EXHIBIT 3
Distribution Agreement
UNDERWRITING AGREEMENT
THIS UNDERWRITING AGREEMENT made this 1st day of December 1996, by and
between BenefitsCorp Equities, Inc. (the "Underwriter") and Great-West Life &
Annuity Insurance Company (the "Insurance Company"), on its own behalf and on
behalf of the Maxim Series Account of Great-West Life & Annuity Insurance
Company (the "Series Account"), as follows:
WHEREAS, the Insurance Company has registered the Series Account as a unit
investment trust under the Investment Company Act of 1940, as amended (the "1940
Act") and has registered the Contracts under the Securities Act of 1933;
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 Dealers, Inc. (the "NASD"); and
WHEREAS, the Insurance Company and the Series Account desire to have the
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. Representations, Responsibilities and Warranties of Insurance Company
1.01 The Insurance Company represents that it has the authority, and
hereby agrees to, grant the Underwriter the right to serve as the distributor
and principal underwriter of the Contracts during the term of this Agreement.
1.02 The Insurance Company represents and warrants that it is duly
licensed as an insurance company under the laws of the State of Colorado and
that it has taken all appropriate actions to establish the Series Account in
accordance with state and federal laws.
1.03 The Insurance Company agrees to update and maintain a current
prospectus for the Contracts as required by law.
1.04 The Insurance Company represents that it reserves the right to
appoint or refuse to appoint, any proposed associated person of the Underwriter
as an agent or broker of the Insurance Company. The Insurance Company also
retains the right to terminate such agents or brokers once appointed.
1.05 On behalf of the Series Account, the Insurance Company shall furnish
the Underwriter with copies of all financial statements and other documents
which the Underwriter reasonably requests for use in connection with the
distribution of the contracts.
2. Representations, Responsibilities and Warranties of Underwriter
2.01 Underwriter represents that it has the authority and hereby agrees to
serve as distributor and principal underwriter of the Contracts during the term
of this Agreement.
2.02 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 of any state or other
jurisdiction.
2.03 The Underwriter agrees to use its best efforts to solicit
applications for the Contracts, and to undertake, at its own expense, to provide
all sales services relative to the Contracts and otherwise to perform all duties
and functions which are necessary and proper for the distribution of the
Contracts.
2.04 The Underwriter agrees to offer the Contracts for sale in accordance
with the prospectus therefor, then in effect. The Underwriter represents and
agrees that it is not authorized to give any information or make any
representations concerning the Contracts other than those contained in the
current prospectus as filed with the SEC or in such sales literature as may be
authorized by the Insurance Company.
2.05. The Underwriter shall be fully responsible for carrying out its
sales, underwriting and compliance supervisory obligations hereunder in
compliance with the NASD Conduct Rules and all other relevant federal and state
securities laws and regulations. Without limiting the generality of the
foregoing, the Underwriter agrees that it shall have full responsibility for:
(a) ensuring that no person shall offer or sell the Contracts on its
behalf until such person is duly registered as a representative of the
Underwriter, and duly licensed and appointed by the Insurance Company;
(b) ensuring that no person shall offer or sell the Contracts on its
behalf until the Underwriter has confirmed that the Insurance Company is
appropriately licensed, or otherwise qualified to offer and sell such
Contracts under the federal securities laws and any applicable state or
jurisdictional securities and/or insurance laws in each state or
jurisdiction in which such Contracts may be lawfully sold;
(c) continually training, supervising, and controlling all
registered representatives and other agents of the Underwriter for
purposes of complying with the NASD Conduct Rules and with federal and
state securities laws which may be applicable to the offering and sale of
the Contracts. In this respect, the Underwriter shall:
(1) conduct training programs (including the preparation and
utilization of training materials) as is necessary, in the
Underwriter's opinion, to comply with applicable laws and
regulations;
(2) establish and implement reasonable written procedures for
the supervision of the sales practices of agents, representatives or
brokers who sell the Contracts; and
(3) take reasonable steps to ensure that its associated
persons shall not make recommendations to an applicant to purchase a
Contract in the absence of reasonable grounds to believe that the
purchase of the Contract is suitable for such applicants; and
(d) supervising and ensuring compliance with NASD rules of all
administrative functions performed by the Underwriter with respect to the
offering and sale of the Contracts and representations with respect to the
Series Account.
2.06 The Underwriter, or its affiliates, on behalf of the Insurance
Company, shall apply for the proper insurance licenses in the appropriate states
or jurisdictions for the designated persons associated with the Underwriter or
with independent broker-dealers which have entered into agreements with the
Underwriter for the sale of the Contracts. The Underwriter agrees to pay all
licensing or other fees necessary to properly authorize such persons for the
sale of the Contracts.
2.07 The Underwriter shall have the responsibility for paying (i) all
commissions or other fees to its associated persons which are due for the sale
of the Contracts and (ii) any compensation to independent broker-dealers and
their associated persons due under the terms of any sales agreements between the
Underwriter and such broker-dealers. Provided, however, the Insurance Company
retains the ultimate right to reject any commission rate allowed by the
Underwriter. Furthermore, no associated person or independent broker-dealer
shall have an interest in the surrender charges, deductions or other fees
payable to Underwriter as set forth herein. The Underwriter shall have the
responsibility for calculating and furnishing periodic reports to the Insurance
Company as to the sale of the Contracts, and as to the commissions and service
fees payable to persons selling the Contracts.
