXX X. XXXXXX
Print Name of Marketing Organization ------------------------
|_| Individual |_| Partnership |_| Corporation
Title President
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Print Name of Principal Officer
if a Partnership or Corporation
By Date
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Signature of Individual
or Principal Officer
Date
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