Exhibit (c)
Form of Principal Underwriting Agreement
PRINCIPAL UNDERWRITING AGREEMENT
UNDERWRITING AGREEMENT made this 31st day of December, 2003, by and
between Ameritas Investment Corp. (hereinafter the "Underwriter") and Acacia
Life Insurance Company (hereinafter the "Insurance Company"), on its own behalf
and on behalf of Acacia Variable Life Separate Account and Acacia Variable
Annuity Separate Account (hereinafter the "Accounts"), separate accounts of the
Insurance Company, as follows:
WHEREAS, the Accounts were established under authority of resolutions
of the Board of Directors of Acacia National Life Insurance Company ("Acacia
National") on January 31, 1995 and May 10, 1996, respectively, and were
transferred to the Insurance Company under the authority of a resolution of the
Insurance Company's Board of Directors approved on April 30, 2003, which
resolution approved the Merger of Acacia National into the Insurance Company on
or about December 31, 2003, in order to set aside and invest assets attributable
to certain variable annuity and variable life insurance contracts (hereinafter
"Contracts") issued by the Insurance Company;
WHEREAS, the Insurance Company has registered or will register the
Accounts as a unit investment trusts under the Investment Company Act of 1940
(the "Investment Company Act"), and has registered or will register the
Contracts under the Securities Act of 1933 (the "1933 Act").
WHEREAS, the Insurance Company has filed or will file the Contracts for
approval by the state insurance departments in those jurisdictions where it is
authorized to transact business.
WHEREAS, the Underwriter is registered as a broker-dealer with the
Securities and Exchange Commission (the "SEC") under the Securities Exchange Act
of 1934, as amended (the "1934 Act"), and is a member of the National
Association of Securities Dealer, Inc. (the "NASD"); and
WHEREAS, the Insurance Company and the Accounts desire to have
Contracts sold and distributed through the Underwriter and the Underwriter is
willing to sell and distribute such Contracts under the terms stated herein.
NOW, THEREFORE, the parties hereto agree as follows:
1. The Insurance Company grants to the Underwriter the right to be,
and the Underwriter agrees to serve as distributor and principal
underwriter of the Contracts during the term of this Agreement.
The Underwriter agrees to use its best efforts to perform all
duties and functions which are necessary and proper.
2. All premiums for Contracts shall be remitted promptly in full
together with such application, forms and any other documents
required by the Insurance Company. Checks or money orders in
payment of premiums shall be drawn to the order of "Acacia Life
Insurance Company".
3. The Underwriter agrees to offer the Contracts for sale in
accordance with the prospectuses in effect. The Underwriter is
not authorized to give any information or to make any
representations concerning the Contracts other than those
contained in the current prospectuses filed with the SEC or in
such sales literature as may be developed and authorized by the
Insurance Company in conjunction with the Underwriter.
4. The Underwriter shall be responsible for any filings of
advertisement or sales literature required to be made with the
NASD. All advertising, sales and marketing materials utilized by
or on behalf of the Insurance Company shall be subject to prior
written approval of the Insurance Company and the Insurance
Company shall maintain files of all such materials in accordance
with all applicable state insurance laws and regulations.
5. The Underwriter agrees to join Insurance Company, upon Insurance
Company's request and after independent review of such matters,
in any joint applications required to be filed with the SEC under
the "1934 Act," the "1933 Act" and the Investment Company Act.
6. The Insurance Company shall be responsible for any filings of
advertising and sales literature required to be made state
insurance regulators.
7. On behalf of the Accounts, the Insurance Company shall furnish
the Underwriter with copies of all prospectuses, financial
statements and other documents which the Underwriter reasonably
requests for use in connection with the distribution of the
Contracts.
8. Insurance Company represents to Underwriter that the prospectus
included in Insurance Company's Registration Statement,
post-effective amendments thereto and any supplements thereto, as
filed or to be filed with the SEC, as of their effective dates,
contain or will contain, all statements and information which are
required to be stated therein by the 1933 Act and in all respects
conform or will conform to the requirements thereof. Neither any
prospectus, nor any supplement thereof, includes or will include,
any untrue statement of a material fact, or omits or will omit to
state any material fact required to be stated therein or
necessary to make the statement therein not misleading, provided,
however, that the foregoing representations shall not apply to
information contained in or omitted from any prospectus or
supplement in reliance upon, and in conformity with written
information furnished to Insurance Company by Underwriter
specifically for use in the preparation thereof. The foregoing
representation also shall not apply to information contained in
or omitted from any prospectus or supplement of any underlying
mutual fund.
