Exhibit 99.B(3)(a)
UNDERWRITING AND
ADMINISTRATIVE SERVICES AGREEMENT
This AGREEMENT made this _____ day of July, 2007 between and among Commonwealth
Annuity and Life Insurance Commonwealth Annuity, a Massachusetts corporation
("Commonwealth Annuity"), on its own behalf and on behalf of each of its
separate investment accounts (collectively, the "Account(s)") as set forth in
Schedule A hereto, and Epoch Securities, Inc., a Massachusetts corporation
("Epoch").
WHEREAS, Commonwealth Annuity and the Account(s) issue certain variable annuity
contracts or variable insurance policies (the "Variable Contracts") which may be
deemed to be securities under the Securities Act of 1933 (the "1933 Act"), and
the laws of some states;
WHEREAS, Epoch, an affiliate of Commonwealth Annuity, is registered as a
broker-dealer with the Securities and Exchange Commission ("SEC") under the
Securities Exchange Act of 1934 (the "1934 Act") and is a member of the National
Association of Securities Dealers, Inc. ("NASD");
WHEREAS, the parties desire Epoch to act as principal underwriter for the
Account(s) set forth in Exhibit A, as may be amended from time-to-time by mutual
consent of the parties, to enter into selling agreements with independent
broker-dealers in connection with the sale of the contract, and to assume full
responsibility for the securities activities of all "persons associated" (as
that term is defined in Section 3(a)(18) of the 0000 Xxx) with Epoch and engaged
directly or indirectly in the variable contract operations (the "associated
persons");
WHEREAS, the parties desire to have Commonwealth Annuity perform certain
administrative services on behalf of Epoch in connection with the sale and
servicing of the contracts;
NOW, THEREFORE, in consideration of the covenants and mutual promises of the
parties made to each other, it is hereby covenanted and agreed as follows:
1. Commonwealth Annuity hereby appoints Epoch as the principal underwriter of
the variable annuity contracts ("Variable Contracts") issued by Commonwealth
Annuity and the Account. Epoch will promote such Variable Contracts in those
states in which Commonwealth Annuity has variable contract authority and in
which the Contracts are qualified for sale under applicable state law, as
Commonwealth Annuity shall so notify Epoch from time to time. Epoch shall
suspend its efforts to effectuate sales of the Contract in such jurisdictions as
Commonwealth Annuity may request at any time.
2. Epoch shall assume responsibility for the activities of all persons engaged
directly or indirectly in the promotion of the solicitation of the Contracts,
including but not limited to the continued compliance by itself and its
associated persons with the NASD Rules of Practice and Federal and state
securities laws, to the extent applicable in connection with the sale of the
contracts.
3. Epoch may enter into sales agreements with independent broker-dealers for the
sale of the contracts through their registered representatives; provided,
however, that no such registered representative shall be allowed to participate
in the solicitation of the Contracts unless such person has been appointed to
solicit variable contracts by Commonwealth Annuity in any state in which such
solicitations may occur. All such sales agreements shall provide that each
independent broker-dealer will assume full responsibility for continued
compliance by itself and its associated persons with applicable laws and
regulations, including but not limited to the NASD Rules of Fair Practice and
Federal and state securities laws.
4. Epoch agrees that it will not use any sales literature, as defined under the
rules of the NASD or by the statutes or regulations of any state in which the
Contracts may be solicited, unless such material has received prior written
approval by Commonwealth Annuity. Epoch, directly or through Commonwealth
Annuity as its agent, will make timely filings with the SEC, NASD, and any other
securities regulatory authorities of all reports and any sales literature
relating to the Accounts, as may be required by statutes or regulations to be
filed by the principal underwriter.
5. On behalf of the Accounts, Commonwealth Annuity will prepare and submit (a)
all registration statements and prospectuses (including amendments) and all
reports required by law to be filed by the Accounts with Federal and state
securities regulatory authorities, and (b) all notices, proxies, proxy
statements, and periodic reports that are to be transmitted to persons having
voting rights with respect to the Accounts.
6. Commonwealth Annuity will, except as otherwise provided in this Agreement,
bear the cost of all services and expenses, including legal services and
expenses, filing fees, and other fees incurred in connection with (a)
registering the Accounts and contracts and qualifying the contracts for sale in
the various states, (b) preparing, printing, and distributing all registration
statements and prospectuses (including amendments), contracts, notices, periodic
reports, and proxy solicitation material and (c) preparing, printing and
distributing advertising and sales literature used by Epoch or furnished by
Epoch to broker-dealers in connection with offering the contracts.
7. All costs associated with the variable contract compliance function
including, but not limited to, fees and expenses associated with qualifying and
licensing associated persons with Federal and state regulatory authorities and
the NASD and with performing compliance-related administrative services, shall
be allocated to Commonwealth Annuity. To the extent that Epoch incurs
out-of-pocket expenses in connection with the Variable Contracts compliance
function, Commonwealth Annuity shall reimburse Epoch for such expenses.
