UNDERWRITING AGREEMENT
THIS AGREEMENT, is entered into on this __ day of June, 1999, by and among
ALLSTATE LIFE INSURANCE COMPANY, ("Allstate Life" or "Company") a life insurance
company organized under the laws of the State of Illinois, on its own and on
behalf of the ALLSTATE FINANCIAL ADVISORS SEPARATE ACCOUNT I ("Separate
Account"), a separate account established pursuant to the insurance laws of the
State of Illinois, and ALLSTATE LIFE FINANCIAL SERVICES, INC., ("Principal
Underwriter"), a corporation organized under the laws of the state of Delaware.
RECITALS
WHEREAS, Company proposes to issue to the public certain variable annuity
contracts identified in the Attachment A ("Contracts"); and
WHEREAS, Company, by resolution adopted on April 30, 1999, established the
Separate Account for the purpose of issuing the Contracts; and
WHEREAS, the Separate Account is registered with the Securities and
Exchange Commission ("Commission") as a unit investment trust under the
Investment Company Act of 1940, as amended ("Investment Company Act"); and
WHEREAS, the Contracts to be issued by Company are registered with the
Commission under the Securities Act of 1933, as amended ("Securities Act"), and
the Investment Company Act (File Nos: 333-77605 and 811-09327) for offer and
sale to the public and otherwise are in compliance with all applicable laws; and
WHEREAS, Principal Underwriter, a broker-dealer registered with the
Commission under the Securities Exchange Act of 1934, as amended, ("Exchange
Act"), and a member of the National Association of Securities Dealers, Inc.
("NASD"), proposes to act as principal underwriter on an agency (best efforts)
basis in the marketing and distribution of said Contracts; and
WHEREAS, Company desires to obtain the services of Principal Underwriter as
an underwriter and distributor of said Contracts issued by Company through the
Separate Account;
NOW THEREFORE, in consideration of the foregoing, and of the mutual
covenants and conditions set forth herein, and for other good and valuable
consideration, the Company, the Separate Account, and the Principal Underwriter
hereby agree as follows:
1. AUTHORITY AND DUTIES
(a) Principal Underwriter will serve as underwriter and distributor on an
agency basis for the Contracts which will be issued by the Company
through the Separate Account.
(b) Principal Underwriter will use its best efforts to provide information
and marketing assistance to licensed insurance agents and
broker-dealers on a continuing basis. However, Principal Underwriter
shall be responsible for compliance with the requirements of state
broker-dealer regulations and the Exchange Act as each applies to
Principal Underwriter in connection with its duties as distributor of
said Contracts. Moreover, Principal Underwriter shall conduct its
affairs in accordance with the By-Laws and Conduct Rules of the NASD.
(c) Subject to agreement with the Company, Principal Underwriter may enter
into selling agreements with broker-dealers which are registered with
the Commission under the Exchange Act, members of the NASD, and/or
authorized by applicable law or exemptions to sell variable annuity
contracts issued by Company through the Separate Account. Any such
contractual arrangement is expressly made subject to this Agreement,
and Principal Underwriter will at all times be responsible to Company
for supervision of compliance with the federal securities laws
regarding distribution of Contracts.
2. WARRANTIES
(a) The Company represents and warrants to Principal Underwriter that:
(i) Registration Statement on Form N-4 for each of the Contracts
identified in Attachment A have been filed with the Commission in
the form previously delivered to Principal Underwriter and that
copies of any and all amendments thereto will be forwarded to
Principal Underwriter at the time that they are filed with
Commission;
(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
and the Investment Company Act, and the rules and regulations of
the Commission under such Acts, and will not contain any 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 statement or
omission made in reliance upon and in conformity with information
furnished in writing to Company by Principal Underwriter
expressly for use therein;
(iii)The Company is validly existing as a stock life insurance
company in good standing under the laws of the State of Illinois,
with power to own its properties and conduct its business as
described in the Prospectus relating to the Contracts,, and has
been duly qualified for the transaction of business and is in
good standing under the laws of each jurisdiction in which it
owns or leases properties, or conducts any business;
(iv) The Contracts to be issued by the Company and through the
Separate Account and offered for sale by Principal Underwriter on
behalf of the Company hereunder have been duly and validly
authorized and, when issued and delivered with payment therefore
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 to be
appropriately licensed and/or appointed to comply with the state
insurance laws;
(vi) The performance of this Agreement and the consummation of the
transactions contemplated by this Agreement will not result in a
violation of any of the provisions of or default under any
statute, indenture, mortgage, deed of trust, note agreement or
other agreement or instrument to which Company is a party or by
which Company is bound (including Company's Charter or By-laws as
a stock life insurance company, or any order, rule or regulation
of any court or governmental agency or body having jurisdiction
over Company or any of its properties);
(vii)There is no consent, approval, authorization or order of any
court or governmental agency or body required for the
consummation by Company of the transactions contemplated by this
Agreement, except such as may be required under the Exchange Act
or state insurance or securities laws in connection with the
distribution of the Contracts; and
(viii) There are no material legal or governmental proceedings pending
to which Company or the Separate Account is a party or of which
any property of Company or the Separate Account is the subject
(other than as set forth in the Prospectus relating to the
Contracts, or litigation incidental to the kind of business
conducted by the Company) which, if determined adversely to
Company, would individually or in the aggregate have a material
adverse effect on the financial position, surplus or operations
of Company.