9. The Underwriter represents that it is duly registered as a
broker-dealer under the 1934 Act and is a member in good standing
of the NASD and, to the extent necessary to offer the Contracts,
shall be duly registered or otherwise qualified under the
securities laws and insurance laws of any state or other
jurisdiction. The Underwriter shall be responsible itself, or
through contracts with others, including Insurance Company, for
carrying out its sales and underwriting obligations hereunder in
continued compliance with the NASD Rules of Fair Practice and
federal and state securities laws and regulations. Without
limiting the generality of the foregoing, the Underwriter agrees
that it shall be fully responsible for:
(a) ensuring that no person shall offer to sell the Contracts on
its behalf until such person is duly registered as a
representative of the Underwriter, duly licensed and
appointed by the Insurance Company, and appropriately
licensed, registered or otherwise qualified to offer and
sell such Contracts under the federal securities laws and
any applicable securities laws and insurance laws of each
state or other jurisdiction in which such Contracts may be
lawfully sold, in which the Insurance Company is licensed to
sell the Contracts and in which such persons shall offer or
sell the Contracts; and
(b) training, supervision, and controlling all such persons for
purposes of complying on a continuous basis with the NASD
Rules of Fair Practice and with federal and state securities
law requirements applicable in connection with the offer and
sale of the Contracts. Underwriter is responsible for all
costs associated with this undertaking. In connection with
this undertaking, the Underwriter shall:
(1) conduct such training (including the preparation and
utilization of training materials) as in the opinion of
the Underwriter is necessary to accomplish the purposes
of this Agreement;
(2) establish and implement reasonable written procedures
for supervision of sales practices of agents,
representatives or brokers selling the Contracts; and
(3) take reasonable steps to ensure that its associated
persons shall not make recommendations to an applicant
to purchase a Contract and shall not sell a
Contract in the absence of reasonable grounds to
believe that the purchase of the Contract is suitable
for such applicant.
10. The Underwriter is hereby authorized to enter into sales
agreements with other independent broker-dealers for the sale of
the Contract. All such sales agreements entered into by the
Underwriter shall provide that each independent broker-dealer
will assume full responsibility for continued compliance by
itself and its associated persons with the NASD Rules of Fair
Practice and applicable federal and state securities laws. All
associated persons of such independent broker-dealers soliciting
applications for the Contracts shall be duly and appropriately
licensed or appointed for the sale of the Contracts under the
Federal and state securities laws and the insurance laws of the
applicable states or jurisdictions in which such Contracts may be
lawfully sold.
11. The Insurance Company shall apply for the proper insurance
licenses in the appropriate states of jurisdictions for the
designated persons associated with the Underwriter or with other
independent broker-dealers which have entered into agreements
with the Underwriter for the sale of the Contracts, provided that
the Insurance Company reserves the right to refuse to appoint any
proposed registered representative as an agent or broker, and to
terminate an agent or broker once appointed. The cost of
licensing for a designated person will be paid by the party
designating such person for licensing. The Insurance Company will
pay the cost of appointing all designated persons.
12. The Insurance Company and the Underwriter shall cause to be
maintained and preserved for the periods prescribed such
accounts, books, and other documents as are required of them by
the Investment Company Act of 1940, the 1934 Act, and any other
applicable laws and regulations. The books, accounts and records
of the Insurance Company, the Account and the Underwriter as to
all transactions hereunder shall be maintained so as to disclose
clearly and accurately the nature and details of the
transactions. The Insurance Company shall maintain such books and
records of the Underwriter pertaining to the sale of the
Contracts and required by the 1934 Act as may be mutually agreed
upon from time to time by the Insurance company and the
Underwriter; provided that such books and records shall be the
property of the Underwriter, and shall at all times be subject to
such reasonable periodic, special or other examination by the SEC
and all other regulatory bodies having jurisdiction. The
Insurance Company shall be responsible for sending all required
confirmations on customer transactions in compliance with
applicable regulations, as modified by any exemption or other
relief obtained by the Insurance Company. The Underwriter shall
cause the Insurance Company to be furnished with such reports as
the Insurance Company may reasonably request for the purpose of
meeting its reporting and record keeping requirements under the
insurance laws of the State of Nebraska and any other applicable
states or jurisdictions.
13. The Insurance Company shall have the responsibility for paying
(i) all commissions or other fees to associated persons of the
Underwriter which are due for the sale of the Contract and (ii)
any compensation to other independent broker-dealers and their
associated persons due under the terms of any sales agreements
between the Underwriter, Insurance Company, and such
broker-dealers. Notwithstanding the preceding sentence, no
associated person or broker-dealer shall have an interest in any
deductions or other fees payable to the Underwriter pursuant to
the terms of this Agreement.
