Exhibit 3
UNDERWRITING AGREEMENT
THIS UNDERWRITING AGREEMENT made this 1st day of May 2003, by and
between BenefitsCorp Equities, Inc. (hereinafter the "Underwriter") and First
Great-West Life & Annuity Insurance Company (hereinafter the "Insurance
Company"), on its own behalf and on behalf of the Variable Annuity-1 Series
Account of First Great-West Life & Annuity Insurance Company (hereinafter the
"Series Account"), as follows:
WHEREAS, the Series Account was established under authority of the
Insurance Company's Board of Directors on January 15, 1997, in order to set
aside and invest assets attributable to certain variable annuity contracts
(hereinafter the "Contracts") issued by the Insurance Company;
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 distributes 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 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. The Underwriter agrees to offer the Contracts for sale in accordance
with the prospectus therefor, then 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 prospectus therefor filed with the SEC
or in such sales literature as may be authorized by the Insurance Company.
3. 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. The Underwriter shall be fully responsible for carrying out its
sales, underwriting and compliance supervisory obligations hereunder in
continued compliance with the NASD Conduct Rules 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 or 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 the Insurance Company and representative are appropriately licensed,
registered or otherwise qualified to offer and sell such Contracts under
the federal securities laws and any applicable state or jurisdictional
securities laws in each state or jurisdiction in which such Contracts
may be lawfully sold;
(b) continually training, supervising, and controlling all such
persons 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 connection, the Underwriter
shall:
(1) conduct training programs (including the preparation
and utilization of training materials) as is necessary, in the
Underwriter's opinion, to accomplish the purposes of this
Agreement;
(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
(c) supervising and ensuring compliance with NASD rules of all
administrative functions performed with respect to the offering of the
Contracts and the establishment and maintenance of the Series Account.
4. 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. All such sales
agreements 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 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. The processes and procedures for the
acquisition of such licenses and appointments shall be in accordance with the
provisions of any such sales agreements.
5. The Underwriter, or its affiliate, 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,
provided however, that the Insurance Company reserves the right to refuse to
appoint any proposed associated person as an agent or broker, and to terminate
an agent or broker once appointed. The Underwriter agrees to pay all licensing
or other fees necessary to properly authorize such persons for the sale of the
Contracts.
6. 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 it by the 1940 Act and any other applicable
laws and regulations. The books, accounts and records if 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. 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 recordkeeping requirements under the
insurance laws of the State of Colorado and any other applicable states or
jurisdictions.
7. 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. Notwithstanding the preceding sentence, the
Insurance Company retains the ultimate right to reject any commission rate
allowed by the Underwriter and 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.
8. 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.
9. 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. 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; and
(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.
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.
10. 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 from time to time in effect, 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
11.
11. The Underwriter agrees and understands that all documents, reports,
records, books, files and other materials relative to this agreement (the
"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 said documents, reports, records, books files
and other material shall be returned to the Insurance Company.
12. Insurance Company agrees and understands that the Underwriter may
maintain copies of the records as is required by any relevant securities laws,
the SEC, the NASD or any other self regulatory agency.
13. Underwriter shall establish and maintain facilities and procedures
for the safekeeping of all records relative to this Agreement. Such records
shall remain confidential and shall not voluntarily be disclosed to any other
person or entity.
14. Except as otherwise provided, Underwriter acknowledges that
Insurance Company retains the overall right and responsibilities to direct and
control the activities of the Underwriter.
15. 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 not be affected.
16. 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.
17. 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.
First Great-West Life & Annuity Insurance Company
By: /s/ Xxxxxxx X. Wooden
Xxxxxxx X. Wooden
Executive Vice-President
Financial Services
By: /s/ Xxxxxx X. Xxxx
Xxxxxx X. Xxxx
Senior Vice President
Individual/Institutional Markets
BenefitsCorp Equities, Inc.
By: /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
President