(b) Principal Underwriter represents and warrants to Company that:
(i) It is a broker-dealer duly registered with the Commission under
the Exchange Act, is a member in good standing of the NASD, and
is in compliance with the securities laws in those states in
which it conducts business as a broker-dealer;
(ii) As principal underwriter, it shall permit the offer and sale of
Contracts to the public only by and through persons who are
appropriately licensed under securities laws and who are
appointed in writing by the Company to be authorized insurance
agents unless such persons are exempt from licensing and
appointment requirements;
(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, indenture, mortgage, deed of trust,
note agreement or other agreement or instrument to which
Principal Underwriter is a party or by which Principal
Underwriter is bound (including the Certificate of Incorporation
or By-laws of Principal Underwriter or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over either Principal Underwriter or its property);
and
(iv) To the extent that any statements made in the Registration
Statements, or any amendments or supplements thereto, are made in
reliance upon and in conformity with written information
furnished to Company by Principal Underwriter expressly for use
therein, such statements 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.
3. BOOKS AND RECORDS
(a) Principal Underwriter shall keep, in a manner and form approved by
Company and in accordance with Rules 17a-3 and 17a-4 under the
Exchange Act, correct records and books of account as required to be
maintained by a registered broker-dealer, acting as principal
underwriter, of all transactions entered into on behalf of Company
with respect to its activities under this Agreement. Principal
Underwriter shall make such records and books of account available for
inspection by the Commission, NASD, and any other governmental agency
or body having jurisdiction over Principal Underwriter, and Company
shall have the right to inspect, make copies of or take possession of
such records and books of account at any time upon demand.
(b) Subject to applicable Commission or NASD restrictions, Company will
send confirmations of Contract transactions to Contract Owners.
Company will make such confirmations and records of transactions
available to Principal Underwriter upon request. Company will also
maintain Contract Owner records on behalf of Principal Underwriter, to
the extent permitted by applicable securities laws.
4. SALES MATERIALS
(a) After authorization to commence the activities contemplated herein,
Principal Underwriter will utilize the currently effective prospectus
relating to the Contracts in connection with its underwriting,
marketing and distribution efforts. As to other types of sales
material, Principal Underwriter hereby agrees and will require any
participating or selling broker-dealers to represent and agree that
they will use only sales materials which have been authorized for use
by Company, which conform to the requirements of federal and state
laws and regulations, and which have been filed, where required, with
the appropriate regulatory authorities, including the NASD.
(b) Principal Underwriter will not distribute any prospectus, sales
literature or any other printed matter or material relating to the
Contracts in the underwriting and distribution of the Contracts if, to
the knowledge of Principal Underwriter, any of the foregoing misstates
the duties, obligation or liabilities of Company or Principal
Underwriter.
5. COMPENSATION
(a) Company agrees to pay Principal Underwriter for direct expenses
incurred on behalf of Company. Such direct expenses shall include, but
not be limited to, the costs of goods and services purchased from
outside vendors, travel expenses and state and federal regulatory fees
incurred on behalf of Company.
(b) Principal Underwriter shall present a statement after the end of the
quarter showing the apportionment of services rendered and the direct
expenses incurred. Settlements are due and payable within thirty days.