14. If Insurance Company is required to refund premiums or return
accumulation values and waive surrender charges on any Contract
for any reason; then no commission will be payable on such
payments, and previously paid commissions, to the extent they are
refunded by the Insurance Company, must be refunded by the
Underwriter.
15. Insurance Company shall indemnify Underwriter for any losses to
which Underwriter may become subject, insofar as such losses
result from negligent, fraudulent or unauthorized acts or
omissions by Insurance Company or its employees.
16. Underwriter agrees to indemnify the Insurance Company for any
losses to which Insurance Company may be subject if the losses
arise out of or result from negligent, improper, fraudulent, or
unauthorized acts or omissions by Underwriter, its employees,
sales personnel, agents or principals, including but not limited
to improper solicitations of applications for Policies,
unauthorized use of sales materials or advertisements, or any
oral or written misrepresentations or unlawful sales practices.
17. (a) Except as provided by paragraph 17(b) through (e), this
Agreement may be terminated by either party hereto upon 180
days' written notice to the other party.
(b) This Agreement may be terminated immediately upon written
notice of one party to the other party hereto in the event
of bankruptcy or insolvency of the party to which notice is
given.
(c) This Agreement may be terminated immediately, at the option
of Insurance Company, in the event that formal
administrative proceeding are instituted against the
Underwriter by the NASD, SEC, any state Insurance
Commissioner or any other regulatory body regarding
Underwriter's duties under this Agreement or related to the
sale of Contracts, and that Insurance Company determines in
its sole judgment exercised in good faith, that any such
administrative proceedings will have a material adverse
effect upon the ability of the Underwriter to perform its
obligations under this Agreement.
(d) This Agreement may be terminated immediately, at the option
of Underwriter, in the event that any of the underlying
funds are not registered, issued or sold in accordance with
applicable state and/or federal law or such law precludes
the use of such shares as the underlying investment media of
the Contracts issued or to be issued by Insurance Company.
(e) This Agreement may be terminated immediately, at the option
of Underwriter, if the underlying fund(s) ceases to qualify
as a Regulated Investment Company under Subchapter M of the
Internal Revenue Code of 1954, as amended.
(f) This Agreement may be terminated, at the option of Insurance
Company, if (a) Insurance Company shall determine in its
sole judgment exercised in good faith that Underwriter has
suffered a material adverse change in its business or
financial condition or is subject to material adverse
publicity and such material adverse change or material
adverse publicity will have a material adverse impact upon
the business and operations of Insurance Company, (b)
Insurance Company shall notify Underwriter in writing of
such determination and its intent to terminate this
Agreement and (c) after considering the actions taken by
Underwriter and any other changes in circumstances since the
giving of such notice, such determination of Insurance
Company shall continue to apply on the sixtieth (60th ) day
following the giving of such notice, which sixtieth day
shall be the effective day of termination.
(g) This Agreement may be terminated at any time upon the mutual
written consent of the parties thereto.
(h) The Underwriter shall not assign or delegate its
responsibilities under this Agreement without the written
consent of the Insurance Company.
(i) Upon termination of the Agreement, all authorizations,
rights and obligations shall cease except the obligations to
settle accounts hereunder, including payments of premiums or
contributions subsequently received for Contract in effect
at the time of termination or issued pursuant to
applications received by the Insurance Company prior to
termination.
18. This Agreement is subject to and its terms are to be
interpreted and construed in accordance with the provisions
of the Investment Company Act and the 1934 Act, and the
rules, regulations, and rulings thereunder and is subject to
the provisions of the NASD Rules of Fair Practice. Without
limiting the generality of the foregoing, the term
"assigned" shall not include any transaction exempted from
section 15(b)(2) of the Investment Company Act.
The Underwriter shall submit to all regulatory and
administrative entities having jurisdiction over the
operation of the Accounts, present or future; and will
provide any information, reports or other material which any
such entity by reason of this Agreement may request or
require pursuant to applicable laws or regulations.
19. 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.
20. This Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of Nebraska.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed, and seals to be affixed, as of the day and year first above written.
AMERITAS INVESTMENT CORP.
Attest:
By:
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Xxxxxxx X. Xxxxxxxx,
President and Chief Executive Officer
ACACIA LIFE INSURANCE COMPANY
Attest:
By:
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Xxxxx Xxxxxxx
President and Chief Executive Officer