3. Records and Confidentiality
3.01 The Insurance Company and the Underwriter shall cause to be
maintained and preserved for the periods prescribed, such accounts, books,
records, files and other documents and materials ("Records") as are required of
it by the 1940 Act and any other applicable laws and regulations. The Records of
the Insurance Company, the Series 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.
3.02 The Underwriter shall cause the Insurance Company to be furnished
with such Records, or copies thereof, as the Insurance Company may reasonably
request for the purpose of meeting its reporting and recordkeeping requirements
under the insurance laws of the State of Colorado and any other applicable
states or jurisdictions.
3.03 The Insurance Company shall cause the Underwriter to be furnished
with any Records, or copies thereof, as the Underwriter may reasonably request
for the purpose of meeting its reporting and recordkeeping requirements under
the federal securities laws or the securities laws of any inquiring
jurisdiction.
3.04 The Underwriter agrees and understands that all Records shall be the
sole property of the Insurance Company and that such property shall be held by
the Underwriter, or its agents during the term of this agreement. Upon
termination, all Records shall be returned to the Insurance Company.
3.05 Insurance Company agrees and understands that the Underwriter may
maintain copies of the Records as is required by any relevant securities law,
the SEC, the NASD or any other self regulatory agency.
3.06 Underwriter shall establish and maintain facilities and procedures
for the safekeeping of all Records relative to this Agreement.
3.07 The parties hereto agree that all Records pertaining to the business
of the other party which are exchanged or received pursuant to this Agreement,
shall remain confidential and shall not be voluntarily disclosed to any other
person, except to the extent disclosure thereof may be required by law. All such
confidential information in the possession of each of the parties hereto shall
be returned to the party from whom it was obtained upon the termination or
expiration of this Agreement.
4. Relationship of the Parties
4.01 Notwithstanding anything in this Agreement to the contrary, the
Underwriter or the Insurance Company may enter into sales agreements with
independent broker-dealers for the sale of the Contracts.
4.02 All such sales agreements as described in 4.01, above, which are
entered into by the Insurance Company or the Underwriter shall provide that each
independent broker-dealer will assume full responsibility for continued
compliance by itself and its associated persons with NASD Conduct Rules 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 and/or appointed for the sale of the Contracts
under the insurance laws of the applicable state or jurisdiction in which the
Contracts may be lawfully sold.
4.03 The services of the Underwriter to the Series Account hereunder are
not to be deemed exclusive and the Underwriter shall be free to render similar
services to others so long as the services rendered hereunder are not interfered
with or impaired.
5. Term and Termination
5.01 Subject to termination, the Agreement shall remain in full force and
effect for one year, and shall continue in full force and effect from year to
year until terminated as provided below. Each additional year shall be an
additional term of this Agreement.
5.02 This Agreement may be terminated:
(a) by either party upon sixty (60) days written notice to the other
party;
(b) immediately, upon written notice in the event of bankruptcy or
insolvency of one party;
(c) at any time upon mutual written consent of the parties;
(d) immediately in the event of its assignment; provided however,
"assigned" shall not include any transaction exempted from section
15(b)(2) of the 1940 Act;
(e) immediately in the event that the Underwriter no longer
qualifies as a broker-dealer under applicable federal law; and
(f) immediately in the event of fraud, misrepresentation, conversion
or unlawful withholding of funds by a party.
5.03 Upon termination of this Agreement, all authorization, rights, and
obligations shall cease except the obligations to settle accounts hereunder,
including payments or premiums or contributions subsequently received for
Contracts in effect at the time of termination or issued pursuant to
applications received by the Insurance Company prior to termination.
5.04 After notice of termination, the parties agree to cooperate to
effectuate an orderly transition of all accounts, payments and Records.
6. Miscellaneous
6.01 This Agreement shall be subject to the provisions of the 1940 Act,
the 1934 Act and the rules, regulations and rulings thereunder. In addition it
shall be subject to the rulings of the NASD, as issued from time to time, and
any exemptions from the 1940 Act the SEC may grant. All terms of this Agreement
will be interpreted and construed in accordance with compliance of this section
6.01.
6.02 Except as otherwise provided, Underwriter acknowledges that Insurance
Company retains the overall right and responsibility to direct and control the
activities of the Underwriter.
6.03 If any provisions of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of this Agreement
shall remain in full force and effect.
6.04 This Agreement constitutes the entire Agreement between the parties
hereto and may not be modified except in a written instrument executed by all
the parties hereto.
6.05 This Agreement shall be governed by the internal laws of the State of
Colorado.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective duly authorized officers and have caused their respective seals
to be affixed hereto, as of the day and year first written above.
Great-West Life & Annuity Insurance
Company
/s/ Xxxx Xxxxxx /s/
______________________ By: ________________________________
Witness: Xxxxxxx X. XxXxxxxx
President and Chief Executive
Officer
BenefitsCorp Equities, Inc.
/s/ Xxxxxxx X. Xxxxxxxx /s/
______________________ By: ________________________________
Witness: Xxxxxxx X. Xxxxxx
President