6. PURCHASE PAYMENTS
Principal Underwriter shall arrange that all orders, purchase payments and
applications collected on the sale of the Contracts are promptly and properly
transmitted to Company for immediate allocation to the Separate Account in
accordance with the procedures of Company and the directions furnished by the
purchasers of such Contracts at the time of purchase.
7. UNDERWRITING TERMS
(a) Principal Underwriter makes no representations or warranties regarding
the number of Contracts to be sold by licensed broker-dealers and
registered representatives of broker-dealers or the amount to be paid
thereunder. Principal Underwriter does, however, represent that it
will actively engage in its duties under this Agreement on a
continuous basis while there are effective registration statements
with the Commission.
(b) Principal Underwriter will use its best efforts to ensure that the
Contracts shall be offered for sale only by registered broker-dealers
and their registered representatives (who are duly licensed as
insurance agents) on the terms described in the currently effective
prospectus describing such Contracts.
(c) It is understood and agreed that Principal Underwriter may render
similar services to other affiliated companies in the distribution of
other variable contracts.
(d) The Company will use its best efforts to assure that the Contracts are
continuously registered with the Commission under the Securities Act
(and under any applicable state "blue sky" laws) and to file for
approval under state insurance laws when necessary.
(e) The Company reserves the right at any time to suspend or limit the
public offering of the Contracts upon one day's written notice to
Principal Underwriter.
8. LEGAL AND REGULATORY ACTIONS
(a) The Company agrees to advise Principal Underwriter immediately of:
(i) any request by the Commission for amendment of the Registration
Statement or for additional information relating to the
Contracts;
(ii) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement relating to the
Contracts or the initiation of any proceedings for that purpose;
and
(iii)the occurrence of any known material event which makes untrue
any statement made in the Registration Statement relating to the
Contracts or which requires the making of a change therein in
order to make any statement made therein not misleading.
(b) 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 Contracts.
(c) During any legal action or inquiry, Company will furnish to Principal
Underwriter such information with respect to the Separate Account and
Contracts in such form and signed by such of its officers as Principal
Underwriter may reasonably request and will warrant that the
statements therein contained when so signed are true and correct.
9. TERMINATION
(a) This Agreement will terminate automatically upon its assignment.
(b) This Agreement shall terminate without the payment of any penalty by
either party upon sixty (60) days' advance written notice.
(c) This Agreement shall terminate at the option of the Company upon
institution of formal proceedings against Principal Underwriter by the
NASD or by the Commission, or if Principal Underwriter or any
registered representative thereof at any time:
(i) employs any device, scheme, artifice, statement or omission to
defraud any person;
(ii) fails to account and pay over promptly to the Company money due
it according to the Company's records; or
(iii) violates the conditions of this Agreement.
10. INDEMNIFICATION
The Company agrees to indemnify Principal Underwriter for any liability that it
may incur to a Contract owner or party-in-interest under a Contract:
(a) arising out of any act or omission in the course of or in connection
with rendering services under this Agreement; or
(b) arising out of the purchase, retention or surrender of a contract;
provided, however, that the Company will not indemnify Principal
Underwriter for any such liability that results from the willful
misfeasance, bad faith or gross negligence of Principal Underwriter or
from the reckless disregard by such Principal Underwriter of its
duties and obligations arising under this Agreement.
11. GENERAL PROVISIONS
(a) This Agreement shall be subject to the laws of the State of Illinois.
(b) This Agreement, along with any Schedules attached hereto and
incorporated herein by reference, may be amended from time to time by
the mutual agreement and consent of the undersigned parties.
(c) In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired
thereby.
IN WITNESS WHEREOF, the undersigned parties have caused this Agreement to
be duly executed, to be effective as of June 25, 1999.
ALLSTATE LIFE INSURANCE COMPANY
(and ALLSTATE FINANCIAL ADVISORS SEPARATE ACCOUNT I)
BY: ____________________________ ________________________
President and Chief Operating Officer Date
ALLSTATE LIFE FINANCIAL SERVICES, INC.
BY: ____________________________ ________________________
President and Chief Executive Officer Date
UNDERWRITING AGREEMENT
Attachment A
"Contracts"
Form #
"Select Directions" Flexible Premium Deferred Variable Annuity Contract LU 4518
(and state variations)
