Exhibit 1.A(3)(a)
PRINCIPAL UNDERWRITING AGREEMENT
--------------------------------
AGREEMENT dated ___________, 1997, by and between United Investors
Life Insurance Company ("United Investors"), a Missouri Corporation on its own
behalf and on the behalf of United Investors Universal Life Variable Account
("Variable Account"), and Xxxxxxx & Xxxx, Inc. ("W&R"), a Missouri corporation.
WITNESSETH:
WHEREAS, Variable Account is a segregated asset account established
and maintained by United Investors pursuant to the laws of the State of Missouri
for certain flexible premium variable life policies to be issued by United
Investors (the "Policies"), under which income, gains, and losses, whether or
not realized, from assets allocated to such account, will be, in accordance with
the Policies, credited to or charged against such account without regard to
other income gains, or losses of United Investors; and
WHEREAS, United Investors has registered Variable Account as a unit
investment trust under the Investment Company Act of 1940 (the "Investment
Company Act"); and
WHEREAS, W&R has registered as a broker/dealer under the Securities
Exchange Act of 1934 (the "Exchange Act") and is a member firm of the National
Association of Securities Dealers, Inc. (The "NASD"); and
WHEREAS, United Investors has registered the Policies
under the Securities Act of 1933 (the "Securities Act") and proposes
to issue and sell the Policies though W&R acting as its principal
underwriter.
NOW THEREFORE, United Investors and W&R hereby mutually agree as
follows:
1. Underwriter.
-----------
(a) United Investors grants to W&R the right, during the term of this
Agreement, subject to the registration requirements of the Securities Act and
the Investment Company Act and the provisions of the Exchange Act, to be the
distributor and principal underwriter of the Policies. W&R agrees to use its
best efforts to distribute the Policies, and to undertake to provide sales
services relative to the Policies and otherwise to perform all duties and
functions necessary and proper for the distribution of the Policies.
(b) To the extent necessary to offer the Policies, W&R shall be duly
registered or otherwise qualified under the securities laws of any state or
other jurisdiction. Any sales representatives of W&R soliciting applications for
the Policies shall be duly and appropriately licensed, registered or otherwise
qualified for the sale of such Policies under the federal securities laws, any
applicable insurance laws and securities laws of each state or other
jurisdiction in which such policies may lawfully be sold and in which United
Investors is licensed to sell Policies. Such direct sales representatives of W&R
shall be independent contractors. W&R shall be responsible for the training,
supervision, and control of its representatives for the purposes of the NASD
Rules of Fair Practice and federal and state securities law requirements
applicable in connection with the offering and sale of the Policies. In this
connection, W&R shall retain written supervisory procedures in compliance with
NASD Rules of Fair Practice, Section 27, Paragraph 2177.
(c) W&R agrees to offer the Policies for sale in accordance with the
prospectus therefore filed with the Securities and Exchange Commission
("Commission") then in effect. W&R is not authorized to give any information or
to make any representations concerning the Policies other than those contained
in such current prospectus or in such sales literature as may be authorized by
United Investors.
(d) All premium payments made or other monies payable under the
Policies shall be paid or remitted by or on behalf of Policyowners directly to
United Investors or its designated servicing agent and shall become the
exclusive property of United Investors. United Investors will retain all such
payments and monies except to the extent such payments and monies are allocated
to the Variable Account.
2. Sales Agreement.
----------------
(a) W&R is hereby authorized to enter into separate written
agreements, on such terms and conditions as W&R may determine to be not
inconsistent with this Agreement, with broker/dealers registered as such under
the Exchange Act which agree to participate in the distribution of the Policies
and to use their best efforts to solicit applications for the Policies.
(b) It is understood and agreed to by United Investors and W&R that
United Investors may from time to time propose that
the Policies be distributed through broker/dealers other than W&R. In such
circumstances, W&R will agree to enter into a sales agreement with another
broker/dealer, subject to W&R's reasonable satisfaction, through its customary
review, with such other broker/dealer's credentials and practices. W&R agrees
that, if reasonably satisfied with the credentials and practices of such other
broker/dealer, a sales agreement will not be withheld. If W&R withholds a sales
agreement without substantiating its reasons for doing so, United Investors may
terminate this agreement by giving W&R thirty (30) days written notice,
notwithstanding any other provision of this Agreement.
