DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT is made this 2nd day of January, 1996,
between Principal Mutual Life Insurance Company ("Principal Mutual"), a mutual
life insurance company organized under the laws of the State of Iowa, and
Princor Financial Services Corporation ("Princor"), an affiliate of Principal
Mutual organized under the laws of the State of Iowa.
WITNESSETH
WHEREAS, Principal Mutual has established Variable Life Separate Account
("Separate Account") and registered such Separate Account as an investment
company under the Investment Company Act of 1940 to fund variable life insurance
policies issued by Principal Mutual Life Insurance Company;
WHEREAS, Princor is registered with the Securities and Exchange
Commission as a broker-dealer under the Securities Exchange Act of 1934 and is a
member of the National Association of Securities Dealers, Inc.; and
WHEREAS, Principal Mutual desires to issue certain PrinFlex Life
policies ("Policies") with respect to the Separate Account which will be sold
and distributed by and through Princor, and Princor is willing to sell and
distribute such Policies under the terms and conditions stated herein;
NOW, THEREFORE, the parties agree as follows:
1. Principal Mutual hereby appoints Princor as the principal underwriter of
the Policies issued with respect to the Separate Account, and Princor agrees to
use its best efforts to sell and distribute the Policies through its registered
representatives or through other broker-dealers registered under the Securities
and Exchange Act of 1934 whose registered representatives are authorized by
applicable law to sell variable life insurance policies.
2. All payments and other monies payable upon the sale, distribution,
renewal or other transaction involving the Policies shall be the property of and
be paid or remitted directly to Principal Mutual, who shall retain all such
payments and monies for its own account except to the extent such payments and
monies are allocated to the Separate Account. Princor shall not be deemed to
have any interest in such payments.
3. For the administrative convenience of the parties, Principal Mutual
shall:
(a) pay to the registered representatives of Princor the
commissions earned on the sale, distribution, renewal
or other transaction involvipg the Policies as
determined in the attached Commission Schedule, and
provide Princor with accurate records of all such
commissions paid on its behalf;
(b) pay to broker-dealers with whom Princor has entered
into a Selling Agreement for the distribution of the
Policies any applicable dealer allowance or other
compensation as provided in such Selling Agreement,
and provide Princor with accurate records of all such
payments paid on its behalf.
4. Principal Mutual shall pay to Princor an amount equal to the expenses
incurred by Princor in the performance of this Agreement. Princor shall provide
a statement of expenses to Principal Mutual at least semi-annually in a form and
manner agreed to by the parties.
5. Princor shall be solely responsible for the supervision and control of
the conduct and activities of its registered representatives with regard to the
sale and distribution of the Policies.
6. Principal Mutual shall assume the responsibility, including the costs
thereof, for all administrative and legal functions pertaining to the Policies
not otherwise specifically assumed by Princor in this agreement, including but
not limited to the following: filing of any policies with a state securities
commission as required by applicable state securities (Blue Sky) laws; the
preparation, printing and filing of prospectuses; the development, filing, and
compliance with federal and state securities laws and regulations of the
Separate Account; contract development; SEC registration; filing and compliance
with state insurance laws and regulations; underwriting; policy issue and
policyowner service functions; developing sales and promotional material; and
training agents.
7. Principal Mutual will prepare and maintain all the books and records in
connection with the offer and sales of variable life insurance policies which
are required to be maintained and preserved in accordance with applicable
securities law; and all such books and records are to be maintained and held by
Principal Mutual on behalf of and as agent for the broker-dealer whose property
they are and shall remain; and all such books and records will be made available
for inspection by the Securities and Exchange Commission at all times.
8. Principal Mutual shall send to each contractowner or such other person
as appropriate a confirmation as required by law or regulation of any
transaction made with respect to the Policies which shall reflect the true facts
of the transaction and show that confirmation of the transaction is being sent
on behalf of the broker-dealer acting in the capacity of agent for the insurance
company.
9. Princor and Principal Mutual may enter into agreements with other
broker-dealers duly licensed under applicable federal and state laws and with
their affiliated general agencies, if any, for the sale and distribution of the
Policies. The commission payable to registered representatives on the sale of
Policies thereunder may not exceed the amount shown on the attached Commission
Schedule.
10. This agreement may be terminated by either party upon 60 days prior
written notice. Princor shall promptly notify the Securities and Exchange
Commission of any such termination.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed on the day and year written above.
PRINCIPAL MUTUAL LIFE
INSURANCE COMPANY
By:_____________________________
PRINCOR FINANCIAL SERVICES
CORPORATION
By:______________________________
