Exhibit 1(3)(a)
PRINCIPAL UNDERWRITING AGREEMENT
THIS AGREEMENT, is entered into on this 25th day of November, 1998, by
and among LINCOLN BENEFIT LIFE COMPANY, ("LBL" or "Company") a life insurance
company organized under the laws of the State of Nebraska, on its own and on
behalf of the VARIABLE UNIVERSAL LIFE ACCOUNT (A) ("Separate Account"), a
separate account established pursuant to the insurance laws of the State of
Nebraska, and ALLSTATE LIFE FINANCIAL SERVICES, INC., ("Principal Underwriter"),
a corporation organized under the laws of the state of Delaware.
WITNESSETH:
WHEREAS, Company proposes to issue to the public certain variable
universal life contracts identified in the Attachment A ("Contracts"); and
WHEREAS, Company, by resolution adopted on May 17, 1990, 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") (File No.
811-7972); and
WHEREAS, the Contracts to be issued by Company are registered with the
Commission under the Securities Act of 1933, as amended, ("Securities Act")
(File No. 333-67386, 333-47717) for offer and sale to the public and otherwise
are in compliance with all applicable laws; and
WHEREAS, Principal Underwriter, a broker-dealer registered 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 an 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 and compliance with the NASD Conduct Rules.
(c) Subject to agreement with the Company, Principal Underwriter
may enter into selling agreements with broker-dealers which
are registered under the Exchange Act 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 Statements on Form S-6 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 Statement 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 Nebraska, with power 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;
(iv) The Contracts to be issued by the Company 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 pursuant to 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 a principal underwriter, it shall permit the offer
and sale of Contracts to the public only by and
through persons who are appropriately licensed under
the 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 Statement, 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 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, the NASD, and all other
regulatory bodies having jurisdiction, 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 subject 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 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
securities laws and regulations and state insurance laws and
regulations, and which have been filed where necessary 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 in
the underwriting and distribution of any Contract 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 to Company 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 purchase payments 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 Investment
Company Act and rules and regulations thereunder, 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 is an effective registration statement with
the Commission.
(b) Principal Underwriter will use its best efforts to ensure that
the Contracts shall be offered for sale by registered
broker-dealers and registered representatives (who also 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 companies in the distribution
of other variable contracts.
(d) The Company will use its best efforts to assure that the
Contracts are continuously registered 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 subject 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 happening 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 subject 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 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
Nebraska.
(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 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 November 25, 1998.
LINCOLN BENEFIT LIFE COMPANY
(and LINCOLN BENEFIT LIFE COMPANY VARIABLE UNIVERSAL LIFE ACCOUNT)
BY: ____________________________
President & Chief Operating Officer
ALLSTATE LIFE FINANCIAL SERVICES, INC.
BY: ____________________________
President
UNDERWRITING AGREEMENT
Attachment A
"Contracts" Form #
Investor's Select VAP 9390
Consultant VAP 9800