(c) All such sales agreements shall provide that each broker/dealer
will assume full responsibility for continued compliance by itself and its
representatives with applicable federal and state securities laws and state
insurance laws, and shall be in such forms and contain such other provisions as
United Investors may from time to time require. Such broker/dealer shall assume
any legal responsibility of United Investors for the acts, commissions, or
defalcations of such representatives insofar as they relate to the sale of the
Policies. Such broker/dealers and their representatives soliciting applications
for the Policies shall be duly and appropriately licensed, registered, or
otherwise qualified for the sale of such Policies under the federal securities
laws, any applicable insurance and securities laws of each state or other
jurisdiction in which such Policies may be lawfully sold and in which United
Investors is licensed to sell the Policies. Each such organization shall be both
registered as a broker/dealer under the Exchange Act and a member of the NASD,
or if not so registered or not such a member, then the representatives of such
organization soliciting applications for Policies shall be registered
representatives of a registered broker/dealer and NASD member which is an
affiliate of such organization and which maintains full responsibility for the
training, supervision, and control of the representatives selling the Policies.
(d) Applications for the Policies solicited by such organizations
through their representatives shall be forwarded to United Investors. All
payments for Policies shall be made by check or money order payable to "United
Investors Life Insurance Company" and remitted promptly by such organizations
to United Investors as agent for W&R. United Investors may also accept wire
transfers via Federal Funds to an account designated by United Investors. All
broker/dealers who agree to participate in the distribution of the Policies
shall act as independent contractors and nothing herein contained shall
constitute such broker/dealers or their agents or employees as employees of
United Investors or W&R in connection with the sale of the Policies.
3. Compensation.
-------------
(a) For the sales services rendered by W&R and its sales
representatives and the continuing obligations spelled out herein, United
Investors shall pay W&R the commissions set forth in Schedule A to this
Agreement, which Schedule may be hereafter amended from time to time by mutual
agreement of United Investors and W&R.
(b) For Policies sold under sales agreements that W&R enters into with
other broker/dealers pursuant to paragraph 2, above, United Investors shall pay
W&R the commissions which are set forth in Schedule B to this Agreement, which
Schedule may be hereafter amended from time to time by mutual agreement of
United Investors and W&R.
4. Administrative Services.
------------------------
United Investor agrees to maintain all required books of account and
related financial records on behalf of W&R. All such books of account and
records shall be maintained and preserved pursuant to Rules 17a-3 and 17a-4
under the Exchange Act (or the corresponding provisions of any future applicable
federal securities laws or regulations). In additional, United Investors will
maintain records of all sales commissions paid to sales representatives of W&R
in connection with the sale of the Policies. All such books and records shall be
maintained by United Investors on behalf of and as agent for W&R whose property
they are and shall remain for all purposes, and shall at all times be subject to
reasonable periodic, special, or other examination by the Commission and all
other regulatory bodies having jurisdiction. United Investors also agrees to
send to W&R's customers all required confirmations on customer transactions.
5. Reports.
--------
W&R shall have the responsibility for maintaining the records of sales
representatives licensed, registered, and otherwise qualified to sell the
Policies and for furnishing periodic reports thereof to United Investors.
6. Regulation.
-----------
(a) This Agreement shall be subject to the provisions of the
Investment Company Act and the Exchange Act and the rules, regulations, and
rulings thereunder and of the NASD, from time to time in effect, including such
exemptions from the Investment Company Act as the Commission may grant, and the
terms hereof shall
be interpreted and construed in accordance therewith. Without limiting the
generality of the foregoing, the term "assigned" shall not include any
transactions exempted from section 15(b) (2) of the Investment Company Act.
(b) W&R shall submit to all regulatory and administrative bodies
having jurisdiction over the present and future operations of United Investors
or Variable Account any information, reports or other material which any such
body by reason of this Agreement may request or require pursuant to applicable
laws or regulations. Without limiting the generality of the foregoing, W&R shall
furnish the State of Missouri Secretary of State and/or the Director of
Insurance with any information or reports which the Secretary of State and/or
the Director of Insurance may request in order to ascertain whether the variable
life operations of United Investors are being conducted in a manner consistent
with any other applicable law or regulations.
7. Suitability.
------------
United Investors and W&R each wish to ensure that the Policies
distributed by W&R will be issued to purchasers for whom the Policy will be
suitable. W&R shall take reasonable steps to ensure that the various sales
representatives appointed by it shall not make recommendations to an applicant
to purchase a Policy in the absence of reasonable grounds to believe that the
purchase of the Policy is suitable for such applicant. While not limited to the
following, a determination of suitability shall be based on information
furnished to a sales representative after reasonable inquiry of such applicant
concerning the applicant's insurance and investment objectives and financial
situation and needs. W&R will require that the applicant complete the Owner's
Confidential Financial Information and Suitability sections of the application
for the Policy.
8. Prospectuses and Promotional Material.
--------------------------------------
United Investors shall furnish W&R with copies of all prospectuses,
financial statements, and other documents and materials which W&R reasonably
requests for use in connection with the distribution of the Policies. United
Investors shall have responsibility for the preparation, filing, and printing of
all required prospectuses and/or registration statements in connection with the
Policies, and the payment of all related expenses. W&R and United Investors
shall cooperate fully in designing, drafting, and reviewing sales promotion
materials, and with respect to the
preparation of individual sales proposals related to the sale of the Policies.
W&R shall not use any such material not provided or approved by United
Investors.
9. Investigation and Proceedings.
------------------------------
(a) W&R and United Investors agree to cooperate fully in any insurance
regulatory investigation or proceeding or any judicial proceeding arising in
connection with the Policies distributed under this Agreement. W&R and United
Investors further agree to cooperate fully in any securities regulatory
inspection, inquiry, investigation or proceeding or any judicial proceeding with
respect to United Investors, W&R, their affiliates and their representatives to
the extent that such inspection, inquiry, investigation or proceeding is in
connection with the Policies distributed under this Agreement. Without limiting
the foregoing:
(i) W&R will be notified promptly of any customer complaint or notice
of any regulatory inspection, inquiry, investigation or proceeding or
judicial proceeding received by United Investors with respect to W&R or
any representative or which may affect United Investors' issuance of any
Policies marketed under this Agreement; and
(ii) W&R will promptly notify United Investors of any customer
complaint or notice of any regulatory inspection, inquiry, investigation
or judicial proceeding received by W&R or any representative with respect
to United Investors or its affiliates in connection with any Policies
distributed under this Agreement or any activity in connection with any
Policies.
(b) In the case of a customer complaint, W&R and United Investors will
cooperate in investigating such complaint and shall arrive at a mutually
satisfactory response.
10. Exclusivity.
-----------
The services of W&R and United Investors under this Agreement are not
deemed to be exclusive and W&R and United Investors shall be free to render
similar services to others, including, without implied limitation, such other
separate investment accounts as are now or hereafter established by United
Investors, W&R or any affiliate of W&R so long as the services of W&R and United
Investors hereunder are not impaired or interfered with thereby.
11. Benefit.
--------
This Agreement shall inure to the benefit of and be binding upon the
successors of the parties hereto.
12. Liability.
---------
Neither party hereto shall be liable to the other for any action taken
or omitted by it, or any of its officers, agents or employees, in performing
their responsibilities under this Agreement in good faith and without gross
negligence, willful misfeasance or reckless disregard of such responsibilities.
13. Notices.
-------
All notices and other communication provided for hereunder shall be in
writing and shall be delivered by hand or mailed first class, postage prepaid,
addressed as follows:
(a) If to United Investors:
United Investors Life Insurance Company
P. O. Box 10207
Birmingham, Alabama 35202-0207
Attention: Xxxxx X. Xxxxxxxx, Esq.
(b) If to W&R:
Xxxxxxx & Xxxx, Inc.
Xxxx Xxxxxx Xxx 00000
Xxxxxxx Xxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxx
or to such other address as United Investor or W&R shall designate by written
notice to the other.
14. Amendment.
----------
This Agreement may be amended from time to time by the mutual
agreement and consent of the parties hereto.
15. Severability.
-------------
If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
16. Termination.
------------
This Agreement shall be effective upon its execution. It may be
terminated at any time by either party hereto on 60 days
written notice to the other party hereto, without the payment of any penalty.
Upon termination of this Agreement, all authorizations, rights and obligations,
shall cease except (i) the obligation to settle accounts hereunder, issued
pursuant to applications received by United Investors prior to termination and
(ii) the agreements contained in paragraph 9 hereof.
17. Applicable Law.
---------------
This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Missouri.
18. Counterparts.
-------------
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original and all of which shall be deemed an
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
(Seal) UNITED INVESTORS LIFE
INSURANCE COMPANY
By:
----------------------- -----------------------
Title: Title:
----------------- --------------------
(seal)
Attest XXXXXXX & XXXX, INC.
By:
----------------------- -----------------------
Title: Title:
----------------- --------------------
EXHIBIT A
TO
PRINCIPAL UNDERWRITING AGREEMENT
Commissions payable to Xxxxxxx & Xxxx, Inc. are set forth
below and subject to all the conditions and limitations contained
in the Agreement to which this Exhibit is attachment.
Plan: Variable Universal Life
% of Premium % of Premium
Year Up to Target Premium Excess or Target Premium
---- -------------------- ------------------------
1 70% 5%
2-10 5% 5%
11 & Later 2% 2%
EXHIBIT B
TO
PRINCIPAL UNDERWRITING AGREEMENT
Commissions payable to Xxxxxxx & Xxxx, Inc. are set forth
below and subject to all the conditions and limitations contained
in the Agreement to which this Exhibit is attachment.
Plan: Variable Universal Life
% of Premium % of Premium
Year Up to Target Premium Excess of Target Premium
---- -------------------- ------------------------
1 70% 5%
2-10 5% 5%
11 & Later 2% 2%