8. Sales commissions and other compensation, if any, due to broker-dealers for
the sale of Contracts shall be paid by Commonwealth Annuity through Epoch. Epoch
will reflect such commissions and other compensation on its books and records,
or as otherwise required or permitted by applicable statutes or regulations.
Commonwealth Annuity, as agent for Epoch, agrees to transmit all sales
commissions and other compensation to broker-dealers having a sales agreement
with Epoch. Epoch or Commonwealth Annuity, as agent for Epoch, shall pay all
other remuneration due any other persons for other activities relating to the
sale of the contracts. Commonwealth Annuity shall reimburse Epoch fully and
completely for all amounts, if any, paid by Epoch to any person pursuant to this
Section.
9. Commonwealth Annuity shall, as agent for Epoch, (a) maintain and preserve in
accordance with Rules 17a-3 and 17a-4 under the 1934 Act all books and records
required to be maintained by Epoch in connection with the offer and sale of the
Variable Contracts, which books and records shall remain the property of Epoch,
and shall at all times be subject to inspection by the SEC in accordance with
Section 17(a) of the 1934 Act and by all other regulatory bodies having
jurisdiction over the Variable Contracts, and (b) send a written confirmation
for each contract transaction reflecting the facts of the transaction and
showing that it is being sent by the Company on behalf of Epoch (acting in the
capacity of principal underwriter for the Accounts), in conformance with the
requirements of Rule 10b-10 of the 1934 Act.
10. Each party hereto shall advise the others promptly (a) of any action of the
SEC or any state or federal authorities which affects the registration or
qualification of the Accounts or the contracts, or the right to offer the
contracts for sale, and (b) of any fact or event which makes untrue any
statement in the registration statement or prospectus, or which requires the
making of any change in the registration statement or prospectus, in order to
make the statements therein not misleading.
11. Commonwealth Annuity agrees to be responsible to the Accounts for all sales
and administrative expenses incurred in connection with the administration of
the contracts and the Accounts other than applicable taxes arising from income
and capital gains of the Accounts and any other taxes arising from the existence
and operation of the Accounts.
12. As compensation for services performed and expenses incurred under this
Agreement, Commonwealth Annuity will receive the charges and deductions as
provided in each outstanding series of Commonwealth Annuity's Variable
Contracts. Epoch will be reimbursed for expenses incurred and may receive
additional compensation, if any, as may be agreed upon by the parties from
time-to-time.
13. Each party hereto shall each comply with all applicable provisions of the
Investment Company Act of 1940, Securities Act of 1933 and of all Federal and
state securities and insurance laws, rules and regulations governing the
issuance and sale of the Contracts. Each party hereto agrees to furnish any
other state
insurance commissioner or regulatory authority with jurisdiction over the
contracts with any information or reports in connection with services provided
under this Agreement which may be requested in order to ascertain whether the
variable insurance product operations of Commonwealth Annuity are being
conducted in a manner consistent with applicable statutes, rules and
regulations.
14. Commonwealth Annuity agrees to indemnify Epoch against any and all claims,
liabilities and expenses including but not limited to reasonable attorneys fees
which Epoch may incur under the Investment Company Act of 1940, Securities Act
of 1933 and all Federal and state securities and insurance laws, rules and
regulations governing the issuance and sale of the Contracts, common law or
otherwise, arising out of or based upon any alleged untrue statements of
material fact contained in any registration statement or prospectus of the
Account, or any alleged omission to state a material fact therein, the omission
of which makes any statement contained therein misleading or of any alleged act
or omission in connection with the offering, sale or distribution of the
Contracts by any registered representatives or associated persons of a NASD
member broker-dealer which has an agreement with Epoch.
Epoch agrees to indemnify Commonwealth Annuity and the Account against any and
all claims, demands, liabilities and expenses, including but not limited to
reasonable attorneys fees, which Commonwealth Annuity or the Account may incur,
arising out of or based upon any act of Epoch or of any registered
representative of an NASD member investment dealer which has an agreement with
Epoch and is acting in accordance with Commonwealth Annuity 's instructions.
Commonwealth Annuity acknowledges that Epoch may similarly attempt to hold such
an NASD member broker-dealer responsible for the acts of registered
representatives and associated persons; and to the extent Commonwealth Annuity
is obligated to indemnify Epoch under this Agreement, Epoch agrees to assign its
rights against such broker-dealers to Commonwealth Annuity
15. This Agreement shall upon execution become effective as of the date first
above written, and
(a) Unless otherwise terminated, this Agreement shall continue in effect
from year-to-year;
(b) This Agreement may be terminated by any party at any time upon giving
60 days' written notice to the other parties hereto; and
(c) This Agreement shall automatically terminate in the event of its
assignment.
16. The initial Account(s) covered by this Agreement are set forth in Appendix
A. This Agreement, including Appendix A, may be amended at any time by mutual
consent of the parties.
17. This Agreement shall be governed by and construed in accordance with the
laws of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year first above written.
COMMONWEALTH ANNUITY AND LIFE EPOCH SECURITIES, INC.
INSURANCE COMPANY
By: By:
--------------------------------- ------------------------------------
Title: Title:
