-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OR8csUHNR/5+ycyuRnIA/EEknsJnfbMWCqhR4qKmPjvQ9JMPRJGpaBwsAZAVUX0h BNpjsRq4cpHgtMrXZPA3uQ== 0001037155-97-000004.txt : 19970417 0001037155-97-000004.hdr.sgml : 19970417 ACCESSION NUMBER: 0001037155-97-000004 CONFORMED SUBMISSION TYPE: N-4 EL PUBLIC DOCUMENT COUNT: 24 FILED AS OF DATE: 19970416 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: VARIABLE ANNUITY I SER ACC OF FIR GRT WEST LI & ANNU INS CO CENTRAL INDEX KEY: 0001037155 STANDARD INDUSTRIAL CLASSIFICATION: [] FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-4 EL SEC ACT: 1933 Act SEC FILE NUMBER: 333-25289 FILM NUMBER: 97582106 FILING VALUES: FORM TYPE: N-4 EL SEC ACT: 1940 Act SEC FILE NUMBER: 811-08183 FILM NUMBER: 97582107 BUSINESS ADDRESS: STREET 1: 8515 E ORCHARD RD STREET 2: C/O GREAT WEST LIFE & ANNUITY INSURANCE CITY: ENGLEWOOD STATE: CO ZIP: 80111 BUSINESS PHONE: 3036893000 MAIL ADDRESS: STREET 1: 8515 E ORCHARD RD STREET 2: C/O GREAT WEST LIFE & ANNUITY INSURANCE CITY: ENGLEWOOD STATE: CO ZIP: 80111 N-4 EL 1 As filed with the Securities and Exchange Commission on April 15, 1997. Registration No. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 (X) PRE-EFFECTIVE AMENDMENT NO. ( ) POST-EFFECTIVE AMENDMENT NO. ( ) and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 (X) Amendment No. ( ) (Check appropriate box or boxes) VARIABLE ANNUITY-1 SERIES ACCOUNT (Exact name of Registrant) FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (Name of Depositor) Albany, New York (Address of Depositor's Principal Executive Offices) (Zip Code) Depositor's Telephone Number, including Area Code: (800) 537-2033 William T. McCallum President and Chief Executive Officer First Great-West Life & Annuity Insurance Company 8515 East Orchard Road Englewood, Colorado 80111 (Name and Address of Agent for Service) Copy to: James F. Jorden, Esq. Jorden Burt Berenson & Johnson LLP 1025 Thomas Jefferson Street, N.W., Suite 400 East Washington, D.C. 20007-0805 Approximate Date of Proposed Public Offering: Upon the effective date of this Registration Statement It is proposed that this filing will become effective on as soon as practicable. The Registrant has chosen to register an indefinite number of securities in accordance with Rule 24f-2. The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission acting pursuant to said Section 8(a) may determine. VARIABLE ANNUITY-1 SERIES ACCOUNT Cross Reference Sheet Showing Location in Prospectus and Statement of Additional Information As Required by Form N-4 FORM N-4 ITEM PROSPECTUS CAPTION 1. Cover Page.......................... Cover Page 2. Definitions......................... Definitions 3. Synopsis............................ Fee Table; Key Features of the Annuity 4. Condensed Financial Information..... Performance Data 5. General Description of Registrant, Depositor and Portfolio Companies............... First Great-West Life & Annuity Insurance Company and the Series Account; Eligible Funds; Voting Rights 6. Deductions and Expenses............ Charges and Deductions; Appendix A; Distribution of the Contracts 7. General Description of Variable Annuity Contracts........ The Contracts; Eligible Funds; Statement of Additional Information 8. Annuity Period...................... Payment Options 9. Death Benefit....................... Death Benefit 10. Purchases and Contract Value........ Application and Contributions; Annuity Account Value 11. Redemptions......................... Cash Withdrawals; Payment Options; Key Features of the Annuity 12. Taxes............................... Federal Tax Consequences 13. Legal Proceedings................... Legal Proceedings 14. Table of Contents of Statement of Additional Information....................... Statement of Additional Information STATEMENT OF ADDITIONAL FORM N-4 ITEM INFORMATION CAPTION 15. Cover Page.......................... Cover Page 16. Table of Contents................... Table of Contents 17. General Information and History........................... General Information; First Great-West Life & Annuity and the Variable Annuity-1 Series Account 18. Services............................ Services 19. Purchase of Securities Being Offered..................... Not Applicable 20. Underwriters........................ Services - Principal Underwriter 21. Calculation of Performance Data.................. Calculation of Performance Data 22. Annuity Payments.................... Calculation of Annuity Payments 23. Financial Statements................ Financial Statements PART A INFORMATION REQUIRED IN A PROSPECTUS INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. THE SCHWAB VARIABLE ANNUITY A FLEXIBLE PREMIUM DEFERRED FIXED AND VARIABLE ANNUITY Distributed by CHARLES SCHWAB & CO., INC. _____________________________________________ Issued by First GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY This prospectus describes interests under a flexible premium deferred annuity contract, The Schwab Variable Annuity (the "Contract"). The Contract is issued on a group basis by First Great-West Life & Annuity Insurance Company (the "Company"). Participation in the Contract will be accounted for by the issuance of a certificate showing your interest under the Contract. Your certificate is also hereafter referred to as the "Contract." Your investment in the Contract may be allocated among twenty-four Investment Divisions of the Variable Annuity-1 Series Account ("Series Account") and the available Guarantee Periods under the Guarantee Period Fund. The Investment Divisions invest in various underlying funds (open-end investment companies) offered by fund families such as Federated, INVESCO, Janus, Lexington, Berger, Alger, Schwab Funds, Stein Roe, Strong, Montgomery, American Century, SAFECO and Van Eck. You also have the option of allocating some or all of your investment in the Contract to the Guarantee Period Fund which allows you to select one or more Guarantee Periods, each of which offers you a specified interest rate for a specified period. There may be a market value adjustment on the amounts withdrawn from the Guarantee Period Fund. The minimum initial investment is $5,000 ($2,000 if an IRA) or $1,000 if made under an Automatic Contribution Plan ("ACP"). The minimum subsequent Contribution is $500 (or $100 per month if made under an ACP). There are no sales charges, redemption, surrender or withdrawal charges. The Contract provides a Free Look Period of 10 days from your receipt of the Contract, during which time you may cancel your investment in the Contract. During the Free Look Period, all Contributions allocated to an Investment Division will be allocated first to the Schwab Money Market Investment Division and will remain there until the next Transaction Date following the end of the Free Look Period. Contributions to the Guarantee Period Fund will be allocated immediately into the specified Guarantee Period(s). Your Variable Account Value will increase or decrease based on the investment performance of the options you select. You bear the entire investment risk under the Contract prior to the annuity commencement date for all amounts in your Variable Sub Accounts. While there is a guaranteed death benefit, there is no guaranteed or minimum Variable Account Value on amounts allocated to Investment Divisions. Therefore, the Annuity Account Value you receive could be less than the total amount of your Contributions. Amounts allocated to the Guarantee Period Fund may be subject to a Market Value Adjustment which could result in receipt of less than your Contributions if you surrender, Transfer, make a partial withdrawal, apply amounts to purchase an annuity or take a distribution upon the death of the Owner or Annuitant before a Guarantee Period Maturity Date. Whether such a result actually occurs depends on the timing of the transaction, the amount of the Market Value Adjustment and the interest rate credited. The interest rate in subsequent Guarantee Periods may be more or less than the rate of a previous Guarantee Period. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. NO PERSON IS AUTHORIZED BY THE COMPANY TO GIVE INFORMATION OR TO MAKE ANY REPRESENTATION, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN CONNECTION WITH THE OFFERS CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE. PLEASE READ THIS PROSPECTUS AND KEEP IT FOR FUTURE REFERENCE. Prospectus Dated ______________, 1997 The Contracts are not deposits of, or guaranteed or endorsed by any bank, nor are the Contracts federally insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency. The Contracts involve certain investment risks, including possible loss of principal. To Place Orders and for Account Information: Contact the Schwab Annuity Service Center at 800-838-0650 or P.O. Box 7666, San Francisco, California 94120-7666. About This Prospectus: This Prospectus concisely presents important information you should have before investing in the Contract. Please read it carefully and retain it for future reference. You can find more detailed information pertaining to the Contract in the Statement of Additional Information dated _____________, 1997 (as may be amended from time to time), and filed with the Securities and Exchange Commission. The Statement of Additional Information is incorporated by reference into this Prospectus, and may be obtained without charge by contacting the Schwab Annuity Service Center at 800-838-0650 or P.O. Box 7666 San Francisco, California 94120-7666. TABLE OF CONTENTS Page DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . KEY FEATURES OF THE ANNUITY . . . . . . . . . . . . . . . . . . . FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY AND THE SERIES ACCOUNT . . . . . . . . . . . . . . . . . THE ELIGIBLE FUNDS. . . . . . . . . . . . . . . . . . . . . . . . . THE GUARANTEE PERIOD FUND . . . . . . . . . . . . . . . . . . . . . THE MARKET VALUE ADJUSTMENT . . . . . . . . . . . . . . . . . . . . APPLICATION AND CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . ANNUITY ACCOUNT VALUE . . . . . . . . . . . . . . . . . . . . . . . TRANSFERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CASH WITHDRAWALS. . . . . . . . . . . . . . . . . . . . . . . . . . TELEPHONE TRANSACTIONS. . . . . . . . . . . . . . . . . . . . . . . DEATH BENEFIT . . . . . . . . . . . . . . . . . . . . . . . . . . . CHARGES AND DEDUCTIONS. . . . . . . . . . . . . . . . . . . . . . . PAYMENT OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . FEDERAL TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . ASSIGNMENTS OR PLEDGES. . . . . . . . . . . . . . . . . . . . . . . PERFORMANCE DATA . . . . . . . . . . . . . . . . . . . . . . . . . DISTRIBUTION OF THE CONTRACTS . . . . . . . . . . . . . . . . . . . SELECTED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . . VOTING RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . RIGHTS RESERVED BY THE COMPANY. . . . . . . . . . . . . . . . . . . LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . EXHIBITS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . F-1 THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO DEALER, SALESPERSON, OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED ON. The Contract is not available in all states. ___________________________________________________________________ DEFINITIONS ___________________________________________________________________ Accumulation Period - The period between the Effective Date and the Payment Commencement Date. Annuitant - The person named in the application upon whose life the payment of an annuity is based and who will receive annuity payments. If a Contingent Annuitant is named, then the Annuitant will be considered the Primary Annuitant. While the Annuitant is living and at least 30 days prior to the annuity commencement date, the Owner may, by Request, change the Annuitant. Annuity Account - An account established by the Company in the name of the Owner that reflects all account activity under this Contract. Annuity Account Value - The sum of the Variable and Fixed Sub-Accounts credited to the Owner under the Annuity Account; less Transfers, partial withdrawals, amounts applied to an annuity option, periodic withdrawals, charges deducted under the Contract and, less Premium Tax, if any. Annuity Payment Period - The period beginning on the annuity commencement date and continuing until all annuity payments have been made under the Contract. Annuity Unit - An accounting measure used to determine the dollar value of any variable annuity payment after the first annuity payment is made. Automatic Contribution Plan ("ACP") - A plan which allows for automatic periodic Contributions. The Contribution amount will be withdrawn from a designated pre-authorized account and automatically credited to the Annuity Account. Beneficiary - The person(s) designated by the Owner, in the application, or as subsequently changed by the Owner by Request, to receive any death benefit which may become payable under the terms of the Contract. If the surviving spouse of an Owner is the surviving Joint Owner, the surviving spouse will become the Beneficiary upon such Owner's death and may elect to take the death benefit, if any, or elect to continue the Contract in force. Company - First Great-West Life & Annuity Insurance Company, the issuer of this annuity, located at 125 Wolf Road, Albany, New York 12205. Contingent Annuitant - The person named in the application, unless later changed by the Owner by Request while the Annuitant is alive and before annuity payments have commenced, who becomes the Annuitant when the Primary Annuitant dies. No new Contingent Annuitant may be designated after the death of the Primary Annuitant. Contractual Guarantee of a Minimum Rate of Interest - The minimum interest rate applicable to each Fixed Sub-Account equal to an annual effective rate in effect at the time the Contribution is made and as reflected in written confirmation of the Contribution. This is the minimum rate allowed by law and is subject to change in accordance with changes in applicable law. Contributions - Purchase amounts received under the Contract and allocated to the Fixed or Variable Sub- Account(s) prior to any Premium Tax or other deductions. Effective Date - The date on which the first Contribution is credited to the Annuity Account. Eligible Fund - A registered management investment company, or portfolio thereof, in which the assets of the Series Account may be invested. Fixed Sub-Accounts - The subdivision(s) of the Owner's Annuity Account reflecting the value of Contributions made to a fixed interest investment option available under the Contract and any Fixed Sub-Account Riders. Guarantee Period - One of the time intervals available in the Guarantee Period Fund during which the Company will credit a stated rate of interest. The Company may stop offering any time interval at any time for new Contributions. Amounts allocated to one or more Guaranteed Periods may be subject to a Market Value Adjustment. Guarantee Period Fund - A Fixed Sub-Account in which amounts allocated will be credited a stated rate of interest for the applicable Guarantee Period(s). Guarantee Period Maturity Date - The last day of any Guarantee Period. Individual Retirement Annuity (IRA) - An annuity contract used in a retirement savings program that is intended to satisfy the requirements of Section 408 of the Internal Revenue Code of 1986, as amended. Investment Division - A division of the Series Account containing the shares of an Eligible Fund. There is an Investment Division for each Eligible Fund. Market Value Adjustment - An adjustment which may be made to amounts paid out before the Guarantee Period Maturity Date due to surrenders, partial withdrawals, Transfers, amounts applied to the periodic withdrawal option or to purchase an annuity, and distributions resulting from death of the Owner or Annuitant, as applicable. The Market Value Adjustment may increase or decrease the amount payable on one of the above-described distributions. A negative adjustment may result in an effective interest rate lower than the applicable Contractual Guarantee of a Minimum Rate of Interest and the value of the Contribution(s) allocated to the Guarantee Period being less than the Contribution(s) made. The Market Value Adjustment is detailed on page ---. Non-Qualified Annuity Contract - An annuity contract which is not intended to be part of a qualified retirement plan and is not intended to satisfy the requirements of Section 408 of the Internal Revenue Code of 1986, as amended. Owner (Joint Owner) or You - The person(s), while the Annuitant is living, named in the Contract Data Page who is entitled to exercise all rights and privileges under the Contract. Joint Owners must be husband and wife as of the date the Contract is issued. The Annuitant will be the Owner unless otherwise indicated in the application. If a Contract is purchased as an IRA, the Owner and the Annuitant must be the same individual and no Joint Owner may be named. Any reference to Owner in the singular tense shall include the plural, and vice versa, as applicable. Payment Commencement Date - The date on which annuity payments or periodic withdrawals commence under a payment option. The Payment Commencement Date must be at least one year after the Effective Date of the Contract. If a Payment Commencement Date is not shown on the Contract Data Page, annuity payments will commence on the first day of the month of the Annuitant's 90th birthday. The Payment Commencement Date may be changed by the Owner within 60 days prior to commencement of annuity payments or it may be changed by the Beneficiary upon the death of the Owner. If this is an IRA, payments which satisfy the minimum distribution requirements of the Internal Revenue Code of 1986, as amended, must begin no later than the Owner's attainment of age 70 1/2. Premium Tax - The amount of tax, if any, charged by a state or other governmental authority. Request - Any instruction in a form satisfactory to the Company and received at the Schwab Annuity Service Center (or other annuity service center subsequently named) from the Owner or the Owner's designee (as specified in a form acceptable to the Company) or the Beneficiary (as applicable) as required by any provision of the Contract or as required by the Company. All Requests are subject to any action taken or payment made by the Company before it was processed. Schwab Annuity Service Center - P.O. Box 7666, San Francisco, California 94120-7666, telephone 800-838- 0650. Series Account - The segregated account established by the Company under New York law and registered as a unit investment trust under the Investment Company Act of 1940, as amended. Simplified Employee Pension - An individual retirement annuity (IRA) which may accept contributions from one or more employers under a retirement savings program intended to satisfy the requirements of Section 408(k) of the Internal Revenue Code of 1986, as amended. Surrender Value - The Annuity Account Value with a Market Value Adjustment, if applicable, on the effective date of the surrender, less Premium Tax, if any. Transaction Date - The date on which any Contribution or Request from the Owner will be processed by the Company at the Schwab Annuity Service Center. Contributions and Requests received after 4:00 p.m. EST/EDT will be deemed to have been received on the next business day. Requests will be processed and the Variable Account Value will be determined on each day that the New York Stock Exchange is open for trading. Transfer - The moving of money from among and between the Investment Division(s) and the Guaranteed Period Fund. Variable Account Value - The sum of the values of the Variable Sub-Accounts credited to the Owner under the Annuity Account. Variable Sub-Accounts - The sub-division(s) of the Owner's Annuity Account containing the value credited to the Owner under the Annuity Account from an Investment Division. We, our, us, or First GWL&A: First Great-West Life & Annuity Insurance Company. KEY FEATURES OF THE ANNUITY The Contract currently allows you to invest in your choice of twenty-four different Investment Divisions offered by thirteen different mutual fund investment advisers. You can also invest in the Guarantee Period Fund. Your Annuity Account Value allocated to an Investment Division will vary with the investment performance of the Investment Division you select. You bear the entire investment risk for all amounts invested in the Investment Division(s). Your Annuity Account Value could be less than the total amount of your Contributions. Who should invest. The Contract is designed for investors who are seeking long-term tax deferred asset accumulation with a wide range of investment options. The Contract can be used for retirement or other long-term investment purposes. The deferral of income taxes is particularly attractive to investors in high federal and state tax brackets who have already fully taken advantage of their ability to make IRA contributions or "pre-tax" contributions to their employer sponsored retirement or savings plans. A Wide Range of Variable Investment Choices. The Contract gives you an opportunity to select among twenty-four different Investment Divisions. Each Investment Division invests in shares of an Eligible Fund. The Eligible Funds cover a wide range of investment objectives as follows: Investment Objective Eligible Funds Aggressive Growth SteinRoe Capital Appreciation Fund Janus Aspen Aggressive Growth Portfolio Alger American Small Capitalization Portfolio Berger IPT-Small Company Growth Fund Strong Discovery Fund II International Aggressive Growth Montgomery Variable Series: International Small Cap Fund Lexington Emerging Markets Fund Growth Schwab Asset Director - High Growth Portfolio Janus Aspen Growth Portfolio Alger American Growth Portfolio American Century VP Capital Appreciation Montgomery Variable Series: Growth Fund International Growth Janus Aspen Worldwide Growth Portfolio American Century VP International Index Schwab S&P 500 Portfolio Growth & Income SAFECO RST Equity Portfolio Federated American Leaders Fund II Equity Income Federated Utility Fund II INVESCO VIF-Industrial Income Portfolio Balanced/Asset Allocation INVESCO VIF-Total Return Portfolio Gold and Precious Metals Van Eck Worldwide Hard Assets Fund High Yield Bond INVESCO VIF-High Yield Portfolio Government Bond Federated Fund for U.S. Government Securities II Money Market Schwab Money Market Portfolio The distinct investment objectives and policies for each Eligible Fund are more fully described in their individual fund prospectuses which are available from the Schwab Annuity Service Center, P.O. Box 7666, San Francisco, California 94120-7666, or via telephone at 1-800-838-0650. The Guarantee Period Fund. The Contract also gives you an opportunity to allocate your Contributions and to transfer your Annuity Account Value to the Guarantee Period Fund. This Fixed Sub-Account option is comprised of Guarantee Periods, each of which has its own stated rate of interest and its own maturity date. The stated rate of interest for the Guarantee Period will depend on the date the Guarantee Period is established and the duration of the Guarantee Period you select from among those available. The rates declared are subject to a minimum (Contractual Guarantee of a Minimum Rate of Interest), but the Company may declare higher rates (the stated rate of interest). The Contractual Guarantee of a Minimum Rate of Interest will be disclosed in the written confirmation. The stated rate of interest will not be less than the Contractual Guarantee of a Minimum Rate of Interest and will also be disclosed in the written confirmation. Amounts withdrawn or transferred from a Guarantee Period prior to the Guarantee Period Maturity Date may be subject to a Market Value Adjustment. (See "Market Value Adjustment," page __.) How to Invest. You must complete a Contract application form in order to invest in the Contract and you must pay by check or instruct us to transfer funds from your Schwab account. The minimum initial investment is $5,000 (or $2,000 if in an IRA). Subsequent investments must be at least $500. The minimum initial investment may be reduced to $1,000 should the Owner agree to make additional $100 per month minimum recurring deposits through an ACP. Free Look Period. The Contract provides for a Free Look Period which allows you to cancel your investment generally within 10 days of your receipt of the Contract. You can cancel the Contract during the Free Look Period by delivering or mailing the Contract to the Schwab Annuity Service Center. The cancellation is not effective unless we receive a notice which is postmarked before the end of the Free Look Period. If the Contract is returned, the Contract will be void from the start and the greater of: (a) Contributions received less surrenders, withdrawals and distributions, or (b) the Annuity Account Value less surrenders, withdrawals and distributions, will be refunded. These procedures may vary where required by state law. (See "Application and Contributions," page ___.) Allocation of the Initial Investment. Any initial Contribution allocated to an Investment Division (other than certain 1035 exchanges - see "Application and Contributions," page __) will be allocated to the Schwab Money Market Portfolio until the next Transaction Date following the end of the Free Look Period. At that time, the Variable Account Value will be allocated to the Investment Divisions in accordance with your instructions. (See "Annuity Account Value," page __.) Your initial investment in the Guarantee Period Fund will be immediately allocated to the Guarantee Period(s) specified in the application. Charges and Deductions Under the Contract. The Contract is a "no load" variable annuity and, as such, imposes no sales charges, redemption or withdrawal charges. There is a Mortality and Expense Risk Charge at an effective annual rate of 0.85% of the value of the net assets in the Variable Account. A Contract Maintenance Charge of $25 will be deducted annually from your Annuity Account Value. There will be a transfer fee of $10 for each Transfer in excess of twelve Transfers per calendar year. (See "Charges and Deductions," page __.) Depending on your state of residence, we may deduct a charge for Premium Tax from purchase payments or amounts withdrawn or at the Payment Commencement Date. (See "Charges and Deductions," page __.) The Market Value Adjustment may increase or decrease the value of a Guarantee Period if the Guarantee Period is broken prior to the Guarantee Period Maturity Date. A negative adjustment may result in an effective interest rate lower than the stated rate of interest for the Guarantee Period and the Contractual Guarantee of a Minimum Rate of Interest and the value of the Guarantee Period being less than Contribution(s). (See "Market Value Adjustment," page __.) Switching Investments. You may switch Contributions among the Investment Divisions or Guarantee Period Fund as often as you like with no immediate tax consequences. You may make a Transfer Request to the Schwab Annuity Service Center. A transfer fee may apply. (See "Charges and Deductions," page __.) Amounts Transferred out of a Guarantee Period prior to the Guarantee Period Maturity Date may be subject to a Market Value Adjustment. (See "Market Value Adjustment," page __.) Full and Partial Withdrawals. You may withdraw all or part of your Annuity Account Value before the earlier of the annuity commencement date you selected or the Annuitant's or Owner's death. Withdrawals may be taxable and if made prior to age 59 1/2 may be subject to a 10% penalty tax. Withdrawals of amounts allocated to a Guarantee Period prior to the Guarantee Period Maturity Date may be subject to Market Value Adjustment. (See "Market Value Adjustment," page __.) The minimum partial withdrawal prior to the Market Value Adjustment is $500. There is no limit on the number of withdrawals made. The Company may delay payment of withdrawals from your Variable Sub-Accounts by up to 7 days and may delay withdrawals from the Guarantee Period Fund by up to 6 months. (See "Cash Withdrawals," page __.) Annuity Options. Beginning on the first day of the month immediately following the annuity commencement date you select, you may elect to receive annuity payments on a fixed or variable basis. (The default date is the first day of the month that the Annuitant attains age 91.) A wide range of annuity options are available to provide flexibility in choosing an annuity payment schedule that meets your particular needs. These annuity options include alternatives designed to provide payments for life (for either a single or joint life), with or without a guaranteed minimum number of payments. (See "Payment Options," page __.) Death Benefit. The amount of the death benefit, if payable before annuity payments commence, will be the greater of (a) the Annuity Account Value with a Market Value Adjustment, if applicable, as of the date a Request for payment is received, less Premium Tax, if any; or (b) the sum of Contributions paid, less partial withdrawals and Periodic Withdrawals, less charges deducted under the Contract, if any, less Premium Tax, if any. (See "Death Benefit," page __.) Customer Service. Schwab's professional representatives are available toll-free to assist you. If you have any questions about your Contract, please telephone the Schwab Annuity Service Center (800-838-0650) or write to the Schwab Annuity Service Center at P.O. Box 7666, San Francisco, California 94120-7666. All inquiries should include the Contract number and the Owner's name. As a Contract Owner you will receive periodic statements confirming any transactions relating to your Contract, as well as a quarterly statement and an annual report. VARIABLE ANNUITY FEE TABLE The purpose of this table and the examples that follow is to assist you in understanding the various costs and expenses that you will bear directly or indirectly when investing in the Contract. The table and examples reflect expenses related to the Investment Divisions as well as of the Eligible Funds. The table assumes that the entire Annuity Account Value is allocated to one or more Investment Divisions. The information set forth should be considered together with the narrative provided under the heading "Charges and Deductions," page __ of this Prospectus, and with the Funds' prospectuses. In addition to the expenses listed below, Premium Tax may be applicable. Contract Owner Transaction Expenses Sales Load None Surrender Fee None Transfer Fee (First 12 Per Year) None Annual Contract Maintenance Charge $25.00 Investment Division Annual Expenses1 (as a percentage of average Variable Account assets) Mortality and Expense Risk Charge 0.85% Administrative Expense Charge 0.00% Other Fees and Expenses of the Variable Account0.00% Total Investment Division Annual Expenses 0.85% Eligible Fund Annual Expenses (1) (as a percentage of Eligible Fund net assets, after expenses reimbursements) Total Management Other 12b-1 Eligible Fees Expenses Fees Fund Expenses Portfolio Alger American Growth Portfolio.75%.04% 0% .79% Alger American Small Capitalization Portfolio.85% .03% 0% .88% American Century VP Capital Appreciation1.00% 0%0%1.00% American Century VP International1.50% 0% 0% 1.50% Berger IPT-Small Company Growth Fund .0%1.15%0% 1.15% Federated American Leaders Fund II.53%.32% 0% .85% Federated Fund for U.S. Government Securities II.0%.80%0%.80% Federated Utility Fund II.24% .61% 0% .85% INVESCO VIF-High Yield Portfolio.60%.27% 0% .87% INVESCO VIF-Industrial Income Portfolio.75%.20%0% .95% INVESCO VIF-Total Return Portfolio.75%.19% 0% .94% Janus Aspen Aggressive Growth Portfolio .72% .04% 0% .76% Janus Aspen Growth Portfolio.65%.04% 0% .69% Janus Aspen Worldwide Growth Portfolio .66% .14% 0% .80% Lexington Emerging Markets Fund.85%.90% 0% 1.75% Montgomery Variable Series: Growth Fund .00%.01%0% .01% Montgomery Variable Series: International Small Cap Fund1.25%.25% 0% 1.50% SAFECO RST Equity Portfolio .70% .02% 0% .72% Schwab Asset Director - High Growth Portfolio.60% .15% 0% .75% Schwab Money Market Portfolio.44%.06% 0% .50% Schwab S&P 500 Portfolio.20% .15% 0% .35% SteinRoe Capital Appreciation Fund.50%.26% 0% .76% Strong Discovery Fund II1.00% .31% 0% 1.31% Van Eck Worldwide Hard Assets Fund.90%.18% 0% 1.08% _________________________________ (1) The figures given above reflect the amounts deducted before expense offset arrangements, if any, from the Eligible Funds during 1996. From time to time, an Eligible Fund's investment adviser, in its sole discretion, may waive all or part of its fees and/or voluntarily assume certain expenses. For a more complete description of the Eligible Funds' fees and expenses, see the Eligible Funds' prospectuses. As of the date of this Prospectus, certain fees are being waived or expenses are being assumed, in each case on a voluntary basis. Without such waivers or reimbursements, the total Eligible Fund annual expenses that would have been incurred for the last completed fiscal year would be: 8.57% for Berger IPT-Small Company Growth Fund; 1.07% for Federated American Leaders Fund II; 1.81% for Federated Fund for U.S. Government Securities II; 1.32% for INVESCO VIF-High Yield Portfolio; 1.19% for INVESCO VIF-Industrial Income Portfolio; 1.30% for INVESCO VIF-Total Return Portfolio; .83% for Janus Aspen Aggressive Growth Portfolio; .83% for Janus Aspen Growth Portfolio; .91% for Janus Aspen Worldwide Growth Portfolio; 4.09% for Lexington Emerging Markets Fund; 6.98% for Montgomery Variable Series: Growth Fund; and 1.02% for Schwab Money Market Portfolio. See the Eligible Funds' prospectuses for a discussion of fee waiver and expense reimbursements. Examples(1) If you retain, annuitize, or surrender the Contract at the end of the applicable time period, you would pay the following fees and expenses on a $1,000 investment, assuming a 5% annual return on assets: Investment Divisions 1 Year 3 Years Alger American Growth Portfolio $ 8.26 $27.11 Alger American Small Capitalization Portfolio $ 9.20 $30.16 American Century VP Capital Appreciation$10.45 $34.21 American Century VP International $15.63 $50.93 Berger IPT-Small Company Growth Fund$12.00 $39.25 Federated American Leaders Fund II $ 8.89 $29.14 Federated Fund for U.S. Government Securities II$ 8.37$27.45 Federated Utility Fund II $ 8.89 $29.14 INVESCO VIF-High Yield Portfolio $ 9.09 $29.82 INVESCO VIF-Industrial Income Portfolio$ 9.93 $32.52 INVESCO VIF-Total Return Portfolio $ 9.82 $32.19 Janus Aspen Aggressive Growth Portfolio $ 7.95 $26.09 Janus Aspen Growth Portfolio $ 7.22 $23.71 Janus Aspen Worldwide Growth Portfolio $ 8.37 $27.45 Lexington Emerging Markets Fund $18.21 $59.20 Montgomery Variable Series: Growth Fund$ 0.10 $ 0.35 Montgomery Variable Series: International Small-Cap Fund $15.63 $50.93 SAFECO RST Equity Portfolio $ 7.53 $24.73 Schwab Asset Director - High Growth Portfolio $ 7.84 $25.75 Schwab Money Market Portfolio $ 5.24 $17.23 Schwab S&P 500 Portfolio $ 3.67 $12.09 SteinRoe Capital Appreciation Fund $ 7.95 $26.09 Strong Discovery Fund II $13.66 $44.61 Van Eck Worldwide Hard Assets Fund $11.28 $36.90 THESE EXAMPLES SHOULD NOT BE CONSIDERED REPRESENTATIONS OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES PAID MAY BE GREATER OR LESS THAN THOSE SHOWN, SUBJECT TO THE GUARANTEES IN THE CONTRACT. These examples assume that no premium taxes have been assessed (although premium taxes may be applicable - see "Premium Tax," page __). (1) The Eligible Fund Annual Expenses and these examples are based on data provided by the Eligible Funds. The Company has no reason to doubt the accuracy or completeness of that data, but the Company has not verified the Eligible Funds' figures. In preparing the Eligible Fund Expense table and the Examples above, the Company has relied on the figures provided by the Eligible Funds. ___________________________________________________________________ FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY AND THE SERIES ACCOUNT ___________________________________________________________________ First Great-West Life & Annuity Insurance Company ("First GWL&A") The Company is a stock life insurance company organized under the laws of the state of New York. First GWL&A was incorporated on April 9, 1996 and is a wholly owned subsidiary of Great-West Life & Annuity Insurance Company ("Great-West"). First GWL&A commenced operations upon receipt of its certificate of authority from the Superintendent of Insurance of New York on , 1997. First GWL&A is principally engaged in the sale of life insurance, accident and health insurance and annuities. It is admitted to do business in the states of New York and Iowa. Great-West is a wholly-owned subsidiary of The Great-West Life Assurance Company ("GWL"). GWL is a subsidiary of Great-West Lifeco Inc., a holding company. Great-West Lifeco Inc. is in turn a subsidiary of Power Financial Corporation, a financial services company. Power Corporation of Canada, a holding and management company, has voting control of Power Financial Corporation. Mr. Paul Desmarais, through a group of private holding companies, which he controls, has voting control of Power Corporation of Canada. The Series Account The Variable Annuity-1 Series Account ("Series Account") was established by the Company on January 15, 1997 as a separate account under the laws of the State of New York. The Series Account is registered with the Securities and Exchange Commission ("Commission") under the Investment Company Act of 1940, as amended ("1940 Act"), as a unit investment trust. The Series Account meets the definition of a "separate account" under the federal securities laws. However, such registration does not involve supervision of the management of the Series Account or the Company by the Commission. The Company does not guarantee the investment performance of the Series Account. The portion of the Annuity Account Value attributable to the Series Account and the amount of variable annuity payments depend on the investment performance of the Eligible Funds. Thus, the Contract Owner bears the full investment risk for all Contributions allocated to the Series Account. The Series Account is administered and accounted for as part of the general business of the Company; but the income, capital gains, or capital losses of each Investment Division are credited to or charged against the assets held in that Investment Division in accordance with the terms of the Contract, without regard to other income, capital gains or capital losses of any other Investment Division or arising out of any other business the Company may conduct. Under New York law, the assets of the Series Account are not chargeable with liabilities arising out of any other business the Company may conduct. Nevertheless, all obligations arising under the Contracts are generally corporate obligations of the Company. The Series Account currently has twenty-four Investment Divisions available for allocation of Contributions. If, in the future, the Company determines that marketing needs and investment conditions warrant, it may establish additional Investment Divisions which will be made available to Owners to the extent and on a basis to be determined by the Company, (See "Addition, Deletion, or Substitution"). Each Investment Division invests in shares of an Eligible Fund, each having a specific investment objective. ___________________________________________________________________ THE ELIGIBLE FUNDS ___________________________________________________________________ The Eligible Funds described below are offered exclusively for use as funding vehicles for insurance products and, consequently, are not publicly available mutual funds. Each Eligible Fund has separate investment objectives and policies. As a result, each Eligible Fund operates as a separate investment portfolio and the investment performance of one Eligible Fund has no effect on the investment performance of any other Eligible Fund. See the Eligible Funds' prospectuses for more information. The Alger American Fund Alger American Small Capitalization Portfolio: Seeks long-term capital appreciation by investing at least 65% of its total assets, except during temporary defensive periods, in equity securities of companies that, at the time of purchase, have total market capitalization within the range of companies included in the Russell 2000 Growth Index ("Russell Index") or the S&P SmallCap 600 Index ("S&P Index"), updated quarterly. Both indexes are broad indexes of small capitalization stocks. As of March 31, 1997, the range of market capitalization of the companies in the Russell Index was $10 million to $1.94 billion; the range of market capitalization of the companies in the S&P Index at that date was $32 million to $2.579 billion. The combined range as of that date was $10 million to $2.579 billion. The Portfolio may invest up to 35% of its total assets in equity securities of companies that, at the time of purchase, have total market capitalization outside this combined range, and in excess of that amount (up to 100% of its assets) during temporary defensive periods. Alger American Growth Portfolio: Seeks long-term capital appreciation by investment of at least 65% of its total assets, except during temporary defensive periods, in equity securities of companies that, at the time of purchase of the securities, have total market capitalization of $1 billion or greater. The Portfolio may invest up to 35% of its total assets in equity securities of companies that, at the time of purchase, have total market capitalization of less than $1 billion. American Century Variable Portfolios, Inc. American Century VP Capital Appreciation: Seeks capital growth by investing in common stocks (including securities convertible into common stocks and other equity equivalents) and other securities that meet certain fundamental and technical standards of selection and have, in the opinion of the investment manager, better-than-average potential for appreciation. The Portfolio's investment manager intends to stay fully invested in such securities, regardless of the movement of stock prices generally. American Century VP International: Seeks capital growth by investing primarily in an internationally diversified portfolio of securities of foreign companies that meet certain fundamental and technical standards of selection and have, in the opinion of the investment manager, potential for capital appreciation. The Portfolio will invest primarily in common stocks (defined to include depository receipts for common stock and other equity equivalents) of such companies. Investment in securities for foreign issues typically involves a greater degree of risk than an investment in domestic securities. Berger Institutional Products Trust Berger IPT-Small Company Growth Fund: Seeks capital appreciation by investing primarily in equity securities (including common and preferred stocks, convertible debt securities and other securities having equity features) of small growth companies with market capitalization of less than $1 billion at the time of initial purchase. Federated Insurance Series Federated American Leaders Fund II: Seeks to achieve long-term growth of capital as a primary objective and seeks to provide income as a secondary objective through investment of at least 65 % of its total assets (under normal circumstances) in common stocks of "blue chip" companies. Federated Fund for U.S. Government Securities II: Seeks to provide current income through investment of at least 65% of its total assets in securities which are primary or direct obligations of the U.S. government or its agencies or instrumentalities or which are guaranteed as to principal and interest by the U.S. government, its agencies, or instrumentalities and in certain collateralized mortgage obligations, and repurchase agreements. Federated Utility Fund II: Seeks to provide high current income and moderate capital appreciation by investing in a professionally-managed, diversified portfolio of utility company equity and debt securities. INVESCO Variable Investment Funds, Inc. INVESCO VIF-Industrial Income Portfolio: Seeks the best possible current income while following sound investment practices. Capital growth potential is an additional consideration in the selection of portfolio securities. The Portfolio normally invests at least 65% of its total assets in dividend-paying common stocks. Up to 10% of the Portfolio's total assets may be invested in equity securities that do not pay regular dividends. The remaining assets are invested in other income-producing securities such as corporate bonds. The Portfolio also has the flexibility to invest in other types of securities. INVESCO VIF-Total Return Portfolio: Seeks a high total return on investment through capital appreciation and current income. The Total Return Portfolio seeks to achieve its investment objective by investing in a combination of equity securities (consisting of common stocks and, to a lesser degree, securities convertible into common stock) and fixed income securities. INVESCO VIF-High Yield Portfolio: Seeks a high level of current income by investing substantially all of its assets in lower rated bonds and other debt securities and in preferred stock. These bonds and other securities are sometimes referred to as "junk bonds." The High Yield Portfolio pursues its investment objective through investment in a variety of long-term, intermediate-term, and short-term bonds. Potential capital appreciation is a factor in the selection of investments, but is secondary to the Portfolio's primary objective. Janus Aspen Series Janus Aspen Aggressive Growth Portfolio: Seeks long-term growth of capital in a manner consistent with the preservation of capital. The Portfolio normally invests at least 50% of its equity assets in securities issued by medium-sized companies. Medium-sized companies are those whose market capitalizations fall within the range of companies in the S&P MidCap 400 Index (the "MidCap Index"). Companies whose capitalization falls outside this range after the Portfolio's initial purchase continue to be considered medium-sized companies for the purpose of this policy. As of December 30, 1996, the MidCap Index included companies with capitalizations between approximately $192 million to $6.5 billion. The range of the MidCap Index is expected to change on a regular basis. Subject to the above policy, the Portfolio may also invest in smaller or larger issuers. Janus Aspen Growth Portfolio: Seeks long-term growth of capital in a manner consistent with the preservation of capital. The Portfolio pursues its objective by investing in common stocks of companies of any size. This Portfolio generally invests in larger, more established issuers. Janus Aspen Worldwide Growth Portfolio: Seeks long-term growth of capital in a manner consistent with the preservation of capital. The Portfolio pursues its objective primarily through investments in common stocks of foreign and domestic issuers. The Portfolio has the flexibility to invest on a worldwide basis in companies and organizations of any size, regardless of country of organization or place of principal business activity. The Portfolio normally invests in issuers from at least five different countries, including the United States; however, it may at times invest in fewer than five countries or even a single country. Lexington Emerging Markets Fund, Inc. Lexington Emerging Markets Fund: Seeks long term growth of capital primarily through investment in equity securities of companies domiciled in, or doing business in emerging countries and emerging markets. For purposes of its investment objective, the Fund considers emerging country equity securities to be any country whose economy and market the World Bank or United Nations considers to be emerging or developing. The Fund may also invest in equity securities and equivalents traded in any market of companies that derive 50% or more of their total revenue from either goods or services produced in such emerging countries or markets or sales made in such countries. Montgomery Variable Series Montgomery Growth Fund: Seeks capital appreciation by investing at least 65% of its total assets (under normal conditions) in the equity securities of domestic corporations. In addition to capital appreciation, this Fund emphasizes value. While the Fund emphasizes investments in common stock, it also invests in other types of equity securities (including options on equity securities, warrants and futures contracts on equity securities). The Fund may invest up to 35% of its total assets in debt securities rated within the three highest grades of S&P, Moody's or Fitch, or unrated debt securities deemed to be of comparable quality by its portfolio manager using guidelines approved by the Board of Trustees. Montgomery International Small Cap Fund: Seeks capital appreciation by investing at least 65% of its total assets (under normal conditions) in equity securities of companies outside the United States having total market capitalizations of less than $1 billion, sound fundamental values and potential for long-term growth at a reasonable price. The Fund generally invests the remaining 35% of its total assets in a similar manner but may invest those assets in companies having market capitalizations of $1 billion or more, or in debt securities, including up to 5% of its total assets in debt securities rated below investment grade. SAFECO Resource Series Trust SAFECO RST Equity Portfolio: Seeks long-term growth of capital and reasonable current income. The Portfolio ordinarily invests principally in common stocks or securities convertible into common stocks. Schwab Annuity Portfolios Schwab Money Market Portfolio: Seeks maximum current income consistent with liquidity and stability of capital. It seeks to achieve its objective by investing in short-term money market instruments. This Portfolio is neither insured nor guaranteed by the United States Government and there can be no assurance that it will be able to maintain a stable net asset value of $1.00 per share. Schwab Asset Director-High Growth Portfolio: seeks to provide high capital growth with less volatility than an all stock portfolio. The High Growth Fund seeks to meet its investment objective by investing in a mix of stocks, bonds, and cash equivalents. Schwab S&P 500 Portfolio: seeks to track the price and dividend performance (total return) of common stocks of U.S. companies, as represented in the Standard & Poor's Composite Index of 500 stocks (the "Index"). The S&P 500 Fund invests primarily in the common stocks of companies composing the Index. SteinRoe Variable Investment Trust SteinRoe Capital Appreciation Fund: Seeks capital growth by investing primarily in common stocks, convertible securities, and other securities selected for prospective capital growth. Strong Discovery Fund II, Inc. Strong Discovery Fund II: Seeks capital growth. The Fund invests in securities that the Fund's investment adviser believes represent attractive growth opportunities. The Fund normally emphasizes equity investments, although it has the flexibility to invest in any security the Fund's investment adviser believes has the potential for capital appreciation. Van Eck Worldwide Insurance Trust Van Eck Worldwide Hard Assets Fund: Seeks long-term capital appreciation by investing in Hard Asset securities; i.e., commodities or securities of firms involved (directly or indirectly) in the following areas: precious metals, ferrous and non-ferrous metals, energy, real estate, and other non-agricultural commodities. The Fund seeks opportunities in all the global stock, bond, and commodity markets, including domestic markets. Current income is not an investment objective. The two Alger American Funds are advised by Fred Alger Management, Inc. of New York, New York. The two American Century Variable Portfolios, Inc., are advised by American Century Investment Management of Kansas City, Missouri, advisers to the American Century family of mutual funds. The Berger IPT-Small Company Growth Fund is advised by Berger Associates of Denver, Colorado. The three Federated Insurance Series Portfolios are advised by Federated Advisers of Pittsburgh, Pennsylvania. The three INVESCO Variable Investment Funds, Inc., Portfolios are advised by INVESCO Funds Group, Inc., of Denver, Colorado. INVESCO Trust Company is the sub-adviser for the INVESCO VIF-Industrial Income Portfolio. The three Janus Aspen Series Portfolios are advised by Janus Capital Corporation of Denver, Colorado. The Lexington Emerging Markets Fund is advised by Lexington Management Corporation of Saddle Brook, New Jersey. The two Montgomery Variable Series Funds are advised by Montgomery Asset Management, L.P. of San Francisco, California. The SAFECO RST Equity Portfolio is advised by SAFECO Asset Management Company of Seattle, Washington. The three Schwab Annuity Portfolios are advised by Charles Schwab Investment Management, Inc., of San Francisco, California. The SteinRoe Capital Appreciation Fund is advised by Stein Roe & Farnham Incorporated of Chicago, Illinois. Strong Discovery Fund II is advised by Strong Capital Management, Inc. of Milwaukee, Wisconsin. The Van Eck Worldwide Hard Assets Fund is advised by Van Eck Associates Corporation of New York, New York. *** Meeting investment objectives depends on various factors, including, but not limited to, how well the Eligible Fund managers anticipate changing economic and market conditions. THERE IS NO ASSURANCE THAT ANY OF THESE ELIGIBLE FUNDS WILL ACHIEVE THEIR STATED OBJECTIVES. The Contracts are not deposits of, or guaranteed or endorsed by, any bank, nor are the Contracts federally insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency. The Contracts involve certain investment risks, including possible loss of principal. Each Eligible Fund is registered with the Commission as an open-end management investment company or portfolio thereof. The Commission does not supervise the management or the investment practices and policies of any of the Eligible Funds. Since some of the Eligible Funds are available to registered separate accounts of other insurance companies offering variable annuity and variable life products, there is a possibility that a material conflict may arise between the interests of the Series Account and one or more other separate accounts investing in the Eligible Funds. In the event of a material conflict, the affected insurance companies are required to take any necessary steps to resolve the matter, including stopping their separate accounts from investing in the Eligible Funds. See the Eligible Funds' prospectuses for more details. Additional information concerning the investment objectives and policies of all of the Eligible Funds and the investment advisory services and administrative services and charges can be found in the current prospectuses for the Eligible Funds, which can be obtained by calling the Schwab Annuity Service Center at 800-838-0650, or by writing to Schwab Annuity Service Center, P.O. Box 7666, San Francisco, California 94120-7666. The Eligible Funds' prospectuses should be read carefully before any decision is made concerning the allocation of Contributions to, or Transfers among, the Investment Divisions. Addition, Deletion, or Substitution The Company does not control the Eligible Funds and cannot guarantee that any of the Eligible Funds will always be available for allocation of Contributions or Transfers. The Company retains the right to make changes in the Series Account and in its investments. Currently, Schwab must approve certain changes. First GWL&A and Schwab reserve the right to eliminate the shares of any Eligible Fund held by an Investment Division and to substitute shares of another Eligible Fund or of another investment company, for the shares of any Eligible Fund, if the shares of the Eligible Fund are no longer available for investment or if, in First GWL&A's or Schwab's judgment, investment in any Eligible Fund would be inappropriate in view of the purposes of the Series Account. To the extent required by the 1940 Act, a substitution of shares attributable to the Owner's interest in an Investment Division will not be made without prior notice to the Owners and the prior approval of the Commission. Nothing contained herein shall prevent the Series Account from purchasing other securities for other series or classes of variable annuity policies, or from effecting an exchange between series or classes of variable policies on the basis of Requests made by you. New Investment Divisions may be established when, in our discretion, marketing, tax, investment or other conditions so warrant. Any new Investment Divisions will be made available to Owners on a basis to be determined by us. Each additional Investment Division will purchase shares in a Eligible Fund or in another mutual fund or investment vehicle. We may also eliminate one or more Investment Divisions if, in our sole discretion, marketing, tax, investment or other conditions so warrant. In the event any Investment Division is eliminated, we will notify the Owners and request a re-allocation of the amounts invested in the eliminated Investment Division. In the event of any such substitution or change, we may make such changes to your Contract as may be necessary or appropriate to reflect such substitution or change. Furthermore, if deemed to be in the best interests of persons having voting rights under the Contracts, the Series Account may be operated as a management company under the 1940 Act or any other form permitted by law, may be de- registered under such Act in the event such registration is no longer required, or may be combined with one or more other separate accounts. Such changes will be made in compliance with applicable law. ___________________________________________________________________ THE GUARANTEE PERIOD FUND ___________________________________________________________________ Guarantee Period Fund Amounts allocated to the Guarantee Period Fund under the Contract will be deposited to, and accounted for, in a non-unitized market value separate account established by the Company under Section 4240 of the New York Insurance Code and in accordance with New York Regulation 128. These amounts accordingly, are not part of the Series Account. A non-unitized market value separate account is a separate account in which the Owner does not participate in the performance of the assets through unit values. Therefore, Owners allocating Contributions do not receive a unit ownership of assets accounted for in this separate account. The assets accrue solely to the benefit of the Company and any gain or loss in the separate account is borne entirely by the Company. For amounts allocated to the Guarantee Period Fund, Owners will receive the Contract guarantees made by the Company. Contributions allocated to or amounts transferred to the Guarantee Period Fund will establish a new Guarantee Period of a duration selected by the Owner from those currently being offered by the Company. Every Guarantee Period offered by the Company will have a time interval of at least one year. Contributions allocated to the Guarantee Period Fund will be credited on the Transaction Date. Each Guarantee Period will have its own stated rate of interest and Guarantee Period Maturity Date. The stated rate of interest applicable to a Guarantee Period will depend on the date the Guarantee Period is established and the duration chosen by the Owner. As of the date of this Prospectus, Guarantee Periods with annual time intervals of 1 to 10 years are offered. The Guarantee Periods may be changed in the future; however, any such modification will not have an impact on any Guarantee Period then in effect. The value of amounts in each Guarantee Period is the Owner's Contributions, less Premium Tax, if any, in that Guarantee Period, plus interest earned, less amounts distributed, withdrawn (in whole or in part), Transferred or applied to an annuity option, periodic withdrawals, and charges deducted under the Contract. If a Guarantee Period is broken, a Market Value Adjustment may be assessed. Any such amount withdrawn or Transferred from a Guarantee Period will be paid in accordance with the MVA formula (See "Market Value Adjustment," page __.) Investments The Company intends to invest in assets which, in the aggregate, have characteristics, especially cash flow patterns, reasonably related to the characteristics of its liabilities. Various techniques will be used to achieve the objective of close aggregate matching of assets and liabilities. The Company will primarily invest in investment-grade fixed income securities including: Securities issued by the U.S. Government or its agencies or instrumentalities, which issues may or may not be guaranteed by the U.S. Government. Debt securities which have an investment grade, at the time of purchase, within the four highest grades assigned by Moody's Investment Services, Inc. (Aaa, Aa, A or Baa), Standard & Poor's Corporation (AAA, AA, A or BBB) or any other nationally recognized rating service. Other debt instruments, including, but not limited to, issues of banks or bank holding companies and of corporations, which obligations, although not rated by Moody's, Standard & Poor's, or other nationally recognized rating firms, are deemed by the Company's management to have an investment quality comparable to securities which may be purchased as stated above. Commercial paper, cash or cash equivalents, and other short-term investments having a maturity of less than one year which are considered by the Company's management to have investment quality comparable to securities which may be purchased as stated above. In addition, the Company may invest in futures and options. Financial futures and related options thereon and options on securities are purchased solely for non-speculative hedging purposes. The Company may sell a futures contract or purchase a put option on futures or securities to protect the value of securities held in or to be sold for the general account or the non-unitized separate account in the event the securities prices are anticipated to decline. Similarly, if securities prices are expected to rise, the Company may purchase a futures contract or a call option thereon against anticipated positive cash flow or may purchase options on securities. WHILE THE FOREGOING GENERALLY DESCRIBES THE INVESTMENT STRATEGY FOR THE GUARANTEE PERIOD FUND, THE COMPANY IS NOT OBLIGATED TO INVEST THE ASSETS ATTRIBUTABLE TO THE GUARANTEE PERIOD FUND ACCORDING TO ANY PARTICULAR STRATEGY, EXCEPT AS MAY BE REQUIRED BY NEW YORK AND OTHER STATE INSURANCE LAWS, NOR WILL THE STATED RATE OF INTEREST THAT THE COMPANY ESTABLISHES NECESSARILY RELATE TO THE PERFORMANCE OF THE NON-UNITIZED MARKET VALUE SEPARATE ACCOUNT. Subsequent Guarantee Periods Prior to the date annuity payments commence, you may invest the value of amounts held in a maturing Guarantee Period in any Guarantee Period that we offer at that time. On the quarterly statement issued prior to the end of any Guarantee Period, we will notify you of the upcoming maturity of a Guarantee Period. THE GUARANTEE PERIOD AVAILABLE FOR NEW CONTRIBUTIONS MAY BE CHANGED AT ANY TIME, INCLUDING BETWEEN THE DATE OF NOTIFICATION OF A MATURING GUARANTEE PERIOD AND THE DATE A SUBSEQUENT GUARANTEE PERIOD BEGINS. Information regarding the current Guarantee Periods then available and their stated rate of interest may be obtained by calling the Schwab Annuity Service Center at: 1-800-838-0650. If the Company receives no direction from the Contract Owner by the Guarantee Period Maturity Date, the Company will automatically allocate the amount from the maturing Guarantee Period to a Guarantee Period equal in duration to the one just ended. If at that time, the duration previously chosen is no longer available, the amount will be allocated to the next shortest available Guarantee Period duration. If none of the above is available, the value of matured Guarantee Periods will be allocated to the Schwab Money Market Investment Division. In any event, a Guarantee Period will not renew for a term equal in duration to the one just ended if the Guarantee Period will mature after the Payment Commencement Date. No Guarantee Period may mature later than six months after a Payment Commencement Date. For example, if a 3-year Guarantee Period matures and the Payment Commencement Date begins 1 3/4 years from the Guarantee Period Maturity Date, the matured value will be transferred to a 2-year Guarantee Period. Breaking A Guarantee Period Any Transfer, withdrawal or the selection of an annuity option prior to the Guarantee Period Maturity Date will be known as breaking a Guarantee Period. When a Request to break a Guarantee Period is received, the Guarantee Period that is closest to the Guarantee Period Maturity Date will be broken first. If a Guarantee Period is broken, a Market Value Adjustment may be assessed. The Market Value Adjustment may increase or decrease the value of the amount Transferred or withdrawn from the Guarantee Period Fund. The Market Value Adjustment may reduce the value of amounts held in a Guarantee Period below the amount of your Contribution(s) allocated to that Guarantee Period. (See "Market Value Adjustment," page __.) Interest Rates Declared rates are effective annual rates of interest. The rate is guaranteed throughout the Guarantee Period. FOR GUARANTEE PERIODS NOT YET IN EFFECT, FIRST GWL&A MAY DECLARE INTEREST RATES DIFFERENT THAN THOSE CURRENTLY IN EFFECT. When a subsequent Guarantee Period begins, the rate applied will not be less than the rate then applicable to new Contracts of the same type with the same Guarantee Period. The stated rate of interest must be at least equal to the Contractual Guarantee of a Minimum Rate of Interest. The Company may declare higher rates. The Contractual Guarantee of a Minimum Rate of Interest is based on the applicable state standard non-forfeiture law which is currently 3% for the Contract. The determination of the stated rate of interest is influenced by, but does not necessarily correspond to, interest rates available on fixed income investments which the Company may acquire using funds deposited into the Guarantee Period Fund. In addition, the Company will consider other items in determining the stated rate of interest including regulatory and tax requirements, sales commissions and administrative expenses borne by the Company, general economic trends, and competitive factors. Market Value Adjustment Distributions from the amounts allocated to a Guarantee Period due to a full surrender or partial withdrawal, Transfer, application of amounts to the periodic withdrawal option or to purchase an annuity, or distributions resulting from the death of the Owner or Annuitant prior to a Guarantee Period Maturity Date will be subject to a Market Value Adjustment ("MVA"). An MVA may increase or decrease the amount payable on one of the above described distributions. Amount available for a full surrender, partial withdrawal or Transfer = amount Requested + MVA. The MVA is calculated by multiplying the amount Requested by the Market Value Adjustment Factor ("MVAF"). The MVA reflects the relationship as of the time of its calculation between (a) the U.S. Treasury Strip ask side yield as published in the Wall Street Journal on the last business day of the week prior to the date the stated rate of interest was established for the Guarantee Period; and (b) the U.S. Treasury Strip ask side yield as published in the Wall Street Journal on the last business day of the week prior to the week the Guarantee Period is broken. There would be a downward adjustment if Treasury rates at the time the Guarantee Period is broken, exceed Treasury rates when the Guarantee Period was created. There would be an upward adjustment if Treasury rates at the time the Guarantee Period is broken, are lower than when the Guarantee Period was created. The MVA factor is the same for all Contracts. 1. The formula used to determine the MVA is: MVA = (amount applied) X (MVAF) The Market Value Adjustment Factor (MVAF) is: MVAF = {[(1 + i)/(1 + j)] N/12} - 1 where: a) i is the U.S. Treasury Strip ask side yield as published in the Wall Street Journal on the last business day of the week prior to the date the stated rate of interest was established for the Guarantee Period. The term of i is measured in years and equals the term of the Guarantee Period; b) j is the U.S. Treasury Strip ask side yield as published in the Wall Street Journal on the last business day of the week prior to the week the Guarantee Period is broken. The term of j equals the remaining term to maturity of the Guarantee Period, rounded up to the higher number of years; and c) N is the number of complete months remaining until maturity. If N is less than 6, the MVA will equal 0. 2. The Market Value Adjustment will apply to any Guarantee Period six or more months prior to the Guarantee Period Maturity Date in each of the following situations: a) Transfer to another Guarantee Period or to an Investment Division offered under this Contract; or b) Surrenders, partial withdrawals, annuitization or Periodic Withdrawals; or c) A single sum payment upon death of the Owner or Annuitant. 3. The Market Value Adjustment will not apply to any Guarantee Period having fewer than six months prior to the Guarantee Period Maturity Date in each of the following situations: a) Transfer to an Investment Division offered under this Contract; or b) Surrenders, partial withdrawals, annuitization or Periodic Withdrawals. c) A single sum payment upon death of the Owner or Annuitant. See Appendix A for Illustrations of the MVA. ___________________________________________________________________ APPLICATION AND CONTRIBUTIONS ___________________________________________________________________ Contributions All Contributions may be paid at the Schwab Annuity Service Center by a check payable to the Company or by transfer to the Company of available funds from your Schwab account. The initial Contribution for the Contract must be at least $5,000 (or $2,000 if for an IRA). Subsequent Contributions must be at least $500. This minimum initial investment may be reduced to $1,000, but only if you participate in an Automatic Contribution Plan and contribute at least $100 per month through a recurring deposit. A confirmation will be issued to you upon the acceptance of each Contribution. Your Contract will be issued and your Contribution generally will be accepted and credited within two business days after receipt of an acceptable application and receipt of the initial Contribution at the Schwab Annuity Service Center. All Contributions should be paid to the Schwab Annuity Service Center by check (payable to First GWL&A) or by instructing Schwab to transfer to First GWL&A available funds from your account with Schwab. Acceptance is subject to there being sufficient information in a form acceptable to us and we reserve the right to reject any application or Contribution. The Schwab Annuity Service Center will process your application and Contributions. If your application is complete and your initial Contribution is being transferred from funds available in your Schwab account, then the Contribution will generally be credited within two business days following receipt of the application. If your application is incomplete, the Schwab Annuity Service Center will either complete the application from information Schwab has on file, or contact you for the additional information. No transfer of funds will be made from your Schwab account until your application is complete. The funds will be credited as Contributions to the Contract when they are transferred. If your Contribution is by check, and the application is complete, Schwab will use its best efforts to credit the Contribution on the day of receipt, but in all such cases it will be credited to your Contract within two business days of receipt. If your application is incomplete, the Schwab Annuity Service Center will complete the application from information Schwab has on file or contact you by telephone to obtain the required information. If your application remains incomplete for five business days, we will return to you both the check and the application unless you consent to our retaining the initial Contribution and crediting it as soon as the requirements are fulfilled. A Contract may be returned within ten days after receipt ("Free Look Period"). During the Free Look Period, all contributions will be processed as follows: (1) Amounts to be allocated to one or more of the then available Guarantee Periods will be allocated as directed, effective upon the Transaction Date. (2) Amounts the Owner has directed to be allocated to one or more of the Investment Divisions will first be allocated to the Schwab Money Market Investment Division until the next Transaction Date following the end of the Free Look Period. On that date, the Variable Account Value held in the Schwab Money Market Investment Division will be allocated to the Investment Divisions selected by the Owner. (3) During the Free Look Period, you may change the allocation percentages among the Investment Divisions and/or your selection of Investment Divisions to which Contributions will be allocated after the Free Look Period. (4) If the Contract is returned, the contract will be void from the start and the greater of: (a) Contributions received less surrenders, withdrawals and distributions, or (b) the Annuity Account Value less surrenders, withdrawals and distributions, will be refunded. Exercising the return privilege requires the return of the Contract to the Company or to the Schwab Annuity Service Center. Amounts the Owner has contributed from a 1035 exchange of the variable annuity issued by Transamerica Occidental Life Insurance Company and First Transamerica Occidental Life Insurance Company distributed by Charles Schwab & Co., Inc. (previously referred to as the Schwab Investment Advantage Annuity Contract) will be immediately allocated to the Investment Divisions selected by the Owner. If the Contract is returned, it will be void from the start and the greater of: (a) Contributions received less surrenders, withdrawals and distributions, or (b) the Annuity Account Value less surrenders, withdrawals and distributions, will be refunded. Additional Contributions may be made at any time prior to the Payment Commencement Date, as long as the Annuitant is living. Additional Contributions must be at least $500 or $100 per month if under an ACP. Additional Contributions will be credited within two days following receipt. Total Contributions may exceed $1,000,000 with our prior approval. The Company reserves the right to modify the limitations set forth in this section. ___________________________________________________________________ ANNUITY ACCOUNT VALUE ___________________________________________________________________ Before the date annuity payments commence, your Annuity Account Value is the sum of each Variable and Fixed Sub-Account established under your Contract. Before the annuity commencement date, the Variable Account Value is the total dollar amount of all Accumulation Units under each of your Variable Sub-Accounts. Initially, the value of each Accumulation Unit was set at $10.00. Each Variable Sub-Account's value prior to the Payment Commencement Date is equal to: (a) net Contributions allocated to the corresponding Investment Division; plus or minus (b) any increase or decrease in the value of the assets of the Variable Sub- Account due to investment results; less (c) the daily Mortality and Expense Risk Charge; less (d) reductions for the Contract Maintenance Charge deducted on the last business day of each Contract Year; less (e) any applicable Transfer Fees; and less (f) any withdrawals or Transfers from the Variable Sub-Account. A Valuation Period is the period between successive Valuation Dates. It begins at the close of the New York Stock Exchange (generally 4:00 p.m. ET) on each Valuation Date and ends at the close of the New York Stock Exchange on the next succeeding Valuation Date. A Valuation Date is each day that the New York Stock Exchange is open for regular business. The value of an Investment Division's assets is determined at the end of each Valuation Date. To determine the value of an asset on a day that is not a Valuation Date, the value of that asset as of the end of the previous Valuation Date will be used. The Variable Account Value is expected to change from Valuation Period to Valuation Period, reflecting the investment experience of the selected Investment Division(s) as well as the deductions for charges. Contributions which you allocate to an Investment Division are used to purchase Variable Accumulation Units in the Investment Division(s) you select. The number of Accumulation Units to be credited will be determined by dividing the portion of each Contribution allocated to the Investment Division by the value of an Accumulation Unit determined at the end of the Valuation Period during which the Contribution was received. In the case of the initial Contribution, Accumulation Units for that payment will be credited to the Variable Account Value (and, except for certain 1035 exchanges), held in the Schwab Money Market Investment Division until the end of the Free Look Period (see "Application and Contributions," page __). In the case of any subsequent Contribution, Accumulation Units for that payment will be credited at the end of the Valuation Period during which we receive the Contribution. The value of an Accumulation Unit for each Investment Division for a Valuation Period is established at the end of each Valuation Period and is calculated by multiplying the value of that unit at the end of the prior Valuation Period by the Investment Division's Net Investment Factor for the Valuation Period. Unlike a brokerage account, amounts held under a Contract are not covered by the Securities Investor Protection Corporation ("SIPC") . ___________________________________________________________________ TRANSFERS ___________________________________________________________________ In General Prior to the Payment Commencement Date you may Transfer all or part of your Annuity Account Value among and between the Investment Divisions and the available Guarantee Periods by sending a Request to the Schwab Annuity Service Center. The Request must specify the amounts being Transferred, the Investment Division(s) and/or Guarantee Period(s) from which the Transfer is to be made, and the Investment Division(s) and/or Guarantee Period(s) that will receive the Transfer. Currently, there is no limit on the number of Transfers you can make among the Investment Divisions during any Contract Year. There is no charge for the first twelve Transfers each Contract Year, but there will be a charge of $10 for each additional Transfer in each Contract Year. We reserve the right to limit the number of Transfers you make. The charge will be deducted from the amount transferred. All Transfers made on a single Transaction Date will be aggregated to count as only one Transfer toward the twelve free Transfers; however, if a one time rebalancing Transfer also occurs on the Transaction Date, it will be counted as a separate and additional Transfer. Transfers involving the Guarantee Period Fund (including Transfers to or from the Investment Division(s)) are not limited during any calendar year. These Guarantee Period Fund Transfers are counted against your twelve free Transfer as discussed above. The $10 charge will apply to each Transfer made in excess of the first twelve Transfers each calendar year. A Transfer generally will be effective on the date the Request for Transfer is received by the Schwab Annuity Service Center if received before 4:00 p.m. Eastern Time. Under current law, there will not be any tax liability to you if you make a Transfer. Transfers involving the Investment Divisions will result in the purchase and/or cancellation of Accumulation Units having a total value equal to the dollar amount being Transferred to or from a particular Investment Division. The purchase and/or cancellation of such units generally shall be made using the Variable Account Value as of the end of the Valuation Date on which the Transfer is effective. When a Transfer is made from amounts in a Guarantee Period before the Guarantee Period Maturity Date, the amount Transferred may be subject to a Market Value Adjustment. (See "Market Value Adjustment," page --.) A Request for Transfer from amounts in a Guarantee Period made prior to the Guarantee Period Maturity Date for Transfers on the Guarantee Period Maturity Date will not be counted for the purpose of determining any Transfer Fee on Transfers in excess of the twelve Transfers per year if these Transfers are to take place on the Guarantee Period Maturity Date. Possible Restrictions We reserve the right without prior notice to modify, restrict, suspend or eliminate the Transfer privileges at any time. For example, restrictions may be necessary to protect Owners from adverse impacts on portfolio management of large and/or numerous Transfers by market timers or others. We have determined that the movement of significant amounts from one Investment Division to another may prevent the underlying Eligible Fund from taking advantage of investment opportunities because the Eligible Fund must maintain a significant cash position in order to handle redemptions. Such movement may also cause a substantial increase in Eligible Fund transaction costs which must be indirectly borne by Owners. Therefore, we reserve the right to require that all Transfer Requests be made by the Owner and not by an Owner's designee and to require that each Transfer Request be made by a separate communication to us. We also reserve the right to request that each Transfer Request be submitted in writing and be manually signed by the Owner; facsimile Transfer Requests may not be allowed. Transfers among the Investment Divisions may also be subject to such terms and conditions as may be imposed by the Eligible Funds. Custom Transfer: Dollar Cost Averaging (Automatic Transfers) The Owner may Request to automatically Transfer at regular intervals, predetermined amounts from one Investment Division selected from among those being allowed under this option (which may be modified by the Company from time to time) to any of the other Investment Divisions. The intervals between Transfers may be monthly, quarterly, semi-annually or annually. The Transfer will be initiated on the Transaction Date one frequency period following the date of the Request. Transfers will continue on that same day each interval unless terminated by you or for other reasons as set forth in the Contract. If there are insufficient funds in the applicable Variable Sub-Account on the date of Transfer, no Transfer will be made; however, Dollar Cost Averaging will resume once there are sufficient funds in the applicable Variable Sub-Account. Dollar Cost Averaging will terminate automatically upon the annuity commencement date. Amounts transferred through Dollar Cost Averaging are not counted against the twelve free Transfers allowed in a calendar year. Automatic Transfers must meet the following conditions: 1. The minimum amount that can be Transferred out of the selected Investment Division is $100 per month. 2. The Owner must specify dollar amount to be Transferred, designate the Investment Division(s) to which the Transfer will be made and the percent to be allocated to such Investment Division(s). The Accumulation Unit values will be determined on the Transfer Date. Dollar Cost Averaging may be used to purchase Accumulation Units of the Investment Divisions over a period of time. The Owner, by Request, may cease Dollar Cost Averaging at any time. Participation in Dollar Cost Averaging does not, however, assure a greater profit, nor will it prevent or necessarily alleviate losses in a declining market. The Company reserves the right to modify, suspend or terminate Dollar Cost Averaging at any time. Custom Transfer: Rebalancer Option The Owner may Request to automatically Transfer among the Investment Divisions on a periodic basis by electing the Rebalancer Option. This option automatically reallocates the Variable Account Value to maintain a particular allocation among Investment Divisions selected by the Owner. The amount allocated to each Investment Division will increase or decrease at different rates depending on the investment experience of the Investment Division. The Owner may Request that the rebalancing occur one time only, in which case the Transfer will take place on the Transaction Date of the Request. This Transfer will count as one Transfer towards the twelve free Transfers allowed in a calendar year. (See "Transfer Fee," page __.) Rebalancing may also be set up on a quarterly, semiannual or annual basis, in which case the first Transfer will be initiated on the Transaction Date one frequency period following the date of the Request. On the Transaction Date for the specified Request, assets will be automatically reallocated to the selected Investment Divisions. Rebalancing will continue on the same Transaction Date for subsequent periods. In order to participate in the Rebalancer Option, the entire Variable Account Value must be included. Transfers set up with these frequencies will not count against the twelve free Transfers allowed in a calendar year. The Owner must specify the percentage of Variable Account Value to be allocated to each Investment Division and the frequency of rebalancing. The Owner, by Request, may modify the allocations or cease the Rebalancer Option at any time. The Rebalancer Option will terminate automatically upon the Payment Commencement Date. Participation in the Rebalancer Option and Dollar Cost Averaging at the same time is not allowed. Participation in the Rebalancer Option does not assure a greater profit, nor will it prevent or necessarily alleviate losses in a declining market. The Company reserves the right to modify, suspend, or terminate the Rebalancer Option at any time. ___________________________________________________________________ CASH WITHDRAWALS ___________________________________________________________________ Withdrawals You (the Owner) may withdraw from the Contract all or part of your Annuity Account Value at any time during the life of the Annuitant and prior to the date annuity payments commence by Request at the Schwab Annuity Service Center subject to the rules below. Federal or state laws, rules or regulations may apply. The amount payable to you if you surrender your Contract is your Annuity Account Value, with a Market Value Adjustment, if applicable, on the effective date of the surrender, and less any applicable Premium Tax. No withdrawals may be made after the date annuity payments commence. A Request for a partial withdrawal will result in a reduction in your Annuity Account Value equal to the sum of the dollar amount withdrawn. A Market Value Adjustment may apply. (See "Market Value Adjustment," page __.) The partial withdrawal proceeds may be greater or less than the amount requested, depending on the effect of the Market Value Adjustment. The minimum partial withdrawal before application of the MVA is $500. Partial withdrawals are unlimited; however, you must specify the Investment Division(s) or Guarantee Period(s) from which the withdrawal is to be made. After any partial withdrawal, if the remaining Annuity Account Value is less than $2,000, then a full surrender may be required. The following terms apply: (a) No partial withdrawals are permitted after the date annuity payments commence. (b) A partial withdrawal will be effective upon the Transaction Date. (c) A partial withdrawal from amounts in a Guarantee Period may be subject to the Market Value Adjustment provisions, the Guarantee Period Fund provisions of the Contract, and the terms of the attached Guarantee Period Fund Rider(s), if any. Withdrawals may be taxable (this includes Periodic Withdrawals, discussed below). Moreover, the Internal Revenue Code (the "Code") provides that a 10% penalty tax may be imposed on the taxable portions of certain early withdrawals. The Code generally requires us to withhold federal income tax from withdrawals. However, generally you will be entitled to elect, in writing, not to have tax withholding apply unless withholding is mandatory for your Contract. Withholding applies to the portion of the withdrawal which is included in your income and subject to federal income tax. The tax withholding rate is 10% of the taxable amount of the withdrawal. Withholding applies only if the taxable amount of the withdrawal is at least $200. Some states also require withholding for state income taxes. (See "Federal Tax Matters," page __.) Withdrawal Requests must be in writing to ensure that your instructions regarding withholding are followed. If an adequate election is not made, the Request will be denied and no withdrawal or partial withdrawal will be processed. After a withdrawal of all of your total Annuity Account Value, or at any time that your Annuity Account Value is zero, all your rights under the Contract will terminate. Since IRAs are offered by this Prospectus, reference should be made to the applicable provisions of the Code for any additional limitations or restrictions on cash withdrawals. ___________________________________________________________________ TELEPHONE TRANSACTIONS ___________________________________________________________________ We will employ reasonable procedures to confirm that instructions communicated by telephone are genuine and if we follow such procedures we will not be liable for any losses due to unauthorized or fraudulent instructions. However, we may be liable for such losses if we do not follow those reasonable procedures. The procedures we will follow for telephone transactions may include requiring some form of personal identification prior to acting on instructions received by telephone, providing written confirmation of the transaction, and/or tape recording the instructions given by telephone. We reserve the right to suspend telephone transaction privileges at any time, for some or all Contracts, and for any reason. Withdrawals are not permitted by telephone. ___________________________________________________________________ DEATH BENEFIT ___________________________________________________________________ Payment of Death Benefit Before the date annuity payments commence, the death benefit, if any, will be equal to the greater of: (a) the Annuity Account Value with an MVA, if applicable, as of the date the Request for payment is received, less Premium Tax, if any, or (b) the sum of Contributions paid, less partial withdrawals and/or Periodic Withdrawals, less Premium Tax, if any. The death benefit will become payable following the Company's receipt of a Request from the Beneficiary. When an Owner or the Annuitant dies before the annuity commencement date and a death benefit is payable to a Beneficiary, the death benefit proceeds will remain invested in accordance with the allocation instructions given by the Owner(s) until new allocation instructions are Requested by the Beneficiary or until the death benefit is actually paid to the Beneficiary. The death benefit will be determined as of the date payments commence; however, on the date a payment option is processed, amounts in the Variable Sub-Account will be Transferred to the Money Market Investment Division unless the Beneficiary otherwise elects by Request. Subject to the distribution rules set forth below, payment of the death benefit may be Requested to be made as follows: A. Proceeds from the Variable Sub-Account(s) 1. payment in a single sum; or 2. payment under any of the variable annuity options provided under this Contract. B. Proceeds from the Guarantee Period(s) 1. payment in a single sum with respect to which a Market Value Adjustment may apply; or 2. payment under any of the annuity options provided under this Contract with respect to which a Market Value Adjustment may apply; or 3. payment on the Guarantee Period Maturity Date so that a Market Value Adjustment will not apply. In any event, no payment of benefits provided under the Contract will be allowed that does not satisfy the requirements of Section 72(s) of the Code and any other applicable federal or state laws, rules or regulations. Distribution Rules 1. Death of Annuitant Upon the death of the Annuitant while the Owner is living, and before the annuity commencement date, the Company will pay the death benefit to the Beneficiary unless there is a Contingent Annuitant. If a Contingent Annuitant was named by the Owner(s) prior to the Annuitant's death, and the Annuitant dies before the annuity commencement date while the Owner and Contingent Annuitant are living, no death benefit will be payable by reason of the Annuitant's death and the Contingent Annuitant will become the Annuitant. If the Annuitant dies after the date annuity payments commence and before the entire interest has been distributed, any benefit payable must be distributed to the Beneficiary in accordance with and at least as rapidly as under the payment option applicable to the Annuitant on the Annuitant's date of death. If a corporation or other non-individual is an Owner, or if the deceased Annuitant is an Owner, the death of the Annuitant will be treated as the death of an Owner and the Contract will be subject to the "Death of Owner" provisions described below. 2. Death of Owner If the Owner is not the Annuitant: (1) If there is a Joint Owner who is the surviving spouse of the deceased Owner, the Joint Owner will become the Owner and Beneficiary and may elect to take the death benefit or elect to continue the Contract in force. (2) In all other cases, the Company will pay the death benefit to the Beneficiary even if a Joint Owner (who was not the Owner's spouse on the date of the Owner's death), the Annuitant and/or the Contingent Annuitant are alive at the time of the Owner's death, unless the sole Beneficiary is the deceased Owner's surviving spouse and the Beneficiary elects to become the Owner and Annuitant and to continue the Contract in force. If the Owner is not the Annuitant, and the Owner dies after annuity payments commence and before the entire interest has been distributed while the Annuitant is living, any benefit payable will continue to be distributed to the Annuitant at least as rapidly as under the payment option applicable on the Owner's death. All rights granted the Owner under the Contract will pass to any surviving Joint Owner and, if none, to the Annuitant. If the Owner is the Annuitant (Owner/Annuitant): (1) If there is a Joint Owner who is the surviving spouse of the deceased Owner and a Contingent Annuitant, the Joint Owner will become the Owner and the Beneficiary, the Contingent Annuitant will become the Annuitant, and the Contract will continue in force. (2) If there is a Joint Owner who is the surviving spouse of the deceased Owner but no Contingent Annuitant, the Joint Owner will become the Owner, Annuitant and Beneficiary and may elect to take the death benefit or continue the Contract in force. (3) In all other cases, the Company will pay the death benefit to the Beneficiary, even if a Joint Owner (who was not the Owner's spouse on the date of the Owner's death), Annuitant and/or Contingent Annuitant are alive at the time of the Owner's death, unless the sole Beneficiary is the deceased Owner's surviving spouse and the Beneficiary Requests to become the Owner and Annuitant and to continue the Contract in force. Any death benefit payable to the Beneficiary upon an Owner's death will be distributed as follows: (1) If the Owner's surviving spouse is the person entitled to receive benefits upon the Owner's death, the surviving spouse will be treated as the Owner and will be allowed to take the death benefit or continue the Contract in force; or (2) If the Beneficiary is a non-spouse individual, she/he may elect, not later than one year after the Owner's date of death, to receive the death benefit in either a single sum or payment under any of the variable or fixed annuity options available under the Contract, provided that (a) such annuity is distributed in substantially equal installments over the life or life expectancy of the Beneficiary or over a period not extending beyond the life expectancy of the Beneficiary; and (b) such distributions begin not later than one year after the Owner's date of death. If no election is received by the Company from a non-spouse Beneficiary such that substantially equal installments have begun not later than one year after the Owner's date of death, then the entire amount must be distributed within five years of the Owner's date of death. The death benefit will be determined as of the date the payments commence; or (3) If a corporation or other non-individual entity is entitled to receive benefits upon the Owner's death, the death benefit must be completely distributed within five years of the Owner's date of death. Beneficiary You may select one or more Beneficiaries. If more than one Beneficiary is selected, unless you indicate otherwise, they will share equally in any death benefit payable. You may change the Beneficiary any time before the Annuitant's death. You may, while the Annuitant is living, change the Beneficiary by Request. A change of Beneficiary will take effect as of the date the Request is processed by the Schwab Annuity Service Center, unless a certain date is specified by the Owner. If the Owner dies before the Request was processed, the change will take effect as of the date the Request was made, unless the Company has already made a payment or otherwise taken action on a designation or change before receipt or processing of such Request. A beneficiary designated irrevocably may not be changed without the written consent of that Beneficiary, except as allowed by law. The interest of any Beneficiary who dies before the Owner or the Annuitant will terminate at the death of the Beneficiary. The interest of any Beneficiary who dies at the time of, or within 30 days after, the death of an Owner or the Annuitant will also terminate if no benefits have been paid to such Beneficiary, unless the Owner otherwise indicates by Request. The benefits will then be paid as though the Beneficiary had died before the deceased Owner or Annuitant. If no Beneficiary survives the Owner or Annuitant, as applicable, the Company will pay the death benefit proceeds to the Owner's estate. If the surviving spouse of an Owner is the surviving Joint Owner, the surviving spouse will become the Beneficiary upon such Owner's death and may elect to take the death benefit or may elect to continue the Contract in force. If there is no surviving Joint Owner, and no named Beneficiary is alive at the time at the time of an Owner's death, any benefits payable will be paid to the Owner's estate. Contingent Annuitant While the Annuitant is living, the Owner(s) may, by Request, designate or change a Contingent Annuitant from time to time. A change of Contingent Annuitant will take effect as of the date the Request is processed at the Schwab Annuity Service Center, unless a certain date is specified by the Owner(s). ___________________________________________________________________ CHARGES AND DEDUCTIONS ___________________________________________________________________ No deductions are made from Contributions except for any applicable Premium Tax. Therefore, the full amount of the Contributions (less any applicable Premium Tax) are invested in the Contract. As more fully described below, charges under the Contract are assessed only as deductions for Premium Tax, if applicable, for certain Transfers, as a Contract Maintenance Charge, and as charges against the assets in the Owner's Variable Sub-Account(s) for our assumption of mortality and expense risks. In addition, a Market Value Adjustment may apply to withdrawals and surrenders, Transfers, amounts applied to purchase an annuity, and distributions resulting from death of the Owner or Annuitant if the amounts held in a Guarantee Period are paid out prior to the Guarantee Period Maturity Date. Mortality and Expense Risk Charge We deduct a Mortality and Expense Risk Charge from your Variable Sub-Account(s) at the end of each Valuation Period to compensate us for bearing certain mortality and expense risks under the Contract. This is a daily charge equal to an effective annual rate of 0.85% of the value of the net assets in your Variable Sub-Account(s). The approximate portion of this charge attributable to mortality risks is 0.68%; the approximate portion of this charge estimated to be attributable to expense risk is 0.17% of the value of the net assets in your Variable Sub-Account(s). We guarantee that this charge will never increase beyond 0.85%. The Mortality and Expense Risk Charge is reflected in the Accumulation Unit Values for each of your Variable Sub-Accounts. Thus, this charge will continue to be applicable should you choose a variable annuity payment option or the periodic withdrawal option. Annuity Account Values and annuity payments are not affected by changes in actual mortality experience incurred by us. The mortality risks assumed by us arise from our contractual obligations to make annuity payments determined in accordance with the annuity tables and other provisions contained in the Contract. Thus you are assured that neither the Annuitant's longevity nor an unanticipated improvement in general life expectancy will adversely affect the annuity payments under the Contract. We bear substantial risk in connection with the death benefit before the annuity commencement date, since we will pay a death benefit equal to the greater of the Annuity Account Value with a Market Value Adjustment, if applicable, as of the later of the date of death or the date the Request for payment is received, less Premium Tax, if any; or the sum of the Contributions paid, less partial withdrawals and/or Periodic Withdrawals, less any charges under Contract less Premium Tax, if any (i.e., we bear the risk of unfavorable experience in your Variable Sub-Accounts). The expense risk assumed is the risk that our actual expenses in administering the Contracts and the Series Account will be greater than anticipated, or exceed the amount recovered through the Contract Maintenance Charge plus the amount, if any, recovered through Transfer Fees. If the Mortality and Expense Risk Charge is insufficient to cover actual costs and risks assumed, the loss will fall on us. Conversely, if this charge is more than sufficient, any excess will be profit to us. Currently, we expect a profit from this charge. Our expenses for distributing the Contracts will be borne by our general assets, including any profits from this charge. Contract Maintenance Charge We currently deduct a $25 annual Contract Maintenance Charge from the Annuity Account Value only on each Contract anniversary date. This charge partially covers our costs for administering the Contracts and the Series Account. Once you have selected a payment option, this charge will cease to apply other than for the Periodic Withdrawal Option. The Contract Maintenance Charge is deducted from your Annuity Account Value allocated to the Schwab Money Market Investment Division. If you do not have sufficient Annuity Account Value allocated to the Schwab Money Market Investment Division to cover the Contract Maintenance Charge, then the charge or any portion thereof will be deducted on a pro rata basis from all your Variable Sub-Accounts with current value. If the entire Annuity Account is held in the Guarantee Period Fund or there are not enough funds in any Variable Sub-Account to pay the entire charge, then the Contract Maintenance Charge will be deducted on a pro rata basis from amounts held in all Guarantee Periods. There is no MVA on amounts deducted from a Guarantee Period for the Contract Maintenance Charge. We do not expect a profit from amounts received from the Contract Maintenance Charge. Premium Tax We may be required to pay state premium taxes or retaliatory taxes currently ranging from 0% to 3.5% in connection with Contributions or values under the Contracts. Depending on applicable state law, we will deduct charges for the premium taxes we incur with respect to a particular Contract from the Contributions, from amounts withdrawn, or from amounts applied on the Payment Commencement Date. In some states, charges for both direct premium taxes and retaliatory premium taxes may be imposed at the same or different times with respect to the same Contribution, depending on applicable state law. Transfer Fee There will be a $10 charge for each Transfer in excess of twelve Transfers in any calendar year. We do not expect a profit from the Transfer fee for excess Transfers. Other Taxes Under present laws, we will incur state or local taxes (in addition to the Premium Tax described above) in New York. No charges are currently made for taxes other than Premium Tax. However, we reserve the right to deduct charges in the future for federal, state, and local taxes or the economic burden resulting from the application of any tax laws that we determine to be attributable to the Contracts. Expenses of the Eligible Funds The value of the assets in the Investment Divisions reflect the value of Eligible Fund shares and therefore the fees and expenses paid by each Eligible Fund. A complete description of the fees, expenses, and deductions from the Eligible Funds are found in the Eligible Funds' prospectuses. (See "The Eligible Funds," page __.) Current prospectuses for the Funds can be obtained by calling the Schwab Annuity Service Center at 800-838-0650, or by writing to the Schwab Annuity Service Center, P.O. Box 7666, San Francisco, California 94120-7666. ___________________________________________________________________ PAYMENT OPTIONS ___________________________________________________________________ Periodic Withdrawal Option The Owner may Request that all or part of the Annuity Account Value be applied to a Periodic Withdrawal Option. The amount applied to a Periodic Withdrawal is the Annuity Account Value with an MVA, if applicable, less Premium Tax, if any. In Requesting Periodic Withdrawals, the Owner must elect: - The withdrawal frequency of either 12-, 6-, 3-, or 1-month intervals; - A withdrawal amount; a minimum of $100 is required; - The calendar day of the month on which withdrawals will be made; - One withdrawal option; and - The allocation of withdrawals from the Owner's Variable and/or Fixed Sub-Account(s) as follows: 1) Prorate the amount to be paid across all Variable and Fixed Sub-Accounts in proportion to the assets in each sub-account; or 2) Select the Variable and/or Fixed Sub-Account(s) from which withdrawals will be made. Once the Variable and/or Fixed Sub-Accounts have been depleted, the Company will automatically prorate the remaining withdrawals against all remaining available Variable and/or Fixed Sub-Accounts unless the Owner Requests the selection of another Variable and/or Fixed Sub-Account. The Owner may elect to change the withdrawal option and/or the frequency once each calendar year. While Periodic Withdrawals are being received: 1. the Owner may continue to exercise all contractual rights that are available prior to electing an annuity option, except that no Contributions may be made; 2. for Periodic Withdrawals from Guarantee Periods six or more months prior to its Guarantee Period Maturity Date, a Market Value Adjustment, if applicable, will be assessed; 3. the Owner may keep the same investment options as were in force before periodic withdrawals began; 4. charges and fees under the Contract continue to apply; and 5. maturing Guarantee Periods renew into the shortest Guarantee Period then available. Periodic Withdrawals will cease on the earlier of the date: 1. the amount elected to be paid under the option selected has been reduced to zero; 2. the Annuity Account Value is zero; 3. the Owner Requests that withdrawals stop; or 4. an Owner or the Annuitant dies. The Owner must elect one of the following five (5) withdrawal options: 1. Income for a Specified Period for at least thirty-six (36) months - The Owner elects the duration over which withdrawals will be made. The amount paid will vary based on the duration. 2. Income of a Specified Amount for at least thirty-six (36) months - The Owner elects the dollar amount of the withdrawals. Based on the amount elected, the duration may vary; or 3. Interest Only - The withdrawals will be based on the amount of interest credited to the Guarantee Period Fund between each withdrawal. Available only if 100% of the account value is invested in the Guarantee Period Fund; or 4. Minimum Distribution - If this is an IRA contract, the Owner may Request minimum distributions as specified under Code Section 401(a)(9); or 5. Any Other Form for a period of at least thirty-six (36) months - Any other form of Periodic Withdrawal which is acceptable to the Company. If Periodic Withdrawals cease, the Owner may resume making Contributions. The Owner may elect to restart a Periodic Withdrawal program; however, the Company may limit the number of times the Owner may restart a Periodic Withdrawal program. Periodic withdrawals may be taxable, subject to withholding and subject to the 10% penalty tax. IRAs are subject to complex rules with respect to restrictions on and taxation of distributions, including the applicability of penalty taxes. A competent tax adviser should be consulted before a Periodic Withdrawal Option is requested. (See "Federal Tax Matters," page __.) Annuity Date The date annuity payments commence may be chosen when the Contract is purchased or at a later date. This date must be at least one year after the initial Contribution. In the absence of an earlier election, the annuity date is the first day of the month of the Annuitant's 90th birthday. If an option has not been elected within 30 days of the annuity commencement date, the Annuity Account Value held in the Fixed Sub-Account(s) will be applied under Annuity Payment Option 3, discussed below, to provide payments for life with a guaranteed period of 20 years. The Annuity Account Value held in the Variable Sub-Account(s) will be applied under Variable Annuity Payment Option 1, discussed below, to provide payments for life with a guaranteed period of 20 years. Under section 401(a)(9) of the Code, a Contract which is purchased and used in connection with an Individual Retirement Account or with certain other plans qualifying for special federal income tax treatment is subject to complex "minimum distribution" requirements, which require that distributions under such a plan must begin by a specific date, and also that the entire interest of the plan participant must be distributed within certain specified periods under formulas that specify minimum annual distributions. The application of the minimum distribution requirements to each person will vary according to the person's age and other circumstances. A prospective purchaser may wish to consult a competent tax adviser regarding the application of the minimum distribution requirements. (See "Federal Tax Matters," page __.) Annuity Options An annuity option may be selected by the Owner when the Contract is purchased, or at a later date. This selection may be changed, by Request, at any time up to 30 days before the annuity date. In the absence of an election, payments will automatically commence on the annuity date as described above. The amount to be applied is the Annuity Account Value on the annuity date. The minimum amount that may be withdrawn from the Annuity Account Value to purchase an annuity payment option is $2,000 with an MVA, if applicable. If the amount is less than $2,000, the Company may pay the amount in a single sum subject to the Contract provisions applicable to a partial withdrawal. Payments may be elected to be received monthly, quarterly, semi-annually or annually. Payments to be made under the annuity payment option selected must be at least $50. The Company reserves the right to make payments using the most frequent payment interval which produces a payment of not less than $50. The maximum amount that may be applied under any payment option is $1,000,000, unless prior approval is obtained from the Company. A single sum payment may be elected. If it is, then the amount to be paid is the Surrender Value. If the Owner elects a variable annuity with funds from the Owner's Variable Sub-Accounts, then the amount to be applied is the Annuity Account Value held in the Variable Sub-Account(s), as of the annuity commencement date, less any applicable Premium Tax. If the Owner elects a fixed annuity with funds from the Fixed Sub-Accounts, then the amount to be applied is the Annuity Account Value held in the Fixed Sub-Account(s), as of the annuity commencement date with an MVA, if applicable, less any applicable Premium Tax. Fixed Annuity Payment Options Option 1: Income of Specified Amount The amount applied under this option may be paid in equal annual, semiannual, quarterly or monthly installments of the dollar amount elected for not more than 240 months. Upon death of the Annuitant, the Beneficiary will begin to receive the remaining payments at the same interval that was elected by the Owner. Option 2: Income for a Specified Period Payments are paid annually, semiannually, quarterly or monthly, as elected, for a selected number of years not to exceed 240 months. Upon death of the Annuitant, the Beneficiary will begin to receive the remaining payments at the same interval that was elected by the Owner. Option 3: Fixed Life Annuity with Guaranteed Period This option provides for monthly payments during a designated period and thereafter throughout the lifetime of the Annuitant. The designated period may be 5, 10, 15 or 20 years. Upon death of the Annuitant, for each remaining designated period, the amounts payable under this payment option will be paid to the Beneficiary. Option 4: Fixed Life Annuity This annuity is payable monthly during the lifetime of the Annuitant, terminating with the last payment due prior to the death of the Annuitant. Since no minimum number of payments is guaranteed, this option may offer the maximum level of monthly payments of the annuity options. It is possible that only one payment may be made if the Annuitant died before the date on which the second payment was due. Upon the death of the Annuitant, all payments cease and no amounts are payable to the Beneficiary. Option 5: Any Other Form This option allows an Owner the ability to choose any other form of annuity which is acceptable to the Company. Variable Annuity Payment Options Option 1: Variable Life Annuity with Guarantee Period This option provides for payments during a designated period and thereafter throughout the life time of the Annuitant. The designated period may be 5, 10, 15 or 20 years. Upon death of the Annuitant, for each remaining designated period, the amounts payable under this payment option will be paid to the Beneficiary. Option 2: Variable Life Annuity This annuity is payable during the lifetime of the Annuitant. The annuity terminates with the last payment due prior to the death of the Annuitant. Since no minimum number of payments is guaranteed, this option may offer the maximum level of monthly payments of the annuity options. It is possible that only one payment may be made if the Annuitant died before the date on which the second payment was due. Upon the death of the Annuitant, all payments cease and no amounts are payable to the Beneficiary. Variable annuity payment options are subject to the following provisions: Amount of First Payment The first payment under a variable annuity payment option will be based on the value of the amounts held in each Variable Sub-Account on the 5th Valuation Date preceding the annuity commencement date. It will be determined by applying the appropriate rate to the amount applied under the payment option. Annuity Units The number of Annuity Units paid to the Annuitant for each Variable Sub-Account is determined by dividing the amount of the first monthly payment by its Accumulation Unit Value on the 5th Valuation Date preceding the date the first payment is due. The number of Annuity Units used to calculate each payment for a Variable Sub-Account remains fixed during the Annuity Payment Period. Amount of Payments after the First Payments after the first will vary depending upon the investment experience of the Investment Divisions. The subsequent amount paid from each sub-account is determined by multiplying (a) by (b) where (a) is the number of sub-account Annuity Units to be paid and (b) is the sub-account Annuity Unit value on the 5th Valuation Date preceding the date the annuity payment is due. The total amount of each variable annuity payment will be the sum of the variable annuity payments for each Variable Sub- Account. The Company guarantees that the dollar amount of each payment after the first will not be affected by variations in expenses or mortality experience. Transfers After the Annuity Commencement Date Once annuity payments have begun, no Transfers may be made from a fixed annuity payment option to a variable annuity payment option, or vice versa; however, for variable annuity payment options, Transfers may be made among Investment Divisions. Transfers after the annuity commencement date will be made by converting the number of Annuity Units being Transferred to the number of Accumulation Units of the Variable Sub-Account to which the Transfer is made. The result will be that the next annuity payment, if it were made at that time, would be the same amount that it would have been without the Transfer. Thereafter, annuity payments will reflect changes in the value of the new Annuity Units. *** For annuity options involving life income, the actual age and/or sex of the Annuitant will affect the amount of each payment. We reserve the right to ask for satisfactory proof of the Annuitant's age. We may delay annuity payments until satisfactory proof is received. Since payments to older Annuitants are expected to be fewer in number, the amount of each annuity payment under a selected annuity form will be greater for older Annuitants than for younger Annuitants. If the age or sex of the Annuitant has been misstated, the payments established will be made on the basis of the correct age or sex. If payments were too large because of misstatement, the difference with interest may be deducted by the Company from the next payment or payments. If payments were too small, the difference with interest may be added by the Company to the next payment. This interest is at an annual effective rate which will not be less than the Contractual Guarantee of a Minimum Rate of Interest or greater than 6% as determined by the Company. The Payment Commencement Date and annuity options available for IRAs may also be controlled by endorsements, the plan documents, or applicable law. Once payments start under the annuity form selected by the Owner: (a) no changes can be made in the annuity form, (b) no additional Contributions will be accepted under the Contract, and (c) no further withdrawals, other than withdrawals made to provide annuity benefits, will be allowed. *** A portion or the entire amount of the annuity payments may be taxable as ordinary income. If, at the time the annuity payments begin, we have not received a proper written election not to have federal income taxes withheld, we must by law withhold such taxes from the taxable portion of such annuity payments and remit that amount to the federal government (an election not to have taxes withheld is not permitted for certain Qualified Contracts). State income tax withholding may also apply. (See "Federal Tax-Matters," below.) ___________________________________________________________________ FEDERAL TAX MATTERS ___________________________________________________________________ Introduction The following discussion is a general description of federal income tax considerations relating to the Contracts and is not intended as tax advice. Further, this discussion is based on the assumption that the Contract qualifies as an annuity contract for federal income tax purposes. This discussion is not intended to address the tax consequences resulting from all of the situations in which a person may be entitled to or may receive a distribution under the Contract. Any person concerned about these tax implications should consult a competent tax adviser before initiating any transaction. This discussion is based upon our understanding of the present federal income tax laws as they are currently interpreted by the Internal Revenue Service. No representation is made as to the likelihood of the continuation of the present federal income tax laws or of the current interpretation by the Internal Revenue Service. Moreover, no attempt has been made to consider any applicable state or other tax laws. The Contract may be purchased on a non-tax qualified basis ("Non-Qualified Contract") or purchased and used in connection with IRAs. The ultimate effect of federal income taxes on the amounts held under a Contract, on annuity payments, and on the economic benefit to you, the Annuitant, or the Beneficiary may depend on the type of Contract, and on the tax status of the individual concerned. In addition, certain requirements must be satisfied in purchasing an IRA and receiving distributions from an IRA in order to continue receiving favorable tax treatment. Therefore, purchasers of IRAs should seek competent legal and tax advice regarding the suitability of the Contract for their situation, the applicable requirements, and the tax treatment of the rights and benefits of the Contract. The following discussion assumes that an IRA is purchased with proceeds from and/or Contributions that qualify for the intended special federal income tax treatment. Tax Status The Company is taxed as a life insurance company under Part I of Subchapter L of the Code. Taxation of Annuities In General Section 72 of the Code governs taxation of annuities in general. An Owner who is a natural person generally is not taxed on increases (if any) in the value of an Annuity Account Value until distribution occurs by withdrawing all or part of the Annuity Account Value (e.g., withdrawals or annuity payments under the annuity form elected). However, under certain circumstances, the Owner may be subject to taxation currently. In addition, an assignment, pledge, or agreement to assign or pledge any portion of the Annuity Account Value generally will be treated as a distribution. The taxable portion of a distribution (in the form of a single sum payment or an annuity) is taxable as ordinary income. An IRA Contract may not be assigned as collateral. The Owner of any annuity contract who is not a natural person (e.g. a corporation) generally must include in income any increase in the excess of the Annuity Account Value over the "investment in the contract" (discussed below) during each taxable year. The rule does not apply where the non-natural person is the nominal owner of a Contract and the beneficial owner is a natural person. The rule also does not apply in the following circumstances: (1) where the annuity Contract is acquired by the estate of a decedent, (2) where the Contract is held under an IRA, (3) where the Contract is a qualified funding asset for a structured settlement, and (4) where the Contract is purchased on behalf of an employee upon termination of a qualified plan. A prospective Owner that is not a natural person may wish to discuss these matters with a competent tax adviser. The following discussion generally applies to a Contract owned by a natural person. Withdrawals In the case of a withdrawal under an IRA, including withdrawals under the Periodic Withdrawal Option, a ratable portion of the amount received may be non-taxable. The amount of the non-taxable portion is generally determined by the ratio of the "investment in the contract" to the individual's total accrued benefit under the retirement plan. The "investment in the contract" generally equals the amount of any nondeductible Contributions paid by or on behalf of any individual. Special tax rules may be available for certain distributions from an IRA. With respect to Non-Qualified Contracts, partial withdrawals, including Periodic Withdrawals, are generally treated as taxable income to the extent that the Annuity Account Value immediately before the withdrawal exceeds the "investment in the contract" at that time. If a partial withdrawal is made from a Guarantee Period which is subject to a Market Value Adjustment, then the Annuity Account Value immediately before the withdrawal will not be altered to take into account the Market Value Adjustment. As a result, for purposes of determining the taxable portion of the partial withdrawal, the Annuity Account Value will not reflect the amount, if any, deducted from or added to the Guarantee Period due to the Market Value Adjustment. Full surrenders are treated as taxable income to the extent that the amount received exceeds the "investment in the contract." The taxable portion of any annuity payment is taxed at ordinary income tax rates. Annuity Payments Although the tax consequences may vary depending on the annuity form elected under the Contract, in general, only the portion of the annuity payment that represents the amount by which the Annuity Account Value exceeds the "investment in the contract" will be taxed; after the investment in the contract is recovered, the full amount of any additional annuity payments is taxable. For fixed annuity payments, in general there is no tax on the portion of each payment which represents the same ratio that the "investment in the contract" bears to the total expected value of the annuity payments for the term of the payments; however, the remainder of each annuity payment is taxable. Once the investment in the Contract has been fully recovered, the full amount of any additional annuity payments is taxable. If the annuity payments cease as a result of an Annuitant's death before full recovery of the "investment in the contract," you should consult a competent tax adviser regarding the deductibility of the unrecovered amount. Penalty Tax In the case of a distribution pursuant to a Non-Qualified Contract, there may be imposed a federal income tax penalty equal to 10% of the amount treated as taxable income. In general, however, there is no penalty tax on distributions: (1) made on or after the date on which the recipient of payments under the Contract attains age 59 1/2; (2) made as a result of death or disability of the recipient of payments under the Contract; or (3) received in substantially equal periodic payments as a life annuity or a joint and survivor annuity for the lives or life expectancies of the Owner and a "designated beneficiary." Other exemptions or tax penalties may apply to certain distributions pursuant to an IRA. For more details regarding these exemptions or penalties consult a competent tax adviser. Taxation of Death Benefit Proceeds Amounts may be distributed from the Contract because of the death of an Owner or the Annuitant. Generally such amounts are includible in the income of the recipient as follows: (1) if distributed in a lump sum, they are taxed in the same manner as a full surrender, as described above, or (2) if distributed under an annuity form, they are taxed in the same manner as annuity payments, as described above. Distribution-at-Death Rules In order to be treated as an annuity contract, the terms of the Contract must provide the following two distribution rules: (A) if any Contract Owner dies on or after the date annuity payments commence, and before the entire interest in the Contract has been distributed, the remainder of his interest will not be distributed under a slower distribution schedule than that provided for in the method in effect on the Contract Owner's death; and (B) if any Contract Owner dies before the date annuity payments commence, his entire interest must generally be distributed within five years after the date of death provided that if such interest is payable to a designated Beneficiary, then such interest may be made over the life of that designated Beneficiary or over a period not extending beyond the life expectancy of that Beneficiary, so long as payments commence within one year after the Contract Owner's death. If the sole designated Beneficiary is the spouse of the Contract Owner, the Contract may be continued in the name of the spouse as Contract Owner. The designated Beneficiary is the natural person designated by the terms of the Contract or by the Contract Owner as the individual to whom ownership of the contract passes by reason of the Contract Owner's death. If the Contract Owner is not an individual, then for purposes of the distribution at death rules, the Primary Annuitant is considered the Contract Owner. In addition, when the Contract Owner is not an individual, a change in the Primary Annuitant is treated as the death of the Contract Owner. Transfers, Assignments, or Exchanges A Transfer of ownership of a Contract, the designation of an Annuitant, Payee or other Beneficiary who is not also the Owner, or the exchange of a Contract may result in adverse tax consequences to the Owner that are not discussed herein. An Owner contemplating any such designation, transfer, assignment, or exchange of a Contract should contact a competent tax adviser with respect to the potential tax effects of such a transaction. Multiple Contracts All deferred, non-qualified annuity contracts that are issued by the Company (or our affiliates) to the same Owner during any calendar year will be treated as one annuity contract for purposes of determining the amount includible in gross income under section 72(e) of the Code. Amounts received under any such Contract may be taxable (and may be subject to the 10% Penalty Tax) to the extent of the combined income in all such Contracts. In addition, the Treasury Department has specific authority to issue regulations that prevent the avoidance of section 72(e) through the serial purchase of annuity contracts or otherwise. Congress has also indicated that the Treasury Department may have authority to treat the combination purchase of an immediate annuity contract and separate deferred annuity contracts as a single annuity contract under its general authority to prescribe rules as may be necessary to enforce the income tax laws. Withholding Annuity distributions generally are subject to withholding for the recipient's federal income tax liability at rates that vary according to the type of distribution and the recipient's tax status. Recipients, however, generally are provided the opportunity to elect not to have tax withheld from distributions. Certain distributions from IRAs are subject to mandatory federal income tax withholding. Possible Changes in Taxation In past years, legislation has been proposed that would have adversely modified the federal taxation of certain annuities. For example, one such proposal would have changed the tax treatment of non-qualified annuities that did not have "substantial life contingencies" by taxing income as it is credited to the annuity. There is always the possibility that the tax treatment of annuities could change by legislation or other means (such as IRS regulations, revenue rulings, judicial decisions, etc.). Moreover, it is also possible that any change could be retroactive (that is, effective prior to the date of the change). Section 1035 Exchanges Code Section 1035 provides that no gain or loss shall be recognized on the exchange of one annuity contract for another. A replacement contract obtained in a tax-free exchange of contracts succeeds to the status of the original contract. Special rules apply to Contracts issued prior to August 14, 1982. Prospective Owners wishing to take advantage of a Section 1035 exchange should consult their tax adviser. Individual Retirement Annuities The Contract may be used with IRAs as described in Section 408 of the Code. Section 408 of the Code permits eligible individuals to contribute to an individual retirement program known as an Individual Retirement Annuity. Also, certain kinds of distributions from certain types of qualified and non-qualified retirement plans may be "rolled over" following the rules set out in the Code to maintain favorable tax treatment, to an Individual Retirement Annuity. The sale of a Contract for use with an IRA may be subject to special disclosure requirements of the Internal Revenue Service. Purchasers of the Contract for use with IRA's will be provided with supplemental information required by the Internal Revenue Service or other appropriate agency. Such purchasers will have the right to revoke their purchase within seven days of purchase of the IRA Contract. Various tax penalties may apply to contributions in excess of specified limits, aggregate distributions in excess of $150,000 annually, distributions that do not satisfy specified requirements, and certain other transactions. The Contract will be amended as necessary to conform to the requirements of the Code. Purchasers should seek competent advice as to the suitability of the Contract for use with IRA's. If a Contract is issued in connection with an employer's Simplified Employee Pension ("SEP") plan, Owners, Annuitants and Beneficiaries are cautioned that the rights of any person to any of the benefits under the Contract may be subject to the terms and conditions of the plan itself, regardless of the terms and conditions of the Contract. If a Contract is purchased to fund an IRA the Annuitant must also be the Owner. In addition, if a Contract is purchased to fund an IRA, minimum distributions must commence not later than April 1st of the calendar year following the calendar year in which you attain age 70 1/2. You should consult your tax adviser concerning these matters. The Contract and prototype IRA endorsement have been submitted for IRS approval and determination that they are acceptable under Section 408 of the Code, so that each individual who purchases a Contract with an IRA endorsement will be considered to have adopted a retirement savings program that satisfies the requirements of Section 408 of the Code. The IRS approval is a determination only as to the form of the Contract and does not represent a determination of the merits of the Contract. At the time the Initial Contribution is paid, a prospective purchaser must specify whether he or she is purchasing a Non-Qualified Contract or an IRA. If the initial Contribution is derived from an exchange or surrender of another annuity contract, we may require that the prospective purchaser provide information with regard to the federal income tax status of the previous annuity contract. We will require that persons purchase separate Contracts if they desire to invest monies qualifying for different annuity tax treatment under the Code. Each such separate Contract would require the minimum initial Contribution stated above. Additional Contributions under a Contract must qualify for the same federal income tax treatment as the initial Contribution under the Contract; we will not accept an additional Contribution under a Contract if the federal income tax treatment of such Contribution would be different from that of the initial Contribution. Seek Tax Advice The foregoing discussion of the federal income tax consequences is only a brief summary and is not intended as tax advice. Further, the federal income tax consequences discussed herein reflect our understanding of current law and the law may change. Federal estate tax consequences and state and local estate, inheritance, and other tax consequences of ownership or receipt of distributions under a Contract depend on the individual circumstances of each Owner or recipient of the distribution. A COMPETENT TAX ADVISER SHOULD BE CONSULTED FOR FURTHER INFORMATION. ___________________________________________________________________ ASSIGNMENTS OR PLEDGES ___________________________________________________________________ Generally, rights in the Contract may be assigned or pledged for loans at any time during the life of the Annuitant; however, if the Contract is an IRA, the Owner may not assign the Contract as collateral. If a non-IRA Contract is assigned, the interest of the assignee has priority over the interest of the Owner and the interest of the Beneficiary. Any amount payable to the assignee will be paid in a single sum. A copy of any assignment must be submitted to the Company at the Schwab Annuity Service Center. Any assignment is subject to any action taken or payment made by the Company before the assignment was processed. The Company is not responsible for the validity or sufficiency of any assignment. If any portion of the Annuity Account Value is assigned or pledged for a loan, it may be treated as a distribution. A competent tax adviser should be consulted for further information. ___________________________________________________________________ PERFORMANCE DATA ___________________________________________________________________ From time to time, we may advertise yields and average annual total returns for the Investment Divisions. In addition, we may advertise the effective yield of the Schwab Money Market Investment Division. These figures will be based on historical information and are not intended to indicate future performance. The yield of the Schwab Money Market Investment Division refers to the annualized income generated by an investment in that Investment Division over a specified seven-day period. The yield is calculated by assuming that the income generated for that seven-day period is generated each seven-day period over a 52-week period and is shown as a percentage of the investment. The effective yield is calculated similarly but, when annualized, the income earned by an investment in that Investment Division is assumed to be reinvested. The effective yield will be slightly higher than the yield because of the compounding effect of this assumed reinvestment. The yield of an Investment Division (other than the Schwab Money Market Investment Division) refers to the annualized income generated by an investment in that Investment Division over a specified thirty-day period. The yield is calculated by assuming that the income generated by the investment during that thirty- day period is generated each thirty-day period over a twelve-month period and is shown as a percentage of the investment. The yield calculations do not reflect the effect of any Premium Tax that may be applicable to a particular Contract. To the extent that premium taxes are applicable to a particular Contract, the yield of that Contract will be reduced. For a description of the methods used to determine yield and total returns, see the Statement of Additional Information. Below is a table of performance related information for the Money Market Investment Division for the stated periods ended December 31, 1996: Investment Division Effective Yield Money Market 4.10% The average annual total return of an Investment Division refers to return quotations assuming an investment has been held in the Investment Division for various periods of time including, but not limited to, a period measured from the date the Investment Division commenced operations. When an Investment Division has been in operation for 1, 5, and 10 years, respectively, the average annual total return for these periods will be provided. The average annual total return quotations will represent the average annual compounded rates of return that would equate an initial investment of $1,000 to the redemption value of that investment (excluding Premium Tax) as of the last day of each of the periods for which total return quotations are provided. For additional information regarding yields and total returns calculated using the standard formats briefly described herein, please refer to the Statement of Additional Information. Investment Division One Year Three Year Five Year Since Inception Inception Date of Underlying Fund Alger American Growth Portfolio 12.39% 15.18% 15.60% 17.58% 1/9/89 Alger American Small Capitalization Portfolio 3.30% 11.89% 10.04% 17.70% 9/21/88 American Century VP Capital Appreciation - -5.11% 6.49% 5.23% 9.78% 11/20/87 American Century VP International 13.35% N/A N/A 12.17% 5/1/94 Berger IPT-Small Company Growth Fund N/A N/A N/A - -0.89% 4/15/96 Federated American Leaders Fund II 20.55% N/A N/A 17.01% 2/10/94 Federated Fund for U.S. Government Securities 3.32% N/A N/A 4.71% 3/28/94 Federated Utility Fund II 11.56% N/A N/A 10.63% 2/10/94 INVESCO VIF-High Yield Portfolio 15.60% N/A N/A 12.61% 5/1/94 INVESCO VIF-Industrial Income Portfolio 21.25% N/A N/A 20.41% 8/1/94 INVESCO VIF-Total Return Portfolio 11.23% N/A N/A 12.98% 6/1/94 Janus Aspen Aggressive Growth Portfolio 7.04% 15.97% N/A 20.27% 9/13/93 Janus Aspen Growth Portfolio 17.45% 15.57% N/A 15.21% 9/13/93 Janus Aspen Worldwide Growth Portfolio 27.95% 17.59% N/A 22.13% 9/13/93 Lexington Emerging Markets Fund 6.55% N/A N/A 0.56% 3/30/94 Montgomery Variable Series: Growth Fund N/A N/A N/A 26.14% 2/9/96 Montgomery Variable Series: International Small-Cap Fund N/A N/A N/A N/A 11/27/96 SAFECO RST Equity Portfolio Schwab Asset Director-High Growth Portfolio N/A N/A N/A N/A 11/1/96 Schwab S&P 500 Portfolio N/A N/A N/A N/A 11/1/96 SteinRoe Capital Appreciation Fund 25.87% 11.84% 16.37% 16.50% 1/1/89 Strong Discovery Fund II - -0.04% 7.92% N/A 11.30% 5/8/92 Van Eck Worldwide Hard Assets Fund 17.04% 6.72% 13.54% 7.25% 9/1/89 Performance information for any Investment Division reflects only the performance of a hypothetical Contract under which Annuity Account Value is allocated to an Investment Division during a particular time period on which the calculations are based. Performance information should be considered in light of the investment objectives and policies and characteristics of the Eligible Funds in which the Investment Division invests, and the market conditions during the given time period, and should not be considered as a representation of what may be achieved in the future. Reports and promotional literature may also contain other information including (1) the ranking of any Investment Division derived from rankings of variable annuity separate accounts or their investment products tracked by Lipper Analytical Services, Inc., VARDS, Morningstar, Value Line, IBC/Donoghue's Money Fund Report, Financial Planning Magazine, Money Magazine, Bank Rate Monitor, Standard & Poor's Indices, Dow Jones Industrial Average, and other rating services, companies, publications, or other persons who rank separate accounts or other investment products on overall performance or other criteria, and (2) the effect of tax-deferred compounding on investment returns, or returns in general, which may be illustrated by graphs, charts, or otherwise, and which may include a comparison, at various points in time, of the return from an investment in a Contract (or returns in general) on a tax-deferred basis (assuming one or more tax rates) with the return on a currently taxable basis. Other ranking services and indices may be used. We may from time to time also disclose cumulative (non-annualized) total returns for the Investment Divisions. We may from time to time also disclose yield and standard total returns for any or all Investment Divisions. We may also advertise performance figures for the Investment Divisions based on the performance of an Eligible Fund prior to the time the Series Account commenced operations. For additional information regarding the calculation of other performance data, please refer to the Statement of Additional Information. ___________________________________________________________________ DISTRIBUTION OF THE CONTRACTS ___________________________________________________________________ Charles Schwab & Co., Inc. ("Schwab") is the principal underwriter and distributor of the Contracts. Schwab is registered with the Securities and Exchange Commission as a broker/dealer and is a member of the National Association of Securities Dealers, Inc. ("NASD"). Its principal offices are located at 101 Montgomery, San Francisco, California 94104, telephone 800-838-0650. Certain administrative services are provided by Schwab to assist the Company in the processing of the Contracts, which services are described in written agreements between Schwab and the Company. The Company has agreed to indemnify Schwab (and its agents, employees, and controlling persons) for certain damages arising out of the sale of the Contracts, including those arising under the securities laws. ___________________________________________________________________ SELECTED FINANCIAL DATA ___________________________________________________________________ First GWL&A was incorporated on April 9, 1996 and had no operations until receipt of its certificate of authority from the Superintendent of Insurance of New York on , 1997. Please see the financial statements of First Great-West Life & Annuity Insurance Company included elsewhere in this Prospectus for information related to its financial condition. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Company The Company commenced operations as a New York domiciled life insurer as of , 1997. Accordingly, as of the date of this Prospectus, the Company has not had a significant operating history. The Company will operate in one business segment as a provider of life, health and annuity products to groups of individuals associated with employers or distributors; however, the business operations of First GWL&A will be segregated into two major business units: the Employee Benefits division, which distributes life, health, disability income insurance and 401(k) products to employee groups, primarily to small-to-mid-sized corporations; and the Financial Services Division, which distributes accumulation and payout annuity products for both group and individual clients, primarily in the public\non-profit sectors, as well as insurance products for individual clients. Liquidity and Capital Resources The principal short- and long-term liquidity needs of the Company will be closely managed to satisfy policyholder benefits. The liquidity needs of the Company will be closely managed through cash flow matching of assets and liabilities, and the forecasting of earned and required yields to ensure consistency between policyholder requirements and the yield of assets. Regulation and Reserves The Company is subject to regulation and supervision by the insurance departments of the state in which it is licensed. This regulation covers a variety of areas, including policy reserve requirements, adequacy of company capital and surplus, operational standards, and financial accounting policies and procedures. Pursuant to state insurance laws and regulations, the Company is obligated to hold policy reserves to meet its obligations under all outstanding insurance contracts. These reserves are based on a number of assumptions as to future experience. Neither the reserve requirements nor the other aspects of state insurance regulation provide absolute protection to holders of insurance contracts if the Company were to experience unexpected losses (e.g., infectious diseases or catastrophic investment losses). Competition The Company is engaged in a business that is highly competitive due to the large number of insurance companies and other entities competing in marketing, administering, and selling insurance products. There are approximately 2,300 insurers in the life insurance business in the United States. Segment Information The Company operates in one business segment as a provider of life, health and annuity products to groups of individuals associated with employers or distributors. Employees and Facilities The Company has an administrative services agreement with Great-West Life & Annuity Insurance Company, to provide administrative support for all aspects of the Company's business. Great-West Life & Annuity has approximately 4,300 employees in its U.S. operations. The Company's executive offices are located at 125 Wolf Road, Albany, New York 12205. State Regulation As a life insurance company organized and operated under New York law, First GWL&A is subject to provisions governing such companies and regulation by the New York Superintendent of Insurance. First GWL&A's books and accounts are subject to review and examination by the New York Division of Insurance at any time, and a full examination of its operations is conducted triennially. In addition, First GWL&A is subject to comprehensive and detailed regulation and supervision by the supervisory agencies in each jurisdiction in which it conducts business. Each state's supervisory agency has broad administrative authority which includes, but is not limited to, the power to regulate licenses to transact business, trade practices, agent licensing, policy forms, claims practices, underwriting practices, reserve requirements, fixing maximum interest rates on life insurance policy loans and minimum rates for accumulation of surrender values, the form and content of required financial statements and the type and amounts of investments permitted. First GWL&A is required to file detailed annual reports with supervisory agencies in each of the jurisdictions in which it does business and its accounts are subject to examination by such agencies at regular intervals. Under insurance guaranty fund laws in most states, insurers can be assessed up to prescribed limits for insurance contract losses incurred by insolvent companies. In addition, most jurisdictions, including New York, regulate affiliated groups of insurers such as First GWL&A and its affiliates under insurance holding company legislation. Under such laws, intercorporate transfers of assets and dividend payments from insurance subsidiaries may be subject to prior notice or approval, depending on the size of such transfers and payments in relation to the financial position of the company making the transfer. Changes in control also are regulated under these laws. Although the federal government generally does not directly regulate the business of insurance, federal initiatives often have an impact on the business in a variety of ways. Current and proposed federal measures which may significantly affect First GWL&A's insurance business include employee benefits regulation, controls on medical care costs, insurance reform, managed care regulation, medical entitlement programs (e.g., Medicare), removal of barriers preventing banks from engaging in the insurance and mutual fund businesses, the taxation of insurance companies and the tax treatment of insurance products. The Securities and Exchange Commission regulates certain separate accounts of First GWL&A and the mutual funds used as funding vehicles for those accounts. Directors and Officers Set forth below is information concerning the Company's directors and executive officers, together with their principal occupation for the past five years. Unless otherwise indicated, all of the directors and executive officers have been engaged for not less than five years in their present principal occupation or in another executive capacity with the companies or firms identified. Directors Principal Occupation Last 5 Years Marcia D. Alazraki Partner, Simpson Thacher & Bartlett James Balog Director of Great-West since March 1993; previously Chairman, Lambert Brussels Capital Corporation James W. Burns, O.C. Chairman of the Boards of Lifeco1 and GWL; Deputy Chairman, PCC2 Paul Desmarais, Jr. Chairman and Co-Chief Executive Officer, PCC; Chairman, PFC3 Robert Gratton Chairman of the Board of Great-West; President and Chief Executive Officer, PFC N. Berne Hart Director of Great-West since February 1992; previously Chairman, United Banks of Colorado, Inc. Stuart Z. Katz Partner, Fried, Frank, Harris, Shriver & Jacobson William T. McCallum President and Chief Executive Officer, Great-West; President and Chief Executive Officer (U.S. Operations), GWL Brian E. Walsh Partner, Trinity L.P. since January 1996; previously Managing Director and Co-head, Global Investment Bank, Bankers Trust Company 1 Great-West Lifeco Inc. 2 Power Corporation of Canada 3 Power Financial Corporation Executive Officers Principal Occupation Last 5 Years William T. McCallum President and Chief Executive Officer of the Company and Great- West; President and Chief Executive Officer (U.S. Operations), GWL Dennis Low Executive Vice President, Financial Services of the Company, Great- West and GWL James D. Motz Executive Vice President, Employee Benefits of the Company, Great- West and GWL Robert D. Bond Senior Vice President, Financial Services of the Company, Great- West and GWL; prior to May 1992, National Director, Public Marketing, Aetna Life Insurance Company John T. Hughes Senior Vice President, Chief Investment Officer of the Company, Great-West and GWL D. Craig Lennox Senior Vice President, General Counsel and Secretary of the Company and Great-West; Senior Vice President and Chief U.S. Legal Officer, GWL Martin L. Rosenbaum Senior Vice President, Employee Benefits Operations of the Company, Great-West and GWL Douglas L. Wooden Senior Vice President, Financial Services of the Company, Great- West and GWL Executive Compensation Executive officers of the Company may also serve one or more affiliated companies of First GWL&A. Allocations have been made as to each individual's time devoted to his duties as an executive officer of the Company. The following table shows the cash compensation paid, based on these allocations, to the Chief Executive Officer and the other four most highly compensated executive officers (collectively, the "Named Executive Officers") whose allocated compensation exceeded $60,000, for services rendered in all capacities to the Company in 1996. Compensation Table Name and Principal Position Year Annual Compensation(1) / Salary ($) Bonus ($) Long-Term Compensation Awards / Securities Under Options Granted (2) W.T. McCallum, President and Chief Executive Officer 1996 0 0 None D. Low, Executive Vice President, Financial Services 1996 0 0 None J.T. Hughes, Senior Vice President, Chief Investment Officer 1996 0 0 None D.L. Wooden, Senior Vice President, Financial Services 1996 0 0 None J.D. Motz, Executive Vice President, Employee Benefits 1996 0 0 None (1) The aggregate of perquisites and other personal benefits, securities or property provided to each Named Executive Officer in 1996 did not exceed the lesser of $50,000 and 10% of the total of the individual's annual salary and bonus. (2) Options are for common shares of Lifeco ("Lifeco Options"). Lifeco options are granted by Great-West Lifeco pursuant to the Great-West Lifeco Inc. Stock Option Plan which was approved by Great-West Lifeco shareholders on April 24, 1996. Lifeco options become exercisable 20% per year commencing on the first anniversary date of the grant and expire 10 years after the date of the grant. Pension Plan Table The following table sets out the pension benefits payable to the Named Executive Officers by Great- West Life or the Company, as of December 31, 1996. Employees' Pension Plan Remuneration ($) Years of Service 15 20 25 30 35 400,000 120,000 160,000 200,000 240,000 240,000 500,000 150,000 200,000 250,000 300,000 300,000 600,000 180,000 240,000 300,000 360,000 360,000 700,000 210,000 280,000 350,000 420,000 420,000 800,000 240,000 320,000 400,000 480,000 480,000 900,000 270,000 360,000 450,000 540,000 540,000 1,000,000 300,000 400,000 500,000 600,000 600,000 The Named Executive Officers have the following years of service: Name Years of Service W.T. McCallum 30 D. Low 31 J.T. Hughes 6 D.L. Wooden 5 J.D. Motz 27 For W.T. McCallum, the benefits shown are payable commencing December 31, 2000, and remuneration is the average of the highest 36 consecutive months of compensation during the last 86 months of employment. For D. Low, J.T. Hughes, D.L. Wooden and J.D. Motz, the benefits shown are payable upon the attainment of age 62, and remuneration is the average of the highest 60 consecutive months of compensation during the last 86 months of employment. Compensation includes salary and bonuses prior to any deferrals. The normal form of pension is a life only annuity. Other optional forms of pension payment are available on an actuarially equivalent basis. The benefits listed in the table are subject to deduction for social security and other retirement benefits. Ownership of Securities All of the Company's outstanding shares are owned by Great-West Life & Annuity Insurance Company, 8515 East Orchard Road, Englewood, CO 80111. GWL&A is in turn owned 100% by the Great- West Life Assurance Company, 100 Osborne Street North, Winnipeg, Manitoba, Canada R3C 3A5. The Great-West Life Assurance Company is owned 99.5% by Great-West Lifeco Inc., both of which share the same address. Great-West Lifeco Inc. is owned 86.5% by Power Financial Corporation, 751 Victoria Square, Montreal, Quebec, Canada H2Y 2J3. It is owned 68.3% by 171263 Canada Inc., which is owned 100% by Power Corporation of Canada, both of which share the same address as Power Financial Corporation. Mr. Paul Desmarais, 751 Victoria Square, Montreal, Quebec, Canada H2Y 2J3, through a group of private holding companies, which he controls, has voting control of Power Corporation of Canada. ___________________________________________________________________ VOTING RIGHTS ___________________________________________________________________ To the extent required by applicable law, all Eligible Fund shares held in the Series Account will be voted by the Company at regular and special shareholder meetings of the respective Eligible Funds in accordance with instructions received from persons having voting interests in the corresponding Investment Division. If, however, the 1940 Act or any regulation thereunder should be amended, or if the present interpretation thereof should change, or if we determine that we are allowed to vote all Eligible Funds shares in our own rights, we may elect to do so. Before the annuity commencement date, you the Owner, have the voting interest. The number of votes which are available to you will be calculated separately for each of your Variable Sub-Accounts. That number will be determined by applying your percentage interest, if any, in a particular Investment Division to the total number of votes attributable to that Investment Division. You hold a voting interest in each Investment Division to which your Annuity Account Value is allocated. If you select a variable annuity option, the votes attributable to a Contract will decrease as annuity payments are made. The number of votes of an Eligible Fund will be determined as of the date coincident with the date established by that Eligible Fund for determining shareholders eligible to vote at the meeting of the Eligible Funds. Voting instructions will be solicited by written communication prior to such meeting in accordance with procedures established by the respective Eligible Funds. Shares as to which no timely instructions are received and shares held by us as to which Owners have no beneficial interest will be voted in proportion to the voting instructions which are received with respect to all Contracts participating in the Investment Division. Voting instructions to abstain on any item to be voted upon will be applied on a pro rata basis to reduce the votes eligible to be cast. Each person or entity having a voting interest in a Investment Division will receive proxy material, reports and other material relating to the appropriate Eligible Fund. It should be noted that generally the Eligible Funds are not required to, and do not intend to, hold annual or other regular meetings of shareholders. Contract Owners have no voting rights in the Company. ___________________________________________________________________ RIGHTS RESERVED BY THE COMPANY ___________________________________________________________________ The Company reserves the right to make certain changes if, in its judgment, they would best serve the interests of Owners and Annuitants or would be appropriate in carrying out the purposes of the Contracts. Any changes will be made only to the extent and in the manner permitted by applicable laws. Also, when required by law, the Company will obtain your approval of the changes and approval from any appropriate regulatory authority. Such approval may not be required in all cases, however. Examples of the changes the Company may make include: - To operate the Series Account in any form permitted under the Investment Company Act of 1940 or in any other form permitted by law. - To transfer any assets in any Investment Division to another Investment Division, or to one or more separate accounts, or to a Guarantee Period; or to add, combine or remove Investment Divisions of the Series Account. - To substitute, for the Eligible Fund shares in any Investment Division, the shares of another Eligible Fund or shares of another investment company or any other investment permitted by law. - To make any changes required by the Internal Revenue Code or by any other applicable law in order to continue treatment of the Contract as an annuity. - To change the time or time of day at which a Valuation Date is deemed to have ended. - To make any other necessary technical changes in the Contract in order to conform with any action the above provisions permit the Company to take, including to change the way the Company assess charges, but without increasing as to any then outstanding Contract the aggregate amount of the types of charges which the Company has guaranteed. ___________________________________________________________________ LEGAL PROCEEDINGS ___________________________________________________________________ There are at present no material legal proceedings to which the Series Account is a party or to which the assets of the Series Account are subject. The Company is not currently a party to, and its property is not currently subject to, any material legal proceedings. The lawsuits to which the Company is a party are, in the opinion of management, in the ordinary course of business, and are not expected to have a material adverse effect on the financial results, conditions or prospects of the Company. ___________________________________________________________________ LEGAL MATTERS ___________________________________________________________________ Advice regarding certain legal matters concerning the federal securities laws applicable to the issue and sale of the Contract has been provided by Jorden Burt Berenson & Johnson LLP. The organization of the Company, the Company's authority to issue the Contract, and the validity of the form of the Contract have been passed upon by W. Kay Adam, Vice President, Counsel and Associate Secretary of the Company. ___________________________________________________________________ EXPERTS ___________________________________________________________________ The balance sheet of First Great-West Life & Annuity Insurance Company as of April 4, 1997 included in this prospectus has been audited by Deloitte & Touche LLP, independent auditors, as stated in their report appearing herein, and is included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. ___________________________________________________________________ AVAILABLE INFORMATION ___________________________________________________________________ We have filed a registration statement ("Registration Statement") with the Commission under the 1933 Act relating to the Contracts offered by this Prospectus. This Prospectus has been filed as a part of the Registration Statement and does not contain all of the information set forth in the Registration Statement and exhibits thereto. Reference is hereby made to the Registration Statement and exhibits for further information relating to us and the Contracts. Statements contained in this Prospectus, as to the content of the Contracts and other legal instruments, are summaries. For a complete statement of the terms thereof, reference is made to the instruments as filed as exhibits to the Registration Statement. The Registration Statement and its exhibits may be inspected and copied at the offices of the Commission located at 450 Fifth Street, N.W., Washington, D.C. The Statement of Additional Information contains more specific information relating to the Series Account and First GWL&A. The Table of Contents of the Statement of Additional Information is set forth below: 1. General Information 2. First Great-West Life & Annuity Insurance Company and the Variable Annuity-1 Series Account 3. Calculation of Annuity Payments 4. Postponement of Payments 5. Services 6. Withholding 7. Calculation of Performance Data Appendix A On the following pages are four examples of Market Value Adjustments illustrating (1) increasing interest rates, (2) decreasing interest rates, (3) flat interest rates (i and j are within .10% of each other), and (4) less than 6 months to maturity. Example #1 - Increasing Interest Rates Deposit: $25,000 on November 1, 1996 Maturity Date: December 31, 2005 Interest Guarantee Period:10 years i: assumed to be 6.15% Surrender Date: July 1, 2000 j: 7.00% Amount Surrendered: $10,000 N: 65 MVAF = {[(1 + i)/(1 + j)]N/12} - 1 = {[1.0615/1.07]65/12} - 1 = .957718 - 1 = -.042282 MVA = (amount Transferred or surrendered) x MVAF = $10,000 x - .042282 = - $422.82 Surrender Value = (amount Transferred or surrendered + MVA)x(1-CDSC) = ($10,000 + - $422.82)x(1-0) = $9,577.18 Example #2 - Decreasing Interest Rates Deposit: $25,000 on November 1, 1996 Maturity Date: December 31, 2005 Interest Guarantee Period:10 years i: assumed to be 6.15% Surrender Date: July 1, 2000 j: 5.00% Amount Surrendered: $10,000 N: 65 MVAF = {[(1 + i)/(1 + j)]N/12} - 1 = {[1.0615/1.05]65/12} - 1 = .060778 MVAF = (amount Transferred or surrendered) x MVAF = $10,000 x .060778 = $607.78 Surrender Value = (amount Transferred or surrendered + MVA)x(1-CDSC) = ($10,000 + $607.78)x(1-0) = $10,607.78 Example #3 - Flat Interest Rates Deposit: $25,000 on November 1, 1996 Maturity Date: December 31, 2005 Interest Guarantee Period:10 years i: assumed to be 6.15% Surrender Date: July 1, 2000 j: 6.24% Amount Surrendered: $10,000 N: 65 MVAF = {[(1 + i)/(1 + j)]N/12} - 1 = {[1.0615/1.0624]65/12} - 1 = .995420 - 1 = -.004580 MVA = (amount Transferred or surrendered) x MVAF = $10,000 x -.004589 = $45.80 Surrender Value = (amount Transferred or surrendered + MVA)x(1-CDSC) = ($10,000 + $45.80)x(1-0) = $9,954.20 Example #4 - N<6 (less than 6 months to maturity) Deposit: $25,000 on November 1, 1996 Maturity Date: December 31, 2005 Interest Guarantee Period:10 years i: assumed to be 6.15% Surrender Date: July 1, 2005 j: 7.00% Amount Surrendered: $10,000 N: 5 MVAF = {[(1 + i)/(1 + j)]N/12} - 1 = {[1.0615/1.071]5/12} - 1 = .99629 - 1 = -.00371 However, N<6, so MVAF = 0 MVAF = (amount Transferred or surrendered) x MVAF = $10,000 x 0 = $0 Surrender Value = (amount Transferred or surrendered + MVA)x(1-CDSC) = ($10,000 + $0)x(1-0) = $10,000 FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (A wholly-owned subsidiary of Great-West Life & Annuity Insurance Company) Balance Sheet as of April 4, 1997 and Independent Auditors' Report INDEPENDENT AUDITORS' REPORT To the Board of Directors and Stockholder of First Great-West Life & Annuity Insurance Company: We have audited the accompanying balance sheet of First Great-West Life & Annuity Insurance Company (a wholly-owned subsidiary of Great-West Life & Annuity Insurance Company) as of April 4, 1997. This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with generally accepted standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, such balance sheet presents fairly, in all material respects, the financial position of First Great-West Life & Annuity Insurance Company as of April 4, 1997 in conformity with generally accepted accounting principles. /s/ Deloitte & Touche LLP Deloitte & Touche LLP Denver, Colorado April 14, 1997 FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY BALANCE SHEET APRIL 4, 1997 ASSETS Cash $6,000,000 TOTAL ASSETS $6,000,000 STOCKHOLDER'S EQUITY Common stock, $1,000 par value, 2,000 shares authorized, $2,000,000 issued and outstanding Additional paid-in capital $4,000,000 TOTAL STOCKHOLDER'S EQUITY $6,000,000 FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS APRIL 4, 1997 1. ORGANIZATION Organization - First Great-West Life & Annuity Insurance Company (the Company) is a wholly-owned subsidiary of Great-West Life & Annuity Insurance Company (The Parent Corporation). The Company was incorporated as a stock life insurance company on April 9, 1996 in the State of New York and was capitalized on April 4, 1997 through a $6,000,000 cash investment from its Parent for 2,000 shares of common stock. The Company is currently seeking licensure as an insurance company in the State of New York. Basis of Presentation - The preparation of financial statements in conformity with generally accepted accounting principles which requires management to make estimates and assumptions that affected the reported amounts of assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. 2. SIGNIFICANT ACCOUNTING PRINCIPLES Cash - cash includes only amounts in demand deposit accounts. VARIABLE ANNUITY-1 SERIES ACCOUNT Contracts Under Flexible Premium Deferred Combination Variable and Fixed Annuity Contracts issued by First Great-West Life & Annuity Insurance Company 126 Wolf Road Albany, New York 12205 Telephone: (800) 537-2033 STATEMENT OF ADDITIONAL INFORMATION This Statement of Additional Information is not a Prospectus and should be read in conjunction with the Prospectus, dated , 1997 which is available without charge by contacting the Schwab Annuity Service Center, P.O. Box 7785, San Francisco, California 94120-9420 or at 1-800-838-0650. TABLE OF CONTENTS Page GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . .B-3 FIRST GREAT-WEST LIFE & ANNUITY AND THE VARIABLE ANNUITY-1 SERIES ACCOUNT. . . . . . . . . .B-3 CALCULATION OF ANNUITY PAYMENTS. . . . . . . . . . . . . . . .B-3 POSTPONEMENT OF PAYMENTS . . . . . . . . . . . . . . . . . . .B-4 SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . .B-4 - Safekeeping of Series Account Assets. . . . . . . . . .B-4 - Experts . . . . . . . . . . . . . . . . . . . . . . . .B-4 - Principal Underwriter . . . . . . . . . . . . . . . . .B-5 - Administrative Services Agreement . . . . . . . . . . .B-5 WITHHOLDING. . . . . . . . . . . . . . . . . . . . . . . . . .B-5 CALCULATION OF PERFORMANCE DATA. . . . . . . . . . . . . . . .B-5 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . .B-7 GENERAL INFORMATION In order to supplement the description in the Prospectus, the following provides additional information about the Contracts and other matters which may be of interest to you. Terms used in this Statement of Additional Information have the same meanings as are defined in the Prospectus under the heading "Definitions." FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY AND THE VARIABLE ANNUITY-1 SERIES ACCOUNT First Great-West Life & Annuity Insurance Company (the "Company"), the issuer of the Contract, is a New York corporation qualified to sell life insurance and annuity contracts in New York and Iowa. It was qualified to do business on , 1997 and, therefore, has no prior history. The Company is a wholly-owned subsidiary of Great-West Life & Annuity Insurance Company, a Colorado stock life insurance company, which is a wholly owned subsidiary of The Great-West Life Assurance Company, a stock life insurance company incorporate under the laws of Canada. The Great-West Life Assurance Company is in turn 86.4% by Great-West Lifeco Inc., a holding company. Great-West Lifeco Inc. is owned 68.4% by Power Financial Corporation of Canada, a financial services company. Power Corporation of Canada, a holding and management company, has voting control of Power Financial Corporation of Canada. Mr. Paul Desmarais, through a group of private holding companies, which he controls, has voting control of Power Corporation of Canada. The assets allocated to the Series Account are the exclusive property of the Company. Registration of the Series Account under the Investment Company Act of 1940 does not involve supervision of the management or investment practices or policies of the Series Account or of the Company by the Securities and Exchange Commission. The Company may accumulate in the Series Account proceeds from charges under the Contracts and other amounts in excess of the Series Account assets representing reserves and liabilities under the Contract and other variable annuity contracts issued by the Company. The Company may from time to time transfer to its general account any of such excess amounts. Under certain remote circumstances, the assets of one Investment Division may not be insulated from liability associated with another Investment Division CALCULATION OF ANNUITY PAYMENTS A. Fixed Annuity Options The amount of each annuity payment under a fixed annuity option is fixed and guaranteed by the Company. On the Payment Commencement Date, the Annuity Account Value held in the Fixed Sub-Account(s), with a Market Value Adjustment, if applicable, less Premium Tax, if any, is computed and that portion of the Annuity Account Value which will be applied to the fixed annuity option selected is determined. The amount of the first monthly payment under the fixed annuity option selected will be at least as large as would result from using the annuity tables contained in the Contract to apply to the annuity option selected. The dollar amounts of any fixed annuity payments will not vary during the entire period of annuity payments and are determined according to the provisions of the annuity option selected. B. Variable Annuity Options To the extent a variable annuity option has been selected, the Company converts the Accumulation Units for each of the Owner's Variable Sub-Accounts into Annuity Units for each Variable Sub-Account at their values determined as of the end of the Valuation Period which contains the Payment Commencement Date. The number of Annuity Units paid for each Variable Sub-Account is determined by dividing the amount of the first monthly payment by the sub-account's Annuity Unit Value on the fifth Valuation Date preceding the date the first payment is due. The number of Annuity Units used to calculate each payment for a Variable Sub-Account remains fixed during the annuity payment period. The first payment under a variable annuity payment option will be based on the value of each Variable Sub-Account on the fifth Valuation Date preceding the Payment Commencement Date. It will be determined by applying the appropriate rate to the amount applied under the Payment Option. Payments after the first will vary depending upon the investment experience of the Variable Sub-Accounts. The subsequent amount paid from each sub-account is determined by multiplying (a) by (b) where (a) is the number of sub-account Annuity Units to be paid and (b) is the sub-account Annuity Unit value on the fifth Valuation Date preceding the date the annuity payment is due. The total amount of each Variable Annuity Payment will be the sum of the Variable Annuity Payments for each Variable Sub-Account. POSTPONEMENT OF PAYMENTS With respect to amounts allocated to the Series Account, payment of any amount due upon a total or partial surrender, death or under an annuity option will ordinarily be made within seven days after all documents required for such payment are received by the Schwab Annuity Service Center. However, the determination, application or payment of any death benefit, Transfer, full surrender, partial withdrawal or annuity payment may be deferred to the extent dependent on Accumulation or Annuity Unit Values, for any period during which the New York Stock Exchange is closed (other than customary weekend and holiday closings) or trading on the New York Stock Exchange is restricted as determined by the Securities and Exchange Commission, for any period during which any emergency exists as a result of which it is not reasonably practicable for the Company to determine the investment experience, of such Accumulation or Annuity Units or for such other periods as the Securities and Exchange Commission may by order permit for the protection of investors. SERVICES A. Safekeeping of Series Account Assets The assets of Variable Annuity-1 Series Account (the "Series Account") are held by First Great-West Life & Annuity Insurance Company ("First GWL&A"). The assets of the Series Account are kept physically segregated and held separate and apart from the general account of First GWL&A. First GWL&A maintains records of all purchases and redemptions of shares of the underlying funds. Additional protection for the assets of the Series Account is afforded by blanket fidelity bonds issued to The Great- West Life Assurance Company in the amount of $25 million, which covers all officers and employees of First GWL&A. B. Experts The accounting firm of Deloitte & Touche LLP performs certain accounting and auditing services for First GWL&A and the Series Account. The principal business address of Deloitte & Touche LLP is 555 Seventeenth Street, Suite 3600, Denver, Colorado 80202. The balance sheet of First GWL&A at April 4, 1997 included in the prospectus has been audited by Deloitte & Touche LLP, independent auditors, as set forth in their report appearing therein and is included in reliance upon such report given upon the authority of such firm as experts in accounting and auditing. C. Principal Underwriter The offering of the Contracts is made on a continuous basis by Charles Schwab & Co., Inc. ("Schwab"). Schwab is a California corporation and is a member of the National Association of Securities Dealers ("NASD"). The Company does not anticipate discontinuing the offering of the Contract, although it reserves the right to do so. The Contract generally will be issued for Annuitants from birth to age ninety. D. Administrative Services Agreement First GWL&A and Great-West Life & Annuity Insurance Company ("GWL&A") have entered into an Administrative Services Agreement dated , 1997. Pursuant to the agreement, GWL&A performs certain corporate support services, investment services and other back office administrative services for First GWL&A. In addition, certain of GWL&A's property, equipment, personnel and facilities are made available for First GWL&A for its operations. All charges for services and use of facilities to the extent practicable reflect actual costs, and are intended to be in accordance with New York Insurance Laws. WITHHOLDING Annuity payments and other amounts received under the Contract are subject to income tax withholding unless the recipient elects not to have taxes withheld. The amounts withheld will vary among recipients depending on the tax status of the individual and the type of payments from which taxes are withheld. Notwithstanding the recipient's election, withholding may be required with respect to certain payments to be delivered outside the United States and, with respect to certain distributions from certain types of qualified retirement plans, unless the proceeds are transferred directly to another qualified retirement plan. Moreover, special "backup withholding" rules may require the Company to disregard the recipient's election if the recipient fails to supply the Company with a "TIN" or taxpayer identification number (social security number for individuals), or if the Internal Revenue Service notifies the Company that the TIN provided by the recipient is incorrect. CALCULATION OF PERFORMANCE DATA A. Yield and Effective Yield Quotations for the Money Market Investment Division The yield quotation for the Money Market Investment Division will be for the seven-day period and is computed by determining the net change, exclusive of capital changes, in the value of a hypothetical pre-existing account having a balance of one Accumulation Unit in the Money Market Investment Division at the beginning of the period, subtracting a hypothetical charge reflecting deductions from Participant accounts, and dividing the difference by the value of the account at the beginning of the base period to obtain the base period return, and then multiplying the base period return by (365/7) with the resulting yield figure carried to the nearest hundredth of one percent. The effective yield quotation for the Money Market Investment Division will be for the seven-day period and is carried to the nearest hundredth of one percent, computed by determining the net change, exclusive of capital changes, in the value of a hypothetical pre-existing account having a balance of one Accumulation Unit in the Money Market Investment Division at the beginning of the period, subtracting a hypothetical charge reflecting deductions from Participant accounts, and dividing the difference by the value of the account at the beginning of the base period to obtain the base period return, and then compounding the base period return by adding 1, raising the sum to a power equal to 365 divided by 7, and subtracting 1 from the result, according to the following formula: EFFECTIVE YIELD = [(BASE PERIOD RETURN +1)365/7]-1. For purposes of the yield and effective yield computations, the hypothetical charge reflects all deductions that are charged to all Participant accounts in proportion to the length of the base period, and for any fees that vary with the size of the account, the account size is assumed to be the Money Market Investment Division's mean account size. The specific percentage applicable to a particular withdrawal would depend on a number of factors including the length of time the Contract Owner has participated under the Contracts. (See "Charges and Deductions" on page 17 of the Prospectus.) No deductions or sales loads are assessed upon annuitization under the Contracts. Realized gains and losses from the sale of securities and unrealized appreciation and depreciation of the Money Market Investment Division and the Fund are excluded from the calculation of yield. B. Total Return and Yield Quotations for All Investment Divisions (Other than Money Market) The total return quotations for all Investment Divisions, other than the Money Market, will be average annual total return quotations for the one-year period. The quotations are computed by finding the average annual compounded rates of return over the relevant periods that would equate the initial amount invested to the ending redeemable value, according to the following formula: P(1+T)n = ERV Where:P = a hypothetical initial payment of $1,000 T = average annual total return N = number of years ERV =ending redeemable value of a hypothetical $1,000 payment made at the beginning of the particular period at the end of the particular period For purposes of the total return quotations for these Investment Divisions, the calculations take into effect all fees that are charged to the Contract Value , and for any fees that vary with the size of the account, the account size is assumed to be the respective Investment Divisions' mean account size. The calculations also assume a complete redemption as of the end of the particular period. The yield quotations for these Investment Divisions set forth in the Prospectus are based on the thirty-day period ended on December 31, 1996, and are computed by dividing the net investment income per Accumulation Unit earned during the period by the maximum offering price per unit on the last day of the period, according to the following formula: YIELD = 2[((a-b)cd +1)6 -1] Where:a = net investment income earned during the period by the corresponding portfolio of the Fund attributable to shares owned by the Investment Division. b = expenses accrued for the period (net of reimbursements). c = the average daily number of Accumulation Units outstanding during the period. d = the maximum offering price per Accumulation Unit on the last day of the period. For purposes of the yield quotations for these Investment Divisions, the calculations take into effect all fees that are charged to the Contract Value, and for any fees that vary with the size of the account, the account size is assumed to be the respective Investment Divisions' mean account size. FINANCIAL STATEMENTS The balance sheet of First GWL&A as contained in the prospectus should be considered only as bearing upon First GWL&A's ability to meet its obligations under the Contracts, and they should not be considered as bearing on the investment performance of the Series Account. The interest of Contract Owners under the Contracts are affected solely by the investment results of the Series Account. This Statement of Additional Information contains no financial statements for the Series Account because the Series Account has not yet commenced operations, has no assets or liabilities, and has received no income nor incurred any expenses as of the date of this Statement of Additional Information. PART C OTHER INFORMATION Item 24. Financial Statements and Exhibits (a) Financial Statements The financial statements for First Great-West Life & Annuity Insurance Company are included in the prospectus. (b) Exhibits (1) Certified copy of resolution of Board of Directors or Depositor establishing Registrant is attached as Exhibit 1. (2) Not applicable. (3) Copy of distribution contract between Depositor and Principal Underwriter is attached as Exhibit 3. (4) Copy of the form of the variable annuity contract is attached as Exhibit 4. (5) Copy of the form of application to be used with the variable annuity contract provided pursuant to (4) is attached as Exhibit 5. (6) Copy of Articles of Incorporation and Bylaws of Depositor are attached as Exhibits 6.a. and 6.b. respectively. (7) Not applicable. (8) Copies of participation agreements with underlying funds are attached as Exhibit 8. (9) Opinion of counsel and consent of to be filed by amendment. (10) (a) Written Consent of Jorden Burt Berenson & Johnson LLP is attached as Exhibit 10a. (b) Written Consent of Deloitte & Touche LLP is attached as Exhibit 10b. (c) Written Consent of W. Kay Adam is attached as Exhibit 10c. (11) Not Applicable. (12) Not Applicable. (13) Schedule for computation of each performance quotation provided in response to Item 21 is attached as Exhibit 13. (14) Financial Data Schedule is attached as Exhibit 14. Item 25. Directors and Officers of the Depositor Position and Offices Name Principal Business Address with Depositor Marcia D. Alazraki 425 Lexington Avenue Director New York City, New York 10017 James Balog 2205 North Southwinds BoulevardDirector Vero Beach, Florida 39263 James W. Burns, O.C. (4) Director Paul Desmarais, Jr. (4) Director Robert Gratton (5) Chairman N. Berne Hart 2552 East Alameda Avenue, #99 Director Denver, Colorado 80209 Stuart Z. Katz One New York Plaza Director New York City, New York 10004 William T. McCallum (1) President and Chief Executive Officer Brian E. Walsh Trinity L.P. Director 115 East Putnam Avenue Greenwich, Connecticut 06830 Robert D. Bond (1) Senior Vice President, Financial Services Glen Derback (1) Vice President and Controller John T. Hughes (1) Senior Vice President, Chief Investment Officer D. Craig Lennox (1) Senior Vice President, General Counsel and Secretary Dennis Low (1) Director, Executive Vice President, Financial Services James D. Motz (2) Executive Vice President, Employee Benefits Martin L. Rosenbaum (2) Senior Vice President, Employee Benefits Operations Douglas L. Wooden (1) Director, Senior Vice ______________________________________ President, Financial Services (1) 8515 East Orchard Road, Englewood, Colorado 80111. (2) 8505 East Orchard Road, Englewood, Colorado 80111. Item 26. Persons controlled by or under common control with the Depositor or Registrant Power Corporation of Canada 100% - Marquette Communications Corporation 100% - 171263 Canada Inc. 68.1% - Power Financial Corporation 86.4% - Great-West Lifeco Inc. 99.5% - The Great-West Life Assurance Company 100% - Great-West Life & Annuity Insurance Company 100% First Great-West Life & Annuity Insurance Company 100% - GW Capital Management, Inc. 100% - Financial Administrative Services Corporation 100% - One Corporation 100% - One Health Plan of Illinois, Inc. 100% - One Health Plan of Texas, Inc. 100% - One Health Plan of California, Inc. 100% - One Health Plan of Colorado, Inc. 100% - One Health Plan of Georgia, Inc. 100% - One Health Plan of North Carolina, Inc. 100% - One Health Plan of Washington, Inc. 100% - One Orchard Equities, Inc. 100% - Great-West Benefit Services, Inc. 13% - Private Healthcare Systems, Inc. 100% - Benefits Communication Corporation 100% - BenefitsCorp Equities, Inc. 94% - Maxim Series Fund, Inc. 100% - Greenwood Property Corporation 100% - GWL Properties Inc. 100% - Great-West Realty Investments, Inc. 50% - Westkin Properties Ltd. 100% - Confed Admin Services, Inc. Item 27. Number of Contractowners Not applicable. Item 28. Indemnification Provisions exist under the laws of the state of New York and the Bylaws of First GWL&A whereby First GWL&A may indemnify a director, officer, or controlling person of First GWL&A against liabilities arising under the Securities Act of 1933. The following excerpts contain the substance of these provisions: New York Corporate Code Section 721. Nonexclusivity of statutory provisions for indemnification of directors and officers. The indemnification and advancement of expenses granted pursuant to, or provided by, this article shall not be deemed exclusive of any other rights to which a director or officer seeking indemnification or advancement of expenses may be entitled, whether contained in the certificate of incorporation or the by-laws or, when authorized by such certificate of incorporation or by-laws, (i) a resolution of shareholders, (ii) a resolution of directors, or (iii) an agreement providing for such indemnification, provided that no indemnification may be made to or on behalf of any director or officer if a judgment or other final adjudication adverse to the director or officer establishes that his acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action so adjudicated, or that he personally gained in fact a financial profit or other advantage to which he was not legally entitled. Nothing contained in this article shall affect any rights to indemnification to which corporate personnel other than directors and officers may be entitled by contract or otherwise under law. Section 722. Authorization for indemnification of directors and officers. (a) A corporation may indemnify any person made, or threatened to be made, a party to an action or proceeding ( other than one by or in the right of the corporation to procure a judgment in its favor), whether civil or criminal, including an action by or in the right of any other corporation of any type or kind, domestic or foreign, or any partnership, joint venture, trust, employee benefit plan or other enterprise, which any director or officer of the corporation served in any capacity at the request of the corporation, by reason of the fact that he, his testator or intestate, was a director or officer of the corporation, or served such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise in any capacity, against judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys' fees actually and necessarily incurred as a result of such action or proceeding, or any appeal therein, if such director or officer acted, in good faith, for a purpose which he reasonably believed to be in, or, in the case of service for any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise, not opposed to, the best interests of the corporation and, in criminal actions or proceedings, in addition, had no reasonable cause to believe that his conduct was unlawful. (b) The termination of any such civil or criminal action or proceeding by judgment, settlement, conviction or upon a plea of nolo contendere, or its equivalent, shall not in itself create a presumption that any such director or officer did not act, in good faith, for a purpose which he reasonably believed to be in, or, in the case of service for any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise, not opposed to, the best interests of the corporation or that he had reasonable cause to believe that his conduct was unlawful. (c) A corporation may indemnify any person made, or threatened to be made, a party to an action by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he, his testator or intestate, is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of any other corporation of any type or kind, domestic or foreign, of any partnership, joint venture, trust, employee benefit plan or other enterprise, against amounts paid in settlement and reasonable expenses, including attorneys' fees, actually and necessarily incurred by him in connection with the defense or settlement of such action, or in connection with an appeal therein, if such director or officer acted, in good faith, for a purpose which he reasonably believed to be in, or, in the case of service for any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise, not opposed to, the best interests of the corporation, except that no indemnification under this paragraph shall be made in respect of (1) a threatened action, or a pending action which is settled or otherwise disposed of, or (2) any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation, unless and only to the extent that the court in which the action was brought, or, if no action was brought, any court of competent jurisdiction, determines upon application that, in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such portion of the settlement amount and expenses as the court deems proper. (d) For the purpose of this section, a corporation shall be deemed to have requested a person to serve an employee benefit plan where the performance by such person of his duties to the corporation also imposes duties on, or otherwise involves services by, such person to the plan or participants or beneficiaries of the plan; excise taxes assessed on a person with respect to an employee benefit plan pursuant to applicable law shall be considered fines; and action taken or omitted by a person with respect to an employee benefit plan in the performance of such person's duties for a purpose reasonably believed by such person to be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose which is not opposed to the best interests of the corporation. Section 723. Payment of indemnification other than by court award. (a) A person who has been successful, on the merits or otherwise, in the defense of a civil or criminal action or proceeding of the character described in section 722 shall be entitled to indemnification as authorized in such section. (b) Except as provided in paragraph (a), any indemnification under section 722 or otherwise permitted by section 721, unless ordered by a court under section 724 (Indemnification of directors and officers by a court), shall be made by the corporation, only if authorized in the specific case: (1) By the board acting by a quorum consisting of directors who are not parties to such action or proceeding upon a finding that the director or officer has met the standard of conduct set forth in section 722 or established pursuant to section 721, as the case may be, or, (2) If a quorum under subparagraph (1) is not obtainable or, even if obtainable, a quorum of disinterested directors so directs; (A) By the board upon the opinion in writing of independent legal counsel that indemnification is proper in the circumstances because the applicable standard of conduct set forth in such sections has been met by such director or officer, or (B) By the shareholders upon a finding that the director or officer has met the applicable standard of conduct set forth in such sections. (c) Expenses incurred in defending a civil or criminal action or proceeding may be paid by the corporation in advance of the final disposition of such action or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount as, and to the extent, required by paragraph (a) of section 725. Section 724. Indemnification of directors and officers by a court. (a) Notwithstanding the failure of a corporation to provide indemnification, and despite any contrary resolution of the board or of the shareholders in the specific case under section 723 (Payment of indemnification other than by court award), indemnification shall be awarded by a court to the extent authorized under section 722 (Authorization for indemnification of directors and officers), and paragraph (a) of section 723. Application therefor may be made, in every case, either: (1) In the civil action or proceeding in which the expenses were incurred or other amounts were paid, or (2) To the supreme court in a separate proceeding, in which case the application shall set forth the disposition of any previous application made to any court for the same or similar relief and also reasonable cause for the failure to make application for such relief in the action or proceeding in which the expenses were incurred or other amounts were paid. (b) The application shall be made in such manner and form as may be required by the applicable rules of court or, in the absence thereof, by direction of a court to which it is made. Such application shall be upon notice to the corporation. The court may also direct that notice be given at the expense of the corporation to the shareholders and such other persons as it may designate in such manner as it may require. (c) Where indemnification is sought by judicial action, the court may allow a person such reasonable expenses, including attorneys' fees, during the pendency of the litigation as are necessary in connection with his defense therein, if the court shall find that the defendant has by his pleadings or during the course of the litigation raised genuine issues of fact or law. Section 725. Other provisions affecting indemnification of directors and officers. (a) All expenses incurred in defending a civil or criminal action or proceeding which are advanced by the corporation under paragraph (c) of section 723 (Payment of indemnification other than by court award) or allowed by a court under paragraph (c) of section 724 (Indemnification of directors and officers by a court) shall be repaid in case the person receiving such advancement or allowance is ultimately found, under the procedure set forth in this article, not to be entitled to indemnification or, where indemnification is granted, to the extent the expenses so advanced by the corporation or allowed by the court exceed the indemnification to which he is entitled. (b) No indemnification, advancement or allowance shall be made under this article in any circumstance where it appears: (1) That the indemnification would be inconsistent with the law of the jurisdiction of incorporation of a foreign corporation which prohibits or otherwise limits such indemnification; (2) That the indemnification would be inconsistent with a provision of the certificate of incorporation, a by-law, a resolution of the board or of the shareholders, an agreement or other proper corporate action, in effect at the time of the accrual of the alleged cause of action asserted in the threatened or pending action or proceeding in which the expenses were incurred or other amounts were paid, which prohibits or otherwise limits indemnification; or (3) If there has been a settlement approved by the court, that the indemnification would be inconsistent with any condition with respect to indemnification expressly imposed by the court in approving the settlement. (c) If any expenses or other amounts are paid by way of indemnification, otherwise than by court order or action by the shareholders, the corporation shall, not later than the next annual meeting of shareholders unless such meeting is held within three months from the date of such payment, and, in any event, within fifteen months from the date of such payment, mail to its shareholders of record at the time entitled to vote for the election of directors a statement specifying the persons paid, the amounts paid, and the nature and status at the time of such payment of the litigation or threatened litigation. (d) If any action with respect to indemnification of directors and officers is taken by way of amendment of the by-laws, resolution of directors, or by agreement, then the corporation shall, not later than the next annual meeting of shareholders, unless such meeting is held within three months from the date of such action, and, in any event, within fifteen months from the date of such action, mail to its shareholders of record at the time entitled to vote for the election of directors a statement specifying the action taken. (e) Any notification required to be made pursuant to the foregoing paragraph (c) or (d) of this section by any domestic mutual insurer shall be satisfied by compliance with the corresponding provisions of section one thousand two hundred sixteen of the insurance law. (f) The provisions of this article relating to indemnification of directors and officers and insurance therefor shall apply to domestic corporations and foreign corporations doing business in this state, except as provided in section 1320 (Exemption from certain provisions). Section 726. Insurance for indemnification of directors and officers. (a) Subject to paragraph (b), a corporation shall have power to purchase and maintain insurance: (1) To indemnify the corporation for any obligation which it incurs as a result of the indemnification of directors and officers under the provisions of this article, and (2) To indemnify directors and officers in instances in which they may be indemnified by the corporation under the provisions of this article, and (3) To indemnify directors and officers in instances in which they may not otherwise be indemnified by the corporation under the provisions of this article provided the contract of insurance covering such directors and officers provides, in a manner acceptable to the superintendent of insurance, for a retention amount and for co-insurance. (b) No insurance under paragraph (a) may provide for any payment, other than cost of defense, to or on behalf of any director or officer: (1) if a judgment or other final adjudication adverse to the insured director or officer establishes that his acts of active and deliberate dishonesty were material to the cause of action so adjudicated, or that he personally gained in fact a financial profit or other advantage to which he was not legally entitled, or (2) in relation to any risk the insurance of which is prohibited under the insurance law of this state. (c) Insurance under any or all subparagraphs of paragraph (a) may be included in a single contract or supplement thereto. Retrospective rated contracts are prohibited. (d) The corporation shall, within the time and to the persons provided in paragraph (c) of section 725 (Other provisions affecting indemnification of directors or officers), mail a statement in respect of any insurance it has purchased or renewed under this section, specifying the insurance carrier, date of the contract, cost of the insurance, corporate positions insured, and a statement explaining all sums, not previously reported in a statement to shareholders, paid under any indemnification insurance contract. (e) This section is the public policy of this state to spread the risk of corporate management, notwithstanding any other general or special law of this state or of any other jurisdiction including the federal government. Bylaws of First GWL&A Article II, Section 11. Indemnification of Directors. The corporation may, by resolution of the Board of Directors, indemnify and save harmless out of the funds of the Company to the extent permitted by applicable law, any Director, Officer, or employee of the corporation or any member or officer of any Committee, and his or her heirs, executors and administrators, from and against all claims, liabilities, costs, charges, and expenses whatsoever that any such Director, Officer, employee or any such member or officer sustains or incurs in or about any action, suit, or proceeding that is brought, commenced, or prosecuted against him or her for or in respect of any act, deed, matter or thing whatsoever made, done, or permitted by him or her in or about the execution of the duties of his or her office or employment with the corporation, or in or about the execution of his or her duties as a Director or Officer of another company which he or she so serves at the request and on behalf of the corporation, or in or about the execution of his or her duties as a member or officer of any such Committee, and all other claims, liabilities, costs, charges and expenses that he or she sustains or incurs, in or about or in relation to any such duties or the affairs of the corporation, the affairs of such other company which he or she so serves or the affairs of such Committee, except such claims, liabilities, costs, charges or expenses as are occasioned by acts of omissions which were in bad faith, involved intentional misconduct, a violation of the New York Insurance Law or a knowing violation of any other law or which resulted in such person gaining in fact a financial profit or other advantage to which he or she was not entitled. The corporation may, by resolution of the Board of Directors, indemnify and save harmless out of the funds of the corporation to the extent permitted by applicable law, any Director, Officer, or employee of any subsidiary corporation of the corporation on the same basis, and within the same constraints as, described in the preceding sentence. No payment of indemnification shall be made unless notice has been filed with the Superintendent of Insurance pursuant to Section 1216 of the New York Insurance Law. Item 29.Principal Underwriter (a) Charles Schwab & Co., Inc. ("Schwab") is the distributor of securities of the Registrant. (b) Directors and Officers of Schwab Position and Offices Name Principal Business Address with Underwriter Charles R. Schwab (1) Chairman and Director David S. Pottruck (1) President and Chief Executive Officer and Director Steven L. Scheid (1) Executive Vice President and Chief Financial Officer and Director Tom D. Seip (1) Executive Vice President - Retail John P. Coghlan (1) Executive Vice President, Schwab Institutional Linnet Deily (1) Executive Vice President, Services for Investment Managers Carrie Dwyer (1) Executive Vice President, Corporate Oversight Lon Gorman (1) Executive Vice President and President, Schwab Capital Markets and Trading Daniel O. Leemon (1) Executive Vice President Business Strategy Dawn G. Lepore (1) Executive Vice President, and Chief Information Officer - SITE Timothy F. McCarthy (1) Executive Vice President and President, Financial Products and International - Group Elizabeth G. Sawi (1) Executive Vice President - Electronic Brokerage Richard Tinervin (1) Executive Vice President - Retirement Plan Services Luis E. Valencia (1) Executive Vice President and Chief Administrative Officer Suzanne D. Lyons (1) Executive Vice President - Retail Marketing Karen Chang (1) Executive Vice President - Head of Branches William J. Klipp (1) Executive Vice President - SchwabFunds Peter J. McIntosh (1) Executive Vice President - Brokerage Operations and National Investor Services Parkash P. Ahuja (1) Senior Vice President- Administrative Services Rhet Andrews (1) Senior Vice President - Schwab Institutional Trading and Operations William S. Baughman (1) Senior Vice President - Strategic Marketing Rochelle A. Bays (1) Senior Vice President - CM & T Support Services Michelle B. Blieberg (1) Senior Vice President - HR Support Services Reid P. Conklin (1) Senior Vice President - Southeast Group John Danton (1) Senior Vice President, Retail Financial Planning Martha J. Deevy (1) Senior Vice President - SITE Specialized Services Evelyn S. Dilsaver (1) Senior Vice President Christopher V. Dodds (1) Senior Vice President and Treasurer Sidney J. Dorr (1) Senior Vice President - Capital Markets and Trading Wayne W. Fieldsa (1) Senior Vice President - Securities Operations Edward V. Garlich, Jr.(1) Senior Vice President and Managing Director - Washington Research Group Therese Haberle (1) Senior Vice President - Chief Compliance Officer James M. Hackley (1) Senior Vice President - Active Trader Gerry L. Hansen (1) Senior Vice President - Controller Barbara R. Heinrich (1) Senior Vice President - Fixed Income Jan K. Hier-King (1) Senior Vice President - Schwab Institutional Technology Colleen M. Hummer (1) Senior Vice President - Mutual Fund Operations Daniel J. Keller (1) Senior Vice President - Mutual Funds Technology Michael S. Knight (1) Senior Vice President - Midwest Group Gloria J. Lau (1) Senior Vice President - Schwab International Thomas N. Lawrie (1) Senior Vice President - Electronic Brokerage Services James G. Losi (1) Senior Vice President - Retail Jeffrey M. Lyons (1) Senior Vice President - Mutual Funds Marketing Elinor MacKinnon (1) Senior Vice President - Retail Systems Frederick F. Matteson (1) Senior Vice President - SITE Operations and Infrastructure John McGonigle (1) Senior Vice President - Active Trader Roger G. Neaves (1) Senior Vice President - Production Services Geoffrey Penney (1) Senior Vice President - Financial Products and International Technology Solutions Kenneth W. Perlman (1) Senior Vice President - Capital Markets & Trading - Regulatory Division Earlene Perry (1) Senior Vice President - Retail Operations Hugo W. Quackenbush (1) Senior Vice President - Corporate Communications Edward M. Rodden (1) Senior Vice President - Affluent Customer Enterprise Myra Rothfield (1) Senior Vice President - Customer Development and Retention Louise J. Rothman (1) Senior Vice President - Compensation and Benefits Gideon Sasson (1) Senior Vice President - Electronic Brokerage Site Arthur V. Shaw (1) Senior Vice President - Electronic Brokerage Leonard Short (1) Senior Vice President - CRS Advertising and Brand Management Betsy Snow (1) Senior Vice President - ISD Technical Operations Ray Straka (1) Senior Vice President - Finance and Corporate Administration Technology Support Michelle Swenson (1) Senior Vice President - Mutual Funds Marketing and Development Mary B. Templeton (1) Senior Vice President - General Counsel and Corporate Secretary Mark C. Thompson (1) Senior Vice President - Government and Public Affairs Daniel J. Voet (1) Senior Vice President - Controller Steven Ward (1) Senior Vice President - Investment Officer - SchwabFunds Portfolio Cynthia K. Holbrook (1) Vice President ______________________________________ (1) 101 Montgomery, San Francisco, California 94104. (c) Commissions and other compensation received by Principal Underwriter during registrant's last fiscal year: Net Name of Underwriting Compensation Principal Discounts and on Brokerage Underwriter Commissions Redemption CommissionsCompensation Schwab -0- -0- -0- -0- Item 30.Location of Accounts and Records All accounts, books, or other documents required to be maintained by Section 31(a) of the 1940 Act and the rules promulgated thereunder are maintained by the registrant through First GWL&A, , Albany, New York . Item 31.Management Services Not Applicable. Item 32.Undertakings (a) Registrant undertakes to file a post-effective amendment to this Registration Statement as frequently as is necessary to ensure that the audited financial statements in the Registration Statement are never more than 16 months old for so long as payments under the variable annuity contracts may be accepted. (b) Registrant undertakes to include either (1) as part of any application to purchase a contract offered by the Prospectus, a space that an applicant can check to request a Statement of Additional Information, or (2) a postcard or similar written communication affixed to or included in the Prospectus that the applicant can remove to send for a Statement of Additional Information. (c) Registrant undertakes to deliver any Statement of Additional Information and any financial statements required to be made available under this form promptly upon written or oral request. (d) Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (e) First GWL&A represents that the fees and charges deducted under the Contracts, in the aggregate, are reasonable in relation to the services rendered, the expenses to be incurred, and the risks assumed by First GWL&A. SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant has duly caused this Registration Statement on Form N-4 to be signed on its behalf, in the City of Englewood, State of Colorado, on this 15th day of April , 1997. VARIABLE ANNUITY-1 SERIES ACCOUNT (Registrant) By: /s/ William T. McCallum William T. McCallum, President and Chief Executive Officer of First Great-West Life & Annuity Insurance Company FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (Depositor) By: /s/ William T. McCallum William T. McCallum, President and Chief Executive Officer As required by the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities with First Great-West Life & Annuity Insurance Company and on the dates indicated: Signature and Title Date /s/ Robert Gratton* 4/15 , 1997 Director and Chairman of the Board (Robert Gratton) /s/ William T. McCallum 4/15 , 1997 Director, President and Chief Executive Officer (William T. McCallum) Signature and Title Date /s/ Glen R. Derback 4/15 , 1997 Controller (Glen R. Derback) /s/ Marcia D. Alazraki* 4/15 , 1997 Director, (Marcia D. Alazraki) /s/ James Balog* 4/15 , 1997 Director, (James Balog) /s/ James W. Burns* 4/15 , 1997 Director, (James W. Burns) /s/ Paul Desmarais, Jr.* 4/15 , 1997 Director (Paul Desmarais, Jr.) /s/ N. Berne Hart* 4/15 , 1997 Director (N. Berne Hart) /s/ Stuart Z. Katz* 4/15 , 1997 Director (Stuart Z. Katz) /s/ Brian E. Walsh* 4/15 , 1997 Director (Brian E. Walsh) *By: /s/ D.C. Lennox 4/15 , 1997 D. C. Lennox Attorney-in-fact pursuant to Powers of Attorney filed with this Registration Statement. POWER OF ATTORNEY RE FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY Know all men by these presents, that I, James Balog, a Member of the Board of Directors of First Great-West Life & Annuity Insurance Company, a New York corporation, do hereby constitute and appoint each of D.C. Lennox and G.R. Derback as my true and lawful attorney and agent for me and in my name and on my behalf to do, individually and without the concurrence of the other attorney and agent, any and all acts and things and to execute any and all instruments which either said attorney and agent may deem necessary or desirable to enable First Great-West Life & Annuity Insurance Company and Variable Annuity-1 Series Account, a separate and distinct account of First Great-West Life & Annuity Insurance Company governed under the provisions of the New York Insurance Code, to comply with the Securities Act of 1933 and the Investment Company Act of 1940 and any rules, regulations, and requirements of the Securities and Exchange Commission thereunder, in connection with the registration under said Acts of variable annuity contracts, including specifically, but without limiting the generality of the foregoing, power and authority to sign my name, in my capacity as a Member of the Board of Directors of First Great-West Life & Annuity Insurance Company, to the Registration Statement (Form N-4) of First Great-West Life & Annuity Insurance Company and Schwab Variable Annuity Series Account, and to any and all amendments thereto, and I hereby ratify and confirm all that either said attorney and agent shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand this 2nd day of April , 1997. /s/ James Balog Member, Board of Directors First Great-West Life & Annuity Insurance Company Witness: /s/ Charlote Dickinson Name: Charlote Dickinson POWER OF ATTORNEY RE FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY Know all men by these presents, that I, James W. Burns, O.C., a Member of the Board of Directors of First Great-West Life & Annuity Insurance Company, a New York corporation, do hereby constitute and appoint each of D.C. Lennox and G.R. Derback as my true and lawful attorney and agent for me and in my name and on my behalf to do, individually and without the concurrence of the other attorney and agent, any and all acts and things and to execute any and all instruments which either said attorney and agent may deem necessary or desirable to enable First Great-West Life & Annuity Insurance Company and Variable Annuity-1 Series Account, a separate and distinct account of First Great-West Life & Annuity Insurance Company governed under the provisions of the New York Insurance Code, to comply with the Securities Act of 1933 and the Investment Company Act of 1940 and any rules, regulations, and requirements of the Securities and Exchange Commission thereunder, in connection with the registration under said Acts of variable annuity contracts, including specifically, but without limiting the generality of the foregoing, power and authority to sign my name, in my capacity as a Member of the Board of Directors of First Great-West Life & Annuity Insurance Company, to the Registration Statement (Form N-4) of First Great-West Life & Annuity Insurance Company and Schwab Variable Annuity Series Account, and to any and all amendments thereto, and I hereby ratify and confirm all that either said attorney and agent shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand this 3rd day of April , 1997. /s/ James W. Burns, O.C. Member, Board of Directors First Great-West Life & Annuity Insurance Company Witness: /s/ D.C. Lennox Name: D.C. Lennox POWER OF ATTORNEY RE FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY Know all men by these presents, that I, Paul Desmarais, Jr., a Member of the Board of Directors of First Great-West Life & Annuity Insurance Company, a New York corporation, do hereby constitute and appoint each of D.C. Lennox and G.R. Derback as my true and lawful attorney and agent for me and in my name and on my behalf to do, individually and without the concurrence of the other attorney and agent, any and all acts and things and to execute any and all instruments which either said attorney and agent may deem necessary or desirable to enable First Great-West Life & Annuity Insurance Company and Variable Annuity-1 Series Account, a separate and distinct account of First Great-West Life & Annuity Insurance Company governed under the provisions of the New York Insurance Code, to comply with the Securities Act of 1933 and the Investment Company Act of 1940 and any rules, regulations, and requirements of the Securities and Exchange Commission thereunder, in connection with the registration under said Acts of variable annuity contracts, including specifically, but without limiting the generality of the foregoing, power and authority to sign my name, in my capacity as a Member of the Board of Directors of First Great-West Life & Annuity Insurance Company, to the Registration Statement (Form N-4) of First Great-West Life & Annuity Insurance Company and Schwab Variable Annuity Series Account, and to any and all amendments thereto, and I hereby ratify and confirm all that either said attorney and agent shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand this 8th day of April , 1997. /s/ Paul Desmarais, Jr. Member, Board of Directors First Great-West Life & Annuity Insurance Company Witness: /s/ Lucie Filteau Name: Lucie Filteau POWER OF ATTORNEY RE FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY Know all men by these presents, that I, Robert Gratton, a Member of the Board of Directors of First Great-West Life & Annuity Insurance Company, a New York corporation, do hereby constitute and appoint each of D.C. Lennox and G.R. Derback as my true and lawful attorney and agent for me and in my name and on my behalf to do, individually and without the concurrence of the other attorney and agent, any and all acts and things and to execute any and all instruments which either said attorney and agent may deem necessary or desirable to enable First Great-West Life & Annuity Insurance Company and Variable Annuity-1 Series Account, a separate and distinct account of First Great-West Life & Annuity Insurance Company governed under the provisions of the New York Insurance Code, to comply with the Securities Act of 1933 and the Investment Company Act of 1940 and any rules, regulations, and requirements of the Securities and Exchange Commission thereunder, in connection with the registration under said Acts of variable annuity contracts, including specifically, but without limiting the generality of the foregoing, power and authority to sign my name, in my capacity as a Member of the Board of Directors of First Great-West Life & Annuity Insurance Company, to the Registration Statement (Form N-4) of First Great-West Life & Annuity Insurance Company and Schwab Variable Annuity Series Account, and to any and all amendments thereto, and I hereby ratify and confirm all that either said attorney and agent shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand this 3rd day of April , 1997. /s/ Robert Gratton Member, Board of Directors First Great-West Life & Annuity Insurance Company Witness: /s/ Nicole Barolet Name: Nicole Barolet POWER OF ATTORNEY RE FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY Know all men by these presents, that I, N. Berne Hart, a Member of the Board of Directors of First Great-West Life & Annuity Insurance Company, a New York corporation, do hereby constitute and appoint each of D.C. Lennox and G.R. Derback as my true and lawful attorney and agent for me and in my name and on my behalf to do, individually and without the concurrence of the other attorney and agent, any and all acts and things and to execute any and all instruments which either said attorney and agent may deem necessary or desirable to enable First Great-West Life & Annuity Insurance Company and Variable Annuity-1 Series Account, a separate and distinct account of First Great-West Life & Annuity Insurance Company governed under the provisions of the New York Insurance Code, to comply with the Securities Act of 1933 and the Investment Company Act of 1940 and any rules, regulations, and requirements of the Securities and Exchange Commission thereunder, in connection with the registration under said Acts of variable annuity contracts, including specifically, but without limiting the generality of the foregoing, power and authority to sign my name, in my capacity as a Member of the Board of Directors of First Great-West Life & Annuity Insurance Company, to the Registration Statement (Form N-4) of First Great-West Life & Annuity Insurance Company and Schwab Variable Annuity Series Account, and to any and all amendments thereto, and I hereby ratify and confirm all that either said attorney and agent shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand this 3rd day of April , 1997. /s N. Berne Hart Member, Board of Directors First Great-West Life & Annuity Insurance Company Witness: /s/ Wilma J. Hart Name: Wilma J. Hart POWER OF ATTORNEY RE FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY Know all men by these presents, that I, Brian E. Walsh, a Member of the Board of Directors of First Great-West Life & Annuity Insurance Company, a New York corporation, do hereby constitute and appoint each of D.C. Lennox and G.R. Derback as my true and lawful attorney and agent for me and in my name and on my behalf to do, individually and without the concurrence of the other attorney and agent, any and all acts and things and to execute any and all instruments which either said attorney and agent may deem necessary or desirable to enable First Great-West Life & Annuity Insurance Company and Variable Annuity-1 Series Account, a separate and distinct account of First Great-West Life & Annuity Insurance Company governed under the provisions of the New York Insurance Code, to comply with the Securities Act of 1933 and the Investment Company Act of 1940 and any rules, regulations, and requirements of the Securities and Exchange Commission thereunder, in connection with the registration under said Acts of variable annuity contracts, including specifically, but without limiting the generality of the foregoing, power and authority to sign my name, in my capacity as a Member of the Board of Directors of First Great-West Life & Annuity Insurance Company, to the Registration Statement (Form N-4) of First Great-West Life & Annuity Insurance Company and Schwab Variable Annuity Series Account, and to any and all amendments thereto, and I hereby ratify and confirm all that either said attorney and agent shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand this 5th day of April , 1997. /s/ Brian E. Walsh Member, Board of Directors First Great-West Life & Annuity Insurance Company Witness: /s/ Margaret Canty Name: Margaret Canty POWER OF ATTORNEY RE FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY Know all men by these presents, that I, Marcia D. Alazraki, a Member of the Board of Directors of First Great-West Life & Annuity Insurance Company, a New York corporation, do hereby constitute and appoint each of D.C. Lennox and G.R. Derback as my true and lawful attorney and agent for me and in my name and on my behalf to do, individually and without the concurrence of the other attorney and agent, any and all acts and things and to execute any and all instruments which either said attorney and agent may deem necessary or desirable to enable First Great-West Life & Annuity Insurance Company and Variable Annuity-1 Series Account, a separate and distinct account of First Great-West Life & Annuity Insurance Company governed under the provisions of the New York Insurance Code, to comply with the Securities Act of 1933 and the Investment Company Act of 1940 and any rules, regulations, and requirements of the Securities and Exchange Commission thereunder, in connection with the registration under said Acts of variable annuity contracts, including specifically, but without limiting the generality of the foregoing, power and authority to sign my name, in my capacity as a Member of the Board of Directors of First Great-West Life & Annuity Insurance Company, to the Registration Statement (Form N-4) of First Great-West Life & Annuity Insurance Company and Schwab Variable Annuity Series Account, and to any and all amendments thereto, and I hereby ratify and confirm all that either said attorney and agent shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand this 4th day of April , 1997. /s/ Marcia D. Alazraki Member, Board of Directors First Great-West Life & Annuity Insurance Company Witness: /s/ Patricia Matecki Name: Patricia Matecki POWER OF ATTORNEY RE FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY Know all men by these presents, that I, Stuart Z. Katz, a Member of the Board of Directors of First Great-West Life & Annuity Insurance Company, a New York corporation, do hereby constitute and appoint each of D.C. Lennox and G.R. Derback as my true and lawful attorney and agent for me and in my name and on my behalf to do, individually and without the concurrence of the other attorney and agent, any and all acts and things and to execute any and all instruments which either said attorney and agent may deem necessary or desirable to enable First Great-West Life & Annuity Insurance Company and Variable Annuity-1 Series Account, a separate and distinct account of First Great-West Life & Annuity Insurance Company governed under the provisions of the New York Insurance Code, to comply with the Securities Act of 1933 and the Investment Company Act of 1940 and any rules, regulations, and requirements of the Securities and Exchange Commission thereunder, in connection with the registration under said Acts of variable annuity contracts, including specifically, but without limiting the generality of the foregoing, power and authority to sign my name, in my capacity as a Member of the Board of Directors of First Great-West Life & Annuity Insurance Company, to the Registration Statement (Form N-4) of First Great-West Life & Annuity Insurance Company and Schwab Variable Annuity Series Account, and to any and all amendments thereto, and I hereby ratify and confirm all that either said attorney and agent shall do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand this 14th day of April , 1997. /s/ Stuart Z. Katz Member, Board of Directors First Great-West Life & Annuity Insurance Company Witness: /s/ Lola M. Kador Name: Lola M. Kador Exhibit Table Form N-4 Exhibit 1. Certified copy of resolution of Board of Directors establishing Registrant1 3. Copy of distribution contract between Depositor and Principal Underwriter1 4. Copy of the form of variable annuity contract 1 5. Copy of the form of application to be used with the variable contract 1 6. (a) Copy of Articles of Incorporation of Depositor1 (b) Copy of Bylaws of Depositor 1 8. Copies of participation agreements with underlying funds 1 9. Opinion and consent of 2 10. (a) Consent of Jorden Burt Berenson & Johnson LLP1 (b) Consent of Deloitte & Touche LLP1 (c) Consent of W. Kay Adam 2 13. Schedule for computation of each performance quotation 1 14. Financial Data Schedule 1 1 Filed with this Registration Statement. 2 To be filed by amendment. EX-1 2 EXHIBIT 1 This will certify that the following is a true and correct copy of a resolution adopted by unanimous consent by the Board of Directors of First Great-West Life & Annuity Insurance Company effective the fifteenth day of January, 1997, and that said resolution is still in full force and effect: 1. That the Company hereby authorizes the establishment of a separate account designated Schwab Variable Annuity Series Account (hereinafter "the Account"), subject to such conditions as hereafter set forth, said use, purposes, and conditions to be in full compliance with Section 4240 of the New York Insurance Code and all rules and regulations of the New York Department of Insurance; Further, that the Account shall be established for the purpose of allowing the Company to issue individual annuity contracts authorized by Section 408 of the Internal Revenue Code and such other individual variable annuity contracts ("Contracts") as the President or a Vice-President may designate and shall constitute a separate account into which will be allocated amounts paid to the Company which are to be applied under the terms of such Contracts; and Further, that the income, gains and losses, realized or unrealized, from assets allocated to the Account shall be credited to or charged against such Account without regard to other income, gains, or losses of the Company to the extent provided in the Contracts; and Further, that the fundamental investment policy of the Account shall be to invest or reinvest the assets of the Account in securities issued by investment companies registered under the Investment Company Act of 1940; and Further, that eleven separate investment divisions be, and hereby are, established within the Account to which net payments under the Contracts will be allocated in accordance with instructions received from contractholders, and that the President or a Vice-President each be, and hereby is, authorized to increase or decrease the number of investment divisions in the Account as may be necessary or appropriate; and Further, that each investment division may be comprised of two subdivisions, one to hold the amounts contributed under Contracts qualifying for favorable tax treatment under the Internal Revenue Code, as amended, and the other to hold amounts contributed under Contracts which do not qualify for such tax treatment; and Further, that the President or a Vice-President each be, and hereby is, authorized to deposit such amounts in the Account or in each investment division as may be necessary or appropriate to facilitate the commencement of the Account's operations; and Further, that the President or a Vice-President each be, and hereby is, authorized to transfer funds from time to time into the Account in order to establish the Account or to support the operation of the Contracts with respect to the Account or to transfer funds from time to time out of the Account if transfer is made by cash or securities having a readily determined market value, if such transfer is approved by the Commissioner of the Division of Insurance; and Further, that the President or a Vice-President each be, and is hereby authorized to change the designation of the Account to such other designation as he may deem necessary or appropriate; and Further, that the appropriate officers of the Company, with such assistance from the Company's auditors, legal counsel and independent consultants or others as they may require, be, and they hereby are, authorized and directed to take all action necessary to: (a) register the Account as a unit investment trust under the Investment Company Act of 1940, as amended; (b) register the Contracts in such amounts, which may be an indefinite amount, as the officers of the Company shall from time to time deem appropriate, under the Securities Act of 1933; and (c) take all other actions which are necessary in connection with the offering of said Contracts for sale and the operation of the Account in order to comply with the Investment Company Act of 1940, the Securities Exchange Act of 1934, the Securities Act of 1933 and other applicable federal laws, including the filing of any amendments to registration statements, any undertakings, and any applications for exemptions from the Investment Company Act of 1940 or other applicable federal laws as the officers of the Company shall deem necessary or appropriate; and Further, that the appropriate officers of the Company be, and they hereby are, authorized on behalf of the Account and on behalf of the Company to take any and all action they may deem necessary or advisable in order to sell the Contracts, including any registrations, filings and qualifications of the Company, its officers, agents and employees, and the Contracts under the insurance and securities laws of any of the states of the United States of America or other jurisdictions, and in connection therewith to prepare, execute, deliver and file all such applications, reports, covenants, resolutions, applications for exemptions, consents to service of process and other papers and instruments as may be required under such laws, and to take any and all further action which said officers or counsel of the Company may deem necessary or desirable (including entering into whatever agreements may be necessary) in order to maintain such registrations or qualifications for as long as said officers or counsel deem it to be in the best interests of the Account and the Company; and Further, that the President, the Vice-Presidents and the Secretary of the Company be, and they hereby are, each authorized in the names and on behalf of the Account and the Company to execute and file irrevocable written consents on the part of the Account and of the Company to be used in such states wherein such consents to service of process may be required under the insurance or securities laws therein in connection with said registration or qualification of the Contracts and to appoint the appropriate state official or such other person as may be allowed by said insurance or securities laws, agent of the Account and of the Company for the purpose of receiving and accepting process; and Further, that the President or a Vice-President each be, and hereby is, authorized to cause the Company to institute procedures for providing voting rights for owners of such Contracts with respect to securities owned by the Account; and Further, that the President or a Vice-President each be, and is hereby authorized to execute such agreement or agreements as deemed necessary and appropriate with underwriters and distributors for the Contracts in connection with the establishment and maintenance of the Account or the design, administration and offer and sale of the Contracts; provided, however, that the Company is directed to finalize such agreements before effecting any registrations or filings of the Contracts or the Account; and Further, that the appropriate officers of the Company are hereby authorized to execute whatever agreement or agreements may be necessary or appropriate to enable the Account to invest in securities issued by one or more investment companies registered under the Investment Company Act of 1940 as may be specified in the respective Contracts; and Further, that the appropriate officers of the Company, and each of them, are hereby authorized to execute and deliver all such documents and papers and to do or cause to be done all such acts and things as they may deem necessary or desirable to carry out the foregoing resolutions and the intent and purposes thereof; and Further, that the term "appropriate officers" as used herein, shall include all of the elected and appointed officers of the Company, either severally or individually, subject to any applicable resolutions of the Board of Directors dealing with signing authority for the Company. 2. That the Company hereby authorizes the establishment of a separate account pursuant to C.R.S. section 10-7-402 designated as the Fixed Annuity Account (hereinafter, "the Account"), subject to such conditions as hereafter set forth, said use, purposes, and conditions to be in full compliance with C.R.S. section 10-7-402 and all rules and regulations of the Colorado Division of Insurance; Further, that the Account shall be established for the purpose of allowing the Company to issue market value adjusted (modified guaranteed) annuity contracts on a group and individual basis as the President or a Vice President may designate for such purpose and shall constitute a separate account into which are allocated amounts paid to the Company which are to be applied under the terms of such Contracts; and Further, that the income, gains and losses, realized or unrealized, from assets allocated to the Account shall be credited to or charged against such Account without regard to other income, gains, or losses of the Company to the extent provided in the Contracts; and Further, that the fundamental investment policy of the Account shall be to invest or reinvest the assets of the Account in investment grade (at the time of purchase) fixed income securities, which assets, in the aggregate, have characteristics, in particular cash flow patterns, reasonably related to the characteristics of the liabilities including but not limited to securities issued by the U.S. Government or its agencies or instrumentalities, corporate debt securities, commercial paper, cash or cash equivalents and other short-term investments; and Further, that the President or a Vice President each be, and hereby is, authorized to deposit such amount in the Account as may be necessary or appropriate to facilitate the commencement of the Account's operations; and Further, that the President or a Vice President each be, and hereby is, authorized to transfer funds from time to time into the Account in order to establish the Account and to support the operation of the Contracts with respect to the Account or to transfer funds from time to time out of the Account if transfer is made by cash or securities having a readily determined market value, if such transfer of securities is approved by the Commissioner of the Division of Insurance; and Further, that the President or a Vice President each be, and is hereby authorized to change the designation of the Account to such other designation as he may deem necessary or appropriate; and Further, that the appropriate officers of the Company, with such assistance from the Company's auditors, legal counsel and independent consultants or others as they may require, be, and they hereby are, authorized and directed to take all action necessary to: (a) register the Contracts in such amounts, which may be an indefinite amount, as the officers of the Company shall from time to time deem appropriate, under the Securities Act of 1933; and, (b) to take all other actions which are necessary in connection with the offering of said Contracts for sale and the operation of the Account in order to comply with the Securities Act of 1933 and the Securities Exchange Act of 1934 and other applicable federal laws, including the filing of any amendments to registration statements, any undertakings, and any applications for exemptions from applicable federal law as the officers of the Company shall deem necessary or appropriate; and Further, that the appropriate officers of the Company be, and they hereby are, authorized on behalf of the Account and on behalf of the Company to take any and all action they may deem necessary or advisable in order to sell the Contracts, including any registrations, filings and qualifications of the Company, its officers, agents and employees, and the Contracts under the insurance and securities laws of any of the states of the United States of America or other jurisdictions, and in connection therewith to prepare, execute, deliver and file all such applications, reports, covenants, resolutions, applications for exemptions, consents to service of process and other papers and instruments as may be required under such laws, and to take any and all further action which said officers or counsel of the Company may deem necessary or desirable (including entering into whatever agreements may be necessary) in order to maintain such registrations or qualifications for as long as said officers or counsel deem it to be in the best interests of the Account and the Company; and Further, that the President, the Vice-Presidents and the Secretary of the Company be, and they hereby are, each authorized in the names and on behalf of the Account and the Company to execute and file irrevocable written consents on the part of the Account and of the Company to be used in such states wherein such consents to service of process may be required under the insurance or securities laws therein in connection with said registration or qualification of the Contracts and to appoint the appropriate state official or such other person as may be allowed by said insurance or securities laws, agent of the Account and of the Company for the purpose of receiving and accepting process; and Further, that the President or a Vice-President each be, and is hereby authorized to execute such agreement or agreements as deemed necessary and appropriate with underwriters and distributors for the Contracts in connection with the establishment and maintenance of the Account or the design, administration, offer and sale of the Contracts; provided, however, that the Company is directed to finalize such agreements before effecting any registrations or filings of the Contracts or the Account; and Further, that the appropriate officers of the Company are hereby authorized to execute whatever agreement or agreements may be necessary or appropriate to enable the Account to invest in the specified securities as may be specified in the respective Contracts or otherwise required by law; and Further, that the appropriate officers of the Company are hereby authorized to execute and deliver all such documents and papers and to do or cause to be done all such acts and things as they may deem necessary or desirable to carry out the foregoing resolutions and the intent and purposes thereof; and Further, that the term "appropriate officers" as used herein, shall include all of the elected and appointed officers of the Company, either severally or individually, subject to any applicable resolutions of the Board of Directors dealing with signing authority for the Company. Dated at Englewood, /s/ W.K. Adam Colorado this 3rd W.K. Adam, Secretary day of April , 1997. EX-3 3 EXHIBIT 3 DISTRIBUTION AGREEMENT BY AND BETWEEN CHARLES SCHWAB & CO., INC. AND FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY TABLE OF CONTENTS Description SECTION 1. AVAILABLE CONTRACTS 2 1.1 Availability 2 1.2 Modification of Contracts; Suspension or Restriction of Sales 2 1.3 Reinsurance of Contracts 3 SECTION 2. CONTRACT DISTRIBUTION 3 2.1 Exclusive Appointments; Efforts; Independent Contractor 3 2.2 Registration of Associated Persons 4 2.3 Insurance Agent Licensing 5 2.4 Sales Agreements 5 2.5 Supervisory Responsibilities 6 2.6 Suitability Determinations 6 2.7 Marketing Materials 6 2.8 Non-marketing Materials 7 2.9 Banking Arrangements 8 2.10 Limitations on Authority 8 SECTION 3. RECORDKEEPING 9 3.1 Recordkeeping 9 SECTION 4. LEGAL COMPLIANCE 10 4.1 Securities Laws 10 4.2 Tax Laws 12 4.3 Insurance Laws and Other Laws 12 4.4 Notice of Certain Proceedings and Other Circumstances 14 4.5 Parties to Cooperate 15 4.6 Information About FIRST GREAT-WEST and SCHWAB 15 SECTION 5. COSTS AND EXPENSES 16 5.1 FIRST GREAT-WEST to Pay Employees 16 5.2 SCHWAB to Pay Employees 16 5.3 Each Party To Bear Own Costs 16 SECTION 6. INDEMNIFICATION 17 6.1 Indemnification by FIRST GREAT-WEST 17 6.2 Indemnification by SCHWAB 18 6.3 Limitation on Liability 20 6.4 Injunctive Relief 20 SECTION 7. TERM AND TERMINATION 20 7.1 Term 20 7.2 Events of Termination 20 7.3 Events of Default 22 7.4 Parties to Cooperate Respecting Termination 22 SECTION 8. CONFIDENTIALITY 22 SECTION 9. ARBITRATION 23 SECTION 10. BONDING AND INSURANCE 25 SECTION 11. NOTICES 25 SECTION 12. TRADEMARKS 25 SECTION 13. MISCELLANEOUS 27 13.1 Amendment 27 13.2 Non-Assignment 27 13.3 Governing Law 27 13.4 Survival of Provisions 27 13.5 Severability 27 13.6 Waiver 28 13.7 Right to Audit 28 13.8 Force Majeure 28 13.9 Entire Agreement 28 SCHEDULE 1 30 SCHEDULE 1.1 31 DISTRIBUTION AGREEMENT This Distribution Agreement (the "Agreement") is made as of the day of ________, 1997, by and between Charles Schwab & Co., Inc., a California corporation ("SCHWAB"), and First Great-West Life & Annuity Insurance Company, a New York insurance company ("FIRST GREAT-WEST"), on behalf of itself and each of its separate accounts listed on Schedule 1 hereto, as the same may be amended from time to time (each an "Account") (each, a "Party," collectively, the "Parties"). RECITALS WHEREAS, FIRST GREAT-WEST is a New York life insurance company duly licensed as required by applicable law to issue life insurance and annuity contracts identified on Schedule 1.1, as may be amended from time to time, (each a "Contract," collectively, the "Contracts") in certain states and other jurisdictions; and WHEREAS, FIRST GREAT-WEST, has developed or is developing Contracts, some of which shall be funded by segregated asset accounts; and WHEREAS, SCHWAB is licensed or will become licensed as required by applicable law to market such Contracts pursuant to applicable state law and is registered as a broker-dealer under the Securities Exchange Act of 1934 (the "1934 Act") and under the securities laws in all fifty (50) states, and is a member of the National Association of Securities Dealers, Inc. ("NASD"); and WHEREAS, FIRST GREAT-WEST has extensive experience in the operation of its insurance business and has trained personnel, equipment, and facilities for conducting its present and future insurance operations; and WHEREAS, SCHWAB has extensive experience in the operation of its business as a registered broker-dealer and has trained (and NASD-registered) personnel, equipment, and facilities for conducting its present and future broker-dealer operations; and WHEREAS, certain personnel of SCHWAB may engage, or deemed to be engaged, directly or indirectly, in the offering, selling, advertising or marketing of certain Contracts the interests under which are required to be registered under the Securities Act of 1933, as amended (the "1933 Act") ("registered Contracts"); the confirming of transactions under registered Contracts as required by the 1934 Act Rule 10b-10; the maintenance of records with respect to registered Contracts as required by 1934 Act Rules 17a-3 and 17a-4 or other SEC or NASD rules applicable to registered broker-dealers (all Distributor personnel engaged in these activities, as well as all other persons whom Section 3(a)(18) of the 1934 Act defines as associated persons of SCHWAB, are collectively referred to herein as "Associated Persons"); and WHEREAS, FIRST GREAT-WEST and SCHWAB desire to enter into an agreement to have SCHWAB act as the principal underwriter and/or insurance agent, as applicable, for the sale of the Contracts. NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and of the mutual expectations of benefit occurring from the activities herein contemplated, the Parties hereto agree as follows: SECTION 1. AVAILABLE CONTRACTS 1.1 Availability (a) SCHWAB shall have exclusive marketing and distribution rights for certain Contracts specifically identified in Schedule 1.1 (hereinafter, "Exclusive Contracts"). SCHWAB shall have non-exclusive marketing and distribution rights for all Contracts identified in Schedule 1.1 (hereinafter, "Other Contracts"). Schedule 1.1 may be amended from time to time as mutually agreed to in writing between the two Parties. The Parties have agreed that certain Contracts will be designed to be sold into the Internal Revenue Code Section 403(b), 457 and 401(k) markets and made available for distribution by SCHWAB and added to Schedule 1.1 when available. SCHWAB acknowledges that FIRST GREAT-WEST is currently marketing contracts similar to the Exclusive Contracts and may develop and market contracts in the future with similar terms to those contained in the Contracts. In no event may FIRST GREAT-WEST directly or indirectly develop, issue, market or otherwise promote any Contract that bears the name SCHWAB or any other proprietary SCHWAB tradenames, trademarks or service mark without the prior written approval of SCHWAB, except as permitted by and in accordance with Section 12.1 hereof. 1.2 Modification of Contracts; Suspension or Restriction of Sales (a) FIRST GREAT-WEST may modify the terms of any Contract, to the extent permitted or required by applicable law. Any modification, other than a modification required to be made to conform the Contracts to a change in applicable law, shall be approved by SCHWAB, which approval shall not be unreasonably withheld. SCHWAB may, from time to time, propose modifications to the terms of any Contract, and FIRST GREAT-WEST agrees to implement any such modification in a timely manner, subject to FIRST GREAT-WEST's approval, which shall not be unreasonably withheld. Prior to implementation of any modification, the Parties must mutually agree on such change or changes and agree as to who will bear the costs associated with such change. (b) Upon 180 days' prior written notice, FIRST GREAT-WEST may suspend or restrict the sale of any Contract in any state or other jurisdiction, FIRST GREAT-WEST will effect such withdrawal in accordance with all applicable law. FIRST GREAT-WEST reserves the right to immediately withdraw any fixed annuity contract (or portion thereof) with respect to future sales where the declared interest rate, as determined by FIRST GREAT-WEST's usual and customary business practices, would be below that Contract's declared minimum guaranteed interest rate. In addition, notwithstanding any provision herein to the contrary, FIRST GREAT-WEST may refuse to sell any Contract to any applicant for any reason so long as such refusal does not violate any applicable state insurance law. FIRST GREAT-WEST shall communicate the reasons for any refusal to SCHWAB. 1.3 Reinsurance of Contracts FIRST GREAT-WEST may reinsure any of the Contracts with a reinsurer of its choice at any time in accordance with applicable law. SECTION 2. CONTRACT DISTRIBUTION 2.1 Exclusive Appointments; Efforts; Independent Contractor (a) FIRST GREAT-WEST appoints SCHWAB, and SCHWAB accepts FIRST GREAT-WEST's appointment, as the exclusive principal underwriter, and, as applicable, exclusive insurance agent for the offer and sale of the Exclusive Contracts and as non-exclusive principal underwriter and insurance agent of the Other Contracts offered by SCHWAB to the public, during the term of this Agreement, in each state and other jurisdiction in which such Contracts may lawfully be offered and sold. Notwithstanding anything herein to the contrary, SCHWAB shall not act as, or be deemed to be, the principal underwriter of any Contract that is not registered under the 1933 Act and which appears on any of the Schedules attached hereto. (b) SCHWAB shall use all commercially reasonable efforts to offer the Contracts for sale and distribution, but shall be under no obligation to effectuate any particular amount of sales of Contracts. SCHWAB shall, however, provide FIRST GREAT-WEST in writing new product sales projections for the initial twelve (12) month period of this Agreement and every twelve (12) month period thereafter. The estimate should contain quarterly information for the period in question. The estimate should also provide sales estimates on a Contract by Contract basis, and include all projected premiums. FIRST GREAT-WEST acknowledges that SCHWAB currently sells, and may in the future sell, annuity contracts and/or life insurance policies issued by life insurance companies unaffiliated with FIRST GREAT-WEST. (c) SCHWAB shall at all times function as, and be deemed to be, an independent contractor. (d) Except as may be necessary to comply with the requirements of any applicable law or regulation, SCHWAB shall not, absent FIRST GREAT-WEST's consent, actively promote the replacement of any Contract or the redirection of the cash value of a Contract into any other product; provided, however, that FIRST GREAT-WEST's consent shall be presumed granted (i) upon the occurrence, with respect to FIRST GREAT-WEST, of any event described in Sections 7.2(a)(iii) or 7.2(b) hereof only to the extent of Contract owners in those jurisdictions in the events under 7.2(b)(ii) and (iii) or (ii) upon the failure of FIRST GREAT-WEST to cure a default pursuant to Section 7.3 hereof. "Actively promote" shall include, but not be limited to, mailings specifically sent to or conversations specifically held with Contract owners or licensed agents of SCHWAB which induce or attempt to induce a Contract owner to surrender the Contract and replace it with another product (other than a product offered by FIRST GREAT-WEST or it affiliates), or to direct premiums, cash values or deposits from a Contract to any other product (other than a product offered by FIRST GREAT-WEST or its affiliates). Notwithstanding the foregoing, in no event shall this provision prevent SCHWAB from concurrently or subsequently offering and selling to a Contract owner any non-insurance product, whether or not offered by FIRST GREAT-WEST or its affiliates. This provision shall survive the termination of this Agreement other than pursuant to Sections 7.2(a)(iii), 7.2(b) or 7.3 hereof. 2.2 Registration of Associated Persons (a) SCHWAB shall be responsible for ensuring, at its sole cost, that each Associated Person involved with the offer or sale of registered Contracts is duly registered and qualified pursuant to the 1934 Act, NASD regulations, and any other required securities regulatory body. (b) In connection with such registration, SCHWAB shall conduct such background investigations of the SCHWAB employees necessary to determine their qualifications, good character and moral fitness to offer and sell the Contracts. Such information shall be available to FIRST GREAT-WEST upon request. (c) SCHWAB shall continuously monitor the status of SCHWAB and each of SCHWAB's registered employees to ensure that they are and remain properly registered and qualified. 2.3 Insurance Agent Licensing (a) Neither SCHWAB nor any of its employees shall engage in any activities that would require insurance agent licensing in the state or jurisdiction where such activities are performed, unless and until SCHWAB and its employees are properly licensed to perform such services in the particular state or other jurisdiction. As used herein, "properly licensed" includes the filing of an appointment by FIRST GREAT-WEST, SCHWAB and/or other person when required by the laws or regulations of the applicable state or jurisdiction. (b) SCHWAB shall, from time to time, advise FIRST GREAT-WEST of the SCHWAB employees that it wishes FIRST GREAT-WEST to appoint as FIRST GREAT-WEST insurance agents. In that connection, SCHWAB shall conduct background investigations of the SCHWAB employees to determine their qualifications, good character and moral fitness to offer and sell the Contracts, and shall prepare and submit completed agent appointment forms for FIRST GREAT-WEST's approval. FIRST GREAT-WEST shall forward all approved agent appointment forms in a timely manner to the appropriate state insurance departments and pay all required appointment fees. (c) SCHWAB shall be responsible for ensuring that all SCHWAB employees engaged in the offer or sale of Contracts (whether or not registered with the SEC under the 1933 Act) are properly licensed and remain properly licensed under the insurance laws of the applicable states and other jurisdictions to sell the Contracts. In furtherance of this obligation, SCHWAB shall continuously monitor the status of SCHWAB's and each SCHWAB employee's insurance agent license and renewal in each state and jurisdiction in which the Contracts may be offered and sold. SCHWAB shall notify FIRST GREAT-WEST in a timely manner of any license not renewed. (d) SCHWAB agrees to undertake all actions necessary and to pay all costs to effect licensing of itself and its employees and renewals thereof as required for the business of this Agreement. FIRST GREAT-WEST agrees to take all actions necessary and to pay all costs to effect the appointment as insurance agents of SCHWAB and its employees and renewals thereof as required for the business of this Agreement. (e) FIRST GREAT-WEST, in its sole discretion, may refuse to appoint or renew the appointment of a SCHWAB employee as a FIRST GREAT-WEST insurance agent. In the event FIRST GREAT-WEST refuses to renew the appointment of a SCHWAB employee, it shall not act except upon ten (10) days prior written notice to SCHWAB. 2.4 Sales Agreements FIRST GREAT-WEST and SCHWAB may, from time to time, enter into separate written agreements ("Sales Agreements"), on such terms and conditions as they may determine to be not inconsistent with this Agreement, with one or more organizations that agree to participate in the distribution of the Contracts, provided, that such organizations, shall to the extent required by law, be both registered as a broker-dealer under the 1934 Act and a member of the NASD, and provided further, that such organizations and their agents or representatives soliciting applications for Contracts shall be properly licensed, registered or otherwise qualified to offer and sell the Contracts under the applicable insurance and other laws of each state or other jurisdiction in which FIRST GREAT-WEST is licensed to sell the Contracts. Such written agreements with other organizations shall be subject to approval by FIRST GREAT-WEST and shall incorporate terms and provisions establishing requirements and standards of conduct on the sale of the Contracts by the organization. 2.5 Supervisory Responsibilities (a) SCHWAB shall be responsible for training, monitoring and controlling the activities of SCHWAB employees involved in the offer and sale of the Contracts. FIRST GREAT-WEST shall participate in, and shall bear responsibility with respect to, such training, monitoring, and control to the extent required by applicable NASD rules, SEC laws, state insurance laws, or other applicable laws. (b) Notwithstanding the above, FIRST GREAT-WEST shall provide adequate training to SCHWAB supervisory personnel with respect to the Contracts. 2.6 Suitability Determinations SCHWAB agrees to establish written procedures that will require SCHWAB employees to review all Contract applications to determine that the Contracts are a "suitable" investment vehicle for the applicant. While not limited to the following, such written procedures must provide that a determination of suitability shall be based on information furnished to a SCHWAB employee after reasonable inquiry of such applicant concerning the applicant's investment objectives and financial situation. In no event shall Contracts be sold describing premiums as "vanishing" or Contracts as being paid up at a time other than the date described in the Contract itself. 2.7 Marketing Materials (a) SCHWAB shall have the responsibility for developing, printing, and distributing, at its sole cost, all marketing materials to be used in connection with the offer and sale of the Contracts. As used herein, "marketing materials" shall mean any "advertisement" or "sales literature," as those terms are defined in NASD Conduct Rule 2210(a), as amended from time to time, including any so-called "dealer only" materials, and including any material intended to be spoken in the solicitation of a Contract, such as telephone scripts, scripted answers to questions and slide show scripts but excluding Contract Prospectuses, registration statements, annual and semi-annual reports and other materials that are developed by FIRST GREAT-WEST. (b) SCHWAB shall submit definitive copies of all marketing materials to FIRST GREAT-WEST for its written approval, which shall not be unreasonably withheld, at least five (5) business days prior to printing or finalization. (c) SCHWAB shall, to the extent required, file in a timely manner all marketing materials with the NASD, the SEC, or any other securities regulatory body, as appropriate, and shall obtain any necessary approval of these regulatory bodies of such marketing materials. (d) FIRST GREAT-WEST shall, to the extent required by law, file in a timely manner all marketing materials with the various state insurance regulatory bodies, and shall obtain any necessary approval of these regulatory bodies of such marketing materials. 2.8 Non-marketing Materials (a) FIRST GREAT-WEST shall be responsible for preparing, printing in quantity and delivering to SCHWAB, at FIRST GREAT-WEST's sole cost: (i) all Contract forms, applications and related materials, (ii) all forms pertaining to the processing of premium payments, refunds and other monies, and (iii) all forms pertaining to transactions, claims, and other features available under the Contracts, including, but not limited to, full or partial surrenders, exchanges, transfers, loans, systematic purchases, death claims, changes in premium allocations, and changes in beneficiary. FIRST GREAT-WEST shall submit definitive copies of all materials to SCHWAB for its written approval, which shall not be unreasonably withheld, at least five (5) business days prior to printing or finalization. (b) SCHWAB shall be responsible for preparing, printing, and distributing, at its sole cost, all correspondence with Contract owners, except for correspondence or other communication prepared, printed, and distributed by FIRST GREAT-WEST. FIRST GREAT-WEST and SCHWAB agree that SCHWAB shall submit copies of all prototypes of correspondence, with all variations, and copies of all materials being mass mailed to Contract owners to FIRST GREAT-WEST for its written approval, which shall not be unreasonably withheld, at least five (5) business days prior to printing or finalization. (c) FIRST GREAT-WEST shall be responsible for preparing, printing, and distributing, or causing the same to be done, at its sole cost: (i) all Contract owner account statements, (ii) confirmations of Contract owner transactions required to be delivered to Contract owners pursuant to Section 4.1(g), and (iii) all documents described in Sections 4.1(b), 4.1(h) and 4.2(c)hereof. FIRST GREAT-WEST and SCHWAB agree that FIRST GREAT-WEST shall submit the form of all items (i) and (ii) and definitive copies of (iii) to SCHWAB for its written approval, which shall not be unreasonably withheld, at least five (5) business days prior to printing or finalization. FIRST GREAT-WEST acknowledges that these materials, with the exception of 4.2(c), are marketing materials and may be used as such by SCHWAB. (d) SCHWAB and FIRST GREAT-WEST agree that correspondence or other communication to any policyowner involving a complaint shall be submitted to the other for written approval prior to mailing or communicating with the policyowner. 2.9 Banking Arrangements (a) SCHWAB agrees to handle all premium payments or other monies that it receives in connection with the sale of the Contracts as a fiduciary for the benefit of FIRST GREAT-WEST. All such premium payments shall be the property of FIRST GREAT-WEST. (b) Premium payments may be received by either SCHWAB or FIRST GREAT-WEST. SCHWAB shall deposit and maintain any premium payments received by SCHWAB (whether such premium payments are received in the form of a check, pursuant to an authorization to wire transfer monies from a SCHWAB client's account, or in any other manner) in one or more segregated accounts maintained by FIRST GREAT-WEST in its name (or in the name of an Account) at one or more banks or other financial institutions, and in connection therewith SCHWAB shall: (i) send FIRST GREAT-WEST a copy of the deposit slip or wire transfer ticket by overnight mail or fax, and (ii) immediately deposit any monies received with an application into such depository account or accounts as designated from time to time by FIRST GREAT-WEST. FIRST GREAT-WEST shall be responsible for depositing any premium payments received at the offices of FIRST GREAT-WEST. 2.10 Limitations on Authority (a) SCHWAB and its employees shall have no authority to, and shall not: (i) add, alter, waive or discharge any Contract or application provision or Prospectus provision or represent that such can be done by FIRST GREAT-WEST or SCHWAB; (ii) extend the time of making any payments; (iii) alter or substitute FIRST GREAT-WEST's forms in any manner; (iv) give or offer to give, on behalf of FIRST GREAT-WEST, any tax or legal advice related to the purchase of a Contract; (v) guarantee the issuance of any Contract or the reinstatement of any lapsed Contract; or (vi) exercise any authority on behalf of FIRST GREAT-WEST other than that expressly conferred on SCHWAB or its employees by this Agreement. (b) FIRST GREAT-WEST and its employees shall have no authority to, and shall not (i) give or offer to give on behalf of SCHWAB, any tax or legal advice related to the purchase of a Contract, or (ii) exercise any authority on behalf of SCHWAB other than that expressly conferred on FIRST GREAT-WEST or its employees by this Agreement. SECTION 3. RECORDKEEPING 3.1 Recordkeeping (a) Each Party agrees to keep, at its principal office, all accounts, books and other records required by and in accordance with applicable federal and state law, including any state insurance laws, and the regulations of any regulatory body having jurisdiction over such accounts, books, and other records, including but not limited to Rules 31a-1 and 31a-2 under the Investment Company Act of 1940 (" 1940 Act") and Rules 17a-3 and 17a-4 under the 1934 Act. (b) Any and all accounts, books and other records of FIRST GREAT-WEST, the Accounts, and SCHWAB as may pertain to the Contracts and this Agreement shall be maintained so as to clearly and accurately disclose the nature and details of Contract transactions or any transactions related thereto. (c) Any accounts, books, and other records maintained by FIRST GREAT-WEST, at its expense, as agent for the benefit of SCHWAB shall conform to the requirements of Rules 17a-3 and 17a-4 under the 1934 Act, and as further amplified in SEC Release 34-8389. Furthermore, such accounts, books, and other records shall remain the property of SCHWAB, shall be surrendered promptly to SCHWAB at its request without charge, and shall at all times be subject to inspection by SCHWAB, the SEC pursuant to Section 17(a) of the 1934 Act and any other appropriate governmental agency. SCHWAB shall have responsibility for maintaining the records required of it by applicable law or regulations with respect to broker-dealer operations, although, in SCHWAB's discretion and at FIRST GREAT-WEST's expense, SCHWAB may use FIRST GREAT-WEST as its agent for this purpose. (d) Any accounts, books, and other records maintained by SCHWAB, at its expense, as agent for the benefit of FIRST GREAT-WEST or the Accounts, shall conform to the requirements of Rules 31a-1 and 31a-2 under the 1940 Act or such other SEC requirement as relates to non-1940 Act products or as required by state insurance regulators and conveyed to SCHWAB in writing. Furthermore, such accounts, books, and records shall remain the property of FIRST GREAT-WEST or the Accounts, shall be surrendered promptly to FIRST GREAT-WEST or the Accounts upon request by FIRST GREAT-WEST without charge, and shall at all times be subject to inspection by FIRST GREAT-WEST, whether acting on behalf of itself or the Accounts, the SEC pursuant to Section 31(b) of the 1940 Act and any other appropriate governmental agency. FIRST GREAT-WEST or the Accounts shall have responsibility for maintaining the records required of them by applicable law or regulations with respect to investment company operations, although, in FIRST GREAT-WEST's discretion and at the Distributor's expense, FIRST GREAT-WEST and the Accounts may use SCHWAB as their agent for this purpose. (e) Upon the written request of either Party to the other, or upon termination of this Agreement, a Party shall provide to the other without charge the originals, if the requesting Party is required to maintain such originals, or, at the requesting Party's cost, copies of the accounts, books and other records or electronic information representing the accounts, books and records if that is the format in which they are maintained. SECTION 4. LEGAL COMPLIANCE 4.1 Securities Laws (a) FIRST GREAT-WEST represents and warrants that: (i) interests in each Account funding any Contract or Contracts will be registered under the 1933 Act to the extent required by the 1933 Act, (ii) the Contracts will be duly authorized for issuance and sale in compliance with all applicable federal and state laws, including, without limitation, the 1933 Act, the 1934 Act, the 1940 Act and New York law, (iii) each Account is and will remain registered under the 1940 Act, to the extent required by the 1940 Act, (iv) each Account does and will comply in all material respects with the requirements of the 1940 Act and the rules thereunder, to the extent required, (v) each Account's 1933 Act registration statement relating to the Contracts, together with any amendments thereto, will at all times comply in all material respects with the requirements of the 1933 Act and the rules thereunder, (vi) FIRST GREAT-WEST will amend the registration statement for its Contracts under the 1933 Act and for its Accounts under the 1940 Act from time to time as required in order to effect the continuous offering of its Contracts or as may otherwise be required by applicable law, subject to its right to discontinue or withdraw from future sale any Contract pursuant to 1.2(b) of this Agreement, and (vii) each prospectus for the Contracts, including any statement of additional information (collectively, as the context requires, "Contract Prospectus") will at all times comply in all material respects with the requirements of the 1933 Act and the rules thereunder. (b) FIRST GREAT-WEST represents and warrants that it will prepare, print, and deliver, in a timely manner annual and semi-annual reports for the Accounts, Contract Prospectuses, voting instruction forms, as required, and related materials to all existing Contract owners, as appropriate. The costs of preparing and delivering the foregoing materials shall be borne by FIRST GREAT-WEST. (c) SCHWAB represents and warrants that it is duly registered with the SEC as a broker-dealer under the 1934 Act, that it is licensed as a broker-dealer in all 50 states, and that the activities of SCHWAB and its employees in connection with the offer and sale of Contracts shall be in compliance with applicable federal and state securities laws in all material respects. (d) SCHWAB agrees that neither it nor its employees shall make any representations concerning the Contracts, except those contained in or reasonably derived from the Contract Prospectus, registration statements, annual or semi-annual reports of the Accounts, or in other written materials prepared by or on behalf of FIRST GREAT-WEST. (e) SCHWAB shall reimburse FIRST GREAT-WEST for the cost of printing the Contract Prospectuses for persons other than existing Contract owners, and SCHWAB shall pay for all costs of delivering Contract Prospectuses to such persons. (f) SCHWAB agrees to execute such papers and do such acts and things as shall from time to time be reasonably requested by FIRST GREAT-WEST for the purpose of maintaining the registration of the Contracts under the 1933 Act and any Account under the 1940 Act and any applicable insurance regulatory authority. (g) SCHWAB, directly or through FIRST GREAT-WEST (at FIRST GREAT-WEST's expense), shall, upon or prior to the completion of each Contract transaction for which a confirmation is legally required, send a written confirmation to the Contract owner for each such transaction, in a form and manner which complies with the requirements of the 1934 Act, state laws and regulations, and the disclosure requirements of the NASD. Such confirmations shall be furnished to all Contract owners in accordance with securities laws, shall reflect the facts of the transaction, and, if applicable, shall show that they are being sent by FIRST GREAT-WEST on behalf of SCHWAB. The Parties agree that the form and the manner of use of confirmations in connection with transactions occurring in Contract accounts shall be supervised by SCHWAB. FIRST GREAT-WEST shall prepare and distribute such confirmations in accordance with SCHWAB's instructions. FIRST GREAT-WEST shall make no changes or variations in either the form or the manner of distribution of such confirmations without the written approval of SCHWAB and shall cause such confirmations to be issued as directed by SCHWAB and on behalf of SCHWAB. (h) FIRST GREAT-WEST represents and warrants that it shall prepare, print, deliver and file with the SEC or other appropriate regulatory body, or cause the same to be done, as required by law and in a timely manner, all registration statements, annual and semi-annual reports, proxies and related materials, and other documents relating to all underlying investment vehicles to which Contract owner premiums may be allocated. FIRST GREAT-WEST's obligations in this regard, and the allocation of expenses relating thereto, shall be delineated in a separate agreement with each underlying investment vehicle and SCHWAB, to which FIRST GREAT-WEST shall be a party. 4.2 Tax Laws (a) FIRST GREAT-WEST represents and warrants that the Contracts currently are treated as annuity, endowment, or life insurance contracts under applicable provisions of the Internal Revenue Code of 1986, as amended ("Code") and that it will make every effort to maintain such treatment; FIRST GREAT-WEST will notify SCHWAB immediately upon having a reasonable basis for believing that any of the Contracts have ceased to be so treated or that they might not be so treated in the future. (b) FIRST GREAT-WEST represents and warrants that each Account is a "segregated asset account" and that interests in each Account are offered exclusively through the purchase of or transfer into a "variable contract," within the meaning of such terms under Section 817 of the Code and the regulations thereunder to the extent required by law. FIRST GREAT-WEST will make every effort to continue to meet such definitional requirements, and it will notify SCHWAB immediately upon having a reasonable basis for believing that such requirements have ceased to be met or that they might not be met in the future. (c) FIRST GREAT-WEST agrees to administer the Contracts in a manner that will comply with all federal and state tax law. (d) FIRST GREAT-WEST agrees to prepare, print, and deliver to Contract owners, and, to the extent required, file with the Internal Revenue Service and any other appropriate regulatory body, all reports, forms, and other information necessary for FIRST GREAT-WEST to comply with applicable federal and state tax law. 4.3 Insurance Laws and Other Laws (a) FIRST GREAT-WEST shall take all actions necessary to the extent required by law to obtain and maintain all regulatory approvals required to issue the Contracts for sale in any states where the contracts are being offered for sale. (b) SCHWAB shall take all actions necessary to ensure that it and its employees are properly licensed and appointed by FIRST GREAT-WEST to sell insurance and annuities in the jurisdictions in which they are selling and shall execute such papers and do such acts and things as shall from time to time be reasonably requested by FIRST GREAT-WEST for the purpose of qualifying and maintaining qualification of the Contracts for sale under the applicable laws of any state. (c) FIRST GREAT-WEST represents and warrants that: (i) it is an insurance company duly organized, validly existing and in good standing under the laws of the State of New York and has full corporate power, authority and legal right to execute, deliver and perform its duties and comply with its obligations under this Agreement, (ii) it will legally and validly establish and maintain each Account as a segregated asset account under Section 4220of the New York Insurance Code and the regulations thereunder, and (iii) the Contracts comply in all material respects with all other applicable federal and state laws and regulations. (d) SCHWAB represents and warrants that it is a corporation duly organized, validly existing, and in good standing under the laws of the State of California and has full power, authority, and legal right to execute, deliver, and perform its duties and comply with its obligations under this Agreement. (e) SCHWAB represents and warrants that it is a member in good standing of the NASD and that it has obtained all approvals necessary to offer the Contracts and otherwise enter into and carry out all transactions contemplated by this Agreement, has obtained or will obtain all approvals, licenses, authorizations, orders or consents, and shall be duly registered and appointed or otherwise qualified under the securities and insurance laws of any state or other jurisdiction where offers or sales of the Contracts may be made. (f) SCHWAB agrees that it shall be bonded as required by all applicable laws and regulations. SCHWAB shall be responsible for carrying out its sales and underwriting obligations hereunder in continued compliance with applicable NASD Rules of Fair Practice and federal and state securities laws and regulations and state insurance laws and regulations. 4.4 Notice of Certain Proceedings and Other Circumstances (a) FIRST GREAT-WEST shall immediately notify SCHWAB of: (i) the issuance by any court or regulatory body of any stop order, cease and desist order, or other similar order with respect to any Contract or to any Account's registration statement under the 1933 Act relating to the Contracts or any Contract Prospectus, (ii) any request by the SEC or other regulatory body for any amendment to such registration statement or Contract Prospectus, (iii) the initiation of any proceeding materially affecting the offering or sale of the Contracts or the ability of FIRST GREAT-WEST to issue or sell such Contracts, (iv) any other actions or circumstances that may prevent the lawful offer or sale of any of the Contracts in any state. FIRST GREAT-WEST shall make every effort to prevent the issuance of any such stop order, cease and desist order or similar order and, if any such order is issued, to obtain the lifting thereof at the earliest possible time. (b) SCHWAB shall immediately notify FIRST GREAT-WEST of: (i) the issuance by any court or regulatory body of any order having a material effect with respect to SCHWAB's ability to perform its obligations hereunder, (ii) the initiation of any proceeding materially affecting the offering or sale of the Contracts or the ability of SCHWAB to sell such Contracts, and (iii) any other actions or circumstances that may prevent the lawful offer or sale of any of the Contracts in any state. (c) SCHWAB shall notify FIRST GREAT-WEST within three (3) business days if it or any of its officers, directors, employees or registered representatives who are licensed to sell insurance and are appointed by FIRST GREAT-WEST is or becomes subject to any proceedings or is sanctioned or suspended (i) by the SEC or NASD, (ii) by any court for securities, insurance or financial institution law violations, or (iii) by any state regulatory authority. (d) In the case of an oral or written consumer or regulatory agency complaint, SCHWAB and FIRST GREAT-WEST shall notify the other within three (3) business days of receipt and shall coordinate and fully cooperate in responding to such complaints. SCHWAB and FIRST GREAT-WEST shall develop procedures to coordinate, investigate and respond to such complaints. 4.5 Parties to Cooperate SCHWAB and FIRST GREAT-WEST shall cooperate fully in any insurance or securities regulatory examination, investigation, or proceeding or any judicial proceeding with respect to FIRST GREAT-WEST, SCHWAB, and their respective affiliates, agents and representatives to the extent that such examination, investigation, or proceeding arises in connection with Contracts distributed under this Agreement. SCHWAB and FIRST GREAT-WEST shall furnish applicable federal and state regulatory authorities with any information or reports in connection with its services or sales under this Agreement, which authorities may lawfully request in order to ascertain whether FIRST GREAT-WEST or SCHWAB sales and operations are being conducted in a manner consistent with any applicable law or regulations. The Parties shall, at least 10 business days prior to provision of such information, notify the other to enable that Party, if it so desires, to interpose any legal objections to provision of the reports or information. 4.6 Information About FIRST GREAT-WEST and SCHWAB (a) FIRST GREAT-WEST shall provide to SCHWAB or its designated agent at least one complete copy of all SEC registration statements, Contract Prospectuses, reports, any required voting instruction solicitation material, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to each Account or the Contracts, at least five (5) business days prior to the filing of such document with the SEC or other regulatory authorities for approval. (b) Neither FIRST GREAT-WEST nor any of its affiliates will give any information or make any representations or statements on behalf of or concerning SCHWAB or its affiliates in connection with the sale of the Contracts other than (i) the information or representations contained in the registration statement, including the Contract Prospectus contained therein, as such registration statement and Prospectus may be amended from time to time; or (ii) in reports or voting instruction solicitation materials for the Accounts; or (iii) in marketing material prepared by SCHWAB, except with the express written permission of SCHWAB. (c) Except with the express written permission of FIRST GREAT-WEST, neither SCHWAB nor any of its affiliates, officers or employees will give any information or make any representations or statements on behalf of or concerning FIRST GREAT-WEST or its affiliates or the Contracts or Accounts, in connection with the sale of the Contracts other than (i) the information or representations contained in the Contracts, the registration statement, including the Contract Prospectus contained therein, as such registration statement and Prospectus may be amended from time to time, or the Prospectuses of the underlying funds; or (ii) in reports or voting instruction solicitation materials for the Accounts; or (iii) in marketing material or other material approved or developed by FIRST GREAT-WEST. SECTION 5. COSTS AND EXPENSES 5.1 FIRST GREAT-WEST to Pay Employees FIRST GREAT-WEST shall have the responsibility for paying any compensation due its employees. FIRST GREAT-WEST specifically agrees to indemnify, hold harmless and defend SCHWAB against any and all expense, cost, causes of action, liability, loss or damage, including reasonable attorneys' fees, resulting or arising from or related to any claim against SCHWAB for compensation allegedly owed to a FIRST GREAT-WEST employee. FIRST GREAT-WEST specifically agrees that it shall not represent to any employee, broker-dealer, or registered representative that any compensation or fees are payable to them from SCHWAB. 5.2 SCHWAB to Pay Employees SCHWAB shall have the responsibility for paying any compensation due its employees. SCHWAB specifically agrees to indemnify, hold harmless and defend FIRST GREAT-WEST against any and all expense, cost, causes of action, liability, loss or damage, including reasonable attorneys' fees, resulting or arising from or related to any claim against FIRST GREAT-WEST for compensation allegedly owed to a SCHWAB employee. SCHWAB specifically agrees that it shall not represent to any employee, broker-dealer, or registered representative that any compensation or fees are payable to them from FIRST GREAT-WEST. 5.3 Each Party To Bear Own Costs Except as otherwise expressly provided, each Party to this Agreement shall bear all expenses of fulfilling its duties and obligations hereunder. SECTION 6. INDEMNIFICATION 6.1 Indemnification by FIRST GREAT-WEST (a) FIRST GREAT-WEST shall indemnify and hold harmless SCHWAB against any loss, liability, claim, damage or expense (including the reasonable cost of investigating or defending any alleged loss, liability, claim, damage or expense, and reasonable counsel fees incurred in connection therewith) arising by reason of any person's acquiring any Contract, which may be based upon any federal or state securities act, or on any other statute or at common law, (i) on the ground that the Contract, offering document, registration statement or related Contract Prospectus, as from time to time amended and supplemented, or the annual or interim reports to Contract owners, any published marketing materials or communications with any Contract owner or prospective Contract owner concerning the Contract, include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, if such statement or omission was made in reliance upon, and in conformity with, information furnished by or on behalf of FIRST GREAT-WEST to SCHWAB; or (ii) on the ground that FIRST GREAT-WEST, its employees, officers, or directors, failed to comply with any applicable securities or other laws and regulations in connection with its rendering of Contract issue, recordkeeping, confirmation or other services under this Agreement; or (iii) on the ground of FIRST GREAT-WEST's negligence or misconduct, or that of FIRST GREAT-WEST's employees, officers, or directors, in the performance of its duties hereunder, or breach by FIRST GREAT-WEST of any representation or warranty hereunder. The indemnities in this Section 6.1 shall, upon the same terms and conditions, extend to and inure to the benefit of each director, officer and employee of SCHWAB and any person controlling or controlled by SCHWAB within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act. (b) In no case is the indemnity of FIRST GREAT-WEST in favor of SCHWAB and any such controlling or controlled persons to be deemed to protect SCHWAB or any such controlling or controlled persons thereof against any liability to FIRST GREAT-WEST, or the Accounts or its Contract owners to which SCHWAB or any such controlling or controlled persons would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of reckless disregard of its obligations and duties under this Agreement. In addition, in no case is FIRST GREAT-WEST to be liable under its indemnity agreement contained in Section 6.1(a) with respect to any claim made against SCHWAB or any such controlling or controlled persons, unless SCHWAB or such controlling or controlled persons, as the case may be shall have notified FIRST GREAT-WEST in writing by fax or overnight mail within two (2) days after the summons or other first legal process giving information of the nature of the claim shall have been served upon SCHWAB or such controlling or controlled persons (or after SCHWAB or such controlling or controlled persons shall have received notice of such service on any designated agent), but failure to notify FIRST GREAT-WEST of any such claim shall not relieve FIRST GREAT-WEST from any liability which it may have to the person against whom such action is brought otherwise than on account of its indemnity agreement contained in this paragraph. FIRST GREAT-WEST will be entitled to participate at its own expense in the defense, or, if it so elects, to assume the defense of any suit brought to enforce any such liability, but if FIRST GREAT-WEST elects to assume the defense, such defense shall be conducted by counsel chosen by it and satisfactory to SCHWAB or such controlling or controlled person or persons, defendant or defendants in the suit. In the event FIRST GREAT-WEST elects to assume the defense of any such suit and retains such counsel, SCHWAB or such controlling or controlled person or persons, defendant or defendants in the suit, shall bear the fees and expense of any additional counsel retained by SCHWAB or such controlling or controlled person or persons, but, in case FIRST GREAT-WEST does not elect to assume the defense of any such suit, it will reimburse SCHWAB or such controlling or controlled person or persons, defendant or defendants in the suit, for the reasonable fees and expense of any counsel retained by them. FIRST GREAT-WEST shall promptly notify SCHWAB of the commencement of any litigation or proceedings against FIRST GREAT-WEST or any of its officers, directors, employees or agents in connection with the issuance or sale of the Contracts. 6.2 Indemnification by SCHWAB (a) SCHWAB shall indemnify and hold harmless FIRST GREAT-WEST and the Accounts against any loss, liability, claim, damage or expense (including the reasonable cost of investigating or defending any alleged loss, liability, claim, damage or expense and reasonable counsel fees incurred in connection therewith) arising by reason of any person's acquiring any Contract, which may be based upon any federal or state securities act, or on any other statute or at common law: (i) on the ground that the Contract, offering document, registration statement or related Contract Prospectus, as from time to time amended and supplemented, or the annual or interim reports to Contract owners, any published marketing materials or communications with any Contract owner or prospective Contract owner concerning the Contract, include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, if such statement or omission was made in reliance upon, and in conformity with, information furnished in connection therewith by or on behalf of SCHWAB to FIRST GREAT-WEST; or (ii) on the ground that SCHWAB, its employees, officers or directors failed to comply with any applicable securities or other laws and regulations in connection with its rendering of Contract issue, recordkeeping, confirmation or other services under this Agreement; or (iii) on the ground of SCHWAB's negligence or misconduct, or that of SCHWAB's employees, officers or directors, in the performance of its duties hereunder, or breach of any representation or warranty hereunder. The indemnities in this Section 6.2 shall, upon the same terms and conditions, extend to and inure to the benefit of each director, officer and employee of FIRST GREAT-WEST and any person controlling or controlled by FIRST GREAT-WEST within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act. (b) In no case is the indemnity of SCHWAB in favor of FIRST GREAT-WEST and any such controlling or controlled persons to be deemed to protect FIRST GREAT-WEST or any such controlling or controlled persons thereof against any liability to SCHWAB to which FIRST GREAT-WEST or any such controlling or controlled persons would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of reckless disregard of its obligations and duties under this Agreement. In addition, in no case is SCHWAB to be liable under its indemnity agreement contained in Section 6.2(a) with respect to any claim made against FIRST GREAT-WEST or any such controlling or controlled persons, unless FIRST GREAT-WEST or such controlling or controlled persons, as the case may be shall have notified SCHWAB in writing within two (2) days after the summons or other first legal process giving information of the nature of the claim shall have been served upon FIRST GREAT-WEST or such controlling or controlled persons (or after FIRST GREAT-WEST or such controlling or controlled persons shall have received notice of such service on any designated agent), but failure to notify SCHWAB of any such claim shall not relieve SCHWAB from any liability which it may have to the person against whom such action is brought otherwise than on account of its indemnity agreement contained in this paragraph. SCHWAB will be entitled to participate at its own expense in the defense, or, if it so elects, to assume the defense of any suit brought to enforce any such liability, but if SCHWAB elects to assume the defense, such defense shall be conducted by counsel chosen by it and satisfactory to FIRST GREAT-WEST or such controlling or controlled person or persons, defendant or defendants in the suit. In the event SCHWAB elects to assume the defense of any such suit and retain such counsel, FIRST GREAT-WEST or such controlling or controlled person or persons, defendant or defendants in the suit, shall bear the fees and expense of any additional counsel retained by FIRST GREAT-WEST or such controlling or controlled person or persons, but, in case SCHWAB does not elect to assume the defense of any such suit, it will reimburse FIRST GREAT-WEST or such controlling or controlled person or persons, defendant or defendants in the suit, for the reasonable fees and expense of any counsel retained by them. SCHWAB shall promptly notify FIRST GREAT-WEST of the commencement of any litigation or proceedings against SCHWAB or any of its officers, directors, employees or agents in connection with the issuance or sale of the Contracts. 6.3 Limitation on Liability In no event shall either Party under this Agreement be liable for lost profits or for exemplary, special, punitive or consequential damages alleged to have been sustained by the other Party, as opposed to a third party. 6.4 Injunctive Relief The Parties each agree that monetary damages may be an inadequate remedy in the event of a breach by either Party of any of the covenants in this Agreement, and that any such breach by a Party may cause the other Party great and irreparable injury and damage. Accordingly, nothing in this Agreement shall limit a Party's right to obtain equitable relief when appropriate. SECTION 7. TERM AND TERMINATION 7.1 Term This Agreement shall be effective as of the date first above written and shall remain in full force and effect thereafter, subject to Section 7.2 below. 7.2 Events of Termination (a) In addition to the provisions of Section 7.3, this Agreement shall terminate at either Party's option, without penalty: (i) with or without cause, on not less than 180 days written notice to the other Party; (ii) upon the mutual written consent of the Parties; (iii) upon written notice of one Party to the other in the event of bankruptcy or insolvency of the Party to which notice is given; or (b) This Agreement shall terminate at the option of SCHWAB, in the event of (i) fraud, misrepresentation, conversion or unlawful withholding of funds by FIRST GREAT-WEST; (ii) the dissolution or disqualification of FIRST GREAT-WEST to do business under any applicable state or federal law where FIRST GREAT-WEST's ability to perform is materially impaired; however, such termination shall extend only to the jurisdiction(s) where FIRST GREAT-WEST is prohibited from doing business; (iii) the suspension or revocation of any material license or permit held by FIRST GREAT-WEST by the appropriate governmental agency or authority; however, such termination shall extend only to the jurisdiction(s) where FIRST GREAT-WEST is prohibited from doing business; (iv) the sale (without the prior written consent of SCHWAB, which consent shall not be unreasonably withheld) of the FIRST GREAT-WEST business relating to the Contracts, which sale is to an unaffiliated person or entity, whether by merger, consolidation, or sale of substantially all of FIRST GREAT-WEST's assets or stock related to the Contracts, during the term of, and any extension of, this Agreement; (v) upon institution of formal proceedings against FIRST GREAT-WEST by the NASD, SEC, or any other regulatory body regarding FIRST GREAT-WEST's duties under this Agreement, the sale of the Contracts, or the operation of any Account, which would materially impair the marketability of the Contracts, provided that such proceedings result in a finding of material wrongdoing by FIRST GREAT-WEST, or which result in disqualification from continued membership with the NASD or registration with the SEC; or (vi) any termination at the option of SCHWAB of that certain Administration Agreement of even date herewith between FIRST GREAT-WEST and SCHWAB (the "Administration Agreement") pursuant to Section 7.2(a)(iii), 7.2(b)(i)-(iv), or 7.3 of the Administration Agreement. (c) This Agreement shall terminate at the option of FIRST GREAT-WEST, in the event of: (i) fraud, misrepresentation, conversion or unlawful withholding of funds by SCHWAB; (ii) the dissolution or disqualification of SCHWAB to do business under any applicable state or federal law where SCHWAB's ability to perform is materially impaired; however, such termination shall extend only to the jurisdiction(s) where SCHWAB is prohibited from doing business; (iii) the suspension or revocation of any material license or permit held by SCHWAB by the appropriate governmental agency or authority; however, such termination shall extend only to the jurisdiction(s) where SCHWAB is prohibited from doing business; (iv) the sale (without the prior written consent of FIRST GREAT-WEST, which consent shall not be unreasonably withheld) of SCHWAB's business to an unaffiliated person or entity, whether by merger, consolidation, or sale of substantially all of SCHWAB's assets or stock or otherwise, during the term of, and any extension of, this Agreement; (v) upon institution of formal disciplinary proceedings against SCHWAB by the NASD, SEC, or any other regulatory body, which would materially impair the marketability of the Contracts, provided that such proceedings result in a finding of material wrongdoing by SCHWAB, or which result in disqualification from continued membership with the NASD or registration with the SEC; or (vi) any termination at the option of FIRST GREAT-WEST of the Administration Agreement pursuant to Section 7.2(a)(iii), 7.2(c)(i)-(iv), or 7.3 of the Administration Agreement. 7.3 Events of Default If either Party breaches this Agreement or is in default in the performance of any of its duties and obligations hereunder (the "defaulting Party"), the non-defaulting Party may give written notice thereof to the defaulting Party, and if such breach or default is not remedied within 90 days after such written notice is given, then the non-defaulting Party may terminate this Agreement by giving 90 days written notice of such termination to the defaulting Party. 7.4 Parties to Cooperate Respecting Termination The Parties agree to cooperate and give reasonable assistance to one another in effecting an orderly transition following termination. SECTION 8. CONFIDENTIALITY Subject to the requirements of legal process and regulatory authority, each Party shall treat as confidential (a) the identity of existing or prospective Contract owners and the investment managers enrolled in SCHWAB's Financial Advisor Service Program ("investment managers"), (b) any financial or other information provided by existing or prospective Contract owners or investment managers, and (c) any other information reasonably identified as confidential in writing by any other Party hereto (collectively "confidential information"). Except as permitted by this Agreement, no Party shall disclose, disseminate or utilize any confidential information without the express written consent of the affected Party until such time as such information may come into the public domain, except as permitted by this Agreement or as otherwise necessary to service the Contracts and/or respond to appropriate regulatory authorities. Each Party shall take all reasonable precautions to prevent the unauthorized disclosure of any confidential information. Nothing in this Section 8 shall prevent SCHWAB from using the confidential information pertaining to existing or prospective Contract owners for marketing purposes. In no event shall confidential information pertaining to existing or prospective Contract owners be furnished by FIRST GREAT-WEST to any other company or person (except as required by law or regulation) or be used to solicit sales of any kind, including but not limited to any other products, securities or services for a period of two years following termination of this Agreement. Without limiting the foregoing, no Party shall disclose any information that another Party reasonably considers to be proprietary. For purposes of this Agreement, proprietary information includes, but is not limited to, computer system and client information. The intent of this Section 8 is that no Party or any affiliate thereof shall utilize, or permit to be utilized, its knowledge of the other Party that is derived as a result of the relationship created by this Agreement and any related agreements, except to the extent necessary by the terms of this Agreement or the related agreements. SECTION 9. ARBITRATION Any controversy or claim arising out of or relating to this Agreement, or the breach hereof, shall be settled by arbitration under the rules of the NASD in effect at that time. If the NASD refuses jurisdiction, or the Parties mutually agree in writing, the arbitration procedure described herein shall be used. In either event, the decision of the arbitrator(s) is final and judgment upon the award rendered may be entered in any court having jurisdiction thereof. To initiate arbitration, either FIRST GREAT-WEST or SCHWAB shall notify the other Party in writing of its desire to arbitrate, stating the nature of its dispute and the remedy sought. The Party to which the notice is sent shall respond to the notification in writing within ten (10) days of its receipt. The arbitration hearing shall be before a panel of three arbitrators, each of whom must be (1) a present or former officer of a life insurance or reinsurance company and/or (2) an officer and principal of a registered Broker-Dealer. The panel must contain at least one representative from each of (1) and (2). An arbitrator may not be a present or former director, officer, employee, attorney, or consultant of FIRST GREAT-WEST or SCHWAB or either's affiliates. FIRST GREAT-WEST and SCHWAB shall each name five (5) candidates to serve as an arbitrator. FIRST GREAT-WEST and SCHWAB shall each choose one candidate from the other Party's list, and these two candidates shall serve as the first two arbitrators. FIRST GREAT-WEST and SCHWAB shall each present their initial lists of five (5) candidates by written notification to the other Party within twenty-five (25) days of the date of the mailing of the notification initiating the arbitration. Any subsequent additions to the list which are required shall be presented within ten (10) days of the date the naming Party receives notice that a candidate that has been chosen declines to serve. The two arbitrators shall then select the third arbitrator from the eight (8) candidates remaining on the lists of FIRST GREAT-WEST and SCHWAB within fourteen (14) days of the acceptance of their positions as arbitrators. If the two arbitrators cannot agree on the choice of a third, then this choice shall be referred back to the Parties. FIRST GREAT-WEST and SCHWAB shall take turns striking the name of one of the remaining candidates from the initial eight (8) candidates until only one candidate remains. If the candidate so chosen shall decline to serve as the third arbitrator, the candidate whose name was stricken last shall be nominated as the third arbitrator. This process shall continue until a candidate has been chosen and accepted. This candidate shall serve as the third arbitrator. The first turn at striking the name of a candidate shall belong to the Party that is responding to the other Party's initiation of the arbitration. Once chosen, the arbitrators are empowered to decide all substantive and procedural issues by a majority of votes. It is agreed that each of the three arbitrators should be impartial regarding the dispute. Therefore, at no time will either Party contact or otherwise communicate with any person who is to be or who has been designated as a candidate to serve as an arbitrator concerning the dispute, except upon the basis of jointly drafted communications provide by both Parties to inform those candidates actually chosen as arbitrators of the nature and facts of the dispute. Likewise, any written or oral arguments provided to the arbitrators concerning the dispute shall be coordinated with the other Party and shall be provided simultaneously to the other Party or shall take place in the presence of the other Party. Further, at no time shall any arbitrator be informed that the arbitrator has been named or chosen by one Party or the other. The arbitration hearing shall be held on a date fixed by the arbitrators. In no event shall this date be later than six (6) months after the appointment of the third arbitrator. As soon as possible, the arbitrators shall establish pre-arbitration procedures as warranted by the facts and issues of the particular case. At least ten (10) days prior to the arbitration hearing, each Party shall provide the other Party and the arbitrators with a detailed statement of the facts and arguments it will present at the arbitration hearing. The arbitrators may consider any relevant evidence; they shall give the evidence such weight as they deem it entitled to after consideration of any objections raised concerning it. The Party initiating the arbitrations shall have the burden of proving its case by a preponderance of the evidence. Each Party may examine any witnesses who testify at the arbitration hearing, the arbitrators shall apportion the costs of arbitration, which shall include but not be limited to their own fees and expenses, as they deem appropriate. SECTION 10. BONDING AND INSURANCE Each Party shall maintain sufficient fidelity bond coverage (including coverage for larceny and embezzlement) and errors and omissions insurance coverage as may be required by applicable law or as such Party deems necessary in light of its obligations under this Agreement. SECTION 11. NOTICES Any notice required or permitted to be sent under this Agreement shall be given to the following persons at the following addresses and facsimile numbers, or such other persons, addresses or facsimile numbers as the Party receiving such notices or communications may subsequently direct in writing: FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY 8515 East Orchard Road Englewood, CO 80111 303-689-4356 Dennis Low CHARLES SCHWAB & CO., INC. Office of Corporate Counsel 101 Montgomery Street San Francisco, CA 94104 415-636-6100 Mary Templeton SECTION 12. TRADEMARKS 12.1 SCHWAB owns all right, title and interest in and to the name, trademark and service mark "SCHWAB", and SCHWAB owns (or will own prior to use) all other tradenames, trademarks and service marks that may be used by SCHWAB in performing SCHWAB's obligations under this Agreement (collectively with the "SCHWAB" name, trademark and service mark, the "SCHWAB licensed marks" or the "licensor's licensed marks"). SCHWAB hereby grants to FIRST GREAT-WEST (including its affiliates) a non-exclusive license to use the SCHWAB licensed marks in connection with FIRST GREAT-WEST's performance of the services contemplated under this Agreement subject to the terms and conditions set forth in this Section 12. 12.2 FIRST GREAT-WEST owns all right, title and interest in and to the name, trademark and service mark "First Great-West Life & Annuity Insurance Company", and FIRST GREAT-WEST owns (or will own prior to use) all other tradenames, trademarks and service marks that may be used by FIRST GREAT-WEST in performing FIRST GREAT-WEST's obligations under this Agreement (collectively with the "First Great-West Life & Annuity Insurance Company" name, trademark and service mark, the "FIRST GREAT-WEST licensed marks" or the "licensor's licensed marks"). FIRST GREAT-WEST hereby grants to SCHWAB (including its affiliates) a non-exclusive license to use the FIRST GREAT-WEST licensed marks in connection with SCHWAB's performance of the services contemplated by this Agreement, subject to the terms and conditions set forth in this Section 12. 12.3 The grant of license by SCHWAB and FIRST GREAT-WEST (each, a "licensor") to the other and affiliates thereof (the "licensees") shall terminate automatically when the Contracts cease to be outstanding or by either Party at its election upon termination of this Agreement. Upon automatic termination, each licensee shall cease to use a licensor's licensed marks. Upon FIRST GREAT-WEST's elective termination of this license, SCHWAB (including its affiliates) shall immediately cease to distribute promotional, sales or advertising material relating to any Contract and shall likewise cease any activity that suggests that it has any right under the FIRST GREAT-WEST licensed marks or that it has any association with FIRST GREAT-WEST or any affiliate of FIRST GREAT-WEST in connection with any such Contracts. Similarly, upon SCHWAB's elective termination of this license, FIRST GREAT-WEST (including its affiliates) shall cease to issue as soon as reasonably practicable, any new Contracts bearing any of the SCHWAB licensed marks and shall likewise cease any activity which suggests that it has any right under any of the SCHWAB licensed marks or that it has any association with SCHWAB or any affiliate of SCHWAB, except that FIRST GREAT-WEST shall have the right to administer any outstanding Contracts bearing any of the SCHWAB licensed marks and in connection therewith to use the SCHWAB licensed marks. 12.4 Notwithstanding any provision in this Agreement to the contrary, a licensee shall obtain the prior written approval of the licensor for the public release by such licensee of any materials bearing the licensor's licensed marks. The licensor's approval shall not be unreasonably withheld. 12.5 During the term of this grant of license, a licensor may request that a licensee submit samples of any materials bearing any of the licensor's licensed marks that were previously approved by the licensor but, due to changed circumstances, the licensor may wish to reconsider, or that were not previously approved in the manner set forth above. If, on the reconsideration or on initial review, respectively, any such samples fail to meet with the written approval of the licensor, then the licensee shall immediately cease distributing such disapproved materials. The licensor's approval shall not be unreasonably withheld. The licensee shall obtain the prior written approval of the licensor for the use of any new materials developed to replace the disapproved materials, in the manner set forth above. 12.6 Each licensee hereunder: (i) acknowledges and stipulates that the licensor's licensed marks are valid and enforceable trademarks and/or service marks and that such licensee does not own the licensor's licensed marks and claims no rights therein other than as a licensee under this Agreement; (ii) agrees never to contend otherwise in legal proceedings or in other circumstances; and (iii) acknowledges and agrees that the use of the licensor's licensed marks pursuant to this grant of license shall inure to the benefit of the licensor. SECTION 13. MISCELLANEOUS 13.1 Amendment This Agreement may be amended at any time by a writing executed by the Parties. 13.2 Non-Assignment This Agreement shall not be assigned by either Party without the prior written consent of the other Party, provided, however, that FIRST GREAT-WEST or SCHWAB may subcontract or assign provision of services to affiliates or subsidiaries, including Financial Administrative Services Corporation. Such assignment or subcontracting does not relieve FIRST GREAT-WEST or SCHWAB of any responsibility with regard to its obligations under this Agreement for such services. 13.3 Governing Law This Agreement shall be interpreted in accordance with and governed by the laws of the State of New York. 13.4 Survival of Provisions Sections 2.1(d), 3.1, 4.4, 4.5, 4.6, 5, 6, 8, 9, 10, 12, and 13.7 shall survive termination of this Agreement. 13.5 Severability Should any provision of this Agreement be held or made invalid by a court decision, statute, rule, or otherwise, the remainder of this Agreement shall not be affected thereby. 13.6 Waiver Any failure or delay by either Party to enforce at any time any of the provisions of this Agreement, or to exercise any right or option which is herein provided, or to require at any time the performance of any of the provisions hereof, shall in no way be construed to be a waiver of such provision of this Agreement. 13.7 Right to Audit FIRST GREAT-WEST, its employees or authorized representatives may audit, inspect and examine at reasonable times, during regular business hours and with at least 24 hours prior notice, all books and records of SCHWAB and its agents of all transactions arising under this Agreement. FIRST GREAT-WEST agrees to limit its review of the books and records to the extent necessary and as often as necessary to fulfill all contractual obligations to the holders of Contracts, to comply with all legal and regulatory requirements, to meet the requirements of FIRST GREAT-WEST auditors and to ensure compliance with this Agreement. SCHWAB, its employees or authorized representatives may audit, inspect and examine at reasonable times, during regular business hours and with at least 24 hours prior notice, all books and records of FIRST GREAT-WEST and its agents of all transactions arising under this Agreement. SCHWAB agrees to limit its review of the books and records to the extent necessary and as often as necessary to fulfill all contractual obligations to the holders of Policies, to comply with all legal and regulatory requirements, to meet the requirements of SCHWAB auditors and to ensure compliance with this Agreement. 13.8 Force Majeure Neither Party shall be liable for damages due to delay or failure to perform any obligation under this Agreement where such delay or failure results directly or indirectly from circumstances beyond the control and without the fault or negligence of such Party. 13.9 Entire Agreement This Agreement shall be the sole and only agreement between FIRST GREAT-WEST and SCHWAB regarding the distribution of the Contracts, and it supersedes all prior and contemporaneous agreements regarding the distribution of the Contracts. This Agreement may not be amended, supplemented, or modified, except as expressly permitted herein, without the written agreement of the Parties. IN WlTNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first written above. CHARLES SCHWAB & CO., INC. FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY BY: _/s/ Jeff Benton _________ BY:_/s/ Dennis Low_________________ Jeff Benton Dennis Low Vice President, Annuities & Life Insurance Executive Vice President, Financial Services BY: _/s/ D.C. Lennox______________ D.C. Lennox Sr. Vice President, General Counsel and Secretary SCHEDULE 1 SEPARATE ACCOUNTS OF FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY Variable Annuity-1 Series Account, a separate account established under New York law on January 15, 1997. Fixed Annuity Account, a separate account established under New York law on January 15, 1997. SCHEDULE 1.1 CONTRACTS AVAILABLE FOR OFFER AND SALE 1. The Schwab Variable Annuity. Form J434. Exclusive marketing. Registered with SEC. Contributions may be allocated among a number of investment options. The value of the contributions allocated to the variable annuity option will vary according to the investment experience of the investment options. Also, contributions may be allocated to one or more guaranteed certificate periods. If, prior to maturity of a certificate, the Contract is surrendered in full or in part or amounts allocated to a certificate are transferred, a market value adjustment to the Contract value will be made. The market value adjustment may be a positive or negative adjustment based on the results of an indexed calculation. This product may be issued as an IRA or non-qualified contract. 2. The Schwab Fixed Annuity. Form J424. Flexible Premium Deferred Market Value Adjusted Annuity. Exclusive marketing. Registered with SEC. Contributions may be allocated to one or more guaranteed certificate periods. If, prior to maturity of a certificate, the Contract is surrendered in full or in part or amounts allocated to a certificate are transferred, a market value adjustment to the Contract value will be made. The market value adjustment may be a positive or negative adjustment based on the results of an indexed calculation. This product may be issued as an IRA or non-qualified contract. 3. Single Premium Immediate Annuity. Non-exclusive marketing. Not registered with SEC. Form numbers J260, J261. schwab1stgwl&a 31 EX-4 4 EXHIBIT 4 First Great-West Life & Annuity Insurance Company A Stock Company 125 Wolf Road Albany, NY 12205 FLEXIBLE PREMIUM FIXED AND VARIABLE DEFERRED GROUP ANNUITY PLEASE READ THIS ANNUITY CERTIFICATE CAREFULLY. PAYMENTS AND VALUES BASED ON THE FIXED ACCOUNT VALUE MAY BE SUBJECT TO A MARKET VALUE ADJUSTMENT, AND MAY RESULT IN POSITIVE AND NEGATIVE ADJUSTMENTS TO AMOUNTS PAYABLE DUE TO SURRENDERS AND TRANSFERS, AMOUNTS APPLIED TO PURCHASE AN ANNUITY. THE MARKET VALUE ADJUSTMENT IS APPLIED TO THE AMOUNT OF TRANSFER OR WITHDRAWAL REQUESTED AND A NEGATIVE ADJUSTMENT MAY CAUSE THE AMOUNT TRANSFERRED OR WITHDRAWN TO BE LESS THAN THE AMOUNT REQUESTED. THE MARKET VALUE ADJUSTMENT WILL NOT APPLY TO ANY GUARANTEE PERIOD HAVING FEWER THAN 6 MONTHS PRIOR TO THE GUARANTEE PERIOD MATURITY DATE FOR: 1) TRANSFER TO ANOTHER GUARANTEE PERIOD, FIXED SUB-ACCOUNT OR TO A VARIABLE SUB-ACCOUNT OFFERED UNDER THIS CERTIFICATE; OR 2) SURRENDERS, PARTIAL WITHDRAWALS, ANNUITIZATION OR PERIODIC WITHDRAWALS; OR 3) A SINGLE SUM PAYMENT UPON DEATH OF AN OWNER OR THE ANNUITANT. ALL PAYMENTS AND VALUES BASED ON THE INVESTMENT EXPERIENCE OF THE VARIABLE ACCOUNT VALUE ARE VARIABLE, MAY INCREASE OR DECREASE ACCORDINGLY, AND ARE NOT GUARANTEED AS TO AMOUNT. THE SMALLEST ANNUAL RATE OF INVESTMENT RETURN WHICH WOULD HAVE TO BE EARNED ON THE ASSETS OF THE SEPARATE ACCOUNT SO THAT THE DOLLAR AMOUNT OF VARIABLE ANNUITY PAYMENTS WILL NOT DECREASE IS 5%. A 10% FEDERAL TAX PENALTY MAY APPLY IF A SURRENDER, WITHDRAWAL, OR DISTRIBUTION IS TAKEN PRIOR TO THE TAXPAYER'S ATTAINMENT OF AGE 59 1/2. FREE LOOK PERIOD 10 DAY RIGHT TO EXAMINE CERTIFICATE. IF NOT SATISFIED WITH THE CERTIFICATE, RETURN IT TO THE COMPANY OR THE SCHWAB ANNUITY SERVICE CENTER WITHIN 10 DAYS OF RECEIVING IT. THE CERTIFICATE WILL BE VOID FROM THE START, AND THE COMPANY WILL REFUND THE GREATER OF: 1) CONTRIBUTIONS RECEIVED; OR 2) THE ANNUITY ACCOUNT VALUE LESS SURRENDERS, WITHDRAWALS, AND DISTRIBUTIONS. FLEXIBLE PREMIUM FIXED AND VARIABLE DEFERRED GROUP ANNUITY. Contributions may be made until the Payment Commencement Date or until the death benefit is payable to a Beneficiary. The Owner is as shown on the Certificate Data Page unless changed as provided for in this Certificate. The Company will pay the Annuitant the first of a series of annuity payments on the annuity commencement date by applying the Annuity Account Value with a Market Value Adjustment, if applicable, of the Owner's Annuity Account according to the Payment Options Provisions. Subsequent payments will be paid on the same day of each frequency period according to the provisions of this Certificate. Non-Participating. Not eligible to share in the Company's divisible surplus. Signed for First Great-West Life & Annuity Insurance Company on the issuance of this Certificate. D.C. Lennox, W.T. McCallum, Secretary President and Chief Executive Officer J434 NY (97) FLEXIBLE PREMIUM FIXED AND VARIABLE DEFERRED GROUP ANNUITY. Contributions may be made until the Payment Commencement Date or until the death benefit is payable to a Beneficiary. The Owner is as shown on the Certificate Data Page unless changed as provided for in this Certificate. The Company will pay the Annuitant the first of a series of annuity payments on the annuity commencement date by applying the Annuity Account Value with a Market Value Adjustment, if applicable, of the Owner's Annuity Account according to the Payment Options Provisions. Subsequent payments will be paid on the same day of each frequency period according to the provisions of this Certificate. Non-Participating. Not eligible to share in the Company's divisible surplus. CORPORATE HEADQUARTERS - Albany, New York J434 NY CERTIFICATE DATA PAGE ANNUITY INFORMATION OWNER INFORMATION Annuity Certificate Number: 1234567 Effective Date: March 1, 1996 Status of Annuity: Non-Qualified Initial Contribution: $5,000 Payment Commencement Date: March 1, 2006 Owner: JOHN C. DOE Date of Birth: April 1, 1944 Tax ID Number: 111-11-1111 Joint Owner: JANE B. DOE Date of Birth: November 12, 1948 Tax ID Number: ###-##-#### ANNUITANT INFORMATION Annuitant: JOHN C. DOE Date of Birth: March 22, 1942 Tax ID Number: ###-##-#### Contingent Annuitant: DAVID J. DOE Date of Birth: June 6, 1964 Tax ID Number: ###-##-#### CERTIFICATE INFORMATION This Certificate Data Page, together with the Initial Premium Allocation Confirmation, reflects the information with which your Certificate has been established as of the Effective Date. If you wish to change or correct any information on this page, please call the Schwab Annuity Service Center immediately at 1-800-838-0650. CONTRACTUAL GUARANTEE OF A MINIMUM RATE OF INTEREST: [3%] CHARGES: Charges at the time we issued this Certificate are shown below. Risk Charge: Mortality: Expense: Total: .68% maximum .17% maximum .85% maximum Certificate Maintenance Charge: $25.00 maximum annually PAYMENT COMMENCEMENT DATE: The date on which annuity payments or periodic withdrawals will start. This Certificate Data Page indicates the date that you selected, or if no date is specified, the latest date on which payments can start. (You may change the Payment Commencement Date prior to commencement of annuity payments, or it may be changed by the Beneficiary upon the death of an Owner.) SERVICE CENTER: Schwab Annuity Service Center P.O. Box 7666 San Francisco, California 94120-7666 1-800-838-0650 POLICYHOLDER INFORMATION Policyholder BENEFICIARY INFORMATION Beneficiary: Sally Smith Date of Birth: January 17, 1956 Tax ID Number: ###-##-#### J434 NY Page i J434 Page ii J434 NY Page ii Table of Contents Use this Table of Contents to locate specific topics in this annuity Certificate. DEFINITIONS 3 GENERAL PROVISIONS Entire Contract 5 Certificate Modification 5 Non-Participating 5 Misstatement of Age or Sex 5 Reports 6 Notice and Proof 6 Tax Consequences of Payments 6 Currency 6 Voting Rights 6 OWNERSHIP PROVISIONS Rights of Owner 6 Beneficiary 6 Designation of Beneficiary 6 Change of Beneficiary 7 Death of Beneficiary 7 Successive Beneficiaries 7 Annuitant 7 Contingent Annuitant 7 Change of Ownership 7 Collateral Assignment 7 Ownership of Series Account 7 CONTRIBUTIONS PROVISIONS Effective Date 8 Contributions 8 Allocation of Contributions 8 ACCOUNT VALUE AND MARKET VALUE ADJUSTMENT PROVISIONS Certificate Maintenance Charge 8 Variable Account Value 8 Accumulation Units 9 Accumulation Unit Value 9 Net Investment Factor 9 Risk Charge 9 Guarantee Period Fund 9 Value of Guarantee Period 10 Allocation at Guarantee Period Maturity Date 10 Breaking a Guarantee Period 10 Market Value Adjustment 11 J434 NY Page 1 Table of Contents (continued) Use this Table of Contents to locate specific topics in this annuity Certificate. TRANSFER PROVISIONS Transfers 11 Dollar Cost Averaging 12 The Rebalancer Option 12 DEATH BENEFIT PROVISIONS Payment of Death Benefit 13 Distribution Rules 13 Compliance with Code Section 72(s) 14 SURRENDERS AND PARTIAL WITHDRAWALS Surrender Benefit 14 Partial Withdrawals 14 Postponement 15 PAYMENT OPTIONS How to Elect 15 Selection of Payment Options 15 Variable Annuity Payment Options 15 Fixed Annuity Payment Options 16 Periodic Withdrawal Option 17 How to Elect Periodic Withdrawals 17 Periodic Withdrawal Options Available 17 J434 NY Page 2 J401 Page 2 Definitions Accumulation Period - the period between the Effective Date and the Payment Commencement Date. Accumulation Unit - an accounting measure used to determine the Variable Account Value before the date annuity payments commence. Annuitant - the person named in the application and in the Certificate Data Page upon whose life the payment of an annuity is based and who will receive annuity payments. If a Contingent Annuitant is named, then the Annuitant will be considered the Primary Annuitant. Annuity Account - an account that reflects the total value of the Owner's Variable and Fixed Sub-Accounts. Annuity Account Value - the sum of the Variable and Fixed Sub-Accounts credited to the Owner under the Annuity Account. Annuity Payment Period - the period beginning on the Payment Commencement Date and continuing until all annuity payments have been made under this Certificate. Annuity Unit - an accounting measure used to determine the dollar value of any variable dollar annuity payment after the first annuity payment is made. Automatic Contribution Plan - a plan provided to the Owner to allow for automatic payment of Contributions. The Contribution amount will be withdrawn from a pre-authorized account and automatically credited to the Annuity Account. Beneficiary - the person(s) designated by the Owner to receive death proceeds which may become payable upon the death of an Owner or the Annuitant. If the surviving spouse of an Owner is the surviving Joint Owner, the surviving spouse will be deemed to be the Beneficiary upon such Owner's death and may take the death benefit or elect to continue this Certificate in force. The Beneficiary is shown on the Certificate Data Page unless later changed by the Owner. Certificate - the document issued to the Owner which specifies the rights and obligations of the Owner. Company - First Great-West Life & Annuity Insurance Company, the underwriter for this annuity, located at 125 Wolf Road, Albany, New York 12205. Contingent Annuitant - the person named in the application who will become the Annuitant upon the death of the Primary Annuitant. The Contingent Annuitant is the person named in the Certificate Data Page, unless later changed by Request while the Primary Annuitant is alive and before annuity payments have commenced. Contract - the document issued to the Policyholder which specifies the rights and obligations of the Policyholder. Contractual Guarantee of a Minimum Rate of Interest - the minimum interest rate applicable to each Fixed Sub-Account in effect at the time the Contribution is made. This is the minimum interest rate allowed by law and is subject to change in accordance with changes in applicable law. Contributions - purchase amounts received and allocated to the Variable or Fixed Sub-Account(s) prior to any Premium Tax or other deductions. Effective Date - the date on which the first Contribution is credited to the Annuity Account. Eligible Fund - a registered management investment company in which the assets of the Series Account may be invested. Fixed Account Value - the sum of the values of the Fixed Sub-Accounts credited to the Owner under the Annuity Account. Fixed Sub-Accounts - the sub-division(s) of the Annuity Account described in the Certificate and in the attached Fixed Sub-Account Riders, if any. Guarantee Period - one of the time intervals of the Guarantee Period Fund available under this Certificate. The Company will specify the Guarantee Period time intervals that are available and the predetermined rate of interest that will apply to each of the Guarantee Period time intervals. This rate of interest will be equal to the annual effective rate in effect at the time the Contribution is made and as reflected in written confirmation of the Contribution. The Company may stop offering any time interval at any time for new Contributions. Amounts allocated to one or more Guarantee Periods may be subject to a Market Value Adjustment. J418 Page 4 J434 NY Page 3 Definitions (continued) Guarantee Period Fund - A type of Fixed Sub-Account. Guarantee Period Maturity Date - the last day of any Guarantee Period. Individual Retirement Annuity (IRA) - an annuity Contract used for a retirement savings program that is intended to satisfy the requirements of Section 408 of the Internal Revenue Code of 1986, as amended. Investment Division - a division of the Series Account containing the shares of a specific portfolio of the Eligible Fund. There is an Investment Division for each portfolio of the Eligible Fund. Market Value Adjustment - an adjustment which may be made to amounts paid out before the Guarantee Period Maturity Date due to surrenders, partial withdrawals, Transfers, and amounts applied to a periodic withdrawal or to purchase an annuity. The Market Value Adjustment may increase or decrease the amount payable on one of the above described distributions. A negative adjustment may result in an effective interest rate lower than the Contractual Guarantee of a Minimum Rate of Interest applicable to this Contract and the value of the Contribution(s) allocated to the Guarantee Period being less than the Contribution(s) made. Non-qualified Annuity Certificate - an annuity Certificate which is not intended to be a part of a qualified retirement plan and is not intended to satisfy the requirements of Section 408 of the Internal Revenue Code of 1986, as amended. Owner (Joint Owners) - the person or persons named in the Certificate Data Page. The Owner is entitled to exercise all rights and privileges under the Certificate, while the Annuitant is living, except as reserved by the Policyholder. Joint Owners must be husband and wife as of the Effective Date. The Annuitant will be the Owner unless otherwise indicated in the application. If a Certificate is purchased as an Individual Retirement Annuity under Section 408 of the Code, the Annuitant must be the sole Owner; no Joint Owner may be named. Payment Commencement Date - the date on which annuity payments or periodic withdrawals commence under a payment option. The Payment Commencement Date must be at least one year after this Certificate's Effective Date. If a Payment Commencement Date is not shown on the Certificate Data Page, annuity payments will begin on the first day of the month of the Annuitant's 90th birthday. The Payment Commencement Date may be changed by the Owner prior to commencement of annuity payments or it may be changed by the Beneficiary upon the death of an Owner. If this is an IRA Certificate, payments which satisfy the minimum distribution requirements of the Code must begin no later than the Owner/Annuitant's attainment of age 70 1/2. Policyholder - the organization entering into the contract and whose name appears on the Certificate Data Page as the Policyholder. Premium Tax - the amount of tax, if any, charged by a state or other governmental authority. Request - any instruction in a form satisfactory to the Company and received at the Schwab Annuity Service Center (or other annuity service center subsequently named) from the Owner or the Owner's designee (as specified in a form acceptable to the Company) or the Beneficiary, (as applicable) as required by any provision of this Certificate or as required by the Company. The Request is subject to any action taken or payment made by the Company before it was processed. Schwab Annuity Service Center - Post Office Box 7666, San Francisco, California 94120-7666. The toll-free telephone number is 1-800-838-0650. Simplified Employee Pension (SEP) - an Individual Retirement Annuity (IRA) which may accept Contributions from one or more employers under a retirement savings program intended to satisfy the requirements of Section 408(k) of the Internal Revenue Code of 1986, as amended. Series Account - the segregated investment account established by the Company under New York law and registered as a unit investment trust under the Investment Company Act of 1940, as amended. Surrender Value - will be equal to: (a) Annuity Account Value with a Market Value Adjustment, if applicable, on the effective date of the surrender; less (b) Premium Tax, if any. J434 NY Page 4 J434 4/1/97 Page 4 Definitions (continued) Transaction Date - the date on which any Contribution or Request from the Owner will be processed by the Company at the Schwab Annuity Service Center. Contributions and Requests received after 4:00 p.m. EST/EDT will be deemed to have been received on the next business day. Requests will be processed and the Variable Account Value will be valued on each date that the New York Stock Exchange is open for trading. Transfer - the moving of money from one sub-account to one or more sub-account(s). Valuation Date - the date on which the net asset value of each Eligible Fund is determined. Valuation Period - the period between two successive Valuation Dates. Variable Account Value - the sum of the values of the Variable Sub-Accounts credited to the Owner under the Annuity Account. The Variable Account Value is credited with a return based upon the investment experience of the Investment Division(s) selected by the Owner and will increase or decrease accordingly. Variable Sub-Accounts - sub-division(s) of the Owner's Annuity Account containing the value credited to the Owner from an Investment Division. General Provisions What is your agreement with us? ENTIRE CONTRACT This Certificate, Certificate Data Page, riders and amendments, if any, form the Entire Contract between the Owner and the Company. This Entire Contract supersedes all prior representations, statements, warranties, promises and agreements of any kind, whether oral or written, relating to the subject matter of this Certificate. All statements in the application made by an Owner or the Annuitant will be considered representations and not warranties. How can this Certificate be modified? CERTIFICATE MODIFICATION This Certificate may be modified only by written agreement between the Company and the Policyholder, except that upon 30 days notice to the Policyholder, the Company may at any time and without the consent of the Policyholder or any other person, modify this Certificate as needed to conform to changes in tax or other law. Such modifications will become part of this Certificate. Nothing in the group annuity contract invalidates or impairs any right granted to the Certificate Owner by New York Statutes Insurance Law Section 3219 or the Certificate. If this Certificate is purchased as an IRA, the Company reserves the right to modify this Certificate to the extent necessary to qualify it as an Individual Retirement Annuity as described in Section 408 of the Internal Revenue Code of 1986, as amended, and all related sections and regulations which are in effect during the term of this Certificate. The Company may terminate certain Variable and Fixed Sub-Accounts. In that event, the Owner, by Request, may change the allocation of the Contributions and maturing Guarantee Periods. If no Request is made by the date the sub-account is terminated, future Contributions and maturing Guarantee Periods will be allocated to the Money Market Sub-Account. Any modification will not affect the terms, provisions or conditions which are, or may be, applicable to Contributions previously made to any such Variable Sub-Account. Any modification will not affect the terms of any unmatured Guarantee Period or other Fixed Sub-Account, except as may be described in the attached Fixed Sub-Account riders, if any. The Company may cease offering existing variable or fixed annuity payment options. ONLY THE PRESIDENT, A VICE-PRESIDENT, OR THE SECRETARY OF THE COMPANY CAN MODIFY OR WAIVE ANY PROVISION OF THIS CERTIFICATE. NON-PARTICIPATING This Certificate is non-participating. It is not eligible to share in the Company's divisible surplus. What if the Annuitant's age or sex is misstated? MISSTATEMENT OF AGE OR SEX If the age or sex of the Annuitant has been misstated, the annuity payments established will be made on the basis of the correct age. If payments were too large because of misstatement, the difference with interest may be deducted by the Company from the next payment or payments. If payments were too small, the difference with interest may be added by the Company to the next payment. This interest will result in an annual effective rate which will not be less than the Contractual Guarantee of a Minimum Rate of Interest or greater than 6% per year, as determined by the Company. J434 NY Page 5 General Provisions (continued) How will the Contract values be reported? REPORTS The Company will furnish the Owner, at least annually, a statement of the Annuity Account Value and the Surrender Value. The Company will furnish the Owner copies of any other notices, reports or documents required by law. What are the notice and proof requirements? NOTICE AND PROOF Any notice or demand by the Company to or upon the Owner, or any other person may be given by mailing it to that person's last known address as stated in the Company's file. In the event of the death of an Owner or the Annuitant, the Company will require proof of death. Any application, report, Request, election, direction, notice or demand by the Owner, or any other person, must be made in a form satisfactory to the Company. What are the tax consequences? TAX CONSEQUENCES OF PAYMENTS The Owner or Beneficiary, as the case may be, must determine the timing and amount of any benefit payable. Payments elected by the Owner in the form of periodic withdrawals, surrenders or partial withdrawals will be tax reported to the Owner. Annuity payments are payable to the Annuitant and will be tax reported to the Annuitant. Payments made to a Beneficiary will be tax reported to the Beneficiary. It is recommended that a competent tax adviser be consulted prior to obtaining any distribution from, or changing the ownership of, this Certificate. A 10% federal tax penalty may apply if a surrender, withdrawal, or distribution is taken prior to the taxpayer's attainment of age 59 1/2. Nothing contained herein will be construed to be tax or legal advice. Neither the Policyholder nor the Company assumes any responsibility or liability for any damages or costs, including but not limited to taxes, penalties, interest or attorney's fees incurred by the Owner, the Annuitant, the Beneficiary, or any other person arising out of any such determination. CURRENCY All Contributions and all transactions will be in the currency of the United States of America. What are the voting rights? VOTING RIGHTS The Company will vote the shares of an Eligible Fund. To the extent required by law, the Company will vote according to the instructions of the Owner in proportion to the interest in the Variable Sub-Account. In such event, the Company will send proxy materials and form(s) to the Owner for a reply. If no reply is received by the date specified in the proxy materials, the Company will vote shares of the appropriate Eligible Fund in the same proportion as shares of the Eligible Fund for which replies have been received. During the Annuity Payment Period, the number of votes will decrease as the assets held to fund annuity payments decrease. The Owner will be entitled to receive the proxy materials and form(s). Ownership Provisions What are the Owner's rights? RIGHTS OF OWNER While the Annuitant is living, the Owner has the sole and absolute power to exercise all rights and privileges in this Certificate. Upon the death of an Owner or the Annuitant, the Death Benefit Provisions section will apply. How is the Beneficiary determined? BENEFICIARY The Owner may, while the Annuitant is living, designate or change a Beneficiary by Request from time to time as provided below. If an Owner dies and the surviving Joint Owner is the surviving spouse of the deceased Owner, such surviving spouse will become the Beneficiary and may take the death benefit or elect to continue this Certificate in force. DESIGNATION OF BENEFICIARY Unless changed as provided below, or as otherwise required by law, the Beneficiary will be as shown on the Certificate Data Page. Unless otherwise indicated, if more than one Beneficiary is designated, then each such Beneficiary so designated will share equally in any benefits and or rights granted by the Contract to such Beneficiary or allowed by the Company. If the Beneficiary is a partnership, any benefits will be paid to the partnership as it existed at the time of an Owner's or the Annuitant's death. The Company may rely on an affidavit by any responsible person to identify a Beneficiary or verify the non-existence of a Beneficiary not identified by name. J434 NY Page 6 J434 4/3/97 Page 5 Ownership Provisions (continued) CHANGE OF BENEFICIARY The Owner may, while the Annuitant is living, change the Beneficiary by Request. The Company shall not be bound by any change of Beneficiary unless it is made in writing and recorded at the Schwab Annuity Service Center. A change of Beneficiary will take effect as of the date the Request is processed at the Schwab Annuity Service Center, unless a certain date is specified by the Owner. If an Owner dies before the date the Request was processed, the change will take effect as of the date of the Request, unless the Company has already made a payment or has otherwise taken action on a designation or change before receipt or processing of such Request. A Beneficiary designated irrevocably may not be changed without the written consent of that Beneficiary, except to the extent required by law. DEATH OF BENEFICIARY The interest of any Beneficiary who dies before an Owner or the Annuitant will terminate at the death of such Beneficiary. The interest of any Beneficiary who dies at the time of, or within 30 days after, the death of an Owner or the Annuitant will also terminate if no benefits have been paid to such Beneficiary, unless the Owner has indicated otherwise by Request. The benefits will then be paid as though the Beneficiary had died before the deceased Owner or Annuitant. SUCCESSIVE BENEFICIARIES If an Owner dies, and the surviving Joint Owner is the surviving spouse of the deceased Owner, the surviving spouse will become the Beneficiary and may take the death benefit or elect to continue this Certificate in force. If there is no surviving Joint Owner, and no named Beneficiary is alive at the time of an Owner's death, any benefits payable will be paid to the Owner's estate. ANNUITANT While the Annuitant is living and at least 30 days prior to the annuity commencement date, the Owner may, by Request, change the Annuitant. A change of Annuitant will take effect as of the date the Request is processed at the Schwab Annuity Service Center. How is the Contingent Annuitant determined? CONTINGENT ANNUITANT While the Annuitant is alive, the Owner may, by Request, designate or change a Contingent Annuitant from time to time. A change of Contingent Annuitant will take effect as of the date the Request is processed at the Schwab Annuity Service Center, unless a certain date is specified by the Owner. Can the ownership of this Certificate be changed? CHANGE OF OWNERSHIP If this is an IRA Certificate, the Owner's right to change the ownership is restricted. An IRA Certificate may not be sold, assigned, transferred, discounted or pledged as collateral for a loan or as security for the performance of an obligation or for any other purpose to any person other than as may be required or permitted under Section 408 of the Internal Revenue Code of 1986, or under any other applicable section of the Code, as amended. If this is a non-qualified Certificate, the Owner may change the ownership while the Annuitant is living. Any change of ownership must be made by Request on a form satisfactory to the Company. The change will take effect as of the date the Request is processed at the Schwab Annuity Service Center, unless a certain date is specified by the Owner, and is subject to any action taken or payment made by the Company before it was processed. Can this Certificate be assigned? COLLATERAL ASSIGNMENT If this is an IRA Certificate, the Owner may not assign this Certificate as collateral. If this is a non-qualified Certificate, the Owner can assign this Certificate as collateral while the Annuitant is living. The interest of the assignee has priority over the interest of the Owner and the interest of any Beneficiary. Any amounts payable to the assignee will be paid in a single sum. A copy of any assignment must be submitted to the Company at the Schwab Annuity Service Center. Any assignment is subject to any action taken or payment made by the Company before the assignment was processed. The Company is not responsible for the validity of any assignment. An assignment, pledge or agreement to assign or pledge any portion of the Annuity Account Value generally will be treated as a distribution. It is recommended that a competent tax adviser be consulted prior to making such a change to this Certificate. Who owns the Series Account? OWNERSHIP OF SERIES ACCOUNT The Company has absolute ownership of the assets of the Series Account. The portion of the assets of the Series Account equal to the reserves and other Certificate liabilities with respect to the Series Account are not chargeable with liabilities arising out of any other business the Company may conduct. J418 Page 4 J434 NY Page 7 Ownership Provisions (continued) CHANGE OF BENEFICIARY The Owner may, while the Annuitant is living, change the Beneficiary by Request. The Company shall not be bound by any change of Beneficiary unless it is made in writing and recorded at the Schwab Annuity Service Center. A change of Beneficiary will take effect as of the date the Request is processed at the Schwab Annuity Service Center, unless a certain date is specified by the Owner. If an Owner dies before the date the Request was processed, the change will take effect as of the date of the Request, unless the Company has already made a payment or has otherwise taken action on a designation or change before receipt or processing of such Request. A Beneficiary designated irrevocably may not be changed without the written consent of that Beneficiary, except to the extent required by law. DEATH OF BENEFICIARY The interest of any Beneficiary who dies before an Owner or the Annuitant will terminate at the death of such Beneficiary. The interest of any Beneficiary who dies at the time of, or within 30 days after, the death of an Owner or the Annuitant will also terminate if no benefits have been paid to such Beneficiary, unless the Owner has indicated otherwise by Request. The benefits will then be paid as though the Beneficiary had died before the deceased Owner or Annuitant. SUCCESSIVE BENEFICIARIES If an Owner dies, and the surviving Joint Owner is the surviving spouse of the deceased Owner, the surviving spouse will become the Beneficiary and may take the death benefit or elect to continue this Certificate in force. If there is no surviving Joint Owner, and no named Beneficiary is alive at the time of an Owner's death, any benefits payable will be paid to the Owner's estate. ANNUITANT While the Annuitant is living and at least 30 days prior to the annuity commencement date, the Owner may, by Request, change the Annuitant. A change of Annuitant will take effect as of the date the Request is processed at the Schwab Annuity Service Center. How is the Contingent Annuitant determined? CONTINGENT ANNUITANT While the Annuitant is alive, the Owner may, by Request, designate or change a Contingent Annuitant from time to time. A change of Contingent Annuitant will take effect as of the date the Request is processed at the Schwab Annuity Service Center, unless a certain date is specified by the Owner. Can the ownership of this Certificate be changed? CHANGE OF OWNERSHIP If this is an IRA Certificate, the Owner's right to change the ownership is restricted. An IRA Certificate may not be sold, assigned, transferred, discounted or pledged as collateral for a loan or as security for the performance of an obligation or for any other purpose to any person other than as may be required or permitted under Section 408 of the Internal Revenue Code of 1986, or under any other applicable section of the Code, as amended. If this is a non-qualified Certificate, the Owner may change the ownership while the Annuitant is living. Any change of ownership must be made by Request on a form satisfactory to the Company. The change will take effect as of the date the Request is processed at the Schwab Annuity Service Center, unless a certain date is specified by the Owner, and is subject to any action taken or payment made by the Company before it was processed. Can this Certificate be assigned? COLLATERAL ASSIGNMENT If this is an IRA Certificate, the Owner may not assign this Certificate as collateral. If this is a non-qualified Certificate, the Owner can assign this Certificate as collateral while the Annuitant is living. The interest of the assignee has priority over the interest of the Owner and the interest of any Beneficiary. Any amounts payable to the assignee will be paid in a single sum. A copy of any assignment must be submitted to the Company at the Schwab Annuity Service Center. Any assignment is subject to any action taken or payment made by the Company before the assignment was processed. The Company is not responsible for the validity of any assignment. An assignment, pledge or agreement to assign or pledge any portion of the Annuity Account Value generally will be treated as a distribution. It is recommended that a competent tax adviser be consulted prior to making such a change to this Certificate. Who owns the Series Account? OWNERSHIP OF SERIES ACCOUNT The Company has absolute ownership of the assets of the Series Account. The portion of the assets of the Series Account equal to the reserves and other Certificate liabilities with respect to the Series Account are not chargeable with liabilities arising out of any other business the Company may conduct. J418 Page 4 J434 NY Page 7 Contributions Provisions What is the Effective Date? EFFECTIVE DATE The Effective Date, shown on the Certificate Data Page, is the date the initial Contribution is credited to the Annuity Account. How may Contributions be made? CONTRIBUTIONS Contributions should be payable to First Great-West Life & Annuity Insurance Company (the Company) at the Schwab Annuity Service Center at any time during the Accumulation Period. All Contributions must be paid in a form acceptable to the Company, during the lifetime of the Annuitant and before the Payment Commencement Date. Coverage will begin on the Effective Date. At any time after the Effective Date, the Owner may make additional Contributions. The minimum amount accepted after the initial Contribution is $500 except subsequent payments made via an Automatic Contribution Plan have a minimum of $100 per month. Total Contributions while this Certificate is in force may exceed $1,000,000 with prior approval from the Company. The Company may modify these limitations. How are Contributions allocated? ALLOCATION OF CONTRIBUTIONS During the Free Look Period, all Contributions will be processed as follows: * Amounts to be allocated to one or more of the Fixed Sub-Accounts will be allocated as directed, effective upon the Transaction Date. (Allocation will not be delayed until the end of the Free Look Period.) * Amounts to be allocated to one or more of the Variable Sub-Accounts will first be allocated to the Money Market Sub-Account and will remain there until the next Transaction Date following end of the Free Look Period plus five calendar days. On that date, the Variable Account Value held in the Money Market Sub-Account will be allocated to the Variable Sub-Accounts selected by the Owner. During the Free Look Period, the Owner may re-allocate among the Variable Sub-Accounts. If the Certificate is returned during the Free Look Period, it will be void from the start, and the Company will refund the greater of: 1) Contributions received; or 2) the Annuity Account Value less surrenders, withdrawals, and distributions. After the Free Look Period, subsequent Contributions will be allocated in the Annuity Account as Requested by the Owner. If there are no accompanying instructions, then allocations will be made in accordance with standing instructions. Allocations will be effective upon the Transaction Date. Account Value and Market Value Adjustment Provisions What is the annual Certificate Maintenance Charge? CERTIFICATE MAINTENANCE CHARGE The following charge is applicable to the Annuity Account Value. Each year, beginning on the first anniversary of the Certificate Effective Date, a Certificate Maintenance Charge of not more than $25 will be deducted from the Annuity Account. This charge will be deducted from the Money Market Fund Sub-Account. If there is not sufficient value in the Money Market Sub-Account to cover all of the Certificate Maintenance Charge, the remainder will be deducted proportionately from the other Variable Sub-Accounts based on their relative values. If there is not sufficient value in the Variable Sub-Accounts, then the remainder will be deducted from the Fixed Sub-Accounts. There is no Market Value Adjustment on amounts taken from Fixed Sub-Accounts for a Certificate Maintenance Charge. VARIABLE ACCOUNT PROVISIONS How is the Variable Account Value determined? VARIABLE ACCOUNT VALUE The Variable Account Value for the Owner on any date during the Accumulation Period will be the sum of the values of the Variable Sub-Accounts. The value of the Owner's interest in a Variable Sub-Account will be determined by multiplying the number of the Owner's Accumulation Units by the accumulation unit value for that Variable Sub-Account. J434 NY Page 8 J434 4/3/97 Page 8 J418 Page 4 J434 Page 7 Account Value and Market Value Adjustment Provisions (continued) ACCUMULATION UNITS For each Contribution, the number of Accumulation Units credited for the Owner to a Variable Sub-Account will be determined by dividing the amount of the Contribution, less Premium Tax, if any, by the accumulation unit value for that Variable Sub-Account on the applicable Transaction Date. ACCUMULATION UNIT VALUE The initial accumulation unit value of each Variable Sub-Account was established at $10. The accumulation unit value of a Variable Sub-Account on a Valuation Date is calculated by multiplying the accumulation unit value as of the immediately preceding Valuation Date by the net investment factor as described in the Net Investment Factor provision below. The dollar value of an Accumulation Unit will vary in amount depending on the investment experience of the Eligible Fund and charges taken from the Sub-Account. NET INVESTMENT FACTOR The net investment factor for any Variable Sub-Account for any Valuation Period is determined by dividing (a) by (b), and subtracting (c) from the result where: (a) is the net result of: (i) the net asset value per share of the Eligible Fund shares held in the Variable Sub-Account determined as of the end of the current Valuation Period; plus (ii) the per share amount of any dividend (or, if applicable, capital gain distributions) made by the applicable Eligible Fund on shares held in the Variable Sub-Account if the "ex-dividend" date occurs during the current Valuation Period; minus or plus (iii) a per unit charge or credit for any taxes incurred by or reserved for in the Variable Sub-Account, which is determined by the Company to have resulted from the investment operations of the Variable Sub-Account. (b) is the net result of: (i) the net asset value per share of the Eligible Fund shares held in the Variable Sub-Account determined as of the end of the immediately preceding Valuation Period; minus or plus (ii) the per unit charge or credit for any taxes incurred by or reserved for in the Variable Sub-Account for the immediately preceding Valuation Period. (c) is an amount representing the risk charge deducted from each Variable Sub-Account on a daily basis, equal to an annual rate as shown in the table below as a percentage of the daily net asset value of each Variable Sub-Account. This charge will not exceed: Mortality: Expense: Total: .68% maximum .17% maximum .85% maximum The net investment factor may be greater than, less than, or equal to one. Therefore, the accumulation unit value may increase, decrease or remain unchanged. The per share amount of any dividend referred to in paragraph (a)(ii) includes a deduction for an investment advisory fee. This fee compensates the investment adviser for services provided to the Eligible Fund. The fee may differ between Eligible Funds and may be renegotiated each year. RISK CHARGE The risk charge compensates the Company for its assumption of certain mortality and expense risks. This charge is set forth above in the Net Investment Factor provision. FIXED ACCOUNT PROVISIONS How is the Fixed Account Value determined? GUARANTEE PERIOD FUND The Guarantee Period Fund is a type of Fixed Sub-Account. The Owner, by Request, may allocate all or a portion of a Contribution to any of the several Guarantee Periods then offered by the Company. The sum of the values of the Owner's Guarantee Periods is the value of the Owner's interest in the Guarantee Period Fund. J418 Page 4 J434 NY Page 9 Account Value and Market Value Adjustment Provisions (continued) What is the value of each Guarantee Period? VALUE OF GUARANTEE PERIOD All Contributions allocated to a Guarantee Period will earn an annual effective rate of interest equal to the rate stated by the Company for the applicable Guarantee Period from the Transaction Date to the end of the Guarantee Period. The account will be credited daily with interest earned. If the Owner does not break a Guarantee Period, the annual effective rate will be at least the Contractual Guarantee of a Minimum Rate of Interest. If the Owner breaks a Guarantee Period, a Market Value Adjustment may apply. The Market Value Adjustment is applied to the amount of Transfer or withdrawal Requested and a negative adjustment may cause the amount Transferred or withdrawn to be less than the amount Requested. Each Guarantee Period has its own value, which is calculated as follows: * the Owner's Contributions, less Premium Tax, if any, in that Guarantee Period; plus * interest earned; less * amounts Transferred, distributed, surrendered (in whole or in part), or applied to an annuitization option; less * periodic withdrawals; less * Certificate Maintenance Charges. ALLOCATION AT GUARANTEE PERIOD MATURITY DATE At any time prior to the Guarantee Period Maturity Date, the Owner may Request to allocate the maturity value of that Guarantee Period among any of the Variable and Fixed Sub-Accounts then offered by the Company under this Certificate. The election is effective on its Guarantee Period Maturity Date. If the election is not received at the Schwab Annuity Service Center prior to the Guarantee Period Maturity Date, the value of the matured Guarantee Period will be allocated to a new Guarantee Period with the same Guarantee Period as the matured Guarantee Period. If the new Guarantee Period would mature later than the Payment Commencement Date, the value will be allocated to the Guarantee Period that matures closest to the Payment Commencement Date. If the Company is not then offering the same Guarantee Period under the Certificate, the value of the matured Guarantee Period will be allocated to a new Guarantee Period with the closest shorter Guarantee Period then available. If none of the above is available, the value of the matured Guarantee Period will be allocated to the Money Market Sub-Account. If held to maturity, amounts from a matured Guarantee Period allocated to a new Guarantee Period or other Fixed Sub-Account will earn the annual effective rate applicable to that Guarantee Period or Fixed Sub-Account. This annual effective rate may differ from the annual effective rate applicable to the matured Guarantee Period. What if the Guarantee Period is broken prior to maturity? BREAKING A GUARANTEE PERIOD Any Transfer, surrender (in whole or in part), distribution due to death, or the selection of an annuity option prior to the Guarantee Period Maturity Date will be known as breaking a Guarantee Period. When a Request to break a Guarantee Period is received, the Guarantee Period that is closest to the Guarantee Period Maturity Date will be broken first. If a Guarantee Period is broken, a Market Value Adjustment may be assessed. The Market Value Adjustment may increase or decrease the value of the amount being Transferred or withdrawn from the Guarantee Period. The Market Value Adjustment is described below. J434 NY Page 10 J434 4/3/97 Page 9 Account Value and Market Value Adjustment Provisions (continued) MARKET VALUE ADJUSTMENT Distributions from the amounts allocated to a Guarantee Period due to a full surrender or partial withdrawal, Transfer, application of amounts to the Periodic Withdrawal Option or to purchase an annuity. Guarantee Period Maturity Date will be subject to a Market Value Adjustment ("MVA"). An MVA may increase or decrease the amount payable on one of the above described distributions. The Amount Available for a full surrender, partial withdrawal, or Transfer is the Amount Requested plus the MVA. Amount Available = Amount Requested + MVA The MVA is calculated by multiplying the amount Requested by the Market Value Adjustment Factor ("MVAF"). The formula used to determine the MVA is: MVA = (Amount Requested) X (MVAF) The Market Value Adjustment Factor (MVAF) is: - -1 where: * i is the U.S. Treasury Strip ask side yield as published in The Wall Street Journal on the last business day of the week prior to the date the stated rate of interest was established for the Guarantee Period. The term of i is measured in years and equals the term of the Guarantee Period; and * j is the U.S. Treasury Strip ask side yield as published in The Wall Street Journal on the last business day of the week prior to the week the Guarantee Period is broken. The term of j equals the remaining term to maturity of the Guarantee Period, rounded up to the higher number of years; and * N is the number of complete months remaining until maturity. The Market Value Adjustment will equal 0 if N is less than 6. If The Wall Street Journal ceases to publish the U.S. Treasury Strip ask side yield, an alternate source for the same index will be used. If the Treasury Strip ask side yield is not published anywhere, an appropriate substitute index of publicly traded obligations will be chosen. The Market Value Adjustment will apply to any Guarantee Period broken six or more months prior to the Guarantee Period Maturity Date in each of the following situations: * Transfers to another Guarantee Period, Fixed Sub-Account or to an Investment Division offered under this Certificate; or * Surrenders, partial withdrawals, annuitization or periodic withdrawals. The Market Value Adjustment will not apply to any Guarantee Period having fewer than 6 months prior to the Guarantee Period Maturity Date in each of the following situations: * Transfer to another Guarantee Period, Fixed Sub-Account or to a Variable Sub-Account offered under this Certificate; or * Surrenders, partial withdrawals, annuitization or periodic withdrawals. Transfer Provisions Can Transfers be made between the Fixed and Variable Sub-Accounts? TRANSFERS The Owner may make Transfers by Request. The following provisions apply: (a) At any time prior to the date annuity payments begin, the Owner, by Request, may Transfer all or a portion of the Annuity Account Value among the Variable and Fixed Sub-Accounts currently offered by the Company. No Transfers are permitted after the election of a fixed annuity payment option; however, if a variable annuity payment option is elected, Transfers may be made from one Variable Sub-Account to another. (b) A Transfer will be effective upon the Transaction Date. (c) A Transfer from Fixed Sub-Accounts will be subject to the terms of the Fixed Account Provisions and the attached Fixed Sub-Account Rider(s), if any. The Annuity Account Value may be Transferred prior to the Guarantee Period Maturity Date. The Market Value Adjustment will be assessed except in the situations described in the Market Value Adjustment Provision. (d) There is no administrative charge for the first twelve Transfers made in a calendar year. There is a $10 administrative fee for each subsequent Transfer. All Transfers made on a single Transaction Date will be aggregated to count as only one Transfer toward the twelve free Transfers; however, if a one time rebalancing Transfer also occurs on the Transaction Date, it will be counted as a separate and additional Transfer. J418 Page 4 J434 NY Page 11 Transfer Provisions (continued) Is Dollar Cost Averaging offered? DOLLAR COST AVERAGING By Request, the Owner may elect Dollar Cost Averaging in order to purchase units of the Variable Sub-Accounts over a period of time. The Owner may Request to automatically Transfer a predetermined dollar amount, subject to the Company's minimum, at regular intervals from any one or more designated Variable Sub-Accounts to one or more of the remaining, then available, Variable Sub-Accounts. The unit value will be determined on the dates of the Transfers. The Owner must specify the percentage to be Transferred into each designated Variable Sub-Account. Transfers may be set up on any one of the following frequency periods: monthly, quarterly, semiannually, or annually. The Transfer will be initiated on the Transaction Date one frequency period following the date of the Request. The Company will provide a list of Variable Sub-Accounts eligible for Dollar Cost Averaging which may be modified from time to time. Amounts Transferred through Dollar Cost Averaging are not counted against the twelve free Transfers allowed in a calendar year. The Owner may terminate Dollar Cost Averaging at any time by Request. Dollar Cost Averaging will terminate automatically upon the annuity commencement date. Participation in Dollar Cost Averaging and the Rebalancer Option at the same time is not allowed. Participation in Dollar Cost Averaging does not assure a greater profit, or any profit, nor will it prevent or necessarily alleviate losses in a declining market. The Company reserves the right to modify, suspend, or terminate Dollar Cost Averaging at any time. Is rebalancing available? THE REBALANCER OPTION By Request, the Owner may elect the Rebalancer Option in order to automatically Transfer among the Variable Sub-Accounts on a periodic basis. This type of automatic Transfer program automatically reallocates the Variable Account Value to maintain a particular percentage allocation among Variable Sub-Accounts selected by the Owner. The amount allocated to each Variable Sub-Account will grow or decline at different rates depending on the investment experience of the Variable Sub-Account. The Owner may Request that rebalancing occur one time only, in which case the Transfer will take place on the Transaction Date of the Request. This Transfer will count as one Transfer towards the twelve free Transfers allowed in a calendar year. Rebalancing may also be set up on a quarterly, semiannual, or annual basis, in which case the first Transfer will be initiated on the Transaction Date one frequency period following the date of the Request. On the Transaction Date for the specified Request, assets will be automatically reallocated to the selected funds. Rebalancing will continue on the same Transaction Date for subsequent periods. In order to participate in the Rebalancer Option, the entire Variable Account Value must be included. Transfers set up with these frequencies will not count against the twelve free Transfers allowed in a calendar year. The Owner must specify the percentage of Variable Account Value to be allocated to each Variable Sub-Account and the frequency of rebalancing. The Owner may terminate the Rebalancer Option at any time by Request. The Rebalancer Option will terminate automatically upon the annuity commencement date. Participation in the Rebalancer Option and Dollar Cost Averaging at the same time is not allowed. Participation in the Rebalancer Option does not assure a greater profit, nor will it prevent or necessarily alleviate losses in a declining market. The Company reserves the right to modify, suspend, or terminate the Rebalancer Option at any time. J434 NY Page 12 J434 4/3/97 Page 11 Death Benefit Provisions How is the death benefit paid? PAYMENT OF DEATH BENEFIT Upon the death of an Owner or the Annuitant, the death benefit will become payable in accordance with these death benefit provisions following the Company's receipt of a Request, while this Certificate is in force. The amount of the death benefit will be as follows: If the Owner or Annuitant dies after the date annuity payments commence and before the entire interest has been distributed, the remaining annuity payments, if any, will be paid to the Beneficiary under the payment option applicable on the date of death. The Beneficiary will not be allowed to change the method of distribution in effect on the date of the Owner's or Annuitant's death or to elect a new payment option; or If the Owner or Annuitant dies before the date annuity payments commence, the Company will pay proceeds to the Beneficiary the greater of A and B below: A. ( the Fixed Account Value as of the date the Request for payment is received, less Premium Tax, if any; plus ( the Variable Account Value as of the date the Request for payment is received, less Premium Tax, if any; B. the sum of Contributions paid, less partial surrenders and Periodic Withdrawals, less Premium Tax, if any. When an Owner or the Annuitant dies before the annuity commencement date and a death benefit is payable to a Beneficiary, the death benefit proceeds will remain invested in accordance with the allocation instructions given by the Owner until new allocation instructions are Requested by the Beneficiary or until the death benefit is actually paid to the Beneficiary. The death benefit will be determined as of the date payments commence; however, on the date a payment option is processed, amounts in the Variable Sub-Account will be Transferred to the Money Market Investment Division unless the Beneficiary otherwise elects by Request. Distribution of the death benefit may be Requested to be made as follows (subject to the distribution rules set forth below): A. Proceeds from the Variable Sub-Account(s) 1. payment in a single sum; or 2. payment under any of the variable annuity options provided under the Certificate. B. Proceeds from the Fixed Sub-Account(s) 1. payment in a single sum; or 2. payment under any of the annuity options provided under this Certificate. DISTRIBUTION RULES If Annuitant Dies Before Annuity Commencement Date Upon the death of the Annuitant while the Owner is living, and before the annuity commencement date, the death benefit provided under the Certificate will be paid to the Beneficiary unless there is a surviving Contingent Annuitant. If a Contingent Annuitant was named by the Owner prior to the Annuitant's death, and the Annuitant dies before the annuity commencement date, while the Owner and Contingent Annuitant are living, no death benefit will be payable by reason of the Annuitant's death and the Contingent Annuitant will become the Annuitant. If a corporation or other non-individual is an Owner, or if the deceased Annuitant is an Owner, the death of the Annuitant will be treated as the death of an Owner and the Certificate will be subject to the death of an Owner provisions described below. If an Owner Dies Before Annuity Commencement Date If an Owner dies before the annuity commencement date, and such Owner was the Annuitant, the following provisions shall apply: (1) If there is a Joint Owner (who is the surviving spouse of the deceased Owner) and a Contingent Annuitant, the Joint Owner will become the Owner and the Beneficiary, the Contingent Annuitant will become the Annuitant, and the Certificate will continue in force; (2) If there is a Joint Owner who is the surviving spouse of the deceased Owner but no Contingent Annuitant, the Joint Owner will become the Owner, the Annuitant and the Beneficiary, and may take the death benefit or elect to continue this Certificate in force; (3) In all other cases, the Company will pay the death benefit to the Beneficiary even if a former spouse Joint Owner, the Annuitant and/or the Contingent Annuitant are alive at the time of an Owner's death, unless the sole Beneficiary is the deceased Owner's surviving spouse and the Beneficiary Requests to become the Owner and the Annuitant, and to continue the Certificate in force. If an Owner dies before the annuity commencement date, and such Owner was not the Annuitant, the following provisions shall apply: (1) If there is a Joint Owner who is the surviving spouse of the deceased Owner, the Joint Owner will become the Owner and Beneficiary and may take the death benefit or elect to continue this Certificate in force. (2) In all other cases, the Company will pay the death benefit to the Beneficiary even if a former spouse Joint Owner, the Annuitant and/or the Contingent Annuitant are alive at the time of the Owner's death, unless the sole Beneficiary is the J434 NY Page 13 Death Benefit Provisions (continued) deceased Owner's surviving spouse and such Beneficiary Requests to become the Owner and the Annuitant and to continue the Certificate in force. To whom and when is the death benefit payable? Any death benefit payable to the Beneficiary upon an Owner's death will be distributed as follows: (1) If the Owner's surviving spouse is the person entitled to receive benefits upon the Owner's death, the surviving spouse will be treated as the Owner and will be allowed to take the death benefit or continue the Certificate in force. (2) If a non-spouse individual is the person entitled to receive benefits upon the Owner's death, such individual may elect, not later than one year after the Owner's date of death, to receive the death benefit in either a single sum or payment under any of the variable or fixed annuity options available under the Certificate, provided that: (a) such annuity is distributed in substantially equal installments over the life or life expectancy of such Beneficiary; and (b) such distributions begin not later than one year after the Owner's date of death. If no election is received by the Company from an individual non-spouse Beneficiary such that substantially equal installments have begun no later than one year after the Owner's date of death, then the entire amount must be distributed within five years of the Owner's date of death; or (3) If a corporation or other non-individual entity is entitled to receive benefits upon the Owner's death, the death benefit must be completely distributed within five years of the Owner's date of death. The death benefit will be determined as of the date the payments commence. If Annuitant Dies After Annuity Commencement Date Upon the death of the Annuitant (or any Owner/Annuitant) after the annuity commencement date, any benefit payable must be distributed to the Beneficiary in accordance with and at least as rapidly as under the annuity option then in effect. If an Owner Dies After Annuity Commencement Date and While the Annuitant is Living Upon the death of an Owner after the annuity commencement date and while the Annuitant is living, any benefit payable will continue to be distributed to the Annuitant at least as rapidly as under the annuity option then in effect. All of the Owner's rights granted under the Certificate or allowed by the Company will pass to any surviving Joint Owner and, if none, to the Annuitant. COMPLIANCE WITH CODE SECTION 72(s) In any event, no payment of benefits provided under the Certificate will be allowed that does not satisfy the requirements of Code Section 72(s), as amended from time to time, and any other applicable federal or state law, rules or regulations. These death benefit provisions will be interpreted and administered in accordance with such requirements. Surrenders And Partial Withdrawals Can withdrawals be made from this Certificate? SURRENDER BENEFIT At any time prior to the date annuity payments commence and subject to the provisions of this Certificate, the Owner may surrender this Certificate for the Surrender Value which will be computed as of the Transaction Date. The Company will make the distribution, paid in a single sum, as soon as practical after receipt of the Request. PARTIAL WITHDRAWALS The Owner may make a partial withdrawal from the Annuity Account Value at any time, by Request, prior to the date annuity payments commence and subject to the terms of this Certificate. A Market Value Adjustment may apply. The minimum partial withdrawal amount is $500. After any partial withdrawal, if the remaining Annuity Account Value is less than $2,000, then a full surrender may be required. By Request, the Owner must elect the Variable or Fixed Sub-Account(s), or a combination of them, from which a partial withdrawal is to be made and the amount to be withdrawn from each sub-account. The Annuity Account Value will be reduced by the partial withdrawal amount. The partial withdrawal proceeds may be greater than or less than the amount requested, depending on the effect of the Market Value Adjustment. The following terms apply: (a) No partial withdrawals are permitted after the date annuity payments commence. (b) If a partial withdrawal is made within 30 days of the date annuity payments are scheduled to commence, the Company may delay the Payment Commencement Date by 30 days. (c) A partial withdrawal will be effective upon the Transaction Date. (d) A partial withdrawal from a Fixed Sub-Account may be subject to the Market Value Adjustment Provisions, the Fixed Account Provisions of this Certificate, and the terms of the attached Fixed Sub-Account Rider(s), if any. J434 NY Page 14 J434 4/3/97 Page 12 J434 Page 15 J434 4/3/97 Page 12 Surrenders And Partial Withdrawals (continued) POSTPONEMENT In accordance with state law, if the Company receives a Request for surrender or partial withdrawal, the Company may postpone any cash payment as follows: * from the Fixed Account Value, for no more than 6 months (30 days in West Virginia); and * from the Variable Account Value, for no more than 7 business days. During the postponement period: * the Fixed Sub-Account(s) will continue to earn interest at the annual effective rate applicable to the Guarantee Period (or at the rate applicable to the attached Fixed Sub-Account Riders, if any) that was in effect at the time the Request for surrender or partial withdrawal was made; and * the Variable Account Value will continue to be subject to the investment experience (gains or losses) of the underlying Eligible Fund(s) and all applicable charges. Payment Options How are annuity payment options and the Periodic Withdrawal Option elected? HOW TO ELECT The Request of the Owner is required to elect, or change the election of, a payment option and must be received by the Company at least 30 days prior to the Payment Commencement Date. At any time prior to the Payment Commencement Date, the Owner may Transfer between Fixed and Variable Sub-Account options, subject to the Transfer provisions of this Certificate. However, on the Payment Commencement Date, the following restrictions apply: * the Variable Account Value may be applied only to any of the variable annuity payment options available; and * the Fixed Account Value may be applied only to any of the fixed annuity payment options available. If an option has not been elected within 30 days of the Payment Commencement Date, the Variable Account Value will be applied under Variable Annuity Payment Option 1 to provide payments for life with a guaranteed period of 20 years. The Fixed Account Value will be applied under Fixed Annuity Payment Option 3 to provide payments for life with a guaranteed period of 20 years. What guidelines apply to annuity payment options? SELECTION OF PAYMENT OPTIONS (a) A single sum payment may be elected. If so, the amount to be paid is the Surrender Value. (b) If a fixed annuity payment option is elected, the amount to be applied is the Fixed Account Value, as of the Payment Commencement Date, plus a Market Value Adjustment, if applicable, less Premium Tax, if any. (c) If a variable annuity payment option is elected, the amount to be applied is the Variable Account Value, as of the Payment Commencement Date, less Premium Tax, if any. (d) The minimum amount that may be withdrawn from the Annuity Account Value to purchase an annuity payment option is $2,000. If the amount is less than $2,000, the Company may pay the amount in a single sum subject to the Partial Withdrawals Provision. Payments may be elected to be received on any of the following frequency periods: monthly, quarterly, semiannually, or annually. (e) Payments to be made under the annuity payment option selected must be at least $50. The Company reserves the right to make the payments using the most frequent payment interval which produces a payment of not less than $50. (f) The maximum amount that may be applied under any annuity payment option is $1,000,000, unless prior approval is obtained from the Company. (g) For information on electing periodic withdrawals, refer to the Periodic Withdrawal Option section on Page 17. What variable annuity payment options are available? VARIABLE ANNUITY PAYMENT OPTIONS The guaranteed annuity table is based on mortality from the 1983 Table (a) for Individual Annuity Valuation and a guaranteed interest rate of 5% per year. The Company may offer a better rate than the guaranteed rate shown. The following variable annuity payment options are available: (a) Option 1: Variable Life Annuity with Guaranteed Period Payments for the guaranteed Annuity Payment Period elected or the lifetime of the Annuitant whichever is longer. The guaranteed Annuity Payment Period elected may be 5, 10, 15, or 20 years. Upon death of the Annuitant, the Beneficiary will begin to receive the remaining payments at the same interval elected by the Owner. See Table A. J434 NY Page 15 Payment Options (continued) (b) Option 2: Variable Life Annuity Payments for the Annuitant's lifetime, without a guaranteed period. See Table A. Upon death of the Annuitant, all payments cease and no amounts are payable to the Beneficiary. (c) Option 3: Any Other Form Any other form of variable annuity which is acceptable to the Company. These variable annuity payment options are subject to the following provisions: (1) Amount of First Payment The first payment under a variable annuity payment option will be based on the value of each Variable Sub-Account on the 5th Valuation Date preceding the date annuity payments commence. It will be determined by applying the appropriate rate from Table A to the amount applied under the payment option. (2) Annuity Units The number of Annuity Units paid to the Annuitant for each Variable Sub-Account is determined by dividing the amount of the first payment by the sub-account's annuity unit value on the 5th Valuation Date preceding the date the first payment is due. The number of Annuity Units used to calculate each payment for a Variable Sub-Account remains fixed during the Annuity Payment Period. (3) Amount of Payments after the First Payments after the first will vary depending upon the investment experience of the Variable Sub-Accounts. The subsequent amount paid from each sub-account is determined by multiplying (a) by (b) where (a) is the number of sub-account Annuity Units to be paid and (b) is the sub-account annuity unit value on the 5th Valuation Date preceding the date the annuity payment is due. The total amount of each variable annuity payment will be the sum of the variable annuity payments for each Variable Sub-Account. The Company guarantees that the dollar amount of each payment after the first will not be affected by variations in expenses or mortality experience. (4) Transfers After the Payment Commencement Date Once variable annuity payments have begun, the Owner may Transfer all or part of the Variable Account Value from one Variable Sub-Account to another. Transfers after the Payment Commencement Date will be made by converting the number of Annuity Units being Transferred to the number of Annuity Units of the sub-account to which the Transfer is made. The result will be that the next annuity payment, if it were made at that time, would be the same amount that it would have been without the Transfer. Thereafter, annuity payments will reflect changes in the value of the new Annuity Units. Once annuity payments have begun, no Transfers may be made from a fixed annuity payment option to a variable annuity payment option, or from a variable annuity payment option to a fixed annuity payment option. The Certificate's Transfer provisions will apply. What fixed annuity payment options are available? FIXED ANNUITY PAYMENT OPTIONS The guaranteed annuity table is based on mortality from the 1983 Table (a) for Individual Annuity Valuation and a guaranteed interest rate of 2 1/2% per year. The Company may offer a better rate than the guaranteed rate shown. The rate offered is not less than the single consideration immediate annuity contract rate offered to the same class of Annuitants. The following fixed annuity payment options are available: (a) Option 1: Income of Specified Amount An annuity payment at 12-, 6-, 3-, or 1-month intervals, of an amount elected by the Owner for an Annuity Payment Period of not more than 240 months. Upon death of the Annuitant, the Beneficiary will begin to receive the remaining payments at the same interval that was elected by the Owner. See Table C. (b) Option 2: Income for a Specified Period An annuity payment at 12-, 6-, 3-, or 1-month intervals, for the number of months elected, for an Annuity Payment Period of not more than 240 months. Upon death of the Annuitant, the Beneficiary will begin to receive the remaining payments at the same interval that was elected by the Owner. See Table C. (c) Option 3: Fixed Life Annuity with Guaranteed Period Payments for the guaranteed Annuity Payment Period elected which may be 5, 10, 15, or 20 years or the lifetime of the Annuitant whichever is longer. Upon death of the Annuitant, any amounts remaining payable under this payment option will be paid to the Beneficiary. See Table B. (d) Option 4: Fixed Life Annuity Monthly payments for the Annuitant's lifetime, without a guaranteed period. See Table B. Upon death of the Annuitant, all payments cease and no amounts are payable to the Beneficiary. (e) Option 5: Any Other Form Any other form of annuity which is acceptable to the Company. J434 NY Page 16 J434 4/3/97 Page 13 Payment Options (continued) What guidelines apply to periodic withdrawals? PERIODIC WITHDRAWAL OPTION The Owner must Request that all or part of the Annuity Account Value be applied to a Periodic Withdrawal Option. Premium Tax, if applicable, will be deducted before applying the amount Requested. While periodic withdrawals are being received: * a Market Value Adjustment applies to periodic withdrawals from Guarantee Periods 6 or more months prior to maturity; * the Owner may keep the same Fixed and Variable Sub-Accounts as were in force before periodic withdrawals began; * Charges and fees under this Certificate continue to apply; ( the Owner may continue to exercise all contractual rights that are available prior to electing a payment option, except that no Contributions may be made; ( if a partial withdrawal is made from a Fixed Sub-Account, the Market Value Adjustment, if applicable, will be applied; * Guarantee Periods renew into the shortest Guarantee Period then available. HOW TO ELECT PERIODIC WITHDRAWALS The Request of the Owner is required to elect, or change the election of, the Periodic Withdrawal Option. The Owner must Request: the withdrawal frequency of either 12-, 6-, 3-, or 1-month intervals; a withdrawal amount; a minimum of $100 is required; the calendar month, day, and year on which withdrawals are to begin; one Periodic Withdrawal Option; and the allocation of withdrawals from the Variable and/or Fixed Sub-Account(s) as follows: 1) Prorate the amount to be paid across all Variable and Fixed Sub-Accounts in proportion to the assets in each sub-account; or 2) Select the Variable and/or Fixed Sub-Account(s) from which withdrawals will be made. Once the Variable and/or Fixed Sub-Accounts(s) have been depleted, the Company will automatically prorate the remaining withdrawals against all remaining available Sub-Accounts, unless the Owner Requests the selection of another Variable Sub-Account. The Owner may elect to change the withdrawal option and/or frequency once each calendar year. Periodic Withdrawals will cease on the earlier of the date: * the amount elected to be paid under the option selected has been reduced to zero; * the Annuity Account Value is zero; * the Owner Requests that withdrawals stop; * the Owner purchases an annuity option; or * of death of an Owner or the Annuitant. PERIODIC WITHDRAWAL OPTIONS AVAILABLE The Owner must elect one of these 5 withdrawal options: 1) Income for a Specified Period for at least thirty-six (36) months - The Owner elects the duration over which withdrawals will be made. The amount paid will vary based on the duration; or 2) Income of a Specified Amount for at least thirty-six (36) months - The Owner elects the dollar amount of the withdrawals. Based on the amount elected, the duration may vary; or 3) Interest Only - The withdrawals will be based on the amount of interest credited to the Fixed Sub-Account(s) between each withdrawal. Available only if 100% of the account value is invested in the Fixed Sub-Account; or 4) Minimum Distribution - If this is an IRA Certificate, the Owner may Request minimum distributions as specified under Internal Revenue Code 401(a)(9); or 5) Any Other Form for a period of at least thirty-six (36) months - - Any other form of periodic withdrawal which is acceptable to the Company. J418 Page 4 J434 NY Page 17 TABLE A - Variable Life Annuity FEMALE Monthly Payment for Each $1,000 of Annuity Account Value Without With Guaranteed Period Age of Guaranteed 5 10 15 20 Annuitant Period Years Years Years Years 20 4.29 4.29 4.29 4.29 4.29 21 4.31 4.31 4.30 4.30 4.30 22 4.32 4.32 4.32 4.31 4.31 23 4.33 4.33 4.33 4.32 4.32 24 4.34 4.34 4.34 4.34 4.33 25 4.36 4.36 4.35 4.35 4.35 26 4.37 4.37 4.37 4.37 4.36 27 4.39 4.39 4.38 4.38 4.38 28 4.40 4.40 4.40 4.40 4.39 29 4.42 4.42 4.42 4.41 4.41 30 4.44 4.44 4.44 4.43 4.42 31 4.46 4.46 4.45 4.45 4.44 32 4.48 4.48 4.47 4.47 4.46 33 4.50 4.50 4.49 4.49 4.48 34 4.52 4.52 4.52 4.51 4.50 35 4.55 4.54 4.54 4.53 4.52 36 4.57 4.57 4.56 4.56 4.55 37 4.60 4.60 4.59 4.58 4.57 38 4.63 4.62 4.62 4.61 4.59 39 4.65 4.65 4.65 4.64 4.62 40 4.69 4.68 4.68 4.67 4.65 41 4.72 4.72 4.71 4.70 4.68 42 4.75 4.75 4.74 4.73 4.71 43 4.79 4.79 4.78 4.76 4.74 44 4.83 4.83 4.82 4.80 4.77 45 4.87 4.87 4.86 4.84 4.81 46 4.91 4.91 4.90 4.88 4.85 47 4.96 4.96 4.94 4.92 4.88 48 5.01 5.00 4.99 4.96 4.92 49 5.06 5.06 5.04 5.01 4.97 50 5.12 5.11 5.08 5.06 5.01 Without With Guaranteed Period Age of Guaranteed 5 10 15 20 Annuitant Period Years Years Years Years 51 5.17 5.17 5.14 5.11 5.05 52 5.23 5.23 5.20 5.16 5.10 53 5.30 5.29 5.26 5.22 5.15 54 5.37 5.36 5.33 5.27 5.20 55 5.44 5.43 5.40 5.34 5.25 56 5.52 5.51 5.47 5.40 5.31 57 5.60 5.59 5.54 5.47 5.37 58 5.69 5.68 5.62 5.54 5.43 59 5.79 5.77 5.71 5.62 5.49 60 5.89 5.87 5.80 5.69 5.55 61 6.00 5.97 5.90 5.78 5.61 62 6.11 6.08 6.00 5.86 5.67 63 6.24 6.20 6.11 5.95 5.74 64 6.37 6.33 6.22 6.04 5.80 65 6.51 6.47 6.34 6.14 5.87 66 6.66 6.61 6.47 6.24 5.93 67 6.82 6.77 6.60 6.34 5.99 68 7.00 6.93 6.74 6.44 6.05 69 7.19 7.11 6.89 6.54 6.11 70 7.39 7.31 7.05 6.65 6.16 71 7.62 7.51 7.21 6.75 6.21 72 7.86 7.74 7.38 6.85 6.26 73 8.12 7.98 7.56 6.96 6.30 74 8.41 8.23 7.74 7.05 6.34 75 8.72 8.51 7.93 7.15 6.37 76 9.06 8.80 8.12 7.24 6.40 77 9.42 9.11 8.31 7.32 6.42 78 9.81 9.44 8.51 7.39 6.44 79 10.24 9.80 8.70 7.46 6.46 80 10.71 10.16 8.88 7.52 6.47 If payments commence on any other date than the exact age of the Annuitant as shown above, the amount of the monthly payment shall be determined by the Company on the actuarial basis used in determining the above amounts. J434 NY Page 18 J434 Page 18 J401 Page 14 J401 Page 13 TABLE A - Variable Life Annuity MALE Monthly Payment for Each $1,000 of Annuity Account Value Without With Guaranteed Period Age of Guaranteed 5 10 15 20 Annuitant Period Years Years Years Years 20 4.38 4.38 4.37 4.37 4.36 21 4.39 4.39 4.39 4.38 4.38 22 4.41 4.41 4.40 4.40 4.39 23 4.43 4.42 4.42 4.42 4.41 24 4.44 4.44 4.44 4.43 4.42 25 4.46 4.46 4.46 4.45 4.44 26 4.48 4.48 4.48 4.47 4.46 27 4.50 4.50 4.50 4.49 4.48 28 4.52 4.52 4.52 4.51 4.50 29 4.55 4.55 4.54 4.53 4.52 30 4.57 4.57 4.56 4.55 4.54 31 4.60 4.59 4.59 4.58 4.57 32 4.62 4.62 4.62 4.60 4.59 33 4.65 4.65 4.64 4.63 4.61 34 4.68 4.68 4.67 4.66 4.64 35 4.72 4.71 4.70 4.69 4.67 36 4.75 4.75 4.74 4.72 4.70 37 4.79 4.78 4.77 4.75 4.73 38 4.82 4.82 4.81 4.79 4.76 39 4.86 4.86 4.85 4.82 4.79 40 4.91 4.90 4.89 4.86 4.82 41 4.95 4.95 4.93 4.90 4.86 42 5.00 4.99 4.97 4.94 4.90 43 5.05 5.04 5.02 4.98 4.93 44 5.10 5.09 5.07 5.03 4.97 45 5.16 5.15 5.12 5.07 5.02 46 5.21 5.20 5.17 5.12 5.06 47 5.28 5.26 5.23 5.17 5.10 48 5.34 5.33 5.29 5.23 5.15 49 5.41 5.39 5.35 5.28 5.20 50 5.48 5.46 5.41 5.34 5.24 Without With Guaranteed Period Age of Guaranteed 5 10 15 20 Annuitant Period Years Years Years Years 51 5.55 5.53 5.48 5.40 5.29 52 5.63 5.61 5.55 5.46 5.35 53 5.71 5.69 5.63 5.53 5.40 54 5.80 5.77 5.70 5.60 5.45 55 5.89 5.87 5.79 5.67 5.51 56 5.99 5.96 5.88 5.74 5.57 57 6.10 6.06 5.97 5.82 5.62 58 6.21 6.17 6.07 5.90 5.68 59 6.33 6.29 6.17 5.98 5.74 60 6.46 6.42 6.28 6.07 5.80 61 6.60 6.55 6.40 6.16 5.86 62 6.75 6.69 6.52 6.26 5.91 63 6.91 6.84 6.64 6.34 5.97 64 7.09 7.01 6.78 6.43 6.02 65 7.27 7.18 6.91 6.52 6.07 66 7.47 7.36 7.06 6.62 6.12 67 7.68 7.56 7.21 6.71 6.17 68 7.91 7.76 7.36 6.80 6.21 69 8.15 7.98 7.52 6.90 6.26 70 8.42 8.21 7.68 6.98 6.29 71 8.69 8.46 7.84 7.07 6.33 72 8.99 8.71 8.01 7.15 6.36 73 9.31 8.98 8.18 7.23 6.38 74 9.65 9.27 8.35 7.30 6.41 75 10.02 9.57 8.52 7.37 6.43 76 10.41 9.88 8.68 7.43 6.44 77 10.84 10.21 8.84 7.49 6.46 78 11.29 10.55 9.00 7.54 6.47 79 11.78 10.93 9.15 7.59 6.48 80 12.29 11.27 9.30 7.63 6.49 If payments commence on any other date than the exact age of the Annuitant as shown above, the amount of the monthly payment shall be determined by the Company on the actuarial basis used in determining the above amounts. J434 Page 19 J434 NY Page 19 J401 Page 14 J401 Page 14 TABLE B - Life Annuity FEMALE Monthly Payment for Each $1,000 of Annuity Account Value Without With Guaranteed Period Age of Guaranteed 5 10 15 20 Annuitant Period Years Years Years Years 20 2.61 2.61 2.61 2.61 2.61 21 2.63 2.63 2.63 2.63 2.63 22 2.65 2.65 2.65 2.64 2.64 23 2.67 2.67 2.66 2.66 2.66 24 2.69 2.69 2.68 2.68 2.68 25 2.71 2.71 2.70 2.70 2.70 26 2.73 2.73 2.72 2.72 2.72 27 2.75 2.75 2.75 2.74 2.74 28 2.77 2.77 2.77 2.77 2.76 29 2.79 2.79 2.79 2.79 2.79 30 2.82 2.82 2.82 2.81 2.81 31 2.84 2.84 2.84 2.84 2.83 32 2.87 2.87 2.87 2.86 2.86 33 2.90 2.90 2.89 2.89 2.89 34 2.93 2.93 2.92 2.92 2.91 35 2.96 2.96 2.95 2.95 2.94 36 2.99 2.96 2.98 2.98 2.97 37 3.02 3.02 3.02 3.01 3.00 38 3.05 3.05 3.05 3.04 3.04 39 3.09 3.09 3.09 3.08 3.07 40 3.13 3.13 3.12 3.12 3.10 41 3.17 3.16 3.16 3.15 3.14 42 3.21 3.21 3.20 3.19 3.18 43 3.25 3.25 3.24 3.23 3.22 44 3.30 3.29 3.29 3.28 3.26 45 3.34 3.34 3.33 3.32 3.30 46 3.39 3.39 3.38 3.37 3.35 47 3.44 3.44 3.43 3.42 3.39 48 3.50 3.50 3.49 3.47 3.44 49 3.56 3.55 3.54 3.52 3.49 50 3.62 3.61 3.60 3.58 3.54 Without With Guaranteed Period Age of Guaranteed 5 10 15 20 Annuitant Period Years Years Years Years 51 3.68 3.68 3.66 3.64 3.59 52 3.75 3.74 3.73 3.70 3.65 53 3.82 3.81 3.79 3.76 3.71 54 3.89 3.88 3.86 3.83 3.77 55 3.97 3.96 3.94 3.90 3.83 56 4.05 4.04 4.02 3.97 3.89 57 4.14 4.13 4.10 4.05 3.96 58 4.23 4.22 4.19 4.13 4.03 59 4.33 4.32 4.28 4.21 4.10 60 4.44 4.42 4.38 4.30 4.17 61 4.55 4.53 4.48 4.39 4.24 62 4.67 4.65 4.59 4.48 4.31 63 4.79 4.77 4.70 4.58 4.39 64 4.93 4.90 4.82 4.68 4.46 65 5.07 5.04 4.95 4.78 4.53 66 5.23 5.19 5.09 4.89 4.61 67 5.39 5.35 5.23 5.00 4.68 68 5.57 5.52 5.38 5.11 4.74 69 5.76 5.71 5.53 5.23 4.81 70 5.96 5.90 5.70 5.34 4.87 71 6.19 6.11 5.87 5.46 4.93 72 6.43 6.34 6.05 5.57 4.98 73 6.69 6.58 6.24 5.68 5.03 74 6.97 6.84 6.43 5.79 5.07 75 7.28 7.12 6.63 5.90 5.11 76 7.61 7.41 6.83 5.99 5.14 77 7.97 7.73 7.04 6.09 5.17 78 8.36 8.06 7.24 6.17 5.19 79 8.78 8.42 7.44 6.24 5.21 80 9.24 8.79 7.64 6.31 5.22 If payments commence on any other date than the exact age of the Annuitant as shown above, the amount of the monthly payment shall be determined by the Company on the actuarial basis used in determining the above amounts. J434 NY Page 20 J401 Page 16 J401 Page 16 J401 Page 16 TABLE B - Life Annuity MALE Monthly Payment for Each $1,000 of Annuity Account Value Without With Guaranteed Period Age of Guaranteed 5 10 15 20 Annuitant Period Years Years Years Years 20 2.72 2.72 2.72 2.72 2.71 21 2.74 2.74 2.74 2.74 2.73 22 2.76 2.76 2.76 2.76 2.75 23 2.79 2.78 2.78 2.78 2.78 24 2.81 2.81 2.81 2.80 2.80 25 2.83 2.83 2.83 2.83 2.82 26 2.86 2.86 2.86 2.85 2.85 27 2.89 2.88 2.88 2.88 2.87 28 2.91 2.91 2.91 2.91 2.90 29 2.94 2.94 2.94 2.93 2.93 30 2.97 2.97 2.97 2.96 2.95 31 3.00 3.00 3.00 2.99 2.98 32 3.04 3.03 3.03 3.03 3.01 33 3.07 3.07 3.07 3.06 3.05 34 3.11 3.10 3.10 3.09 3.08 35 3.14 3.14 3.14 3.13 3.11 36 3.18 3.18 3.18 3.17 3.15 37 3.22 3.22 3.22 3.21 3.19 38 3.27 3.28 3.26 3.25 3.23 39 3.31 3.31 3.30 3.29 3.27 40 3.36 3.36 3.35 3.33 3.31 41 3.41 3.41 3.40 3.38 3.35 42 3.46 3.46 3.45 3.43 3.39 43 3.52 3.51 3.50 3.48 3.44 44 3.57 3.57 3.56 3.53 3.49 45 3.63 3.63 3.61 3.58 3.54 46 3.70 3.69 3.67 3.64 3.59 47 3.76 3.75 3.73 3.69 3.64 48 3.83 3.82 3.80 3.76 3.69 49 3.90 3.89 3.87 3.82 3.75 50 3.98 3.97 3.94 3.88 3.81 Without With Guaranteed Period Age of Guaranteed 5 10 15 20 Annuitant Period Years Years Years Years 51 4.05 4.04 4.01 3.95 3.86 52 4.14 4.12 4.09 4.02 3.93 53 4.22 4.21 4.17 4.10 3.99 54 4.32 4.30 4.25 4.17 4.05 55 4.41 4.39 4.34 4.25 4.11 56 4.51 4.50 4.44 4.33 4.18 57 4.62 4.60 4.54 4.42 4.25 58 4.74 4.72 4.64 4.51 4.31 59 4.86 4.84 4.75 4.60 4.38 60 5.00 4.96 4.87 4.69 4.45 61 5.14 5.10 4.99 4.79 4.51 62 5.29 5.25 5.12 4.89 4.58 63 5.45 5.40 5.25 4.99 4.65 64 5.62 5.57 5.39 5.09 4.71 65 5.81 5.74 5.54 5.20 4.77 66 6.00 5.93 5.69 5.30 4.83 67 6.21 6.12 5.85 5.41 4.88 68 6.44 6.33 6.01 5.51 4.93 69 6.68 6.55 6.18 5.61 4.98 70 6.94 6.79 6.35 5.71 5.02 71 7.21 7.03 6.52 5.80 5.06 72 7.51 7.29 6.70 5.90 5.09 73 7.82 7.57 6.88 5.98 5.12 74 8.16 7.86 7.06 6.08 5.15 75 8.52 8.16 7.24 6.14 5.17 76 8.90 8.48 7.42 6.21 5.19 77 9.32 8.81 7.59 6.27 5.21 78 9.77 9.16 7.76 6.33 5.22 79 10.24 9.52 7.93 6.38 5.24 80 10.75 9.90 8.09 6.43 5.24 If payments commence on any other date than the exact age of the Annuitant as shown above, the amount of the monthly payment shall be determined by the Company on the actuarial basis used in determining the above amounts. J401 Page 17 J434 NY Page 21 J401 Page 17 J401 Page 17 TABLE C - Income of Specified Amount - Income for a Specified Period Payment for Each $1,000 of Annuity Account Value Years Monthly Quarterly Semiannually Annually 1 84.28 252.32 503.09 1,000.00 2 42.66 127.72 254.65 506.17 3 28.79 86.19 171.85 341.60 4 21.86 65.44 130.47 259.33 5 17.70 52.99 105.65 210.00 6 14.93 44.69 89.11 177.12 7 12.95 38.77 77.30 153.65 8 11.47 34.33 68.45 136.07 9 10.32 30.88 61.58 122.40 10 9.39 28.13 56.08 111.47 11 8.64 25.87 51.59 102.54 12 8.02 24.00 47.85 95.11 13 7.49 22.41 44.69 88.83 14 7.03 21.06 41.98 83.45 15 6.64 19.88 39.64 78.80 16 6.30 18.86 37.60 74.73 17 6.00 17.95 35.79 71.15 18 5.73 17.15 34.20 67.97 19 5.49 16.43 32.77 65.13 20 5.27 15.79 31.48 62.58 If payments are for an amount or duration different than that outlined above, the Company will determine the proper amount or duration using the actuarial basis used to determine the above amounts. J434 NY Page 22 J434 Page 22 EX-5 5 EXHIBIT 5 Underwritten by: First Great-West Life & Annuity Insurance Company The Schwab Variable Annuity TM Distributed by: Charles Schwab & Co., Inc. PO Box 7666 San Francisco, CA 94120-7666 FLEXIBLE PREMIUM FIXED AND VARIABLE DEFERRED ANNUITY APPLICATION Please complete and sign this application and return it in the enclosed postage paid envelope. Please take a moment to review the application to make sure all sections are completed and you have signed where indicated. Thank You! Have Questions? Call Us! Schwab Annuity Service Center 1-800-838-0650 6:30am - 4:00 pm, Monday-Friday Pacific Time J434app NY1 2602(9/96) ( 1996 Charles Schwab & Co., Inc. Member NYSE/SIPC All Rights Reserved Underwritten by: First Great-West Life & Annuity Insurance Company The Schwab Variable Annuity TM Distributed by: Charles Schwab & Co., Inc. PO Box 7666 San Francisco, CA 94120-7666 1. Who will own the annuity? The Owner is the person entitled to all rights under the annuity. If the Owner is a Trust, additional forms may be required and certain restrictions may apply. Call the Schwab Annuity Service Center at 1-800-838-0650 for assistance. Name (First/Middle/Last) Home Address City State Zip Birth Date Male/Female Social Security/Tax I.D. Number ( ) ( ) Daytime Telephone Number Evening Telephone Number 2. Who will be the Joint Owner? This is optional, and only a spouse may be a Joint Owner of this annuity. If this is an IRA, a Joint Owner cannot be named. Name (First/Middle/Last) Home Address City State Zip Birth Date Male/Female Social Security/Tax I.D. Number ( ) ( ) Daytime Telephone Number Evening Telephone Number 3. Primary Annuitant. The Annuitant is the person on whose life the annuity payments are based. The Annuitant must be age 90 or younger. If the Annuitant and the Owner are the same, check the appropriate box below and skip to question #5. ( Same as Owner or ( The person listed below Name (First/Middle/Last) Home Address City State Zip Birth Date Male/Female Social Security/Tax I.D. Number ( ) ( ) Daytime Telephone Number Evening Telephone Number 4. Contingent Annuitant. This is optional. The Contingent Annuitant is the person who will become the Annuitant upon the death of the Primary Annuitant. The Contingent Annuitant must be age 90 or younger. If the Contingent Annuitant and the Owner are the same, check the appropriate box below and skip to question #5. ( Same as Owner or ( The person listed below Name (First/Middle/Last) Home Address City State Zip Birth Date Male/Female Social Security/Tax I.D. Number ( ) ( ) Daytime Telephone Number Evening Telephone Number J434app NY1 2602(9/96) ( 1996 Charles Schwab & Co., Inc. Member NYSE/SIPC All Rights Reserved Page 1 (Continued on Next Page) FLEXIBLE PREMIUM FIXED AND VARIABLE DEFERRED ANNUITY APPLICATION (continued) 5. Beneficiary(ies). Who would you like to receive the benefits payable upon the death of the Owner or Annuitant (as applicable)? You may name a person, a trust, a charity, or other entity as Beneficiary. You may name one or more Beneficiaries, indicating the percentage for each (whole percentages only). If you need additional space, please use a separate sheet. Name (First/Middle/Last) Social Security No. Birth Date Percentage Name (First/Middle/Last) Social Security No. Birth Date Percentage Name (First/Middle/Last) Social Security No. Birth Date Percentage Must = 100% 6. Citizenship Status. Is each individual named on this application a citizen of the United States? ( YES ( NO If "No" give details below. Name(s) Country of Legal Residence Country of Citizenship 7. Will this annuity replace a life insurance policy or annuity that you currently own? State law requires that you provide this information when you replace a life insurance or annuity contract with another. ( YES, this will replace the life insurance policy or annuity listed below. ( NO, this will NOT replace another life insurance policy or annuity. Name of Insurance Company Being Replaced Policy Number 8. When would you like periodic withdrawals or annuity payments to begin? If you want payments to begin on a certain date, indicate the month and year. If no date is indicated, annuity payments will begin on the first day of the month of the Annuitant's 91st birthday. I would like the payments to begin on (month) (year) . ( Periodic Withdrawals OR ( Annuity Payments 9. Are you currently a Schwab customer? ( YES, My account number is . ( NO, I am not currently a Schwab customer. 10. How will you pay for this annuity? Minimum initial contribution is $5,000, $2,000 if an IRA, or $1,000 if paid through an Automatic Contribution Plan. Subsequent minimum contributions are $500, $100 if paid through an Automatic Contribution Plan. To establish an Automatic Contribution Plan, please call the Schwab Annuity Service Center for appropriate forms. For non-IRA's: ( Check is attached. (Make check payable to First Great-West Life & Annuity Insurance Company) ( Transfer $ from my Schwab brokerage account as listed in #9 above. ( Transfer the entire balance from my existing annuity or life insurance policy. (Complete enclosed Absolute Assignment/Replacement forms.) For IRA's: ( Check is attached for a new IRA for tax year(s): . (Make check payable to First Great-West Life & Annuity Insurance Company.) ( Transfer funds from my existing IRA annuity or other qualified plan. (Complete enclosed IRA rollover/transfer form.) 11. Compliance Information. The Securities Exchange Act of 1934 requires that we have reasonable grounds to believe, based upon the information provided by you, that your investment selections are suitable given your objectives and financial situation. Please answer the following questions relating to the suitability of your investment choices. Overall Investment Objective ( Capital Preservation ( Income ( Growth ( Speculation Federal Income Tax Bracket ( 15% ( 28% ( 31% or more Annual Income ( Under $15,000 ( $15,000 to $24,999 ( $25,000 to $49,999 ( $50,000 to $99,999 ( $100,000 or more Liquid Net Worth ( Under $15,000 ( $15,000 to $49,999 ( $50,000 to $99,999 ( $100,000 or more J434app NY1 2602(9/96) ( 1996 Charles Schwab & Co., Inc. Member NYSE/SIPC All Rights Reserved Page 2 (Continued on Next Page) FLEXIBLE PREMIUM FIXED AND VARIABLE DEFERRED ANNUITY APPLICATION (continued) 12. How would you like to allocate your payment? You may either choose one investment option from the enclosed list or combine your payment among several. Please write the name of each investment option you choose and indicate the whole percentage of your contribution for each investment option you select. This section must be completed for your application to be processed. Name of Investment Option Allocation % % % % % % % % % % % % % TOTAL =100 % 13. Signatures ( Please send me a copy of the Statement of Additional Information to the prospectus. I understand that I am applying for a Flexible Premium Variable and Fixed Deferred Annuity, Contract Form J434 NY, issued by First Great-West Life & Annuity Insurance Company. I declare that all statements made on this application are true to the best of my knowledge and belief. I acknowledge receipt of the prospectus for the variable and fixed annuity contract. I believe the contract is suitable for my retirement and insurance needs. I understand that amounts allocated to a Variable Sub-Account are variable and are not guaranteed as to dollar amount. I further understand that amounts allocated to a Fixed Sub-Account may be subject to a Market Value Adjustment which may result in positive or negative adjustments to amounts payable under the contract. I hereby direct that my instructions to the Schwab Annuity Service Center be honored for transactions unless otherwise notified by me in writing. I understand that telephone calls may be recorded to monitor the quality of service I receive and to verify contract transaction information. If a transfer from my Schwab brokerage account is indicated in Section 10, I authorize Schwab to transfer the amount specified. I certify under penalty of perjury that the taxpayer identification numbers listed on this application are correct. The Internal Revenue Service does not require your consent to any provision of this document other than the certifications required to avoid backup withholding. Owner's Signature Date Joint Owner's Signature (if applicable) Date For Internal Use Only Do you have reason to believe the annuity applied for will replace any insurance or annuity with us or any other company? ( yes ( no Signature (if required) Rep Code Source Code Date J434app NY1 2602(9/96) ( 1996 Charles Schwab & Co., Inc. Member NYSE/SIPC All Rights Reserved Page 3 (Continued on Next Page) FLEXIBLE PREMIUM FIXED AND VARIABLE DEFERRED ANNUITY APPLICATION (continued) Here is a list of the investment options available. You may either choose one investment option from the following list or combine your payment among several. Please write on the previous page the name of each investment option you choose and specify the whole percentage of your contribution for each investment option you select. Section 12 must be completed for your application to be processed. VARIABLE SUB-ACCOUNTS Investment Objective Eligible Investment Options Aggressive Growth Janus Aspen Aggressive Growth Portfolio SteinRoe Capital Appreciation Fund Strong Discovery Fund II Alger American Small Capitalization Portfolio Growth Janus Aspen Growth Portfolio Alger American Growth Fund TCI Growth Portfolio Montgomery Variable Series: Growth Fund Schwab Asset Director - High Growth Portfolio Growth & Income Federated American Leaders Fund II Equity Income INVESCO VIF - Industrial Income Portfolio Balanced/Asset Allocation INVESCO VIF - Total Return Portfolio Index Schwab S & P 500 Portfolio Gold/Natural Resources Van Eck Gold and Natural Resources Fund International Aggressive Growth Lexington Emerging Markets Fund Montgomery Variable Series: International Small Cap Fund Growth Janus Aspen Worldwide Growth Portfolio TCI International Portfolio High Yield Bond INVESCO VIF - High Yield Portfolio Government Bond Federated Fund for U.S. Government Securities II Money Market Schwab Money Market Portfolio Fixed Sub-Accounts Investment Objective Fixed Sub-Account chosen for specified time intervals, subject to Market Value Adjustment Eligible Guarantee Periods Guarantee Period Fund - 1 Year Guarantee Period Fund - 2 Years Guarantee Period Fund - 3 Years Guarantee Period Fund - 4 Years Guarantee Period Fund - 5 Years Guarantee Period Fund - 6 Years Guarantee Period Fund - 7 Years Guarantee Period Fund - 8 Years Guarantee Period Fund - 9 Years Guarantee Period Fund - 10 Years J434app NY1 2664(9/96) ( 1996 Charles Schwab & Co., Inc. Member NYSE/SIPC All Rights Reserved Page 4 EX-6.(I) 6 EXHIBIT 6(a) DECLARATION OF INTENTION AND CHARTER OF FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY We, the undersigned, all being natural persons of full age, and at least a majority of us citizens and residents of the United States, and at least three of us residents of the State of New York, do hereby declare our intention to form a stock insurance corporation for the purpose of transacting the kinds of insurance authorized by paragraphs 1, 2 and 3 of subsection (a) of Section 1113 of the Insurance Law of the State of New York, and for that purpose do adopt the following Charter: CHARTER OF FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY FIRST: The name of the corporation shall be "First Great-West Life & Annuity Insurance Company" (hereinafter referred to as the "Corporation"). SECOND: The principal office of the Corporation shall be located in Albany County, State of New York. THIRD: The kinds of insurance to be transacted by the Corporation are those specified in Paragraphs "1," "2," and "3" of Section 1113(a) of the Insurance Law of the State of New York, as described below: (1) "Life insurance," means every insurance upon the lives of human beings, and every insurance appertaining thereto,including the granting of endowment benefits, additional benefits in the event of death by accident, additional benefits to safeguard the contract from lapse, accelerated payments of part or all of the death benefit or a special surrender value upon diagnosis (A) of terminal illness defined as a life expectancy of twelve months or less, or (B) of a medical condition requiring extraordinary medical care or treatment regardless of life expectancy, or provide a special surrender value, upon total and permanent disability of the insured, and optional modes of settlement of proceeds. "Life insurance" also includes additional benefits to safeguard the contract against lapse in the event of unemployment of the insured. Amounts paid the insurer for life insurance and proceeds applied under optional modes of settlement or under dividend options may be allocated by the insurer to one or more separate accounts pursuant to section four thousand two hundred forty of this chapter. (2) "Annuities," means all agreements to make periodical payments for a period certain or where the making or continuance of all or some of a series of such payments, or the amount of any such payment, depends upon the continuance of human life, except payments made under the authority of paragraph one hereof. Amounts paid to the insurer to provide annuities and proceeds applied under optional modes of settlement or under dividend options may be allocated by the insurer to one or more separate accounts pursuant to section four thousand two hundred forty of this chapter. (3) "Accident and health insurance," means (i) insurance against death or personal injury by accident or by any specified kind or kinds of accident and insurance against sickness, ailment or bodily injury, including insurance providing disability benefits pursuant to article nine of the workers' compensation law, except as specified in item (ii) hereof; and (ii) non-cancellable disability insurance, meaning insurance against disability resulting from sickness, ailment or bodily injury (but excluding insurance solely against accidental injury) under any contract which does not give the insurer the option to cancel or otherwise terminate the contract at or after one year from the effective date or renewal date. The Corporation shall also have full power and authority to effect reinsurance of the kinds of insurance business which it is licensed to do in New York and may engage in any other kind or kinds of business to the extent necessarily or properly incidental to the kind or kinds of business which it is or may hereafter be authorized to do in the State of New York. FOURTH: The corporate powers of the Corporation shall be exercised through a Board of Directors and through such committees thereof, and by such officers, employees and agents as the Board of Directors shall empower. FIFTH: The Board of Directors of the Corporation shall consist of not more than twenty-one directors nor less than nine directors of which at least four shall not be officers or employees of the Corporation or any entity controlling, controlled by, or under common control with the Corporation and who are not beneficial owners of a controlling interest in the voting stock of the Corporation or any such entity. The exact number of directors shall be determined from time to time in accordance with the provisions of the By-Laws. In the event that the admitted assets of the Corporation exceed five hundred million dollars, the number of directors shall be increased to not less than thirteen within one year following the end of the calendar year in which the admitted assets of the Corporation exceeded five hundred million dollars, of which number not less than one-third shall not be officers or employees of the Corporation or any entity controlling, controlled by, or under common control with the Corporation and who are not beneficial owners of a controlling interest in the voting stock of the Corporation or any such entity. Directors shall be elected at each annual meeting of stockholders, which meeting shall be held on the fourth Thursday in the month of June. Each director so elected shall hold office until the next annual meeting of stockholders when his or her successor is elected and qualifies. In the event that the number of directors duly elected and serving shall be less than the required minimum, the Corporation shall not for that reason be dissolved, but the vacancy or vacancies shall be filled as provided in paragraph Sixth. SIXTH: (a) Each director shall be at least eighteen years of age. At all times a majority of the directors shall be citizens and residents of the United States and not less than three thereof shall be residents of the State of New York. The directors need not be stockholders of the Corporation. (b) If any vacancies shall occur in the Board of Directors by death or resignation or removal or otherwise, the stockholders or by a majority of the remaining members of the Board shall, as provided in the By-Laws, elect a director or directors to fill the vacancy or vacancies occasioned and each director so elected shall hold office until the next annual meeting of stockholders. (c) Notice of any election of a director or directors under the provisions of this section shall be given to the Superintendent of Insurance of the State of New York in the manner and to the extent required by law. (d) No director shall be personally liable to the Corporation or any of its shareholders for damages for breach of duty as a director; provided, however, that the foregoing shall not eliminate or limit the liability of a director if a judgment or other final adjudication adverse to him or her establishes that his or her acts or omissions were in bad faith or involved intentional misconduct or any violation of the Insurance Law or any knowing violation of any other law or that he or she personally gained in fact a financial profit or other advantage to which he or she was not legally entitled. SEVENTH: The names and post office addresses of the directors who shall serve until the first annual meeting of stockholders of the Corporation are as follows: Name Address Marcia D. Alazraki 7 Aspen Heights Slingerlands, New York 12159 Glen R. Derback 7340 Brixham Circle Castle Rock, Colorado 80104 Gail H. Klapper 177 Humboldt Street Denver, Colorado 80218 Dennis Low 3862 Christy Ridge Road Sedalia, Colorado 80135 Jim L. McCallen 7283 South Niagra Circle Englewood, Colorado 80112 Robert K. Shaw 5484 South Nucla Court Aurora, Colorado 80015 Paul T. Shultz 3 Peter Cooper Road Apartment 9G New York, New York 10010 Donald A. Stern 2 Terrace Drive Great Neck, New York 11021 Douglas L. Wooden 5 Huntwick Lane Englewood, Colorado 80110 EIGHTH: The duration of the corporate existence of the Corporation shall be perpetual. NINTH: The amount of authorized paid-in capital of the Corporation shall be $2,000,000 and shall consist of 2,000 shares, par value $1,000 per share. TENTH: No stockholder of the Corporation shall have a preemptive right as such to have first or at any time offered to him any part of any of the presently authorized stock of the Corporation hereinafter optioned, issued or sold, or any part of any securities of the Corporation presently authorized, whether or not issued. ELEVENTH: The Board of Directors shall adopt By-Laws for its own regulation and that of the conduct of the business of the Corporation, which By-Laws shall not be inconsistent with this charter or the laws of the State of New York. TWELFTH: The Board of Directors shall devise and adopt a corporate seal of and for the Corporation, and shall have power to change and alter the same at its pleasure. THIRTEENTH: This charter may be amended in accordance with the laws of the State of New York. No amendment shall be effective until it shall have been approved in writing by the Superintendent of Insurance of the State of New York as provided by law. IN WITNESS WHEREOF, the undersigned have hereunto subscribed their name as of this 19th day of March , 1996. /s/ Marcia D. Alazraki Marcia D. Alazraki /s/ Glen R. Derback Glen R. Derback /s/ Gail H. Klapper Gail H. Klapper /s/ Dennis Low Dennis Low /s/ Jim L. McCallen Jim L. McCallen /s/ Robert K. Shaw Robert K. Shaw /s/ Paul T. Schultz Paul T. Shultz /s/ Donald A. Stern Donald A. Stern /s/ Douglas L. Wooden Douglas L. Wooden EX-6.(II) 7 EXHIBIT 6(b) BYLAWS OF FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY ARTICLE I SHAREHOLDERS' MEETING SECTION 1. Annual Meeting. The Annual Meeting of the Shareholders for the election of the Directors and for the transaction of any other business pertaining to the corporation (whether or not stated in the notice of the meeting) shall be held on the fourth Thursday in the month of June at such time, and place as the Board of Directors, by resolution, shall determine. SECTION 2. Special Meetings. Special Meetings of the Shareholders shall be called whenever ordered by the Chairman of the Board, the President, a quorum of the Board of Directors, or the holders of at least one-quarter (1/4) of the total amount of stock issued and outstanding. Notice of the meeting may be waived and neither the business to be transacted at, nor the purpose of the meeting, need be specified in the waiver of notice. In the absence of waiver of notice, the purposes for which the meeting is called shall be stated in the notice and no other corporate action shall be taken without the consent of all Shareholders entitled to vote. SECTION 3. Place of Meetings. All meetings of the Shareholders shall be held at the principal office of the corporation or at such other place or places, within or without the State of New York, as shall from time to time be designated by the Board of Directors. SECTION 4. Notice of Meetings. Notice of all meetings, regular or special, shall be given by mailing to each Shareholder entitled to vote thereat, directed to his or her address as it appears on the records of the corporation, at least ten days and not more than fifty days before such meeting, a written or printed notice of the time, place, and purpose or purposes thereof. SECTION 5. Quorum. The holders of a majority of the outstanding stock of the corporation entitled to vote, represented in person or by proxy, shall constitute a quorum for all purposes. In the absence of a quorum, the Shareholders entitled to vote thereat, represented in person or by proxy, may adjourn the meeting to a day certain. SECTION 6. Voting. At all meetings of Shareholders each share of stock held by a Shareholder, represented in person or by proxy, shall be entitled to one vote. Proxies shall be in writing and shall be signed by the Shareholder or the Shareholder's attorney-in-fact. Two inspectors of election shall be appointed by the Chairman of the meeting at any Shareholders' Meeting at which inspectors are required. The Directors shall be elected by ballot, and each fully-paid share of stock shall be entitled to one vote. Shares may be voted by proxy, signed by the person legally entitled to vote the same. Each Shareholder shall have the right to cast as many votes in the aggregate as shall equal the number of shares of stock held by him, multiplied by the number of Directors to be elected. ARTICLE II BOARD OF DIRECTORS SECTION 1. Number and Authority. The business and property of this corporation shall be conducted and managed by a Board of Directors consisting of not more than 21 Directors and not less than 9 Directors, the exact number thereof to be fixed and determined by action taken from time to time by the Board of Directors. No decrease in the number of directors shall shorten the term of any incumbent director. All directors shall be at least 18 years of age, a majority shall be citizens and residents of the United States and not less than three directors shall be residents of the State of New York. Further, persons who are not officers or salaried employees of the corporation or of any entity controlling, controlled by or under common control with it and who are not beneficial owners of a controlling interest in the voting stock of the corporation or any such entity (hereinafter referred to as "Independent Directors") shall constitute at least one-third of the Directors and at least one-third of the membership of each Committee of the Board of Directors. SECTION 2. Election. At each annual meeting of Shareholders, the Shareholders shall elect Directors to hold office until the next succeeding annual meeting. Each Director shall hold office for the term for which he or she is elected and until his or her successor has been elected and qualified, subject to removal as hereinafter provided. No election of a Director pursuant to this Section shall be valid unless a notice of election shall have been filed with the Superintendent of Insurance of the State of New York (the "Superintendent of Insurance") at least 10 days prior to the election date. SECTION 3. Removal and Vacancies. Any or all Directors may be removed at any time, with or without cause, by a majority vote of the Shareholders, who shall thereupon elect a successor Director or Directors to fill the vacancy or vacancies at a Special Meeting of Shareholders called for such purpose. A vacancy in the Board of Directors, other than one occurring by reason of removal by Shareholders, shall be filled by the Board of Directors to serve until the next annual meeting of the Shareholders. Where the number of Directors is increased, additional Directors may be elected by the Board of Directors to serve until the next annual meeting of the Shareholders. No successor Directors shall take office until 10 days after a notice of election shall have been filed with the Superintendent of Insurance. SECTION 4. Annual Meeting. The Annual Meeting of the Board of Directors shall be held at the meeting next following the Annual Meeting of the Shareholders. SECTION 5. Other Meetings. Other Meetings of the Board of Directors may be called by order of the Chairman of the Board, the President, or the Secretary or by a majority of the Board of Directors. There shall be at least three such meetings held during each year. SECTION 6. Place of Meetings. Meetings of the Board of Directors shall be held at the principal office of the corporation or at such other place within or without the State of New York as may be designated in the notice thereof. SECTION 7. Notice of Meetings. Notice of meetings of the Board of Directors shall be given by mailing to each member at least three days before such meeting, a written or printed notice of the time and place thereof. Such notice may also be given by telefax sent at least one day before such meeting. SECTION 8. Business Transacted at Meetings. Any business may be transacted and any corporate action taken at any meeting of the Board of Directors whether stated in the notice of such meeting or not, except as otherwise expressly required by law. One or more members of the Board or any Committee thereof may participate in any meeting of the Board or of any such Committee by means of a conference telephone or any similar communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence in person at the meeting. Any action required or permitted to be taken at a meeting of the Board of Directors or any Committee thereof may be taken without a meeting if all members of the Board or such Committee, as the case may be, consent thereto in writing and that such writing or writings are filed with the minutes of proceedings of the Board or such Committee. SECTION 9. Quorum. A majority of the number of Directors fixed by Section 1 shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, provided that at least one Independent Director is present. If a quorum is not present at a meeting, a majority of the Directors present may adjourn the meeting from time to time without further notice, for a period not to exceed 60 days at any one adjournment. SECTION 10. Interest of Directors. Consistent with the requirements of Section 713 of the New York Business Corporation Law, any Director may vote or act on behalf of the corporation in contracting with any other company although he may be a Shareholder, Director, or Officer of such other company. SECTION 11. Indemnification of Directors. The corporation may, by resolution of the Board of Directors, indemnify and save harmless out of the funds of the corporation to the extent permitted by applicable law, any Director, Officer, or employee of the corporation or any member or officer of any Committee, and his or her heirs, executors, and administrators, from and against all claims, liabilities, costs, charges, and expenses whatsoever that any such Director, Officer, employee, or any such member or officer sustains or incurs in or about any action, suit, or proceeding that is brought, commenced, or prosecuted against him or her for or in respect of any act, deed, matter, or thing whatsoever, made, done, or permitted by him or her in or about the execution of the duties of his or her office or employment with the corporation, in or about the execution of his or her duties as a Director or Officer of another company which he or she so serves at the request and on behalf of the corporation, or in or about the execution of his or her duties as a member or officer of any such Committee, and all other claims, liabilities, costs, charges, and expenses that he or she sustains or incurs, in or about or in relation to any such duties or the affairs of the corporation, the affairs of such other company which he or she so serves or the affairs of such Committee, except such claims, liabilities, costs, charges, or expenses as are occasioned by acts or omissions which were in bad faith, involved intentional misconduct, a violation of the New York Insurance Law or a knowing violation of any other law or which resulted in such person personally gaining in fact a financial profit or other advantage to which he or she was not entitled. The corporation may, by resolution of the Board of Directors, indemnify and save harmless out of the funds of the corporation to the extent permitted by applicable law, any Director, Officer, or employee of any subsidiary corporation of the corporation on the same basis and within the same constraints as described in the preceding sentence. No payment of indemnification shall be made unless notice has been filed with the Superintendent of Insurance pursuant to Section 1216 of the New York Insurance Law. ARTICLE III COMMITTEES SECTION 1. Appointment. The Board of Directors shall have the power to appoint Committees and to grant them powers and duties not inconsistent with the laws of the State of New York, its Charter and these Bylaws. All Committees shall consist of not less than three members, provided that where the minimum required number of Directors is increased to thirteen pursuant to the provisions of the Charter, such Committees shall consist of at least five members. SECTION 2. Independent Director Committees. The Board of Directors shall establish one or more Committees composed solely of Independent Directors. Such Committee or Committees shall have the responsibility for recommending the selection of independent certified public accountants, reviewing the corporation's financial condition, the scope and results of the independent audit and any internal audit, nominating candidates for director for election by Shareholders, evaluating performance of officers of the corporation deemed to be principal officers and recommending to the Board of Directors their selection and compensation and recommending any plan to issue options to officers and employees for the purchase of shares of its stock. SECTION 3. Other Committees. All other Committees established by the Board of Directors shall have at least one member who is an Independent Director. SECTION 4. Quorum. All of the members of any Committee consisting of three Directors shall constitute a quorum for the transaction of business. In the case of Committees consisting of more than three members, a majority shall constitute a quorum. ARTICLE IV OFFICERS SECTION 1. Duties in General. All Officers of the corporation, in addition to the duties prescribed by the Bylaws, shall perform such duties in the conduct and management of the business and property of the corporation as may be determined by the Board of Directors. In the case of more than one person holding an office of the same title, any one of them may perform the duties of the office except insofar as the Board of Directors, or the President may otherwise direct. SECTION 2. Number and Designation. The Officers of the corporation shall be a Chairman of the Board, a President, one or more Vice Presidents, one or more Secretaries, one or more Treasurers, one or more Assistant Secretaries, one or more Assistant Treasurers, and such other Officers and Committees as the Board of Directors may from time to time deem advisable. It shall be permissible for the same person to hold more than one office, except that the offices of President and Secretary shall not be held by the same person. SECTION 3. Election and Term of Office. The Board of Directors shall elect from their number a President and shall appoint a Secretary, Treasurer, and such other Officers as shall be prescribed in the Bylaws, and shall fill any vacancy that may occur. Such persons shall hold office until the meeting of the Board of Directors following the next annual meeting of the Shareholders. Any officer may be removed by the Board of Directors, with or without cause. SECTION 4. Chairman of the Board. The Chairman of the Board of Directors shall preside at all meetings of the Shareholders and at all meetings of the Board and shall perform such other duties as the Board of Directors may from time to time prescribe. SECTION 5. President. The President, in the absence of the Chairman of the Board, shall preside at all meetings of the Shareholders and of the Board of Directors. He shall have the powers and perform the duties usually pertaining to the Office of President. SECTION 6. Vice Presidents. The Vice Presidents shall have such powers and perform such duties as may be assigned to them from time to time by the Board of Directors or by the President. The Board of Directors or the President may from time to time determine the order of priority as between two or more Vice Presidents. SECTION 7. Secretary. The Secretary shall keep the minutes of the meetings of the Shareholders, of the Board of Directors, and of the Executive and Investment Committees; shall issue notices of meetings; shall have custody of the corporation's seal and corporate books and records; shall have charge of the issuance, transfer, and cancellation of stock certificates; shall have authority to attest and affix the corporate seal of any instruments executed on behalf of the corporation; and shall perform such other duties as are incident to his or her office and as are required by the Board of Directors or the President. SECTION 8. Assistant Secretaries. The Assistant Secretaries in order of their priority shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary, and shall have such other powers and perform such other duties as may be assigned to them from time to time by the Board of Directors or the President. SECTION 9. Treasurer. The Treasurer shall have custody of the funds and securities of the corporation and shall deposit the same in such banks or depositories as the Board of Directors or the President may direct. The Treasurer may, under the direction of the Board of Directors, disburse all monies and sign checks or other instruments drawn on or payable out of the funds of the corporation, which, however, shall be countersigned by the President, a Vice President, the Secretary, or an Assistant Secretary, or an Assistant Treasurer. He shall also make such transfers of the securities of the corporation as may be ordered by the Board of Directors or the President. In general, the Treasurer shall perform all of the duties incident to his or her office and such other duties as are required of him by the Board of Directors or the President. SECTION 10. Assistant Treasurers. The Assistant Treasurers in order of their priority shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer, and shall have such other powers and perform such other duties as may be assigned to them from time to time by the Board of Directors or the President. SECTION 11. Other Officers. Other Officers who may from time to time be elected by the Board of Directors shall have such powers and perform such duties as may be assigned to them by the Board of Directors or the President. SECTION 12. Compensation. The compensation of the Officers shall be fixed by the Board. ARTICLE V CAPITAL STOCK SECTION 1. Certificates. Every Shareholder shall be entitled at his or her request to a certificate signed by the President or a Vice President, and also by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer and under the seal of the corporation, certifying the number of shares to which he is entitled. SECTION 2. Transfers. Transfers of stock may be made on the books of the corporation only by the holder thereof in person or by his or her attorney duly authorized thereto in writing and upon surrender and cancellation of the certificate therefor duly assigned or accompanied by a duly executed stock power. SECTION 3. Lost or Destroyed Certificates. The Board of Directors may order a new certificate to be issued in place of a certificate lost or destroyed upon proof of such loss or destruction and upon tender to the corporation by the Shareholder of a bond in such amount and in such form and with or without surety as may be ordered, indemnifying the corporation against any liability, claim, loss, cost, or damage by reason of such loss or destruction and the issuance of a new certificate. SECTION 4. Dividends. Dividends may be declared from the legally available surplus of the corporation at such times and in such amounts as the Board of Directors may determine. Such dividends on the capital stock of the corporation may not be declared by a Committee of the Board. Notice of intention to declare a dividend shall be filed with the Superintendent of Insurance not less than 30 days in advance of the proposed declaration. ARTICLE VI CORPORATE FUNDS SECTION 1. Deposits. Checks, drafts, bills, notes, negotiable instruments or any other orders for the payment of money or evidence of indebtedness payable to and received by the corporation may be endorsed for deposit to the credit of the corporation by such Officers or agents of the corporation as the Board of Directors may determine and may be endorsed for deposit to the credit of agents of the corporation in such manner as the Board of Directors may direct. SECTION 2. Withdrawals. All disbursements of the funds of the corporation shall be made by check, draft, or other order signed by such Officers or other persons as the Board of Directors may from time to time authorize to sign the same. ARTICLE VII MISCELLANEOUS PROVISIONS SECTION 1. Voting Stock of Other Corporations. The President, any Vice President, or any other Officer designated by the Board of Directors may execute in the name of the corporation and attach the corporate seal to any proxy or power of attorney authorizing the proxy or proxies or attorney or attorneys named therein to vote the stock of any corporation held in this corporation on any matter on which such stock may be voted. If any stock owned by this corporation is held in any name other than the name of this corporation, instructions as to the manner in which such stock is to be voted on behalf of this corporation may be given to the holder of record by the President, any Vice President, or any other Officer designated by the Board of Directors. SECTION 2. Notices. Any notice under these Bylaws may be given by mail by depositing the same in a post office or postal letter box or postal mail chute in a sealed postpaid wrapper addressed to the person entitled thereto at his or her address as the same appears upon the books or records of the corporation or at such other address as may be designated by such person except that notice which may be given by telegram may be telegraphed to such person at such address; and such notice shall be deemed to be given at the time such notice is mailed or telegraphed. SECTION 3. Waiver of Notice. Any Shareholder, Director, or member of the Executive or Investment Committees may at any time waive any notice required to be given under these Bylaws in accordance with the provisions of the New York Business Corporation Law, including written waiver executed before, at, or after the meeting or by presence at the meeting. ARTICLE VIII AMENDMENTS The Bylaws may be amended in whole or in part by the Board of Directors. Any such amendment shall not be effective until approved by the Superintendent of Insurance pursuant to Section 1210 of the New York Insurance Law. ************************** EX-8.1 8 EXHIBIT 8.1 FUND PARTICIPATION AGREEMENT TCI Portfolios, Inc. TABLE OF CONTENTS ARTICLE I. Sale of Fund Shares 3 ARTICLE II. Representations and Warranties 8 ARTICLE III. Prospectuses and Proxy Statements; Voting 11 ARTICLE IV. Sales Material and Information 13 ARTICLE V. Fees and Expenses 16 ARTICLE VI. Diversification and Qualification 17 ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order 20 ARTICLE VIII. Indemnification 24 ARTICLE IX. Applicable Law 34 ARTICLE X. Termination 34 ARTICLE XI. Notices 38 ARTICLE XII. Miscellaneous 39 SCHEDULE A Contracts 42 SCHEDULE B Designated Portfolios 43 SCHEDULE C Administrative Services 44 SCHEDULE D Reports per Section 6.6 45 SCHEDULE E Expenses 48 PARTICIPATION AGREEMENT Among FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY TCI PORTFOLIOS, INC., AMERICAN CENTURY INVESTMENT MANAGEMENT, INC., AMERICAN CENTURY INVESTMENT SERVICES, INC. and CHARLES SCHWAB & CO., INC. THIS AGREEMENT, made and entered into as of this ____ day of _______________, 1997 by and among FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (hereinafter "FirstGWL&A"), a New York life insurance company, on its own behalf and on behalf of its Separate Account Variable Annuity-1 Series Account (the "Account"); TCI PORTFOLIOS, INC., a corporation organized under the laws of Maryland (hereinafter the "Fund"); AMERICAN CENTURY INVESTMENT MANAGEMENT, INC. (hereinafter the "Adviser"), a Delaware corporation; AMERICAN CENTURY INVESTMENT SERVICES, INC. (hereinafter the "Distributor"), a Missouri corporation; and CHARLES SCHWAB & CO., INC., a California corporation (hereinafter "Schwab"). WHEREAS, the Fund engages in business as an open-end management investment company and makes shares of its Portfolios (defined below) available to act as the investment vehicle for separate accounts established for variable life insurance policies and/or variable annuity contracts (collectively, the "Variable Insurance Products") to be offered by insurance companies, including FirstGWL&A, which have entered into participation agreements similar to this Agreement (hereinafter "Participating Insurance Companies"); and WHEREAS, the beneficial interest in the Fund is divided into several series of shares, each designated a "Portfolio" and representing the interest in a particular managed portfolio of securities and other assets; and WHEREAS, the Fund has obtained an order from the Securities and Exchange Commission (hereinafter the "SEC"), dated March 22, 1988 (File No. 812-6937), granting Participating Insurance Companies and variable annuity and variable life insurance separate accounts exemptions from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended, (hereinafter the "1940 Act") and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Fund to be sold to and held by variable annuity and variable life insurance separate accounts of life insurance companies that may or may not be affiliated with one another (hereinafter the "Mixed and Shared Funding Exemptive Order"); and WHEREAS, the Fund is registered as an open-end management investment company under the 1940 Act and shares of the Portfolio(s) are registered under the Securities Act of 1933, as amended (hereinafter the "1933 Act"); and WHEREAS, the Adviser is duly registered as an investment adviser under the Investment Advisers Act of 1940, as amended, and any applicable state securities laws; and WHEREAS, the Distributor is duly registered as a broker-dealer under the Securities Exchange Act of 1934, as amended, (the "1934 Act") and is a member in good standing of the National Association of Securities Dealers, Inc. (the "NASD"); and WHEREAS, FirstGWL&A has registered or will register certain variable annuity contracts supported wholly or partially by the Account (the "Contracts") under the 1933 Act and said Contracts are listed in Schedule A attached hereto and incorporated herein by reference, as it may be amended from time to time by mutual written agreement; and WHEREAS, the Account is a duly organized, validly existing segregated asset account, established by resolution of the Board of Directors of FirstGWL&A on January 15, 1997, to set aside and invest assets attributable to the Contracts; and WHEREAS, FirstGWL&A has registered or will register the Account as a unit investment trust under the 1940 Act and has registered or will register the securities deemed to be issued by the Account under the 1933 Act; and WHEREAS, to the extent permitted by applicable insurance laws and regulations, FirstGWL&A intends to purchase shares in the Portfolio(s) listed in Schedule B attached hereto and incorporated herein by reference, as it may be amended from time to time by mutual written agreement (the "Designated Portfolio(s)"), on behalf of the Account to fund the Contracts, and the Fund is authorized to sell such shares to unit investment trusts such as the Account at net asset value; and WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Account also intends to purchase shares in other open-end investment companies or series thereof not affiliated with the Fund (the "Unaffiliated Funds") on behalf of the Account to fund the Contracts; and WHEREAS, Schwab will perform certain services for the Fund in connection with the Contracts; NOW, THEREFORE, in consideration of their mutual promises, FirstGWL&A, Schwab, the Fund, the Distributor and the Adviser agree as follows: ARTICLE I. Sale of Fund Shares 1.1. The Fund and Distributor agree to sell to FirstGWL&A those shares of the Designated Portfolio(s) which the Account orders, executing such orders on each Business Day at the net asset value next computed after receipt by the Distributor or its designee of the order for the shares of the Portfolios. For purposes of this Section 1.1, FirstGWL&A shall be the designee of the Fund for receipt of such orders and receipt by such designee shall constitute receipt by the Fund, provided that the Distributor receives notice of any such order by 10:00 a.m. Eastern time on the next following Business Day. "Business Day" shall mean any day on which the New York Stock Exchange is open for trading and on which the Fund calculates its net asset value pursuant to the rules of the SEC. 1.2. The Fund and the Distributor agrees to make shares of the Designated Portfolio(s) available for purchase by FirstGWL&A and the Account at the applicable net asset value per share on each Business Day. Notwithstanding the foregoing, the Board of Directors of the Fund (hereinafter the "Board") may refuse to sell shares of any Portfolio to any person, or suspend or terminate the offering of shares of any Portfolio if such action is required by law or by regulatory authorities having jurisdiction or is, in the sole discretion of the Board acting in good faith and in light of their fiduciary duties under federal and any applicable state laws, necessary in the best interests of the shareholders of such Portfolio. 1.3. The Distributor represents that Fund shares will only be sold to insurance company separate accounts funding variable annuities and variable life insurance products unless and until it obtains an order for an amendment to the Mixed and Shared Funding Exemptive Order granting exemptions from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the 1940 Act and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder to the extent necessary to permit shares of the Designated Portfolio(s) to be sold to and held by certain plans established under Sections 401(a), 403(a) and (b), 408(a), (b) and (k), 414(d), 457(b) or 501(c)(18) of the Internal Revenue Code ("Qualified Plans") and the Distributor will not sell shares of the Designated Portfolio(s) to any other Participating Insurance Company, separate account or any Qualified Plan unless an agreement containing provisions in all material respects substantially the same as Sections 2.1, 3.5, 3.6, 3.7, and Article VII of this Agreement is in effect to govern such sales. 1.4. The Fund agrees to redeem for cash, on FirstGWL&A's request, any full or fractional shares of the Fund held by FirstGWL&A, executing such requests on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the request for redemption. For purposes of this Section 1.4, FirstGWL&A shall be the designee of the Fund for receipt of requests for redemption and receipt by such designee shall constitute receipt by the Fund, provided that the Distributor receives notice of any such request for redemption by 10:00 A.M. Eastern time on the next following Business Day. The Adviser will cause the Designated Portfolio(s) to pay and transmit the proceeds of redemptions of Fund shares as follows: (i) on the next Business Day after the redemption order is received by FirstGWL&A if the Distributor receives notice of the redemption prior to 9:00 a.m. Eastern time on such Business Day; and (ii) on the second Business Day after the redemption order is received by FirstGWL&A if the Distributor receives notice of the redemption after 9:00 a.m. Eastern time but before 10:00 a.m. Eastern time; provided the Fund provides the net asset value per share to FirstGWL&A as required in Section 1.9 of this Agreement. Notwithstanding the foregoing, the Advisor may elect in good faith to effect redemptions over a longer period of time to the extent permitted under the 1940 Act without liability hereunder on the part of the Fund, the Adviser or the Distributor. Payment shall be in federal funds transmitted by wire and/or a credit for any shares purchased the same day as the redemption. 1.5. The Parties hereto acknowledge that the arrangement contemplated by this Agreement is not exclusive; the Fund's shares may be sold to other Participating Insurance Companies (subject to Section 1.3 and Article VI hereof) and the cash value of the Contracts may be invested in other investment companies. 1.6. FirstGWL&A shall pay for Fund shares by 3:00 p.m. Eastern time on the next Business Day after an order to purchase Fund shares is made in accordance with the provisions of Section 1.1 hereof. Payment shall be in federal funds transmitted by wire and/or by a credit for any shares redeemed the same day as the purchase. 1.7. Issuance and transfer of the Fund's shares will be by book entry only. Stock certificates will not be issued to FirstGWL&A or the Account. Shares ordered from the Fund will be recorded in an appropriate title for the Account or the appropriate sub-account of the Account. 1.8. The Distributor shall cause the Fund to furnish same day notice (by wire or telephone, followed by written confirmation) to FirstGWL&A of any income, dividends or capital gain distributions payable on the Designated Portfolio(s)' shares (rate and reinvest price). FirstGWL&A hereby elects to receive all such income dividends and capital gain distributions as are payable on the Designated Portfolio(s) shares in additional shares of that Designated Portfolio. FirstGWL&A reserves the right to revoke this election and to receive all such income dividends and capital gain distributions in cash. The Distributor shall cause the Fund to notify FirstGWL&A by the end of the next following Business Day of the number of shares so issued as payment of such dividends and distributions. 1.9. The Adviser shall make the net asset value ("NAV") per share for each Designated Portfolio available to FirstGWL&A on each Business Day as soon as reasonably practical after the NAV per share is calculated and shall use all reasonable efforts to make such NAV per share available by 7:00 p.m. Eastern time. In the event of a material error in the computation of a Designated Portfolio's NAV per share or any dividend or capital gain distribution (each a "pricing error"), the Adviser shall immediately notify FirstGWL&A as soon as possible after discovery of the error. Such notification may be verbal, but shall be confirmed promptly in writing in accordance with Article XI of this Agreement. For the purposes of this section 1.9, a "material error" shall mean a pricing error that gives rise to the need to take retroactive corrective action under the Fund's then current pricing error correction policy (the "Policy"). Adviser represents that the Board of Directors of the Fund has adopted a Policy which governs the actions to be taken by the Fund and the Adviser in the event of a pricing error. The terms of that Policy provide that a pricing error is to be corrected as follows: (a) if the pricing error results in a difference between the erroneous NAV and the correct NAV of less than $0.01 per share (a "full penny," not as a result of a rounding error), then non-corrective action need be taken; (b) if the pricing error results in a difference between the erroneous NAV and the correct NAV equal to or greater than $0.01 per share (again, a "full penny"), but less than one half of one percent of the Designated Portfolio's NAV at the time of the error, then the Adviser is required to make the Fund "whole"; however, no adjustments need be made to shareholder transactions (including Contractowners); and (c) if the pricing error results in a difference between the erroneous NAV and the correct NAV equal to or greater than $0.01 per share and greater than one half of one percent of the Designated Portfolio's NAV at the time of the error, then the Adviser is required to reimburse the Designated Portfolio for any loss and shareholder transactions may be reprocessed. If any such reprocessing causes FirstGWL&A to correct Contractowner accounts, Adviser shall reimburse FirstGWL&A for its reasonable out-of-pocket cost for adjustments made in connection with making corrections to Contractowner accounts in accordance with the provisions of Schedule E. If Contractowners have received amounts of $500 or more in excess of the amounts to which they otherwise would have been entitled prior to an adjustment for an error, FirstGWL&A and Schwab, when requested by the Adviser of the Fund, will make a good faith attempt to collect such excess amounts from the Contractowners. Any overpayments that have not yet been paid to Contractowners will be remitted by FirstGWL&A or Schwab upon notification by the Adviser of such overpayment. In no event shall Schwab or FirstGWL&A be liable to Contractowners for any such adjustments or underpayment amounts. The Parties acknowledge that the standards set forth in Section 1.9 are consistent with the Parties' understanding of the views expressed by the staff of the Securities and Exchange Commission ("SEC") as of the date of this Agreement. In the event the views of the SEC staff are later modified or superseded by the SEC or judicial interpretation, or if the Board of Directors determines in good faith that another practice is permissible, the Board of Directors may amend such Policy (or adopt another policy) without prior approval of any party to this Agreement. The Adviser agrees to respond to any due diligence inquiry by Schwab or FirstGWL&A regarding whether or not there have been any changes to the Fund's pricing error Policy. ARTICLE II. Representations and Warranties 2.1. FirstGWL&A represents and warrants that the securities deemed to be issued by the Account under the Contracts are or will be registered under the 1933 Act; that the Contracts will be issued and sold in compliance in all material respects with all applicable federal and state laws and that the sale of the Contracts shall comply in all material respects with state insurance suitability requirements. FirstGWL&A further represents and warrants that it is an insurance company duly organized and in good standing under applicable law and that it has legally and validly established the Account prior to any issuance or sale of units thereof as a segregated asset account under Section 4240 of the New York Insurance Law and has registered the Account as a unit investment trust in accordance with the provisions of the 1940 Act to serve as a segregated investment account for the Contracts. 2.2. The Distributor and Adviser each represent and warrant that Designated Portfolio(s) shares sold pursuant to this Agreement shall be registered under the 1933 Act, duly authorized for issuance and sold in compliance with all applicable federal securities laws including without limitation the 1933 Act, the 1934 Act, and the 1940 Act and that the Fund is and shall remain registered under the 1940 Act. The Adviser cause the Fund's registration statement to be amended for its shares under the 1933 Act and the 1940 Act from time to time as required in order to effect the continuous offering of its shares. 2.3. The Fund reserves the right to adopt a plan pursuant to Rule 12b-1 under the 1940 Act and to impose an asset-based or other charge to finance distribution expenses as permitted by applicable law and regulation. In any event, the Adviser agrees to cause the Fund to comply with applicable provisions and SEC staff interpretations of the 1940 Act to assure that the investment advisory or management fees paid by the Fund are in accordance with the requirements of the 1940 Act. To the extent that the Fund decides to finance distribution expenses pursuant to Rule 12b-1, the Fund undertakes to have its Board, a majority of whom are not interested persons of the Fund, formulate and approve any plan pursuant to Rule 12b-1 under the 1940 Act to finance distribution expenses. 2.4. The Adviser represents and warrants that it will cooperate with FirstGWL&A to make every reasonable effort to cause that the investment policies, fees and expenses of the Designated Portfolio(s) to be in compliance with the requirements under insurance and other applicable laws of the State of New York to the extent FirstGWL&A notifies the Adviser of any such requirements. The Adviser shall register and qualify the shares of the Fund for sale in accordance with the laws of the various states if and to the extent required by applicable law. 2.5. The Adviser represents and warrants that the Fund is lawfully organized and validly existing under the laws of the State of Maryland and that it does and will comply in all material respects with the 1940 Act. 2.6. The Distributor represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with any applicable state and federal securities laws. 2.7. The Adviser represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with any applicable state and federal securities laws. 2.8. The Adviser represents and warrants that all of its officers, employees, and other individuals or entities dealing with the money and/or securities of the Designated Portfolio(s) are, and shall continue to be at all times, covered by a blanket fidelity bond or similar coverage for the benefit of the Fund in an amount not less than the minimal coverage required by Rule 17g-1 under the 1940 Act or related provisions as may be promulgated from time to time. The aforesaid bond shall include coverage for larceny and embezzlement and shall be issued by a reputable bonding company. 2.9. Schwab represents and warrants that it has completed, obtained and performed, in all material respects, all registrations, filings, approvals, and authorizations, consents and examinations required by any government or governmental authority as may be necessary to perform this Agreement. Schwab does and will comply, in all material respects, with all applicable laws, rules and regulations in the performance of its obligations under this Agreement. 2.10. The Adviser will provide FirstGWL&A with as much advance notice as is reasonably practicable of any material change affecting the Designated Portfolio(s) (including, but not limited to, any material change in the registration statement or prospectus affecting the Designated Portfolio(s)) and any proxy solicitation affecting the Designated Portfolio(s) and consult with FirstGWL&A in order to implement any such change in an orderly manner, recognizing the expenses of changes and attempting to minimize such expenses by implementing them in conjunction with regular annual updates of the prospectus for the Contracts. The Adviser agrees to share equitably in expenses incurred by FirstGWL&A as a result of actions taken by the Fund, consistent with the allocation of expenses contained in Schedule E attached hereto and incorporated herein by reference. 2.11. FirstGWL&A represents and warrants, for purposes other than diversification under Section 817 of the Internal Revenue Code of 1986 as amended ("the Code"), that the Contracts are currently treated as annuity contracts under applicable provisions of the Code, and that it will make every effort to maintain such treatment and that it will notify Schwab, and the Adviser immediately upon having a reasonable basis for believing that the Contracts have ceased to be so treated or that they might not be so treated in the future. In addition, FirstGWL&A represents and warrants that the Account is a "segregated asset account" and that interests in the Account are offered exclusively through the purchase of or transfer into a "variable contract" within the meaning of such terms under Section 817 of the Code and the regulations thereunder. FirstGWL&A will use every effort to continue to meet such definitional requirements, and it will notify Schwab and the Adviser immediately upon having a reasonable basis for believing that such requirements have ceased to be met or that they might not be met in the future. 2.11 FirstGWL&A covenants and agrees that all orders transmitted by it hereunder on any Business Day will be based upon instructions that it received from Contractowners in proper form prior to the close of trading on the new York Stock Exchange on the previous Business Day. FirstGWL&A shall time stamp all order or otherwise maintain records that will enable FirstGWL&A to demonstrate compliance with this section. ARTICLE III. Prospectuses and Proxy Statements; Voting 3.1. At least annually, the Distributor shall provide FirstGWL&A and Schwab with as many copies of the Fund's current prospectus for the Designated Portfolio(s) as FirstGWL&A and Schwab may reasonably request for marketing purposes (including distribution to Contractowners with respect to new sales of a Contract) with expenses to be borne in accordance with Schedule E hereof. If requested by FirstGWL&A in lieu thereof, the Distributor shall provide such documentation (including a camera-ready copy and computer diskette of the current prospectus for the Designated Portfolio(s)) and other assistance as is reasonably necessary in order for FirstGWL&A once each year (or more frequently if the prospectuses for the Designated Portfolio(s) are amended) to have the prospectus for the Contracts and the Fund's prospectus for the Designated Portfolio(s) printed together in one document. The Distributor agrees that the prospectuses (but not the SAI) (and semi-annual and annual reports) for the Designated Portfolio(s) will describe only the Designated Portfolio(s) and will not name or describe any other portfolios or series that may be in the Fund unless required by law. 3.2. If applicable state or federal laws or regulations require that the Statement of Additional Information ("SAI") for the Fund be distributed to all Contractowners, then the Distributor shall provide FirstGWL&A with copies of the Fund's SAI or documentation thereof for the Designated Portfolio(s) in such quantities, with expenses to be borne in accordance with Schedule E hereof, as FirstGWL&A may reasonably require to permit timely distribution thereof to Contractowners. The Distributor shall also provide SAIs to any Contractowner or prospective owner who requests such SAI from the Fund (although it is anticipated that such requests will be made to FirstGWL&A or Schwab). 3.3. The Distributor shall provide FirstGWL&A and Schwab with copies of the Fund's proxy material, reports to stockholders and other communications to stockholders for the Designated Portfolio(s) in such quantity, with expenses to be borne in accordance with Schedule E hereof, as FirstGWL&A may reasonably require to permit timely distribution thereof to Contractowners. 3.4. It is understood and agreed that, except with respect to information regarding FirstGWL&A or Schwab provided in writing by that party, neither FirstGWL&A nor Schwab is responsible for the content of the prospectus or SAI for the Designated Portfolio(s). (All references hereinafter to "prospectus" whether in respect of Contracts or Fund shares, shall be deemed to include the related SAI, unless otherwise specifically noted.) It is also understood and agreed that, except with respect to information regarding the Fund, the Distributor, the Adviser or the Designated Portfolio(s) provided in writing by the Fund, the Distributor or Adviser, neither the Fund, the Distributor nor Adviser is responsible for the content of the prospectus or SAI for the Contracts. 3.5. If and to the extent required by law FirstGWL&A shall: (i) solicit voting instructions from Contractowners; (ii) vote the Designated Portfolio(s) shares in accordance with instructions received from Contractowners: and (iii) vote Designated Portfolio shares for which no instructions have been received in the same proportion as Designated Portfolio(s) shares for which instructions have been received from Contractowners, so long as and to the extent that the SEC continues to interpret the 1940 Act to require pass-through voting privileges for variable contract owners. FirstGWL&A reserves the right to vote Fund shares held in any segregated asset account in its own right, to the extent permitted by law. 3.6. FirstGWL&A shall be responsible for assuring that each of its separate accounts holding shares of a Designated Portfolio calculates voting privileges in a manner consistent with all other separate accounts investing in the Designated Portfolio(s). The Adviser agrees to promptly notify FirstGWL&A of any changes of interpretations or amendments of the Mixed and Shared Funding Exemptive Order. 3.7. The Fund will comply with all provisions of the 1940 Act requiring voting by shareholders. ARTICLE IV. Sales Material and Information 4.1. FirstGWL&A and Schwab shall furnish, or shall cause to be furnished, to the Distributor or its designee, a copy of each piece of sales literature or other promotional material that FirstGWL&A or Schwab, respectively, develops or proposes to use and in which the Fund (or a Portfolio thereof), its Adviser or one of its sub-advisers, or the Distributor is named in connection with the Contracts, at least ten (10) Business Days prior to its use. All such materials shall be directed to Dina Tantra, Distributor's advertising compliance manager (or such other person as Distributor may designate in writing) by mail at 4500 Main Street, Kansas City, Missouri 64111, or by fax at (816) 340-4074. Such materials shall be accompanied by a request for approval or comments within a reasonable amount of time, which shall not be less than 10 business days from the dated delivered to the Distributor or such shorter period as the parties may agree from time to time. FirstGWL&A or Schwab agrees to use reasonable efforts to notify Distributor's advertising compliance manager of the delivery of such materials (which includes leaving a voice mail message). If the Distributor fails to respond within the time period set forth in the request for review, FirstGWL&A or Schwab may use such material as submitted without further approval by Distributor. If subsequent to approval by Distributor (or the expiration of the time period set forth in the request for approval), Distributor reasonably determines any such material is or has become inaccurate, misleading or otherwise inappropriate, it may request that the FirstGWL&A or Schwab modify such advertising and sales literature, which FirstGWL&A or Schwab will do at the next reprinting of any such materials. If Distributor determines that such material should be modified immediately, Distributor shall notify FirstGWL&A or Schwab of such fact and FirstGWL&A or Schwab shall accommodate Distributor's reasonable requests. In such instances, Distributor shall pay FirstGWL&A or Schwab's reasonable out-of-pocket expenses in reprinting any such advertising and sales materials. Notwithstanding anything contained herein, FirstGWL&A or Schwab shall be responsible for the compliance of all advertising and sales literature prepared by FirstGWL&A or Schwab with all applicable federal, state and NASD requirements. 4.2. FirstGWL&A and Schwab shall not give any information or make any representations or statements on behalf of or concerning the Fund or the Designated Portfolio(s) in connection with the sale of the Contracts other than the information or representations contained in the registration statement or prospectus for the Fund shares, as such registration statement and prospectus may be amended or supplemented from time to time, or in sales literature or other promotional material approved by the Distributor, except with the permission of the Distributor. 4.3. The Distributor shall furnish, or shall cause to be furnished, to FirstGWL&A and Schwab, a copy of each piece of sales literature or other promotional material in which FirstGWL&A and/or its separate account(s), or Schwab is named at least ten (10) Business Days prior to its use. No such material shall be used if FirstGWL&A or Schwab objects to such use within five (5) Business Days after receipt of such material. 4.4. Neither the Distributor nor the Adviser shall give any information or make any representations on behalf of FirstGWL&A or concerning FirstGWL&A, the Account, or the Contracts other than the information or representations contained in a registration statement or prospectus for the Contracts, as such registration statement and prospectus may be amended or supplemented from time to time, or in sales literature or other promotional material approved by FirstGWL&A or its designee, except with the permission of FirstGWL&A. 4.5. FirstGWL&A, the Distributor and the Adviser shall not give any information or make any representations on behalf of or concerning Schwab, or use Schwab's name except with the permission of Schwab. 4.6. The Distributor will provide to FirstGWL&A and Schwab at least one complete copy of all registration statements, prospectuses, sales literature and other promotional materials, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Designated Portfolio(s) and that are relevant to this Agreement, contemporaneously with or as promptly as practical after the filing of such document(s) with the SEC or NASD or other regulatory authorities. 4.7. FirstGWL&A or Schwab will provide to the Fund at least one complete copy of all registration statements, prospectuses and all amendments to any of the above, that relate to the Contracts or the Account and that are relevant to this Agreement, contemporaneously with or as promptly as practical after the filing of such document(s) with the SEC, NASD, or other regulatory authority. 4.8. For purposes of Articles IV and VIII, the phrase "sales literature and/or other promotional material" includes, but is not limited to, advertisements (such as material published, or designed for use in, a newspaper, magazine, or other periodical, radio, television, telephone or tape recording, videotape display, signs or billboards, motion pictures, or other public media; e.g., on-line networks such as the Internet or other electronic media), sales literature (i.e., any written communication distributed or made generally available to customers or the public, including brochures, circulars, research reports, market letters, form letters, seminar texts, reprints or excerpts of any other advertisement, sales literature, or published article), educational or training materials or other communications distributed or made generally available to some or all agents or employees, and prospectuses, SAIs, shareholder reports, and proxy materials and any other material constituting sales literature or advertising under the NASD rules, the 1933 Act or the 1940 Act. 4.9. At the request of any party to this Agreement, each other party will make available to the other party's independent auditors and/or representative of the appropriate regulatory agencies, all records, data and access to operating procedures that may be reasonably requested in connection with compliance and regulatory requirements related to this Agreement or any party's obligations under this Agreement. ARTICLE V. Fees and Expenses 5.1. The Fund, the Adviser and the Distributor shall pay no fee or other compensation to FirstGWL&A under this Agreement, and FirstGWL&A shall pay no fee or other compensation to the Fund, the Adviser, or the Distributor under this Agreement, although the parties hereto will bear certain expenses in accordance with Schedule E, Articles III, V, and other provisions of this Agreement. 5.2. All expenses incident to performance by the Fund, the Distributor and the Adviser under this Agreement shall be paid by the appropriate party, as further provided in Schedule E. The Adviser shall see to it that all shares of the Designated Portfolio(s) are registered and authorized for issuance in accordance with applicable federal law and, if and to the extent required, in accordance with applicable state laws prior to their sale. 5.3. The parties shall bear the expenses of routine annual distribution (mailing costs) of the Fund's prospectus and distribution (mailing costs) of the Fund's proxy materials and reports to owners of Contracts offered by FirstGWL&A, in accordance with Schedule E. 5.4. The Distributor acknowledges that a principal feature of the Contracts is the Contractowner's ability to choose from a number of unaffiliated mutual funds (and portfolios or series thereof), including the Designated Portfolio(s) and the Unaffiliated Funds, and to transfer the Contract's cash value between funds and portfolios. 5.5. Schwab agrees to provide certain administrative services, specified in Schedule C attached hereto and incorporated herein by reference, in connection with the arrangements contemplated by this Agreement. The parties acknowledge and agree that the services referred to in this Section 5.5 are recordkeeping, shareholder communication, and other transaction facilitation and processing, and related administrative services only and are not the services of an underwriter or a principal underwriter of the Fund and that Schwab is not an underwriter for the shares of the Designated Portfolio(s), within the meaning of the 1933 Act or the 1940 Act. 5.6. As compensation for the services specified in Schedule C hereto, the Adviser agrees to pay Schwab a monthly Administrative Service Fee based on the percentage per annum on Schedule C hereto applied to the average daily value of the shares of the Designated Portfolio(s) held in the Account with respect to Contracts sold by Schwab. This monthly Administrative Service Fee is due and payable within thirty (30) days following the last day of the month to which it relates. ARTICLE VI. Diversification and Qualification 6.1. The Distributor and the Adviser represent and warrant that the Fund will at all times sell its shares and invest its assets in such a manner as to ensure that the Contracts will be treated as annuity contracts under the Code, and the regulations issued thereunder. Without limiting the scope of the foregoing, the Adviser represents and warrants that the Fund and each Designated Portfolio thereof will at all times comply with Section 817(h) of the Code and Treasury Regulation 1.817-5, as amended from time to time, and any Treasury interpretations thereof, relating to the diversification requirements for variable annuity, endowment, or life insurance contracts and any amendments or other modifications or successor provisions to such Section or Regulations. The Distributor agrees that shares of the Designated Portfolio(s) will be sold only to Participating Insurance Companies and their separate accounts and certain Qualified Plans (to the extent permitted under the Mixed and Shared Funding Exemptive Order). 6.2. No shares of any Designated Portfolio of the Fund will be sold to the general public. 6.3. The Adviser represents and warrants that the Fund and each Designated Portfolio is currently qualified as a Regulated Investment Company under Subchapter M of the Code, and that each Designated Portfolio will maintain such qualification (under Subchapter M or any successor or similar provisions) as long as this Agreement is in effect. 6.4. The Distributor or the Adviser will notify FirstGWL&A immediately upon having a reasonable basis for believing that the Fund or any Designated Portfolio has ceased to comply with the aforesaid Section 817(h) diversification or Subchapter M qualification requirements or anticipates that it will not so comply in the future. 6.5. Without in any way limiting the effect of Sections 8.3 and 8.4 hereof and without in any way limiting or restricting any other remedies available to FirstGWL&A or Schwab, the Adviser or Distributor will pay all costs associated with or arising out of any failure, or any anticipated or reasonably foreseeable failure, of the Fund or any Designated Portfolio to comply with Sections 6.1, 6.2, or 6.3 hereof, including all costs associated with reasonable and appropriate corrections or responses to any such failure; such costs may include, but are not limited to, the costs involved in creating, organizing, and registering a new investment company as a funding medium for the Contracts pursuant to the mutual agreement of the Adviser, FirstGWL&A and Schwab, and/or the costs of obtaining whatever regulatory authorizations are required to substitute shares of another investment company for those of the failed Portfolio (including but not limited to an order pursuant to Section 26(b) of the 1940 Act); such costs are to include, but are not limited to, reasonable fees and expenses of legal counsel and other advisors to FirstGWL&A and any federal income taxes or tax penalties and interest thereon (or "toll charges" or exactments or amounts paid in settlement) incurred by FirstGWL&A with respect to itself or owners of its Contracts in connection with any such failure or anticipated or reasonably foreseeable failure. 6.6. The Adviser at its expense shall provide FirstGWL&A or its designee with reports demonstrating the Designated Portfolios' compliance with the aforesaid Section 817(h) diversification and Subchapter M qualification requirements, at the times provided for and substantially in the form attached hereto as Schedule D and incorporated herein by reference; provided, however, that providing such reports does not relieve the Fund of its responsibility for such compliance or of its liability for any non-compliance. 6.7. FirstGWL&A agrees that if the Internal Revenue Service ("IRS") asserts in writing in connection with any governmental audit or review of FirstGWL&A or, to FirstGWL&A's knowledge, or to any Contractowner that any Designated Portfolio has failed to comply with the diversification requirements of Section 817(h) of the Code or FirstGWL&A otherwise becomes aware of any facts that could give rise to any claim against the Fund or the Adviser as a result of such a failure or alleged failure: (a) FirstGWL&A shall promptly notify the Fund and the Adviser of such assertion or potential claim; (b) FirstGWL&A shall consult with the Fund and the Adviser as to how to minimize any liability that may arise as a result of such failure or alleged failure; (c) FirstGWL&A shall use its best efforts to minimize any liability of the Fund and the Adviser resulting from such failure, including, without limitation, demonstrating, pursuant to Treasury Regulations, Section 1.817-5(a)(2), to the commissioner of the IRS that such failure was inadvertent; (d) any written materials to be submitted by FirstGWL&A to the IRS, any Contractowner or any other claimant in connection with any of the foregoing proceedings or contests (including, without limitation, any such materials to be submitted to the IRS pursuant to Treasury Regulations, Section 1.817-5(a)(2)) shall be provided by FirstGWL&A to the Fund and the Adviser (together with any supporting information or analysis) within at least two (2) business days prior to submission; (e) FirstGWL&A shall provide the Fund and the Adviser with such cooperation as the Fund and the Adviser shall reasonably request (including, without limitation, by permitting the Fund and the Adviser to review the relevant books and records of FirstGWL&A) in order to facilitate review by the Fund and the Adviser of any written submissions provided to it or its assessment of the validity or amount of any claim against it arising from such failure or alleged failure; (f) FirstGWL&A shall not, with respect to any claim of the IRS or any Contractowner that would give rise to a claim against the Fund or the Adviser, (i) compromise or settle any claim, (ii) accept any adjustment on audit, or (iii) forego any allowable administrative or judicial appeals, without the express written consent of the Fund or the Adviser, which shall not be unreasonably withheld; provided that, FirstGWL&A shall not be required to appeal any adverse judicial decision unless the Fund or the Adviser shall have provided an opinion of independent counsel to the effect that a reasonable basis exists for taking such appeal; and further provided that the Fund or the Adviser shall bear the costs and expenses, including reasonable attorney's fees, incurred by FirstGWL&A in complying with this clause (f). ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order 7.1. The Board will monitor the Fund for the existence of any material irreconcilable conflict between the interests of the contract owners of all separate accounts investing in the Fund. An irreconcilable material conflict may arise for a variety of reasons, including: (a) an action by any state insurance regulatory authority; (b) a change in applicable federal or state insurance, tax, or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretative letter, or any similar action by insurance, tax, or securities regulatory authorities; (c) an administrative or judicial decision in any relevant proceeding; (d) the manner in which the investments of any Designated Portfolio are being managed; (e) a difference in voting instructions given by variable annuity contract and variable life insurance contract owners or by contract owners of different Participating Insurance Companies; or (f) a decision by a Participating Insurance Company to disregard the voting instructions of contract owners. The Board shall promptly inform FirstGWL&A if it determines that an irreconcilable material conflict exists and the implications thereof. 7.2. FirstGWL&A will report any potential or existing conflicts of which it is aware to the Board. FirstGWL&A will assist the Board in carrying out its responsibilities under the Mixed and Shared Funding Exemptive Order, by providing the Board with all information reasonably necessary for the Board to consider any issues raised. This includes, but is not limited to, an obligation by FirstGWL&A to inform the Board whenever Contractowner voting instructions are to be disregarded. Such responsibilities shall be carried out by FirstGWL&A with a view only to the interests of its Contractowners. From time to time, the Distributor will identify in writing to FirstGWL&A any information related to FirstGWL&A's Contractowners it requires from FirstGWL&A in order for the Board to fulfill its responsibilities required by the Mixed and Shared Funding Order. FirstGWL&A agrees to provide such information within a reasonable time, as set forth in the information request. 7.3. If it is determined by a majority of the Board, or a majority of its directors who are not interested persons of the Fund, the Adviser or any sub-adviser to any of the Designated Portfolios (the "Independent Directors"), that a material irreconcilable conflict exists, FirstGWL&A and other Participating Insurance Companies shall, at their expense and to the extent reasonably practicable (as determined by a majority of the Independent Directors), take whatever steps are necessary to remedy or eliminate the irreconcilable material conflict, up to and including: (1) withdrawing the assets allocable to some or all of the separate accounts from the Fund or any Designated Portfolio and reinvesting such assets in a different investment medium, including (but not limited to) another portfolio of the Fund, or submitting the question whether such segregation should be implemented to a vote of all affected contract owners and, as appropriate, segregating the assets of any appropriate group (i.e., annuity contract owners, life insurance contract owners, or variable contract owners of one or more Participating Insurance Companies) that votes in favor of such segregation, or offering to the affected contract owners the option of making such a change; and (2) establishing a new registered management investment company or managed separate account. 7.4. If a material irreconcilable conflict arises because of a decision by FirstGWL&A to disregard contract owner voting instructions and that decision represents a minority position or would preclude a majority vote, FirstGWL&A may be required, at the Fund's election, to withdraw the Account's investment in the Fund and terminate this Agreement; provided, however that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the Independent Directors. Any such withdrawal and termination must take place within six (6) months after the Fund gives written notice that this provision is being implemented, and until the end of that six month period the Distributor and the Fund shall continue to accept and implement orders by FirstGWL&A for the purchase (and redemption) of shares of the Fund. 7.5. If a material irreconcilable conflict arises because a particular state insurance regulator's decision applicable to FirstGWL&A conflicts with the majority of other state regulators, then FirstGWL&A will withdraw the Account's investment in the Fund and terminate this Agreement within six months after the Board informs FirstGWL&A in writing that it has determined that such decision has created an irreconcilable material conflict; provided, however, that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the disinterested members of the Board. Until the end of the foregoing six month period or the completion of the termination and withdrawal of the Account's investment in the Designated Portfolio(s), whichever occurs first, the Distributor and the Fund shall continue to accept and implement orders by FirstGWL&A for the purchase (and redemption) of shares of the Fund. 7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority of the Independent Directors shall determine whether any proposed action adequately remedies any irreconcilable material conflict, but in no event will the Fund be required to establish a new funding medium for the Contracts. FirstGWL&A shall not be required by Section 7.3 to establish a new funding medium for the Contracts if an offer to do so has been declined by vote of a majority of Contractowners affected by the irreconcilable material conflict. In the event that the Board determines that any proposed action does not adequately remedy any irreconcilable material conflict, then FirstGWL&A will withdraw the Account's investment in the Fund and terminate this Agreement within six (6) months after the Board informs FirstGWL&A in writing of the foregoing determination; provided, however, that such withdrawal and termination shall be limited to the extent required by any such material irreconcilable conflict as determined by a majority of the Independent Directors. 7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act or the rules promulgated thereunder with respect to mixed or shared funding (as defined in the Mixed and Shared Funding Exemptive Order) on terms and conditions materially different from those contained in the Mixed and Shared Funding Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies, as appropriate, shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable: and (b) Sections 3.5, 3.6, 3.7, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall continue in effect only to the extent that terms and conditions substantially identical to such Sections are contained in such Rule(s) as so amended or adopted. ARTICLE VIII. Indemnification 8.1. Indemnification By FirstGWL&A 8.1(a). FirstGWL&A agrees to indemnify and hold harmless the Fund, the Distributor and the Adviser and each of their respective directors, officers, employees and affiliates and each person, if any, who controls the Fund, the Distributor or the Adviser within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.1) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of FirstGWL&A) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in the registration statement or prospectus covering the Contracts or contained in the Contracts or sales literature or other promotional material for the Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party: (1) if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser, Distributor or Fund for use in the registration statement or prospectus for the Contracts or in the Contracts or sales literature or other promotional material (or any amendment or supplement thereto) or otherwise for use in connection with the sale of the Contracts or Fund shares; or (2) to the extent that such liability arises as a result of the conduct of any indemnified party; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus or sales literature or other promotional material of the Fund not supplied by FirstGWL&A or persons under its control) or wrongful conduct of FirstGWL&A or persons under its control, with respect to the sale or distribution of the Contracts or Fund Shares; or (iii) arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, or sales literature or other promotional material of the Fund, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such a statement or omission was made in reliance upon and in conformity with information furnished in writing to the Fund by or on behalf of FirstGWL&A for the purpose of inclusion in such registration statement, prospectus, or sales literature or other promotional material; or (iv) arise as a result of any failure by FirstGWL&A to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by FirstGWL&A in this Agreement or arise out of or result from any other material breach of this Agreement by FirstGWL&A, including without limitation Section 2.10 and Section 6.7 hereof, as limited by and in accordance with the provisions of Sections 8.1(b) and 8.1(c) hereof. 8.1(b). FirstGWL&A shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.1(c). FirstGWL&A shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified FirstGWL&A in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify FirstGWL&A of any such claim shall not relieve FirstGWL&A from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that FirstGWL&A has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, FirstGWL&A shall be entitled to participate, at its own expense, in the defense of such action. FirstGWL&A also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from FirstGWL&A to such party of FirstGWL&A's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and FirstGWL&A will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.1(d). The Indemnified Parties will promptly notify FirstGWL&A of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund shares or the Contracts or the operation of the Fund. 8.2. Indemnification by Schwab 8.2(a). Schwab agrees to indemnify and hold harmless the Fund, the Distributor and the Adviser and each of their respective directors, officers, employees and affiliates and each person, if any, who controls the Fund, the Distributor or Adviser within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.2) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of Schwab) or litigation (including reasonable legal and other expenses), to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of Schwab's dissemination of information regarding the Fund that is both (A) materially incorrect and (B) that was neither contained in the Fund's registration statement, prospectus or sales literature or other promotional material of the Fund prepared by the Distributor or Adviser on behalf of the Fund nor provided in writing to Schwab, or approved in writing, by or on behalf of the Fund, the Distributor or the Adviser; or (ii) arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in sales literature or other promotional material prepared by Schwab for the Contracts or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party: (1) if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser, the Distributor or the Fund or to Schwab by FirstGWL&A for use in the registration statement or prospectus for the Contracts or in the Contracts or sales literature or other promotional material (or any amendment or supplement thereto) or otherwise for use in connection with the sale of the Contracts, or (2) to the extent such liability arises as a result of the conduct of any Indemnified Party; or (iii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus or sales literature or other promotional material of the Fund not supplied by Schwab or persons under its control) or wrongful conduct of Schwab or persons under its control, with respect to the sale or distribution of the Contracts; or (iv) arise as a result of any failure by Schwab to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by Schwab in this Agreement or arise out of or result from any other material breach of this Agreement by Schwab; as limited by and in accordance with the provisions of Sections 8.2(b) and 8.2(c) hereof. 8.2(b). Schwab shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.2(c). Schwab shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified Schwab in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify Schwab of any such claim shall not relieve Schwab from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that Schwab has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, Schwab shall be entitled to participate, at its own expense, in the defense of such action. Schwab also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from Schwab to such party of Schwab's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and Schwab will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.2(d). The Indemnified Parties will promptly notify Schwab of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund shares or the Contracts or the operation of the Fund. 8.3. Indemnification by the Adviser 8.3(a). The Adviser agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their respective directors, officers, employees and affiliates and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.3) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Adviser) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or sales literature or other promotional material of the Fund prepared by the Distributor or the Adviser on behalf of the Fund (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party: (1) if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to the Adviser, the Distributor or the Fund by or on behalf of FirstGWL&A or Schwab for use in the registration statement or prospectus for the Fund or in sales literature or other promotional material (or any amendment or supplement thereto) or otherwise for use in connection with the sale of the Contracts or the Fund shares, or (2) or to the extent such liability arises as a result of the conduct of any Indemnified Party; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, or sales literature or other promotional material for the Contracts not supplied by the Adviser or persons under its control) or wrongful conduct of the Fund or the Adviser or persons under their control, with respect to the sale or distribution of Fund shares; or (iii) arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, or sales literature or other promotional material covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser or the Fund for the purpose of inclusion in such registration statement, prospectus, or sales literature or other promotional material; or (iv) arise as a result of any failure by the Fund or the Adviser to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or (v) arise out of or result from any material breach of any representation and/or warranty made by the Distributor or the Adviser in this Agreement or arise out of or result from any other material breach of this Agreement by the Adviser, the Distributor or the Fund; or (vi) arise out of or result from the incorrect calculation or reporting of the daily net asset value per share or dividend or capital gain distribution rate; as limited by and in accordance with the provisions of Sections 8.3(b) and 8.3(c) hereof. 8.3(b). The Adviser shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.3(c). The Adviser shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Adviser in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Adviser of any such claim shall not relieve the Adviser from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Adviser has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Adviser will be entitled to participate, at its own expense, in the defense thereof. The Adviser also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Adviser to such party of the Adviser's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Adviser will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.3(d). FirstGWL&A and Schwab agree promptly to notify the Adviser of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Account. 8.4. Indemnification by the Distributor 8.4(a). The Distributor agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their respective directors, officers, employees and affiliates and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.4) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Distributor) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or sales literature or other promotional material of the Fund prepared by the Adviser or Distributor on behalf of the Fund (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party: (1) if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to the Adviser, the Distributor or Fund by or on behalf of FirstGWL&A or Schwab for use in the registration statement or prospectus for the Fund or in sales literature or other promotional material (or any amendment or supplement thereto) or otherwise for use in connection with the sale of the Contracts or Fund shares, or (2) or to the extent such liability arises as a result of the conduct of any Indemnified Party; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, sales literature or other promotional material for the Contracts not supplied by the Distributor or persons under its control) or wrongful conduct of the Fund, the Distributor or Adviser or persons under their control, with respect to the sale or distribution of Fund shares; or (iii) arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, sales literature or other promotional material covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser, the Distributor or Fund for the purpose of inclusion in such registration statement, prospectus, or sales literature or other promotional material; or (iv) arise as a result of any failure by the Fund or the Distributor to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or (v) arise out of or result from any material breach of any representation and/or warranty made by Adviser or Distributor in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund, Adviser or Distributor; or (vi) arise out of or result from the incorrect calculation or reporting of the daily net asset value per share or dividend or capital gain distribution rate; as limited by and in accordance with the provisions of Sections 8.4(b) and 8.4(c) hereof. 8.4(b). The Distributor shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance or such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.4(c) The Distributor shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Distributor in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Distributor of any such claim shall not relieve the Distributor from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Distributor has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Distributor will be entitled to participate, at its own expense, in the defense thereof. The Distributor also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Distributor to such party of the Distributor's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Distributor will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.4(d) FirstGWL&A and Schwab agree to promptly notify the Distributor of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Account. ARTICLE IX. Applicable Law 9.1. This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the State of New York, without regard to the New York Conflict of Laws provisions. 9.2. This Agreement shall be subject to the provisions of the 1933, 1934 and 1940 Acts, and the rules and regulations and rulings thereunder, including such exemptions from those statutes, rules and regulations as the Securities and Exchange Commission may grant (including, but not limited to, the Mixed and Shared Funding Exemptive Order) and the terms hereof shall be interpreted and construed in accordance therewith. ARTICLE X. Termination 10.1. This Agreement shall terminate: (a) at the option of any party, with or without cause, with respect to some or all Portfolios, upon six (6) months advance written notice delivered to the other parties; provided, however, that such notice shall not be given earlier than six (6) months following the date of this Agreement; or (b) at the option of FirstGWL&A or Schwab by written notice to the other parties with respect to any Portfolio based upon FirstGWL&A's or Schwab's determination that shares of such Portfolio are not reasonably available to meet the requirements of the Contracts; or (c) at the option of FirstGWL&A or Schwab by written notice to the other parties with respect to any Portfolio in the event any of the Portfolio's shares 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 FirstGWL&A; or (d) at the option of the Fund, Distributor or Adviser in the event that formal administrative proceedings are instituted against FirstGWL&A or Schwab by the NASD, the SEC, the Insurance Commissioner or like official of any state or any other regulatory body regarding FirstGWL&A's or Schwab's duties under this Agreement or related to the sale of the Contracts, the operation of any Account, or the purchase of the Fund shares, if, in each case, the Fund, Distributor or Adviser reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of FirstGWL&A or Schwab to perform its obligations under this Agreement; or (e) at the option of FirstGWL&A or Schwab in the event that formal administrative proceedings are instituted against the Fund, the Distributor or the Adviser by the NASD, the SEC, or any state securities or insurance department or any other regulatory body, if Schwab or FirstGWL&A reasonably 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 Fund, the Distributor or the Adviser to perform their obligations under this Agreement; or (f) at the option of FirstGWL&A by written notice to the Fund, the Distributor or the Adviser with respect to any Designated Portfolio if FirstGWL&A reasonably believes that the Designated Portfolio will fail to meet the Section 817(h) diversification requirements or Subchapter M qualifications specified in Article VI hereof; or (g) at the option of either the Fund, the Distributor or the Adviser, if (i) the Fund, Distributor or Adviser determines, in its sole judgment reasonably exercised in good faith, that either FirstGWL&A or Schwab has suffered a material adverse change in their business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on FirstGWL&A's or Schwab's ability to perform its obligations under this Agreement, (ii) the Fund, the Distributor or the Adviser notifies FirstGWL&A or Schwab, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by FirstGWL&A or Schwab and any other changes in circumstances since the giving of such a notice, the determination of the Fund, the Distributor or the Adviser shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or (h) at the option of either FirstGWL&A or Schwab, if (i) FirstGWL&A or Schwab, respectively, shall determine, in its sole judgment reasonably exercised in good faith, that either the Fund, the Distributor or the Adviser has suffered a material adverse change in its business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on the Fund's, the Distributor's or the Adviser's ability to perform its obligations under this Agreement, (ii) FirstGWL&A or Schwab notifies the Adviser of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by the Fund, the Distributor or the Adviser and any other changes in circumstances since the giving of such a notice, the determination of FirstGWL&A or Schwab shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or (i) at the option of FirstGWL&A in the event that formal administrative proceedings are instituted against Schwab by the NASD, the Securities and Exchange Commission, or any state securities or insurance department or any other regulatory body regarding Schwab's duties under this Agreement or related to the sale of the Fund's shares or the Contracts, the operation of any Account, or the purchase of the Fund shares, provided, however, that FirstGWL&A determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of Schwab to perform its obligations related to the Contracts; or (j) at the option of Schwab in the event that formal administrative proceedings are instituted against FirstGWL&A by the NASD, the Securities and Exchange Commission, or any state securities or insurance department or any other regulatory body regarding FirstGWL&A's duties under this Agreement or related to the sale of the Fund's shares or the Contracts, the operation of any Account, or the purchase of the Fund shares, provided, however, that Schwab determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of FirstGWL&A to perform its obligations related to the Contracts; or (k) at the option of any non-defaulting party hereto in the event of a material breach of this Agreement by any party hereto (the "defaulting party") other than as described in 10.1(a)-(j); provided, that the non-defaulting party gives written notice thereof to the defaulting party, with copies of such notice to all other non-defaulting parties, and if such breach shall not have been remedied within thirty (30) days after such written notice is given, then the non-defaulting party giving such written notice may terminate this Agreement by giving thirty (30) days written notice of termination to the defaulting party. 10.2. Notice Requirement. No termination of this Agreement shall be effective unless and until the party terminating this Agreement gives prior written notice to all other parties of its intent to terminate, which notice shall set forth the basis for the termination. Furthermore, (a) in the event any termination is based upon the provisions of Article VII, or the provisions of Section 10.1(a), 10.1(g) or 10.1(h) of this Agreement, the prior written notice shall be given in advance of the effective date of termination as required by those provisions unless such notice period is shortened by mutual written agreement of the parties; (b) in the event any termination is based upon the provisions of Section 10.1(d), 10.1(e), 10.1(i) or 10.1(j) of this Agreement, the prior written notice shall be given at least sixty (60) days before the effective date of termination; and (c) in the event any termination is based upon the provisions of Section 10.1(b), 10.1(c) or 10.1(f), the prior written notice shall be given in advance of the effective date of termination, which date shall be determined by the party sending the notice. 10.3. Effect of Termination. Notwithstanding any termination of this Agreement, other than as a result of a failure by either the Fund or FirstGWL&A to meet Section 817(h) of the Code diversification requirements, the Fund, and the Distributor shall, at the option of FirstGWL&A or Schwab, continue to cause the Fund to make available additional shares of the Designated Portfolio(s) pursuant to the terms and conditions of this Agreement, for all Contracts in effect on the effective date of termination of this Agreement (hereinafter referred to as "Existing Contracts"). Specifically, without limitation, the owners of the Existing Contracts shall be permitted to reallocate investments in the Designated Portfolio(s), redeem investments in the Designated Portfolio(s) and/or invest in the Designated Portfolio(s) upon the making of additional purchase payments under the Existing Contracts. The parties agree that this Section 10.3 shall not apply to any terminations under Article VII and the effect of such Article VII terminations shall be governed by Article VII of this Agreement. 10.4. Surviving Provisions. Notwithstanding any termination of this Agreement, each party's obligations under Article VIII to indemnify other parties shall survive and not be affected by any termination of this Agreement. In addition, with respect to Existing Contracts, all provisions of this Agreement shall also survive and not be affected by any termination of this Agreement, provided, however, that Adviser's obligation to make the administrative services fee payment under Section 5.6 hereof shall continue only if (i) Schwab continues to provide the administrative services contemplated by Section 5.5 and; (i) the Adviser or an affiliate of Adviser continues to serve as the investment adviser to a Designated Portfolio. 10.5. Survival of Agreement. A termination by Schwab shall terminate this Agreement only as to Schwab, and this Agreement shall remain in effect as to the other parties; provided, however, that in the event of a termination by Schwab the other parties shall have the option to terminate this Agreement upon 60 (sixty) days notice, rather than the six (6) months specified in Section 10.1(a). ARTICLE XI. Notices Any notice shall be sufficiently given when sent by registered or certified mail to the other party at the address of such party set forth below or at such other address as such party may from time to time specify in writing to the other party. If to the Fund: TCI Portfolios, Inc. P.O. Box 419385 Kansas City, MO 64141-6385 Attention: General Counsel If to FirstGWL&A: First Great-West Life & Annuity Insurance Company 8515 East Orchard Road Englewood, CO 80111 Attention: Assistant Vice President, Savings Products If to the Adviser: American Century Investment Management, Inc. 4500 Main Street Kansas City, MO 64111 Attention: General Counsel If to the Distributor: American Century Investment Services, Inc. 4500 Main Street Kansas City, MO 64111 Attention: General Counsel If to Schwab: Charles Schwab & Co., Inc. 101 Montgomery Street San Francisco, CA 94104 Attention: General Counsel ARTICLE XII. Miscellaneous 12.1. Subject to the requirements of legal process and regulatory authority, each party hereto shall treat as confidential the names and addresses of the owners of the Contracts and all information reasonably identified as confidential in writing by any other party hereto and, except as permitted by this Agreement, shall not disclose, disseminate or utilize such names and addresses and other confidential information without the express written consent of the affected party until such time as such information may come into the public domain. Without limiting the foregoing, no party hereto shall disclose any information that another party has designated as proprietary. 12.2. The captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provisions hereof or otherwise affect their construction or effect. 12.3. This Agreement may be executed simultaneously in two or more counterparts, each of which taken together shall constitute one and the same instrument. 12.4. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby. 12.5. Each party hereto shall cooperate with each other party and all appropriate governmental authorities (including without limitation the SEC, the NASD and state insurance regulators) and shall permit such authorities reasonable access to its books and records in connection with any investigation or inquiry relating to this Agreement or the transactions contemplated hereby. Notwithstanding the generality of the foregoing, each party hereto further agrees to furnish the New York Insurance Commissioner with any information or reports in connection with services provided under this Agreement which such Commissioner may reasonably request in order to ascertain whether the variable annuity operations of FirstGWL&A are being conducted in a manner consistent with the New York Variable Annuity Regulations and any other applicable law or regulations. 12.6. Any controversy or claim arising out of or relating to this Agreement, or breach thereof, may be settled by arbitration if mutually agreed to by the relevant parties in a forum jointly selected by the relevant parties (but if applicable law requires some other forum, then such other forum) in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. 12.7. The rights, remedies and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies and obligations, at law or in equity, which the parties hereto are entitled to under state and federal laws. 12.8. This Agreement or any of the rights and obligations hereunder may not be assigned by any party without the prior written consent of all parties hereto. 12.9. No provision of this Agreement may be deemed or construed to modify or supersede any contractual rights, duties, or indemnifications, as between the Adviser, the Distributor and the Fund. IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in its name and on its behalf by its duly authorized representative and its seal to be hereunder affixed hereto as of the date specified below. FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY By its authorized officer, By:/s/ Robert K. Shaw Title: Vice President, Marketing & Product Development Date: April 1, 1997 TCI PORTFOLIOS, INC. By its authorized officer, By:/s/ Patrick A. Looby Title: Vice President Date: March 21, 1997 AMERICAN CENTURY INVESTMENT MANAGEMENT, INC. By its authorized officer, By:/s/ Patrick A. Looby Title: Vice President Date: March 21, 1997 AMERICAN CENTURY INVESTMENT SERVICES, INC. By its authorized officer, By:/s/ Patrick A. Looby Title: Vice President Date: March 21, 1997 CHARLES SCHWAB & CO., INC. By its authorized officer, By:/s/ Jeff Benton Title: Vice President, Annuities & Life Insurance Date: March 31, 1997 Schwab Variable Annuity SCHEDULE A Contracts Form Numbers First Great-West Life & Annuity Insurance Company Group Variable/Fixed Annuity Contract J434NY SCHEDULE B Designated Portfolios TCI Growth TCI International SCHEDULE C Administrative Services To be performed by Charles Schwab & Co., Inc. A. Schwab will provide the properly registered and licensed personnel and systems needed for all customer servicing and support - - for both fund and annuity information and questions - including: respond to Contractowner inquiries delivery of prospectus - both fund and annuity; entry of initial and subsequent orders; transfer of cash to insurance company and/or funds; explanations of fund objectives and characteristics; entry of transfers between funds; fund balance and allocation inquiries; mail fund prospectus. B. For the services, Schwab shall receive a fee of 0.00% per annum applied to the average daily value of the shares of the fund held by Schwab's customers, payable by the Adviser directly to Schwab, such payments being due and payable within 30 (thirty) days after the last day of the month to which such payment relates. C. The Distributor will calculate and Schwab will confirm on a daily basis for each Designated Portfolio the number of shares and the asset balance on which the fee is to be paid pursuant to this agreement. Also provided will be a monthly summary of the reports, expressed in both shares and dollar amounts. D. Schwab will communicate all purchase, withdrawal, and exchange orders it receives from its customers to FirstGWL&A who will retransmit them to the Fund. SCHEDULE D Reports per Section 6.6 With regard to the reports relating to the quarterly testing of compliance with the requirements of Section 817(h) and Subchapter M under the Internal Revenue Code (the "Code") and the regulations thereunder, the Adviser shall provide within twenty (20) Business Days of the close of the calendar quarter a report to FirstGWL&A in the Form D1 attached hereto and incorporated herein by reference, regarding the status under such sections of the Code of the Designated Portfolio(s), and if necessary, identification of any remedial action to be taken to remedy non-compliance. With regard to the reports relating to the year-end testing of compliance with the requirements of Subchapter M of the Code, referred to hereinafter as "RIC status," the Fund will provide the reports on the following basis: (i) the last quarter's quarterly reports can be supplied within the 20-day period, and (ii) a year-end report will be provided 45 days after the end of the calendar year. However, if a problem with regard to RIC status, as defined below, is identified in the third quarter report, on a weekly basis, starting the first week of December, additional interim reports will be provided specially addressing the problems identified in the third quarter report. If any interim report memorializes the cure of the problem, subsequent interim reports will not be required. A problem with regard to RIC status is defined as any violation of the following standards, as referenced to the applicable sections of the Code: (a) Less than ninety percent of gross income is derived from sources of income specified in Section 851(b)(2); (b) Thirty percent or greater gross income is derived from the sale or disposition of assets specified in Section 851(b)(3); (c) Less than fifty percent of the value of total assets consists of assets specified in Section 851(b)(4)(A); and (d) No more than twenty-five percent of the value of total assets is invested in the securities of one issuer, as that requirement is set forth in Section 851(b)(4)(B). FORM D1 CERTIFICATE OF COMPLIANCE American Century Investment Management, Inc., the investment adviser for TCI Growth and TCI International (the "Funds"), hereby notifies you that, based on internal compliance testing performed as of the end of the calendar quarter ended , 19 , the Funds were in compliance with all requirements of Section 817(h) and Subchapter M of the Internal Revenue Code (the "Code") and the regulations thereunder as required in the Fund Participation Agreement among First Great-West Life & Annuity Insurance Company, Charles Schwab & Co., Inc. and American Century Investment Management, Inc., other than the exceptions discussed below: Exceptions Remedial Action If no exception to report, please indicate "None." Signed this day of , . American Century Investment Management, Inc. (Signature) By: (Type or Print Name and Title/Position) SCHEDULE E EXPENSES The Distributor and/or Adviser, FirstGWL&A and Schwab will coordinate the functions and pay the costs of the completing these functions based upon an allocation of costs in the tables below. With respect to documents that contain materials related to the Designated Portfolio(s) and portfolios of other issuers and for which Adviser is indicated as the party responsible for the expense, costs shall be allocated to the Adviser according to the number of pages of the Fund's portion of such documents as compared to the total number of pages of the document. Item Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Prospectus Printing of combined prospectuses FirstGWL&A Adviser Distributor shall supply FirstGWL&A with such numbers of the Designated Portfolio(s) prospectus(es) as FirstGWL&A shall reasonably request FirstGWL&A Distributor Distribution to New and Inforce Clients FirstGWL&A FirstGWL&A Distribution to Prospective Clients Schwab Schwab Product Prospectus Printing for Inforce Clients FirstGWL&A FirstGWL&A Printing for Prospective Clients FirstGWL&A Schwab Distribution to New and Inforce Clients FirstGWL&A FirstGWL&A Distribution to Prospective Clients Schwab Schwab Item Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Prospectus Update & Distribution If Required by Fund or Distributor Distributor and FirstGWL&A Distributor If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab Schwab Schwab Product Prospectus Update & Distribution If Required by Fund or Distributor FirstGWL&A Distributor If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab Schwab Schwab Mutual Fund SAI Printing (one copy to be provided) Distributor Distributor Distribution and copying FirstGWL&A FirstGWL&A Product SAI Printing FirstGWL&A FirstGWL&A Distribution FirstGWL&A FirstGWL&A Item Function Party Responsible for Coordination Party Responsible for Expense Proxy Material for Mutual Fund: Printing if proxy required by Law Adviser Adviser Distribution (including labor) if proxy required by Law FirstGWL&A Adviser Printing & distribution if required by FirstGWL&A FirstGWL&A FirstGWL&A Printing & distribution if required by Schwab FirstGWL&A Schwab Item Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Annual & Semi-Annual Report Printing of combined reports FirstGWL&A Distributor Distribution FirstGWL&A FirstGWL&A and Schwab Other communication to New and Prospective clients If Required by the Fund or Distributor Schwab Distributor If Required by FirstGWL&A Schwab FirstGWL&A If Required by Schwab Schwab Schwab Other communication to inforce Distribution (including labor) if required by the Fund or Distributor FirstGWL&A Distributor If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab FirstGWL&A Schwab Item Function Party Responsible for Coordination Party Responsible for Expense Errors in Share Price calculation pursuant to Section 1.10 Cost of error to participants FirstGWL&A Adviser Cost of administrative work to correct error FirstGWL&A Adviser Operations of the Fund All operations and related expenses, including the cost of registration and qualification of shares, taxes on the issuance or transfer of shares, cost of management of the business affairs of the Fund, and expenses paid or assumed by the fund pursuant to any Rule 12b-1 plan Fund or Distributor Fund or Adviser Operations of the Account Federal registration of units of separate account (24f-2 fees) FirstGWL&A FirstGWL&A EX-8.2 9 EXHIBIT 8.2 FUND PARTICIPATION AGREEMENT The Alger American Fund TABLE OF CONTENTS ARTICLE I. Sale of Fund Shares 4 ARTICLE II. Representations and Warranties 8 ARTICLE III. Prospectuses and Proxy Statements; Voting 11 ARTICLE IV. Sales Material and Information 14 ARTICLE V. Fees and Expenses 16 ARTICLE VI. Diversification and Qualification 18 ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order 21 ARTICLE VIII. Indemnification 24 ARTICLE IX. Applicable Law 35 ARTICLE X. Termination 36 ARTICLE XI. Notices 40 ARTICLE XII. Miscellaneous 41 SCHEDULE A Contracts 45 SCHEDULE B Designated Portfolios 46 SCHEDULE C Administrative Services 47 SCHEDULE D Reports per Section 6.6 48 SCHEDULE E Expenses 51 PARTICIPATION AGREEMENT Among FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY THE ALGER AMERICAN FUND, FRED ALGER MANAGEMENT, INC., FRED ALGER & COMPANY, INCORPORATED and CHARLES SCHWAB & CO., INC. THIS AGREEMENT, made and entered into as of this ____ day of _______________, 1997 by and among FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (hereinafter "FirstGWL&A"), a New York life insurance company, on its own behalf and on behalf of its Separate Account Variable Annuity-1 Series Account (the "Account"); THE ALGER AMERICAN FUND, a business trust organized under the laws of the Commonwealth of Massachusetts (hereinafter the "Fund"); FRED ALGER MANAGEMENT, INC. (hereinafter the "Adviser"), a New York corporation; FRED ALGER & COMPANY, INCORPORATED (the "Distributor"), a Delaware corporation; and CHARLES SCHWAB & CO., INC., a California corporation (hereinafter "Schwab"). WHEREAS, the Fund engages in business as an open-end management investment company and is available to act as the investment vehicle for separate accounts established for variable life insurance policies and/or variable annuity contracts (collectively, the "Variable Insurance Products") to be offered by insurance companies, including FirstGWL&A, which have entered into participation agreements similar to this Agreement (hereinafter "Participating Insurance Companies"); and WHEREAS, the beneficial interest in the Fund is divided into several series of shares, each designated a "Portfolio" and representing the interest in a particular managed portfolio of securities and other assets; and WHEREAS, the Fund has obtained an order from the Securities and Exchange Commission (hereinafter the "SEC"), dated February 17, 1989 (File No. 812-7076), and amended September 14, 1995, granting Participating Insurance Companies and variable annuity and variable life insurance separate accounts exemptions from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended, (hereinafter the "1940 Act") and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Fund to be sold to and held by variable annuity and variable life insurance separate accounts of life insurance companies that may or may not be affiliated with one another and, as contemplated by paragraph (f)(3) of Treasury Regulation 1.817-5, qualified and pension and retirement plans ("Qualified Plans") (hereinafter the "Mixed and Shared Funding Exemptive Order"); and WHEREAS, the Fund is registered as an open-end management investment company under the 1940 Act and shares of the Portfolio(s) are registered under the Securities Act of 1933, as amended (hereinafter the "1933 Act"); and WHEREAS, the Adviser is duly registered as an investment adviser under the Investment Advisers Act of 1940, as amended, and any applicable state securities laws; and WHEREAS, the Distributor is duly registered as a broker-dealer under the Securities Exchange Act of 1934, as amended, (the "1934 Act") and is a member in good standing of the National Association of Securities Dealers, Inc. (the "NASD"); and WHEREAS, FirstGWL&A has registered or will register certain variable annuity contracts supported wholly or partially by the Account (the "Contracts") under the 1933 Act and said Contracts are listed in Schedule A attached hereto and incorporated herein by reference, as it may be amended from time to time by mutual written agreement; and WHEREAS, the Account is a duly organized, validly existing segregated asset account, established by resolution of the Board of Directors of FirstGWL&A on January 15, 1997, to set aside and invest assets attributable to the Contracts; and WHEREAS, FirstGWL&A has registered or will register the Account as a unit investment trust under the 1940 Act and has registered or will register the securities deemed to be issued by the Account under the 1933 Act; and WHEREAS, to the extent permitted by applicable insurance laws and regulations, FirstGWL&A intends to purchase shares in the Portfolio(s) listed in Schedule B attached hereto and incorporated herein by reference, as it may be amended from time to time by mutual written agreement (the "Designated Portfolio(s)"), on behalf of the Account to fund the Contracts, and the Fund is authorized to sell such shares to unit investment trusts such as the Account at net asset value; and WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Account also intends to purchase shares in other open-end investment companies or series thereof not affiliated with the Fund (the "Unaffiliated Funds") on behalf of the Account to fund the Contracts; and WHEREAS, Schwab will perform certain services for the Fund in connection with the Contracts; NOW, THEREFORE, in consideration of their mutual promises, FirstGWL&A, Schwab, the Fund, the Distributor and the Adviser agree as follows: ARTICLE I. Sale of Fund Shares 1.1. The Fund agrees to sell to FirstGWL&A those shares of the Designated Portfolio(s) which the Account orders, executing such orders on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the order for the shares of the Portfolios. For purposes of this Section 1.1, FirstGWL&A shall be the designee of the Fund for receipt of such orders and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such order by 10:00 a.m. Eastern time on the next following Business Day. "Business Day" shall mean any day on which the New York Stock Exchange is open for trading and on which the Fund calculates its net asset value pursuant to the rules of the SEC. 1.2. The Fund agrees to make shares of the Designated Portfolio(s) available for purchase at the applicable net asset value per share by FirstGWL&A on behalf of the Account on those days on which the Fund calculates its Designated Portfolio(s)' net asset value pursuant to rules of the SEC, and the Fund shall calculate such net asset value on each day which the New York Stock Exchange is open for trading. Notwithstanding the foregoing, the Board of Trustees of the Fund (hereinafter the "Board") may refuse to sell shares of any Portfolio to any person, or suspend or terminate the offering of shares of any Portfolio if such action is required by law or by regulatory authorities having jurisdiction or is, in the sole discretion of the Board acting in good faith and in light of their fiduciary duties under federal and any applicable state laws, necessary in the best interests of the shareholders of such Portfolio. 1.3. The Fund will not sell shares of the Designated Portfolio(s) to any other Participating Insurance Company or separate account unless an agreement containing provisions substantially the same as Sections 2.1, 3.5, 3.6, and Article VII of this Agreement is in effect to govern such sales. 1.4. The Fund agrees to redeem for cash, on FirstGWL&A's request, any full or fractional shares of the Fund held by FirstGWL&A, executing such requests on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the request for redemption, except that the Fund reserves the right to suspend the right of redemption, consistent with Section 22(e) of the 1940 Act and any applicable rules thereunder. Requests for redemption identified by FirstGWL&A, or its agent, as being in connection with surrenders, annuitizations, or death benefits under the Contracts, upon prior written notice, may be executed within seven (7) calendar days after receipt by the Fund or its designee of the requests for redemption. This Section 1.4 may be amended, in writing, by the parties consistent with the requirements of the 1940 Act and interpretations thereof. For purposes of this Section 1.4, FirstGWL&A shall be the designee of the Fund for receipt of requests for redemption and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such request for redemption by 10:00 A.M. Eastern time on the next following Business Day. 1.5. The Parties hereto acknowledge that the arrangement contemplated by this Agreement is not exclusive; the Fund's shares may be sold to other Participating Insurance Companies (subject to Section 1.3 and Article VI hereof) and the cash value of the Contracts may be invested in other investment companies. 1.6. FirstGWL&A shall pay for Fund shares by 3:00 p.m. Eastern time on the next Business Day after an order to purchase Fund shares is made in accordance with the provisions of Section 1.1 hereof. Payment shall be in federal funds transmitted by wire and/or by a credit for any shares redeemed the same day as the purchase. 1.7. The Fund shall pay and transmit the proceeds of redemptions of Fund shares by 3:00 p.m. Eastern Time on the next Business Day after a redemption order is received in accordance with Section 1.4 hereof, except that payment may be delayed if, for example, the Fund's cash position so requires or if extraordinary market conditions exist, but in no event shall payment be delayed for a greater period than is permitted by the 1940 Act. Payment shall be in federal funds transmitted by wire and/or a credit for any shares purchased the same day as the redemption. 1.8. Issuance and transfer of the Fund's shares will be by book entry only. Stock certificates will not be issued to FirstGWL&A or the Account. Shares ordered from the Fund will be recorded in an appropriate title for the Account or the appropriate sub-account of the Account. 1.9. The Fund shall furnish same day notice (by wire or telephone, followed by written confirmation) to FirstGWL&A of any income, dividends or capital gain distributions payable on the Designated Portfolio(s)' shares. FirstGWL&A hereby elects to receive all such income dividends and capital gain distributions as are payable on the Portfolio shares in additional shares of that Portfolio. FirstGWL&A reserves the right to revoke this election in writing and to receive all such income dividends and capital gain distributions in cash. The Fund shall notify FirstGWL&A by the end of the next following Business Day of the number of shares so issued as payment of such dividends and distributions. 1.10. The Fund shall make the net asset value per share ("NAV") for each Designated Portfolio available to FirstGWL&A on each Business Day as soon as reasonably practical after the NAV per share is calculated and shall use its best efforts to make such net asset value per share available by 6:00 p.m. Eastern time. In the event of a material error in the computation of a Designated Portfolio's NAV or any dividend or capital gain distribution (each, a "pricing error"), which results in adjustments to Contractowner's accounts, the Adviser or the Fund shall immediately notify FirstGWL&A as soon as possible after discovery of the error. Such notification may be verbal, but shall be confirmed promptly in writing in accordance with Article XI of this Agreement. A pricing error shall be corrected as follows: (a) if the pricing error results in a difference between the erroneous NAV and the correct NAV equal to or greater than $0.01 per share, but less than 1/2 of 1% of the Designated Portfolio's NAV at the time of the error, then the Adviser shall either reimburse the Designated Portfolio for any loss, after taking into consideration any positive effect of such error and no adjustments to Contractowner accounts need be made, or, in the Adviser's discretion, the procedures described in item (b) shall be followed; and (b) if the pricing error results in a difference between the erroneous NAV and the correct NAV equal to or greater than 1/2 of 1% of the Designated Portfolio's NAV at the time of the error, then the Adviser shall reimburse the Designated Portfolio for any unrecovered excess redemption proceeds (as defined below) and shall reimburse FirstGWL&A for its reasonable costs of adjustments made to correct Contractowner accounts in accordance with the provisions of Schedule E. If an adjustment is necessary to correct an error of category (b) above which has caused Contractowners to receive less than the amount of shares or redemption proceeds to which they are entitled, or is elected by the Adviser in connection with an error of category (a), the number of shares of the applicable account of each such Contractowner will be adjusted and the amount of any underpayments on redemption transactions not corrected by such adjustment shall be credited by the Fund to FirstGWL&A for crediting of such amounts to the applicable Contractowners' accounts. In the event an NAV pricing error results in a Contractowner's receiving redemption proceeds in an amount which is $500 or more in excess of the amount that such Contractowner would have received with the correct NAV (such amount being the "excess redemption proceeds"), then the effect of such overpayment shall be corrected, to the extent possible, by an adjustment to the number of shares in the Contractowner's account and, FirstGWL&A and Schwab agree that they will make a good faith attempt to collect such excess proceeds not accounted for by such adjustment. Any overpayments that have not yet been paid to Contractowners will be remitted to the Fund by FirstGWL&A or Schwab upon notification by the Adviser of such overpayment. In no event shall Schwab or FirstGWL&A be liable to Contractowners for any such adjustments or underpayment amounts, other than amounts paid by the Fund or Adviser for crediting to Contractowner Accounts as set forth above. No provision in this section 1.10 shall require the adjustment of a Contractowner's account if the adjustment required for that account is less than $25. A pricing error within categories (a) or (b) above shall be deemed to be "materially incorrect" or constitute a "material error" for purposes of this Agreement. The standards set forth in this Section 1.10 are based on the Parties' understanding of the views expressed by the staff of the Securities and Exchange Commission ("SEC") as of the date of this Agreement. In the event the views of the SEC staff are later modified or superseded by SEC or judicial interpretation, the parties shall amend the foregoing provisions of this Agreement to comport with the appropriate applicable standards, on terms mutually satisfactory to all Parties. ARTICLE II. Representations and Warranties 2.1. FirstGWL&A represents and warrants that the securities deemed to be issued by the Account under the Contracts are or, prior to issuance, will be registered under the 1933 Act; that the Contracts will be issued and sold in compliance in all material respects with all applicable federal and state laws and that the sale of the Contracts shall comply in all material respects with state insurance suitability requirements. FirstGWL&A further represents and warrants that it is an insurance company duly organized and in good standing under applicable law and that it has legally and validly established the Account prior to any issuance or sale of units thereof as a segregated asset account under Section 4240 of the New York Insurance Law and has registered the Account as a unit investment trust i n accordance with the provisions of the 1940 Act to serve as a segregated investment account for the Contracts. 2.2. The Fund represents and warrants that Designated Portfolio(s) shares sold pursuant to this Agreement shall be registered under the 1933 Act, duly authorized for issuance and sold in compliance with all applicable federal securities laws including without limitation the 1933 Act, the 1934 Act, and the 1940 Act and that the Fund is and shall remain registered under the 1940 Act. The Fund shall amend the registration statement for its shares under the 1933 Act and the 1940 Act from time to time as required in order to effect the continuous offering of shares of the Designated Portfolios. 2.3. The Fund reserves the right to adopt a plan pursuant to Rule 12b-1 under the 1940 Act and to impose an asset-based or other charge to finance distribution expenses as permitted by applicable law and regulation. In any event, the Fund and Adviser agree to comply with applicable provisions and SEC staff interpretations of the 1940 Act to assure that the investment advisory or management fees paid to the Adviser by the Fund are in accordance with the requirements of the 1940 Act. To the extent that the Fund decides to finance distribution expenses pursuant to Rule 12b-1, the Fund undertakes to have its Board, a majority of whom are not interested persons of the Fund, formulate and approve any plan pursuant to Rule 12b-1 under the 1940 Act to finance distribution expenses. 2.4. The Fund represents and warrants that it will make every effort to ensure that the investment policies, fees and expenses of the Designated Portfolio(s) are and shall at all times remain in compliance with the insurance and other applicable laws of the State of New York and any other applicable state to the extent required to perform this Agreement. The Fund further represents and warrants that it will make every effort to ensure that Designated Portfolio(s) shares will be sold in compliance with the insurance laws of the State of New York and all applicable state insurance and securities laws. The Fund shall register and qualify the shares for sale in accordance with the laws of the various states if and to the extent required by applicable law. FirstGWL&A and the Fund will endeavor to mutually cooperate with respect to the implementation of any modifications necessitated by any change in state insurance laws, regulations or interpretations of the foregoing that affect the Designated Portfolio(s) (a "Law Change"), and to keep each other informed of any Law Change that becomes known to either party. In the event of a Law Change, and to the extent consistent with Article VII, the Fund agrees that, except in those circumstances where the Fund has advised FirstGWL&A that its Board of Directors has determined that implementation of a particular Law Change is not in the best interest of all of the Fund's shareholders, any action required by a Law Change will be taken. 2.5. The Fund represents and warrants that it is lawfully organized and validly existing under the laws of the Commonwealth of Massachusetts and that it does and will comply in all material respects with the 1940 Act. 2.6. The Adviser represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of the State of New York and any applicable state and federal securities laws. 2.7. The Distributor represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of the State of Delaware and any applicable state and federal securities laws. 2.8. The Fund, the Distributor and the Adviser represent and warrant that all of their respective officers, employees, investment advisers, and other individuals or entities dealing with the money and/or securities of the Fund are, and shall continue to be at all times, covered by a blanket fidelity bond or similar coverage for the benefit of the Fund in an amount not less than the minimal coverage required by Rule 17g-1 under the 1940 Act or related provisions as may be promulgated from time to time. The aforesaid bond shall include coverage for larceny and embezzlement and shall be issued by a reputable bonding company. 2.9. Schwab represents and warrants that it has completed, obtained and performed, in all material respects, all registrations, filings, approvals, and authorizations, consents and examinations required by any government or governmental authority as may be necessary to perform this Agreement. Schwab does and will comply, in all material respects, with all applicable laws, rules and regulations in the performance of its obligations under this Agreement. 2.10. The Fund will provide FirstGWL&A with as much advance notice as is reasonably practicable of any material change affecting the Designated Portfolio(s) (including, but not limited to, any material change in the registration statement or prospectus affecting the Designated Portfolio(s)) and any proxy solicitation affecting the Designated Portfolio(s) and consult with FirstGWL&A in order to implement any such change in an orderly manner, recognizing the expenses of changes and attempting to minimize such expenses by implementing them in conjunction with regular annual updates of the prospectus for the Contracts. The Fund agrees to share equitably in expenses incurred by FirstGWL&A as a result of actions taken by the Fund, consistent with the allocation of expenses contained in Schedule E attached hereto and incorporated herein by reference. 2.11. FirstGWL&A represents and warrants, for purposes other than diversification under Section 817 of the Internal Revenue Code of 1986 as amended ("the Code"), that the Contracts are currently treated as annuity contracts under applicable provisions of the Code, and that it will make every effort to maintain such treatment and that it will notify Schwab, the Fund, the Distributor and the Adviser immediately upon having a reasonable basis for believing that the Contracts have ceased to be so treated or that they might not be so treated in the future. In addition, FirstGWL&A represents and warrants that the Account is a "segregated asset account" and that interests in the Account are offered exclusively through the purchase of or transfer into a "variable contract" within the meaning of such terms under Section 817 of the Code and the regulations thereunder. FirstGWL&A will use every effort to continue to meet such definitional requirements, and it will notify Schwab, the Fund, the Distributor, and the Adviser immediately upon having a reasonable basis for believing that such requirements have ceased to be met or that they might not be met in the future. ARTICLE III. Prospectuses and Proxy Statements; Voting 3.1. At least annually, the Distributor or Fund shall provide a camera-ready copy and/or computer diskette of the current prospectus for the Designated Portfolio(s)) and other assistance as is reasonably necessary in order for FirstGWL&A once each year (or more frequently if the prospectuses for the Designated Portfolio(s) are amended) to have the prospectus for the Contracts and the Fund's prospectus for the Designated Portfolio(s) printed together in one document. The Fund and Adviser agree that the prospectuses (and semi-annual and annual reports) for the Designated Portfolio(s) will describe only the Designated Portfolio(s) and will not name or describe any other portfolios or series that may be in the Fund unless required by law. 3.2. If applicable state or federal laws or regulations require that the Statement of Additional Information ("SAI") for the Fund be distributed to all Contractowners, then the Fund and/or the Distributor shall provide FirstGWL&A with copies of the Fund's SAI or documentation thereof for the Designated Portfolio(s) in such quantities, with expenses to be borne in accordance with Schedule E hereof, as FirstGWL&A may reasonably require to permit timely distribution thereof to Contractowners. The Distributor and/or the Fund shall also provide SAIs to any Contractowner or prospective owner who requests such SAI from the Fund (although it is anticipated that such requests will be made to FirstGWL&A or Schwab). 3.3. The Fund and/or the Distributor shall provide FirstGWL&A and Schwab with copies of the Fund's proxy material, reports to stockholders and other communications to stockholders for the Designated Portfolio(s) in such quantity, with expenses to be borne in accordance with Schedule E hereof, as FirstGWL&A may reasonably require to permit timely distribution thereof to Contractowners. 3.4. It is understood and agreed that, except with respect to information regarding FirstGWL&A or Schwab provided in writing by that party, neither FirstGWL&A nor Schwab are responsible for the content of the prospectus or SAI for the Designated Portfolio(s). It is also understood and agreed that, except with respect to information regarding the Fund, the Distributor, Adviser or the Designated Portfolio(s) provided in writing by the Fund, the Distributor or Adviser, neither the Fund, the Distributor nor Adviser are responsible for the content of the prospectus or SAI for the Contracts. 3.5. If and to the extent required by law FirstGWL&A shall: (i) solicit voting instructions from Contractowners; (ii) vote the Designated Portfolio(s) shares in accordance with instructions received from Contractowners: and (iii) vote Designated Portfolio shares for which no instructions have been received in the same proportion as Designated Portfolio(s) shares for which instructions have been received from Contractowners, so long as and to the extent that the SEC continues to interpret the 1940 Act to require pass-through voting privileges for variable contract owners. FirstGWL&A reserves the right to vote Fund shares held in any segregated asset account in its own right, to the extent permitted by law and the Mixed and Shared Funding Exemptive Order. 3.6. FirstGWL&A shall be responsible for assuring that each of its separate accounts holding shares of a Designated Portfolio calculates voting privileges, and the Fund shall provide FirstGWL&A with appropriate assistance in fulfilling such responsibility. The Fund agrees to promptly notify FirstGWL&A of any changes of interpretations or amendments of the Mixed and Shared Funding Exemptive Order. 3.7. The Fund will comply with all provisions of the 1940 Act requiring voting by shareholders, and in particular the Fund will either provide for annual meetings (except insofar as the SEC may interpret Section 16 of the 1940 Act not to require such meetings) or, as the Fund currently intends, comply with Section 16(c) of the 1940 Act (although the Fund is not one of the trusts described in Section 16(c) of that Act) as well as with Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in accordance with the SEC's interpretation of the requirements of Section 16(a) with respect to periodic elections of directors or trustees and with whatever rules the Commission may promulgate in the future with respect thereto. ARTICLE IV. Sales Material and Information 4.1. FirstGWL&A and Schwab shall furnish, or shall cause to be furnished, to the Fund or its designee, a copy of each piece of sales literature or other promotional material that FirstGWL&A or Schwab, respectively, develops or proposes to use and in which the Fund (or a Portfolio thereof), its Adviser or one of its sub-advisers or the Distributor is named in connection with the Contracts, at least ten (10) Business Days prior to its use. No such material shall be used if the Fund objects to such use within five (5) Business Days after receipt of such material. If sales literature or promotional material goes beyond naming the Fund, a Designated Portfolio, the Adviser, a sub-adviser, or the Distributor, FirstGWL&A or Schwab shall obtain from the Fund or its designee affirmative written approval to use such material. 4.2. FirstGWL&A and Schwab shall not give any information or make any representations or statements on behalf of or concerning the Fund, the Adviser or the Distributor in connection with the sale of the Contracts other than the information or representations contained in the registration statement or prospectus for the Fund shares, as such registration statement and prospectus may be amended or supplemented from time to time, or in reports or proxy statements for the Fund, or in sales literature or other promotional material approved by the Fund, the Adviser or the Distributor, except with the permission of the Fund or the Distributor. 4.3. The Fund shall furnish, or shall cause to be furnished, to FirstGWL&A and Schwab, a copy of each piece of sales literature or other promotional material in which it names FirstGWL&A and/or its separate account(s), or Schwab in connection with the transactions contemplated by this Agreement at least ten (10) Business Days prior to its use. No such material shall be used if FirstGWL&A or Schwab objects to such use within five (5) Business Days after receipt of such material. 4.4. The Fund, the Distributor, and the Adviser shall not give any information or make any representations on behalf of FirstGWL&A or concerning FirstGWL&A, the Account, or the Contracts other than the information or representations contained in a registration statement or prospectus for the Contracts, as such registration statement and prospectus may be amended or supplemented from time to time, or in reports for the Account, or in sales literature or other promotional material approved by FirstGWL&A or its designee, except with the permission of FirstGWL&A. 4.5. In connection with the Transactions contemplated by this Agreement, FirstGWL&A, the Fund, the Distributor and the Adviser shall not give any information or make any representations on behalf of or concerning Schwab, or use Schwab's name except with the permission of Schwab, or except which merely names Schwab as administrator or the Fund's participation in a Schwab sponsored program. 4.6. The Fund will provide to FirstGWL&A and Schwab at least one complete copy of all registration statements, prospectuses, SAIs, reports, proxy statements, sales literature and other promotional materials which refer to FirstGWL&A or Schwab, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Designated Portfolio(s), contemporaneously with the filing of such document(s) with the SEC or NASD or other regulatory authorities. 4.7. FirstGWL&A or Schwab will provide to the Fund at least one complete copy of all registration statements, prospectuses, SAIs, reports, solicitations for voting instructions, sales literature and other promotional materials, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Contracts or the Account, contemporaneously with the filing of such document(s) with the SEC, NASD, or other regulatory authority. 4.8. For purposes of Articles IV and VIII, the phrase "sales literature and other promotional material" includes, but is not limited to, advertisements (such as material published, or designed for use in, a newspaper, magazine, or other periodical, radio, television, telephone or tape recording, videotape display, signs or billboards, motion pictures, or other public media; e.g., on-line networks such as Internet or other electronic media), sales literature (i.e., any written communication distributed or made generally available to customers or the public, including brochures, circulars, research reports, market letters, form letters, seminar texts, reprints or excerpts of any other advertisement, sales literature, or published article), educational or training materials or other communications distributed or made generally available to some or all agents or employees, and registration statements, prospectuses, SAIs, shareholder reports, and proxy materials and any other material constituting sales literature or advertising under the NASD rules, 1933 Act or the 1940 Act. 4.9. At the request of any party to this Agreement, each other party will make available to the other party's independent auditors and/or representative of the appropriate regulatory agencies, all records, data and access to operating procedures that may be reasonably requested in connection with compliance and regulatory requirements related to this Agreement or any party's obligations under this Agreement. ARTICLE V. Fees and Expenses 5.1. The Fund shall pay no fee or other compensation to FirstGWL&A or Schwab under this Agreement, and FirstGWL&A shall pay no fee or other compensation to the Fund or Adviser under this Agreement, although the parties hereto will bear certain expenses in accordance with Schedule E, Articles III, V, and other provisions of this Agreement. 5.2. Except as otherwise specifically provided herein or in Schedule E, each party will bear all expenses incident its performance under this Agreement. The Fund shall see to it that all shares of the Designated Portfolio(s) are registered and authorized for issuance in accordance with applicable federal law and, if and to the extent required, in accordance with applicable state laws prior to their sale and pay all expenses related thereto. 5.3. The parties shall bear the expenses of routine annual distribution (mailing costs) of the Fund's prospectus and distribution (mailing costs) of the Fund's proxy materials and reports to owners of Contracts offered by FirstGWL&A, in accordance with Schedule E. 5.4. The Fund, the Distributor and the Adviser acknowledge that a principal feature of the Contracts is the Contractowner's ability to choose from a number of unaffiliated mutual funds (and portfolios or series thereof), including the Designated Portfolio(s) and the Unaffiliated Funds, and to transfer the Contract's cash value between funds and portfolios. The Fund, the Distributor and the Adviser agree to not interfere with FirstGWL&A and Schwab in facilitating the operation of the Account and the Contracts as described in the prospectus for the Contracts, including but not limited to cooperation in not interfering with transfers between Unaffiliated Funds. 5.5. Schwab agrees to provide certain administrative services, specified in Schedule C attached hereto and incorporated herein by reference, in connection with the arrangements contemplated by this Agreement. The parties acknowledge and agree that the services referred to in this Section 5.5 are recordkeeping, shareholder communication, and other transaction facilitation and processing, and related administrative services only and are not the services of an underwriter or a principal underwriter of the Fund and that Schwab is not an underwriter for the shares of the Designated Portfolio(s), within the meaning of the 1933 Act or the 1940 Act. 5.6. As compensation for the services rendered, as specified in Schedule C hereto, the Adviser agrees to pay Schwab a monthly Administrative Service Fee based on the percentage per annum on Schedule C hereto applied to the average daily value of the shares of the Designated Portfolio(s) held in the Account with respect to Contracts sold by Schwab. This monthly Administrative Service Fee is due and payable before the 15th (fifteenth) day following the last day of the month to which it relates. ARTICLE VI. Diversification and Qualification 6.1. The Fund, Distributor and Adviser represent and warrant that they will make every effort to enable each Designated Portfolio to at all times comply with Section 817(h) of the Code and Treasury Regulation 1.817-5, as amended from time to time, and any Treasury interpretations thereof, relating to the diversification requirements for variable annuity, endowment, or life insurance contracts and any amendments or other modifications or successor provisions to such Section or Regulations. The Fund and the Distributor agree that shares of the Designated Portfolio(s) will be sold only to Participating Insurance Companies and their separate accounts and certain Qualified Plans. 6.2. No shares of any Designated Portfolio of the Fund will be sold to the general public. 6.3. The Fund and the Adviser represent and warrant that each Designated Portfolio is currently qualified as a Regulated Investment Company under Subchapter M of the Code, and that each Designated Portfolio will maintain such qualification (under Subchapter M or any successor or similar provisions) as long as this Agreement is in effect. 6.4. The Fund, the Distributor or the Adviser will notify FirstGWL&A immediately upon having a reasonable basis for believing that any Designated Portfolio has ceased to comply with the aforesaid Section 817(h) diversification or Subchapter M qualification requirements or might not so comply in the future. 6.5. Without in any way limiting the effect of Sections 8.3, 8.4 and 8.5 hereof and without in any way limiting or restricting any other remedies available to FirstGWL&A or Schwab, the Adviser or the Distributor will pay all costs associated with or arising out of any failure of the Fund or any Designated Portfolio to comply with Sections 6.1, 6.2, or 6.3 hereof, including all costs associated with reasonable and appropriate corrections or responses to any such failure; such costs may include, but are not limited to, the costs involved in creating, organizing, and registering a new investment company as a funding medium for the Contracts and/or the costs of obtaining whatever regulatory authorizations are required to substitute shares of another investment company for those of the failed Portfolio (including but not limited to an order pursuant to Section 26(b) of the 1940 Act); such costs are to include, but are not limited to, fees and expenses of legal counsel and other advisors to FirstGWL&A and any federal income taxes or tax penalties and interest thereon (or "toll charges" or exactments or amounts paid in settlement) incurred by FirstGWL&A with respect to itself or owners of its Contracts in connection with any such failure. 6.6. The Fund at the Fund's expense shall provide FirstGWL&A or its designee with reports certifying compliance with the aforesaid Section 817(h) diversification and Subchapter M qualification requirements, at the times provided for and substantially in the form attached hereto as Schedule D and incorporated herein by reference; provided, however, that providing such reports does not relieve the Fund of its responsibility for such compliance or of its liability for any non-compliance. 6.7. FirstGWL&A agrees that if the Internal Revenue Service ("IRS") asserts in writing in connection with any governmental audit or review of FirstGWL&A or, to FirstGWL&A's knowledge, of any Contractowner that any Designated Portfolio has failed to comply with the diversification requirements of Section 817(h) of the Code or FirstGWL&A otherwise becomes aware of any facts that could give rise to any claim against the Fund, the Adviser or the Distributor as a result of such a failure or alleged failure: (a) FirstGWL&A shall promptly notify the Fund, the Adviser and the Distributor of such assertion or potential claim; (b) FirstGWL&A shall consult with the Fund, the Adviser and the Distributor as to how to minimize any liability that may arise as a result of such failure or alleged failure; (c) FirstGWL&A shall use its best efforts to minimize any liability of the Fund, the Adviser and the Distributor resulting from such failure, including, without limitation, demonstrating, pursuant to Treasury Regulations, Section 1.817-5(a)(2), to the commissioner of the IRS that such failure was inadvertent; (d) any written materials to be submitted by FirstGWL&A to the IRS, any Contractowner or any other claimant in connection with any of the foregoing proceedings or contests (including, without limitation, any such materials to be submitted to the IRS pursuant to Treasury Regulations, Section 1.817-5(a)(2)) shall be provided by FirstGWL&A to the Fund, the Distributor and the Adviser (together with any supporting information or analysis) within at least two (2) business days prior to submission; (e) FirstGWL&A shall provide the Fund, the Distributor and the Adviser with such cooperation as the Fund, the Distributor and the Adviser shall reasonably request (including, without limitation, by permitting the Fund, the Distributor and the Adviser to review the relevant books and records of FirstGWL&A) in order to facilitate review by the Fund, the Distributor and the Adviser of any written submissions provided to it or its assessment of the validity or amount of any claim against it arising from such failure or alleged failure; (f) FirstGWL&A shall not with respect to any claim of the IRS or any Contractowner that would give rise to a claim against the Fund, the Distributor and the Adviser (i) compromise or settle any claim, (ii) accept any adjustment on audit, or (iii) forego any allowable administrative or judicial appeals, without the express written consent of the Fund, the Distributor and the Adviser, which shall not be unreasonably withheld; provided that, FirstGWL&A shall not be required to appeal any adverse judicial decision unless the Fund, the Distributor and the Adviser shall have provided an opinion of independent counsel to the effect that a reasonable basis exists for taking such appeal; and further provided that the Fund, the Distributor and the Adviser shall bear the costs and expenses, including reasonable attorney's fees, incurred by FirstGWL&A in complying with this clause (f). ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order 7.1. The Board will monitor the Fund for the existence of any material irreconcilable conflict between the interests of the contract owners of all separate accounts investing in the Fund and determine what action, if any, should be taken in response to such conflicts. An irreconcilable material conflict may arise for a variety of reasons, including: (a) an action by any state insurance regulatory authority; (b) a change in applicable federal or state insurance, tax, or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretative letter, or any similar action by insurance, tax, or securities regulatory authorities; (c) an administrative or judicial decision in any relevant proceeding; (d) the manner in which the investments of any Portfolio are being managed; (e) a difference in voting instructions given by variable annuity contract and variable life insurance contract owners or by contract owners of different Participating Insurance Companies; or (f) a decision by a Participating Insurance Company to disregard the voting instructions of contract owners. The Board shall promptly inform FirstGWL&A if it determines that an irreconcilable material conflict exists and the implications thereof. 7.2. FirstGWL&A will report any potential or existing conflicts of which it is aware to the Board. FirstGWL&A will assist the Board in carrying out its responsibilities under the Mixed and Shared Funding Exemptive Order, by providing the Board with all information reasonably necessary for the Board to consider any issues raised. This includes, but is not limited to, an obligation by FirstGWL&A to inform the Board whenever contract owner voting instructions are to be disregarded. 7.3. If it is determined by a majority of the Board, or a majority of its directors who are not interested persons of the Fund, the Distributor, the Adviser or any sub-adviser to any of the Designated Portfolios (the "Independent Directors"), that a material irreconcilable conflict exists, FirstGWL&A and other Participating Insurance Companies shall, at their expense and to the extent reasonably practicable (as determined by a majority of the Independent Directors), take whatever steps are necessary to remedy or eliminate the irreconcilable material conflict, including: (1) withdrawing the assets allocable to some or all of the separate accounts from the Fund or any Designated Portfolio and reinvesting such assets in a different investment medium, including (but not limited to) another portfolio of the Fund, or submitting the question whether such segregation should be implemented to a vote of all affected contract owners and, as appropriate, segregating the assets of any appropriate group (i.e., annuity contract owners, life insurance contract owners, or variable contract owners of one or more Participating Insurance Companies) that votes in favor of such segregation, or offering to the affected contract owners the option of making such a change; and (2) establishing a new registered management investment company or managed separate account. 7.4. If a material irreconcilable conflict arises because of a decision by FirstGWL&A to disregard contract owner voting instructions and that decision represents a minority position or would preclude a majority vote, FirstGWL&A may be required, at the Fund's election, to withdraw the Account's investment in the Fund and terminate this Agreement; provided, however that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the Independent Directors. Any such withdrawal and termination must take place within six (6) months after the Fund gives written notice that this provision is being implemented, and until the end of that six month period the Distributor and the Fund shall continue to accept and implement orders by FirstGWL&A for the purchase (and redemption) of shares of the Fund. 7.5. If a material irreconcilable conflict arises because a particular state insurance regulator's decision applicable to FirstGWL&A conflicts with the majority of other state regulators, then FirstGWL&A will withdraw the Account's investment in the Fund and this Agreement shall terminate within six months after the Board informs FirstGWL&A in writing that it has determined that such decision has created an irreconcilable material conflict; provided, however, that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the disinterested members of the Board. Until the end of the foregoing six month period, the Fund shall continue to accept and implement orders by FirstGWL&A for the purchase (and redemption) of shares of the Fund. 7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority of the Independent Directors shall determine whether any proposed action adequately remedies any irreconcilable material conflict, but in no event will the Fund be required to establish a new funding medium for the Contracts. FirstGWL&A shall not be required by Section 7.3 to establish a new funding medium for the Contracts if an offer to do so has been declined by vote of a majority of Contractowners affected by the irreconcilable material conflict. In the event that the Board determines that any proposed action does not adequately remedy any irreconcilable material conflict, then FirstGWL&A will withdraw the Account's investment in the Fund and this Agreement shall terminate within six (6) months after the Board informs FirstGWL&A in writing of the foregoing determination; provided, however, that such withdrawal and termination shall be limited to the extent required by any such material irreconcilable conflict as determined by a majority of the Independent Directors. 7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act or the rules promulgated thereunder with respect to mixed or shared funding (as defined in the Mixed and Shared Funding Exemptive Order) on terms and conditions materially different from those contained in the Mixed and Shared Funding Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies, as appropriate, shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable: and (b) Sections 3.5, 3.6, 3.7, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall be deemed modified to the extent necessary also to comply with the terms and conditions contained in such Rule(s) as so amended or adopted. 7.8. FirstGWL&A shall at least annually submit to the Board of Trustees of the Fund such reports, materials or data as the Trustees may reasonably request so that the Trustees may fully carry out the obligations imposed upon them by the Mixed and Shared Funding Exemptive Order, and said reports, materials and data shall be submitted more frequently if deemed appropriate by the Board of Trustees. 7.9. FirstGWL&A agrees that any remedial action taken by it in resolving any irreconcilable conflict will be carried out at its expense and with a view only to the interests of its Contractowners. ARTICLE VIII. Indemnification 8.1. Indemnification By FirstGWL&A 8.1(a). FirstGWL&A agrees to indemnify and hold harmless the Fund, the Distributor and the Adviser and each of their officers and directors or trustees and each person, if any, who controls the Fund, Distributor or Adviser within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.1) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of FirstGWL&A) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI covering the Contracts or contained in the Contracts or sales literature and other promotional material for the Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser, Distributor or Fund for use in the registration statement or prospectus or SAI for the Contracts or in the Contracts or sales literature and other promotional material (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI or sales literature and other promotional material of the Fund not supplied by FirstGWL&A or persons under its control) or wrongful conduct of FirstGWL&A or persons under its control, with respect to the sale or distribution of the Contracts or Fund Shares; or (iii) arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, or sales literature and other promotional material of the Fund, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such a statement or omission was made in reliance upon information furnished in writing to the Fund by or on behalf of FirstGWL&A; or (iv) arise as a result of any failure by FirstGWL&A to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by FirstGWL&A in this Agreement or arise out of or result from any other material breach of this Agreement by FirstGWL&A, including without limitation Section 2.11 and Section 6.7 hereof, as limited by and in accordance with the provisions of Sections 8.1(b) and 8.1(c) hereof. 8.1(b). FirstGWL&A shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement to any of the Indemnified Parties. 8.1(c). FirstGWL&A shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified FirstGWL&A in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify FirstGWL&A of any such claim shall not relieve FirstGWL&A from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that FirstGWL&A has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, FirstGWL&A shall be entitled to participate, at its own expense, in the defense of such action. FirstGWL&A also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from FirstGWL&A to such party of FirstGWL&A's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and FirstGWL&A will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.1(d). The Indemnified Parties will promptly notify FirstGWL&A of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund. 8.2. Indemnification by Schwab 8.2(a). Schwab agrees to indemnify and hold harmless the Fund, the Distributor and the Adviser and each of their officers and directors or trustees and each person, if any, who controls the Fund, Distributor or Adviser within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.2) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of Schwab) or litigation (including reasonable legal and other expenses), to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of Schwab's dissemination of information regarding the Fund, the Adviser or the Distributor that is both (A) materially incorrect and (B) that was neither contained in the Fund's registration statement or sales literature and other promotional material of the Fund prepared by the Fund or provided in writing by the Fund to Schwab, or approved in writing, by or on behalf of the Fund, the Distributor or the Adviser; or (ii) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in sales literature or other promotional material prepared by Schwab for the Contracts or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by the Adviser, the Distributor or Fund for use in the registration statement or prospectus for the Contracts or in the Contracts or sales literature and other promotional material (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts; or (iii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus or sales literature of the Fund not supplied by Schwab or persons under its control) or wrongful conduct of Schwab or persons under its control, with respect to the sale or distribution of the Contracts; or (iv) arise as a result of any failure by Schwab to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by Schwab in this Agreement or arise out of or result from any other material breach of this Agreement by Schwab; as limited by and in accordance with the provisions of Sections 8.2(b) and 8.2(c) hereof. 8.2(b). Schwab shall not be liable under this indemnification provision with respect to any losses, claims, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement to any of the Indemnified Parties. 8.2(c). Schwab shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified Schwab in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify Schwab of any such claim shall not relieve Schwab from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that Schwab has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, Schwab shall be entitled to participate, at its own expense, in the defense of such action. Schwab also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from Schwab to such party of Schwab's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and Schwab will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.2(d). The Indemnified Parties will promptly notify Schwab of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund. 8.3. Indemnification by the Adviser 8.3(a). The Adviser agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their directors and officers and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.3) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Adviser) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Fund, Adviser or the Distributor (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to the Adviser, the Distributor or the Fund by or on behalf of FirstGWL&A or Schwab for use in the registration statement or prospectus or SAI for the Fund or in sales literature and other promotional material (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or the Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI or sales literature or other promotional material for the Contracts not supplied by the Adviser or persons under its control) or wrongful conduct of the Fund, the Distributor or Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or (iii) arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, or sales literature and other promotional material covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser, the Distributor or the Fund; or (iv) arise as a result of any failure by the Fund, the Adviser or the Distributor to provide the services and furnish the materials under the terms of this Agreement (including a failure to comply with the diversification and other qualification requirements of Article VI of this Agreement); or (v) arise out of or result from any material breach of any representation and/or warranty made by the Fund, the Adviser or the Distributor in this Agreement or arise out of or result from any other material breach of this Agreement by the Adviser, the Fund or the Distributor; or (vi) arise out of or result from the materially incorrect or untimely calculation or reporting of the daily net asset value per share or dividend or capital gain distribution rate; as limited by and in accordance with the provisions of Sections 8.3(b) and 8.3(c) hereof. This indemnification is in addition to and apart from the responsibilities and obligations of the Adviser specified in Article VI hereof. 8.3(b). The Adviser shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement to any of the Indemnified Parties. 8.3(c). The Adviser shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Adviser in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Adviser of any such claim shall not relieve the Adviser from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Adviser has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Adviser will be entitled to participate, at its own expense, in the defense thereof. The Adviser also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Adviser to such party of the Adviser's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Adviser will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.3(d). The Indemnified Parties will promptly notify the Adviser of the commencement of any litigation or proceedings against them. 8.4. Indemnification By the Fund 8.4(a). The Fund agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their directors and officers and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.4) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Fund) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements, are related to the operations of the Fund and: (i) arise as a result of any failure by the Fund to provide the services and furnish the materials under the terms of this Agreement (including a failure to comply with the diversification and other qualification requirements of Article VI of this Agreement); or (ii) arise out of or result from any material breach of any representation and/or warranty made by the Fund in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund; as limited by and in accordance with the provisions of Sections 8.4(b) and 8.4(c) hereof. 8.4(b). The Fund shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement to any of the Indemnified Parties. 8.4(c). The Fund shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Fund in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Fund of any such claim shall not relieve it from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Fund has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Fund will be entitled to participate, at its own expense, in the defense thereof. The Fund shall also be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Fund to such party of the Fund's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Fund will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.4(d). The Indemnified Parties will promptly notify the Fund of the commencement of any litigation or proceeding against them. 8.4(e). It is understood and agreed that no liability of the Fund Pursuant to this section 8.4 shall extend to the assets of any portfolio of the Fund other than the Designated Portfolios, or where the failure or breach giving rise to such liability relates to a single Designated Portfolio, to the assets of any other Designated Portfolio. 8.5. Indemnification by the Distributor 8.5(a). The Distributor agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their directors and officers and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.5) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Distributor) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the contracts and: (i) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Fund, Adviser or Distributor (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to the Adviser, the Distributor or Fund by or on behalf of FirstGWL&A or Schwab for use in the registration statement or SAI or prospectus for the Fund or in sales literature or other promotional material (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI, sales literature or other promotional material for the Contracts not supplied by the Fund, Adviser or Distributor or persons under their control) or wrongful conduct of the Fund, the Distributor or Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or (iii) arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, sales literature or other promotional material covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser, the Distributor or Fund; or (iv) arise as a result of any failure by the Fund, Adviser or Distributor to provide the services and furnish the materials under the terms of this Agreement (including a failure to comply with the diversification and other qualification requirements of Article VI of this Agreement); or (v) arise out of or result from any material breach of any representation and/or warranty made by the Fund, Adviser or Distributor in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund, Adviser or Distributor; as limited by and in accordance with the provisions of Sections 8.5(b) and 8.5(c) hereof. This indemnification is in addition to and apart from the responsibilities and obligations of the Distributor specified in Article VI hereof. 8.5(b). The Distributor shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance or such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement to any of the Indemnified Parties. 8.5(c) The Distributor shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Distributor in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Distributor of any such claim shall not relieve the Distributor from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Distributor has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Distributor will be entitled to participate, at its own expense, in the defense thereof. The Distributor also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Distributor to such party of the Distributor's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Distributor will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.5(d) The Indemnified Parties will promptly notify the Distributor of the commencement of any litigation or proceedings against them. ARTICLE IX. Applicable Law 9.1. Except as provided in Section 9.2, this Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the State of New York, without regard to the New York Conflict of Laws provisions. 9.2. This Agreement shall be subject to the provisions of the 1933, 1934 and 1940 Acts, and the rules and regulations and rulings thereunder, including such exemptions from those statutes, rules and regulations as the Securities and Exchange Commission may grant (including, but not limited to, the Mixed and Shared Funding Exemptive Order) and the terms hereof shall be interpreted and construed in accordance therewith. ARTICLE X. Termination 10.1. This Agreement shall terminate: (a) at the option of any party, with or without cause, with respect to some or all Portfolios, upon six (6) months advance written notice delivered to the other parties; provided, however, that such notice shall not be given earlier than six (6) months following the date of this Agreement; or (b) at the option of FirstGWL&A or Schwab by written notice to the other parties with respect to any Portfolio based upon FirstGWL&A's or Schwab's reasonable determination in their respective sole judgment exercised in good faith that shares of such Portfolio are not reasonably available to meet the requirements of the Contracts; or (c) at the option of FirstGWL&A or Schwab by written notice to the other parties with respect to any Portfolio in the event any of the Portfolio's shares 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 FirstGWL&A; or (d) at the option of the Fund, the Adviser or Distributor in the event that formal administrative proceedings are instituted against FirstGWL&A or Schwab by the NASD, the SEC, the Insurance Commissioner or like official of any state or any other regulatory body, if, in each case, the terminating party reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of FirstGWL&A or Schwab to perform its obligations under this Agreement; or (e) at the option of FirstGWL&A or Schwab in the event that formal administrative proceedings are instituted against the Fund, the Distributor or Adviser by the NASD, the SEC, or any state securities or insurance department or any other regulatory body, if Schwab or FirstGWL&A reasonably 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 Fund, the Distributor or Adviser to perform their obligations under this Agreement; or (f) at the option of FirstGWL&A by written notice to the Fund with respect to any Portfolio if FirstGWL&A reasonably believes that the Portfolio will fail to meet the Section 817(h) diversification requirements or Subchapter M qualifications specified in Article VI hereof; or (g) at the option of the Fund, the Distributor or the Adviser, if (i) the Fund, the Distributor, or the Adviser, respectively, shall determine, in its sole judgment reasonably exercised in good faith, that either FirstGWL&A or Schwab has suffered a material adverse change in its business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on FirstGWL&A's or Schwab's ability to perform its obligations under this Agreement, (ii) the Fund, the Distributor or Adviser notifies FirstGWL&A or Schwab, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by FirstGWL&A or Schwab and any other changes in circumstances since the giving of such a notice, the determination of the Fund, the Distributor or Adviser shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or (h) at the option of either FirstGWL&A or Schwab, if (i) FirstGWL&A or Schwab, respectively, shall determine, in its sole judgment reasonably exercised in good faith, that either the Fund, the Distributor or the Adviser has suffered a material adverse change in its business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on the Fund's, the Distributor's or Adviser's ability to perform its obligations under this Agreement, (ii) FirstGWL&A or Schwab notifies in writing the Fund, the Distributor or Adviser, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by the Fund, the Distributor or Adviser and any other changes in circumstances since the giving of such a notice, the determination of FirstGWL&A or Schwab shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or (i) at the option of FirstGWL&A in the event that formal administrative proceedings are instituted against Schwab by the NASD, the Securities and Exchange Commission, or any state securities or insurance department or any other regulatory body regarding Schwab's duties under this Agreement or related to the sale of the Fund's shares or the Contracts, the operation of any Account, or the purchase of the Fund shares, provided, however, that FirstGWL&A determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of Schwab to perform its obligations related to the Contracts; or (j) at the option of Schwab in the event that formal administrative proceedings are instituted against FirstGWL&A by the NASD, the Securities and Exchange Commission, or any state securities or insurance department or any other regulatory body regarding FirstGWL&A's duties under this Agreement or related to the sale of the Fund's shares or the Contracts, the operation of any Account, or the purchase of the Fund shares, provided, however, that Schwab determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of FirstGWL&A to perform its obligations related to the Contracts; or (k) at the option of the Fund, the Adviser or the Distributor by written notice to FirstGWL&A, in the event that the terminating party reasonably believes that the Contracts will cease to qualify as annuity contracts under the Code or that a definitional requirement referred to in Section 2.11 will not be met, or if the Contracts are not registered, issued or sold in accordance with applicable state and/or federal law; or (l) at the option of any non-defaulting party hereto in the event of a material breach of this Agreement by any party hereto (the "defaulting party") other than as described in 10.1(a)-(k); provided, that the non-defaulting party gives written notice thereof to the defaulting party, with copies of such notice to all other non-defaulting parties, and if such breach shall not have been remedied within thirty (30) days after such written notice is given, then the non-defaulting party giving such written notice may terminate this Agreement by giving thirty (30) days written notice of termination to the defaulting party. 10.2. Notice Requirement. No termination of this Agreement shall be effective unless and until the party terminating this Agreement gives prior written notice to all other parties of its intent to terminate, which notice shall set forth the basis for the termination. Furthermore, (a) in the event any termination is based upon the provisions of Article VII, or the provisions of Section 10.1(a), 10.1(g) or 10.1(h) of this Agreement, the prior written notice shall be given in advance of the effective date of termination as required by those provisions unless such notice period is shortened by mutual written agreement of the parties; (b) in the event any termination is based upon the provisions of Section 10.1(d), 10.1(e), 10.1(i) or 10.1(j) of this Agreement, the prior written notice shall be given at least sixty (60) days before the effective date of termination; and (c) in the event any termination is based upon the provisions of Section 10.1(b), 10.1(c), 10.1(f) or 10.1(k), the prior written notice shall be given in advance of the effective date of termination. 10.3. Effect of Termination. Notwithstanding any termination of this Agreement, other than as a result of a failure by either the Fund or FirstGWL&A to meet Section 817(h) of the Code diversification requirements, the Fund, the Adviser and the Distributor shall, at the option of FirstGWL&A or Schwab, continue to make available additional shares of the Designated Portfolios pursuant to the terms and conditions of this Agreement, for all Contracts in effect on the effective date of termination of this Agreement (hereinafter referred to as "Existing Contracts"). Specifically, without limitation, the owners of the Existing Contracts shall be permitted to reallocate investments in the Designated Portfolios, redeem investments in the Designated Portfolios and/or invest in the Designated Portfolios upon the making of additional purchase payments under the Existing Contracts. The parties agree that this Section 10.3 shall not apply to any terminations under Article VII and the effect of such Article VII terminations shall be governed by Article VII of this Agreement. 10.4. Surviving Provisions. Notwithstanding any termination of this Agreement, each party's obligations under Article VIII to indemnify other parties shall survive and not be affected by any termination of this Agreement. In addition, to the extent necessary to give effect to Section 10.3 hereof, with respect to Existing Contracts, all provisions of this Agreement shall also survive and not be affected by any termination of this Agreement. 10.5. Survival of Agreement. A termination by Schwab shall terminate this Agreement only as to Schwab, and this Agreement shall remain in effect as to the other parties; provided, however, that in the event of a termination by Schwab the other parties shall have the option to terminate this Agreement upon 60 (sixty) days notice, rather than the six (6) months specified in Section 10.1(a). ARTICLE XI. Notices Any notice shall be sufficiently given when sent by registered or certified mail to a party at the address of such party set forth below or at such other address as such party may from time to time specify in writing to the other parties. If to the Fund: The Alger American Fund 75 Maiden Lane New York, New York 10038 Attention: Gregory S. Duch If to FirstGWL&A: First Great-West Life & Annuity Insurance Company 8515 East Orchard Road Englewood, CO 80111 Attention: Assistant Vice President, Savings Products If to the Adviser: Fred Alger Management, Inc. 75 Maiden Lane New York, New York 10038 Attention: Gregory S. Duch If to the Distributor: Fred Alger & Company, Incorporated 30 Montgomery Street Jersey City, New Jersey 07302 Attention: Gregory S. Duch If to Schwab: Charles Schwab & Co., Inc. 101 Montgomery Street San Francisco, CA 94104 Attention: General Counsel ARTICLE XII. Miscellaneous 12.1. Subject to the requirements of legal process and regulatory authority, each party hereto shall treat as confidential the names and addresses of the owners of the Contracts and all information reasonably identified as confidential in writing by any other party hereto and, except as permitted by this Agreement, shall not disclose, disseminate or utilize such names and addresses and other confidential information without the express written consent of the affected party until such time as such information may come into the public domain. Without limiting the foregoing, no party hereto shall disclose any information that another party has designated as proprietary. 12.2. The captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provisions hereof or otherwise affect their construction or effect. 12.3. This Agreement may be executed simultaneously in two or more counterparts, each of which taken together shall constitute one and the same instrument. 12.4. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby. 12.5. Each party hereto shall cooperate with each other party and all appropriate governmental authorities (including without limitation the SEC, the NASD and state insurance regulators) and shall permit such authorities reasonable access to its books and records in connection with any investigation or inquiry relating to this Agreement or the transactions contemplated hereby. Notwithstanding the generality of the foregoing, each party hereto further agrees to furnish the New York Insurance Commissioner with any information or reports in connection with services provided under this Agreement which such Commissioner may reasonably request in order to ascertain whether the variable annuity operations of FirstGWL&A are being conducted in a manner consistent with the New York Variable Annuity Regulations and any other applicable law or regulations. 12.6. Any controversy or claim arising out of or relating to this Agreement, or breach thereof, shall be settled by arbitration in a forum jointly selected by the relevant parties (but if applicable law requires some other forum, then such other forum) in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. 12.7. The rights, remedies and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies and obligations, at law or in equity, which the parties hereto are entitled to under state and federal laws. 12.8. This Agreement or any of the rights and obligations hereunder may not be assigned by any party without the prior written consent of all parties hereto. 12.9. The Fund is a business trust organized under the laws of the Commonwealth of Massachusetts and under a Declaration of Trust, to which reference is hereby made, a copy of which is on file at the office of the Secretary of State of the Commonwealth of Massachusetts, and to any and all amendments thereto so filed or hereafter filed. The obligations of the Fund entered into hereunder in the name of the Fund or on behalf thereof by any of its trustees, officers, employees or agents are undertaken not individually but in such capacities, and are not binding upon any of the trustees, officers, employees or shareholders of the Fund personally, but bind only the assets of the Fund or of the Designated Portfolio. 12.10. Schwab and FirstGWL&A agree that the obligations assumed by the Distributor and the Adviser pursuant to this Agreement shall be limited in any case to the Distributor and Adviser and their respective assets and neither Schwab nor FirstGWL&A shall seek satisfaction of any such obligation from the shareholders of the Distributor or the Adviser, the Directors, officers, employees or agents of the Distributor or Adviser, or any of them, except to the extent permitted under this Agreement. 12.11. The Fund, Adviser and Distributor agree that the obligations assumed by FirstGWL&A and Schwab pursuant to this Agreement shall be limited in any case to FirstGWL&A and Schwab and their respective assets and neither the Fund, Distributor nor Adviser shall seek satisfaction of any such obligation from the shareholders of the FirstGWL&A or Schwab, the directors, officers, employees or agents of the FirstGWL&A or Schwab, or any of them, except to the extent permitted under this Agreement. 12.12. No provision of this Agreement may be deemed or construed to modify or supersede any contractual rights, duties, or indemnifications, as between the Distributor and the Fund, and as between the Adviser and the Fund. IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in its name and on its behalf by its duly authorized representative and its seal to be hereunder affixed hereto as of the date specified below. FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY By its authorized officer, By:/s/ Robert K. Shaw Title: Vice President, Marketing & Product Development Date: April 1, 1997 THE ALGER AMERICAN FUND: By its authorized officer, By:/s/ Gregory S. Duch Title: Treasurer Date: March 12, 1997 FRED ALGER MANAGEMENT, INC.: By its authorized officer, By:/s/ Gregory S. Duch Title: Executive Vice President Date: March 12, 1997 FRED ALGER & COMPANY, INCORPORATED: By its authorized officer, By:/s/ Gregory S. Duch Title: Executive Vice President Date: March 12, 1997 CHARLES SCHWAB & CO., INC. By its authorized officer, By:/s/ Jeff Benton Title: Vice President, Annuities & Life Insurance Date: March 31, 1997 Schwab Variable Annuity SCHEDULE A ContractsForm Numbers First Great-West Life & Annuity Insurance Company Group Variable/Fixed Annuity Contract J434NY SCHEDULE B Designated Portfolios Alger American Growth Portfolio Alger American Small Capitalization Portfolio SCHEDULE C Administrative Services To be performed by Charles Schwab & Co., Inc. A. Schwab will provide the properly registered and licensed personnel and systems needed for all customer servicing and support - - for both fund and annuity information and questions - including: respond to Contractowner inquiries delivery of prospectus - both fund and annuity; entry of initial and subsequent orders; transfer of cash to insurance company and/or funds; explanations of fund objectives and characteristics; entry of transfers between funds; fund balance and allocation inquiries; mail fund prospectus. B. For the services, Schwab shall receive a fee of 0.25% per annum applied to the average daily value of the shares of the fund held by Schwab's customers, payable by the Adviser directly to Schwab, such payments being due and payable within 15 (fifteen) days after the last day of the month to which such payment relates. C. The Fund will calculate and Schwab will verify with FirstGWL&A the asset balance for each day on which the fee is to be paid pursuant to this Agreement with respect to each Designated Portfolio. D. Schwab will communicate all purchase, withdrawal, and exchange orders it receives from its customers to FirstGWL&A who will retransmit them to each fund. SCHEDULE D Reports per Section 6.6 With regard to the reports relating to the quarterly testing of compliance with the requirements of Section 817(h) and Subchapter M under the Internal Revenue Code (the "Code") and the regulations thereunder, the Fund shall provide within twenty (20) Business Days of the close of the calendar quarter a report to FirstGWL&A in the Form D1 attached hereto and incorporated herein by reference, regarding the status under such sections of the Code of the Designated Portfolio(s), and if necessary, identification of any remedial action to be taken to remedy non-compliance. With regard to the reports relating to the year-end testing of compliance with the requirements of Subchapter M of the Code, referred to hereinafter as "RIC status," the Fund will provide the reports on the following basis: (i) the last quarter's quarterly reports can be supplied within the 20-day period, and (ii) a year-end report will be provided 45 days after the end of the calendar year. However, if a problem with regard to RIC status, as defined below, is identified in the third quarter report, on a weekly basis, starting the first week of December, additional interim reports will be provided specially addressing the problems identified in the third quarter report. If any interim report memorializes the cure of the problem, subsequent interim reports will not be required. A problem with regard to RIC status is defined as any violation of the following standards, as referenced to the applicable sections of the Code: (a) Less than ninety percent of gross income is derived from sources of income specified in Section 851(b)(2); (b) Thirty percent or greater gross income is derived from the sale or disposition of assets specified in Section 851(b)(3); (c) Less than fifty percent of the value of total assets consists of assets specified in Section 851(b)(4)(A); and (d) No more than twenty-five percent of the value of total assets is invested in the securities of one issuer, as that requirement is set forth in Section 851(b)(4)(B). FORM D1 CERTIFICATE OF COMPLIANCE I, , a duly authorized officer, director or agent of Fund hereby certify that Fund is in compliance with all requirements of Section 817(h) and Subchapter M of the Internal Revenue Code (the "Code") and the regulations thereunder as required in the Fund Participation Agreement among First Great-West Life & Annuity Insurance Company, Charles Schwab & Co., Inc. and other than the exceptions discussed below: Exceptions Remedial Action If no exception to report, please indicate "None." Signed this day of , . (Signature) By: (Type or Print Name and Title/Position) SCHEDULE E EXPENSES The Fund and/or Distributor and/or Adviser, and FirstGWL&A will coordinate the functions and pay the costs of the completing these functions based upon an allocation of costs in the tables below. Costs shall be allocated to reflect the Fund's share of the total costs determined according to the number of pages of the Fund's respective portions of the documents. Item Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Prospectus Printing of combined prospectuses FirstGWL&A Fund or Distributor, as applicable Distributor shall supply FirstGWL&A with such numbers of the Designated Portfolio(s) prospectus(es) as FirstGWL&A shall reasonably request FirstGWL&A Fund or Distributor, as applicable Distribution to New and Inforce Clients FirstGWL&A FirstGWL&A Distribution to Prospective Clients Schwab Schwab Product Prospectus Printing for Inforce Clients FirstGWL&A FirstGWL&A Printing for Prospective Clients FirstGWL&A Schwab Distribution to New and Inforce Clients FirstGWL&A FirstGWL&A Distribution to Prospective Clients Schwab Schwab Mutual Fund Prospectus Update & Distribution If Required by Fund or Distributor Fund or Distributor Fund or Distributor If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab Schwab Schwab Product Prospectus Update & Distribution If Required by Fund or Distributor FirstGWL&A Fund or Distributor Item Function Party Responsible for Coordination Party Responsible for Expense If Required by First GWL&A FirstGWL&A First GWL&A If Required by Schwab Schwab Schwab Mutual Fund SAI Printing Fund or Distributor Fund or Distributor Distribution First GWL&A First GWL&A Product SAI Printing FirstGWL&A FirstGWL&A Distribution FirstGWL&A First GWL&A Item Function Party Responsible for Coordination Party Responsible for Expense Proxy Material for Mutual Fund: Printing if proxy required by Law Fund or Distributor Fund or Distributor Distribution (including labor) if proxy required by Law FirstGWL&A Fund or Distributor Printing & distribution if required by FirstGWL&A FirstGWL&A FirstGWL&A Printing & distribution if required by Schwab FirstGWL&A Schwab Item Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Annual & Semi-Annual Report Printing of combined reports FirstGWL&A Fund or Distributor Distribution FirstGWL&A FirstGWL&A and Schwab Other communication to New and Prospective clients If Required by the Fund or Distributor Schwab Fund or Distributor If Required by FirstGWL&A Schwab FirstGWL&A Item Function Party Responsible for Coordination Party Responsible for Expense If Required by Schwab Schwab Schwab Other communication to inforce Distribution (including labor) if required by the Fund or Distributor FirstGWL&A Fund or Distributor If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab FirstGWL&A Schwab Item Function Party Responsible for Coordination Party Responsible for Expense Errors in Share Price calculation pursuant to Section 1.10 Cost of error to participants FirstGWL&A Fund or Adviser Cost of administrative work to correct error FirstGWL&A Fund or Adviser Operations of the Fund All operations and related expenses, including the cost of registration and qualification of shares, taxes on the issuance or transfer of shares, cost of management of the business affairs of the Fund, and expenses paid or assumed by the fund pursuant to any Rule 12b-1 plan Fund or Distributor Fund or Adviser Operations of the Account Federal registration of units of separate account (24f-2 fees) FirstGWL&A FirstGWL&A EX-8.3 10 EXHIBIT 8.3 FUND PARTICIPATION AGREEMENT Berger Institutional Products Trust TABLE OF CONTENTS ARTICLE I. Sale of Fund Shares . . . . . . . . . . . . . . . .4 ARTICLE II. Representations and Warranties. . . . . . . . . . .7 ARTICLE III. Prospectuses and Proxy Statements; Voting . . . . 11 ARTICLE IV. Sales Material and Information. . . . . . . . . . 14 ARTICLE V. Fees and Expenses . . . . . . . . . . . . . . . . 16 ARTICLE VI. Diversification and Qualification . . . . . . . . 17 ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order . . . . 21 ARTICLE VIII.Indemnification . . . . . . . . . . . . . . . . . 24 ARTICLE IX. Applicable Law. . . . . . . . . . . . . . . . . . 37 ARTICLE X. Termination . . . . . . . . . . . . . . . . . . . 38 ARTICLE XI. Notices . . . . . . . . . . . . . . . . . . . . . 41 ARTICLE XII. Miscellaneous . . . . . . . . . . . . . . . . . . 42 SCHEDULE A Contracts . . . . . . . . . . . . . . . . . . . . 46 SCHEDULE B Designated Portfolios . . . . . . . . . . . . . . 47 SCHEDULE C Administrative Services . . . . . . . . . . . . . 48 SCHEDULE D Reports per Section 6.6 . . . . . . . . . . . . . 49 SCHEDULE E Expenses. . . . . . . . . . . . . . . . . . . . . 52 PARTICIPATION AGREEMENT Among FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY BERGER INSTITUTIONAL PRODUCTS TRUST, BERGER ASSOCIATES, INC., BERGER DISTRIBUTORS, INC. and CHARLES SCHWAB & CO., INC. THIS AGREEMENT, made and entered into as of this ____ day of _______________, 1997 by and among FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (hereinafter "FirstGWL&A"), a New York life insurance company, on its own behalf and on behalf of its Separate Account Variable Annuity-1 Series Account (the "Account"); BERGER INSTITUTIONAL PRODUCTS TRUST, a Delaware Business Trust (hereinafter the "Fund"); BERGER ASSOCIATES, INC. (hereinafter the "Adviser"), a corporation organized under the laws of Delaware; BERGER DISTRIBUTORS, INC., a corporation organized under the laws of Colorado (hereinafter the "Distributor"); and CHARLES SCHWAB & CO., INC., a California corporation (hereinafter "Schwab"). WHEREAS, the Fund engages in business as an open-end management investment company and is available to act as the investment vehicle for separate accounts established for variable life insurance policies and/or variable annuity contracts (collectively, the "Variable Insurance Products") to be offered by insurance companies, including FirstGWL&A, which have entered into participation agreements similar to this Agreement (hereinafter "Participating Insurance Companies"); and WHEREAS, the beneficial interest in the Fund is divided into several series of shares, each designated a "Portfolio" and representing the interest in a particular managed portfolio of securities and other assets; and WHEREAS, the Fund has obtained an order from the Securities and Exchange Commission (hereinafter the "SEC"), dated April 24, 1996 (File No. 812-9852), granting Participating Insurance Companies and variable annuity and variable life insurance separate accounts exemptions from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended, (hereinafter the "1940 Act") and Rules 6e- 2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Fund to be sold to and held by variable annuity and variable life insurance separate accounts of life insurance companies that may or may not be affiliated with one another and qualified pension and retirement plans ("Qualified Plans") (hereinafter the "Mixed and Shared Funding Exemptive Order"); and WHEREAS, the Fund is registered as an open-end management investment company under the 1940 Act and shares of the Portfolio(s) are registered under the Securities Act of 1933, as amended (hereinafter the "1933 Act"); and WHEREAS, the Adviser is duly registered as an investment adviser under the Investment Advisers Act of 1940, as amended, and any applicable state securities laws; and WHEREAS, the Distributor is duly registered as a broker-dealer under the Securities Exchange Act of 1934, as amended, (the "1934 Act") and is a member in good standing of the National Association of Securities Dealers, Inc. (the "NASD"); and WHEREAS, FirstGWL&A has registered certain variable annuity contracts supported wholly or partially by the Account (the "Contracts") under the 1933 Act and said Contracts are listed in Schedule A attached hereto and incorporated herein by reference, as such Schedule may be amended from time to time by mutual written agreement; and WHEREAS, the Account is a duly organized, validly existing segregated asset account, established by resolution of the Board of Directors of FirstGWL&A on January 15, 1997, under the insurance laws of the State of New York, to set aside and invest assets attributable to the Contracts; and WHEREAS, FirstGWL&A has registered the Account as a unit investment trust under the 1940 Act and has registered the securities deemed to be issued by the Account under the 1933 Act; and WHEREAS, to the extent permitted by applicable insurance laws and regulations, FirstGWL&A intends to purchase shares in the Portfolio(s) listed in Schedule B attached hereto and incorporated herein by reference, as such Schedule may be amended from time to time by mutual written agreement (the "Designated Portfolio(s)"), on behalf of the Account to fund the Contracts, and the Fund is authorized to sell such shares to unit investment trusts such as the Account at net asset value; and WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Account also intends to purchase shares in other open-end investment companies or series thereof not affiliated with the Fund (the "Unaffiliated Funds") on behalf of the Account to fund the Contracts; and WHEREAS, Schwab will perform certain services for the Fund in connection with the Contracts; NOW, THEREFORE, in consideration of their mutual promises, FirstGWL&A, Schwab, the Fund, the Distributor and the Adviser agree as follows: ARTICLE I. Sale of Fund Shares 1.1. The Fund agrees to sell to FirstGWL&A those shares of the Designated Portfolio(s) which the Account orders, executing such orders on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the order for the shares of the Portfolios. For purposes of this Section 1.1, FirstGWL&A shall be the designee of the Fund for receipt of such orders and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such order by 10:00 a.m. Eastern time on the next following Business Day. "Business Day" shall mean any day on which the New York Stock Exchange is open for trading and on which the Fund calculates its net asset value pursuant to the rules of the SEC. 1.2. The Fund agrees to make shares of the Designated Portfolio(s) available for purchase at the applicable net asset value per share by FirstGWL&A and the Account on those days on which the Fund calculates its Designated Portfolio(s)' net asset value pursuant to rules of the SEC, and the Fund shall calculate such net asset value on each day which the New York Stock Exchange is open for trading. Notwithstanding the foregoing, the Board of Trustees of the Fund (hereinafter the "Board") may refuse to sell shares of any Portfolio to any person, or suspend or terminate the offering of shares of any Portfolio if such action is required by law or by regulatory authorities having jurisdiction or is, in the sole discretion of the Board acting in good faith and in light of its fiduciary duties under federal and any applicable state laws, necessary in the best interests of the shareholders of such Portfolio. 1.3. The Fund will not sell shares of the Designated Portfolio(s) to any other Participating Insurance Company separate account unless an agreement containing provisions substantially the same as Sections 2.1, 3.5, 3.6, 3.7, and Article VII of this Agreement is in effect to govern such sales. 1.4. The Fund agrees to redeem for cash, on FirstGWL&A's request, any full or fractional shares of the Fund held by FirstGWL&A, executing such requests on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the request for redemption. However, if one or more of the Designated Portfolios has determined to settle redemption transactions for all of its shareholders on a delayed basis (more than one Business Day, but in no event more than three Business Days, after the date on which the redemption order is received, unless otherwise permitted by an order of the Commission under Section 22(e) of the 1940 Act), the Fund shall be permitted to delay sending redemption proceeds to FirstGWL&A by the same number of days that the Fund is delayed sending redemption proceeds to the other shareholders of the Fund. This Section 1.4 may be amended, in writing, by the parties consistent with the requirements of the 1940 Act and interpretations thereof. For purposes of this Section 1.4, FirstGWL&A shall be the designee of the Fund for receipt of requests for redemption and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such request for redemption by 10:00 A.M. Eastern time on the next following Business Day. 1.5. The Parties hereto acknowledge that the arrangement contemplated by this Agreement is not exclusive; the Fund's shares may be sold to other Participating Insurance Companies (subject to Section 1.3 and Article VI hereof) and the cash value of the Con- tracts may be invested in other investment companies. 1.6. FirstGWL&A shall pay for Fund shares by 3:00 p.m. Eastern time on the next Business Day after an order to purchase Fund shares is made in accordance with the provisions of Section 1.1 hereof. Payment shall be in federal funds transmitted by wire and/or by a credit for any shares redeemed the same day as the purchase. 1.7. The Fund shall pay and transmit the proceeds of redemptions of Fund shares by 3:00 p.m. Eastern Time on the next Business Day after a redemption order is received in accordance with Section 1.4 hereof. Payment shall be in federal funds transmitted by wire and/or a credit for any shares purchased the same day as the redemption. 1.8. Issuance and transfer of the Fund's shares will be by book entry only. Stock certificates will not be issued to FirstGWL&A or the Account. Shares ordered from the Fund will be recorded in an appropriate title for the Account or the appropriate sub-account of the Account. 1.9. The Fund shall furnish same day notice (by wire or telephone, followed by written confirmation) to FirstGWL&A of any income, dividends or capital gain distributions payable on the Designated Portfolio(s)' shares. FirstGWL&A hereby elects to receive all such income dividends and capital gain distributions as are payable on the Portfolio shares in additional shares of that Portfolio. FirstGWL&A reserves the right to revoke this election and to receive all such income dividends and capital gain distributions in cash. The Fund shall notify FirstGWL&A by the end of the next following Business Day of the number of shares so issued as payment of such dividends and distributions. 1.10.The Fund shall make the net asset value per share for each Designated Portfolio available to FirstGWL&A on each Business Day as soon as reasonably practical after the net asset value per share is calculated and shall use its best efforts to make such net asset value per share available by 6:00 p.m. Eastern time. In the event of an error in the computation of a Designated Portfolio's net asset value per share ("NAV") or any dividend or capital gain distribution (each, a "pricing error"), the Adviser or the Fund shall immediately notify FirstGWL&A as soon as possible after discovery of the error. Such notification may be verbal, but shall be confirmed promptly in writing in accordance with Article XI of this Agreement. A pricing error shall be corrected as follows: (a) if the pricing error results in a difference between the erroneous NAV and the correct NAV of less than $0.01 per share, then no corrective action need be taken; (b) if the pricing error results in a difference between the erroneous NAV and the correct NAV equal to or greater than $0.01 per share, but less than 1/2 of 1% of the Designated Portfolio's NAV at the time of the error, then the Adviser shall reimburse the Designated Portfolio for any loss, after taking into consideration any positive effect of such error; however, no adjustments to Contractowner accounts need be made; and (c) if the pricing error results in a difference between the erroneous NAV and the correct NAV equal to or greater than 1/2 of 1% of the Designated Portfolio's NAV at the time of the error, then the Adviser shall reimburse the Designated Portfolio for any loss (without taking into consideration any positive effect of such error) and shall reimburse FirstGWL&A for the costs of adjustments made to correct Contractowner accounts in accordance with the provisions of Schedule E. If an adjustment is necessary to correct a material error which has caused Contractowners to receive less than the amount to which they are entitled, the number of shares of the applicable sub-account of such Contractowners will be adjusted and the amount of any underpayments shall be credited by the Adviser to FirstGWL&A for crediting of such amounts to the applicable Contractowners accounts. Upon notification by the Adviser of any overpayment due to a material error, FirstGWL&A or Schwab, as the case may be, shall promptly remit to Adviser any overpayment that has not been paid to Contractowners; however, Adviser acknowledges that Schwab and FirstGWL&A do not intend to seek additional payments from any Contractowner who, because of a pricing error, may have underpaid for units of interest credited to his/her account. In no event shall Schwab or FirstGWL&A be liable to Contractowners for any such adjustments or underpayment amounts. A pricing error within categories (b) or (c) above shall be deemed to be "materially incorrect" or constitute a "material error" for purposes of this Agreement. The standards set forth in this Section 1.10 are based on the Parties' understanding of the views expressed by the staff of the Securities and Exchange Commission ("SEC") as of the date of this Agreement. In the event the views of the SEC staff are later modified or superseded by SEC or judicial interpretation, the parties shall amend the foregoing provisions of this Agreement to comport with the appropriate applicable standards, on terms mutually satisfactory to all Parties. ARTICLE II. Representations and Warranties 2.1. FirstGWL&A represents and warrants that the Contracts and the securities deemed to be issued by the Account under the Contracts are or will be registered under the 1933 Act; that the Contracts will be issued and sold in compliance in all material respects with all applicable federal and state laws and that the sale of the Contracts shall comply in all material respects with state insurance suitability requirements. FirstGWL&A further represents and warrants that it is an insurance company duly organized and in good standing under applicable law and that it has legally and validly established the Account prior to any issuance or sale of units thereof as a segregated asset account under Section 4240 of the New York Insurance Law and has registered the Account as a unit investment trust in accordance with the provisions of the 1940 Act to serve as a segregated investment account for the Contracts and that it will maintain such registration for so long as any Contracts are outstanding as required by applicable law. 2.2. The Fund represents and warrants that Designated Portfolio(s) shares sold pursuant to this Agreement shall be registered under the 1933 Act, duly authorized for issuance and sold in compliance with all applicable federal securities laws including without limitation the 1933 Act, the 1934 Act, and the 1940 Act and that the Fund is and shall remain registered under the 1940 Act. The Fund shall amend the registration statement for its shares under the 1933 Act and the 1940 Act from time to time as required in order to effect the continuous offering of its shares. 2.3. The Fund reserves the right to adopt a plan pursuant to Rule 12b-1 under the 1940 Act and to impose an asset-based or other charge to finance distribution expenses as permitted by applicable law and regulation. In any event, the Fund and Adviser agree to comply with applicable provisions and SEC staff interpretations of the 1940 Act to assure that the investment advisory or management fees paid to the Adviser by the Fund are in accordance with the requirements of the 1940 Act. To the extent that the Fund decides to finance distribution expenses pursuant to Rule 12b-1, the Fund undertakes to have its Board, a majority of whom are not interested persons of the Fund, formulate and approve any plan pursuant to Rule 12b-1 under the 1940 Act to finance distribution expenses. 2.4. The Fund represents and warrants that it will make every effort to ensure that the investment policies, fees and expenses of the Designated Portfolio(s) are and shall at all times remain in compliance with the insurance and other applicable laws of the State of New York and any other applicable state to the extent required to perform this Agreement. The Fund further represents and warrants that it will make every effort to ensure that Designated Portfolio(s) shares will be sold in compliance with the insurance laws of the State of New York and all applicable state insurance and securities laws. The Fund shall register and qualify the shares for sale in accordance with the laws of the various states if and to the extent required by applicable law. FirstGWL&A and the Fund will endeavor to mutually cooperate with respect to the implementation of any modifications necessitated by any change in state insurance laws, regulations or interpretations of the foregoing that affect the Designated Portfolio(s) (a "Law Change"), and to keep each other informed of any Law Change that becomes known to either party. In the event of a Law Change, the Fund agrees that, except in those circumstances where the Fund has advised FirstGWL&A that its Board of Directors has determined that implementation of a particular Law Change is not in the best interest of all of the Fund's shareholders with an explanation regarding why such action is lawful, any action required by a Law Change will be taken. 2.5. The Fund represents and warrants that it is lawfully organized and validly existing under the laws of the State of Delaware and that it does and will comply in all material respects with the 1940 Act. 2.6. The Adviser represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of the State of Delaware and any applicable state and federal securities laws. 2.7. The Distributor represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of the State of Colorado and any applicable state and federal securities laws. 2.8. The Fund and the Adviser represent and warrant that all of their respective officers, employees, investment advisers, and other individuals or entities dealing with the money and/or securities of the Fund are, and shall continue to be at all times, covered by one or more blanket fidelity bonds or similar coverage for the benefit of the Fund in an amount not less than the minimal coverage required by Rule 17g-1 under the 1940 Act or related provisions as may be promulgated from time to time. The aforesaid bonds shall include coverage for larceny and embezzlement and shall be issued by a reputable bonding company. 2.9. Schwab represents and warrants that it has completed, obtained and performed, in all material respects, all registrations, filings, approvals, and authorizations, consents and examinations required by any government or governmental authority as may be necessary to perform this Agreement. Schwab does and will comply, in all material respects, with all applicable laws, rules and regulations in the performance of its obligations under this Agreement. 2.10.The Fund will provide FirstGWL&A with as much advance notice as is reasonably practicable of any material change affecting the Designated Portfolio(s) (including, but not limited to, any material change in the registration statement or prospectus affecting the Designated Portfolio(s)) and any proxy solicitation affecting the Designated Portfolio(s) and consult with FirstGWL&A in order to implement any such change in an orderly manner, recognizing the expenses of changes and attempting to minimize such expenses by implementing them in conjunction with regular annual updates of the prospectus for the Contracts. The Fund agrees to share equitably in expenses incurred by FirstGWL&A as a result of actions taken by the Fund, consistent with the allocation of expenses contained in Schedule E attached hereto and incorporated herein by reference. 2.11.FirstGWL&A represents and warrants, for purposes other than diversification under Section 817 of the Internal Revenue Code of 1986 as amended ("the Code"), that the Contracts are currently and at the time of issuance will be treated as annuity contracts under applicable provisions of the Code, and that it will make every effort to maintain such treatment and that it will notify Schwab, the Fund, the Distributor and the Adviser immediately upon having a reasonable basis for believing that the Contracts have ceased to be so treated or that they might not be so treated in the future. In addition, FirstGWL&A represents and warrants that the Account is a "segregated asset account" and that interests in the Account are offered exclusively through the purchase of or transfer into a "variable contract" within the meaning of such terms under Section 817 of the Code and the regulations thereunder. FirstGWL&A will use every effort to continue to meet such definitional requirements, and it will notify Schwab, the Fund, the Distributor and the Adviser immediately upon having a reasonable basis for believing that such requirements have ceased to be met or that they might not be met in the future. FirstGWL&A represents and warrants that it will not purchase Fund shares with assets derived from tax-qualified retirement plans except, indirectly, through Contracts purchased in connection with such plans. ARTICLE III. Prospectuses and Proxy Statements; Voting 3.1. At least annually, the Adviser or Distributor shall provide FirstGWL&A and Schwab with as many copies of the Fund's current prospectus for the Designated Portfolio(s) as FirstGWL&A and Schwab may reasonably request for marketing purposes (including distribution to Contractowners with respect to new sales of a Contract), with expenses to be borne in accordance with Schedule E hereof. If requested by FirstGWL&A in lieu thereof, the Adviser, Distributor or Fund shall provide such documentation (including a camera-ready copy and computer diskette of the current prospectus for the Designated Portfolio(s)) and other assistance as is reasonably necessary in order for FirstGWL&A once each year (or more frequently if the prospectuses for the Designated Portfolio(s) are amended) to have the prospectus for the Contracts and the Fund's prospectus for the Designated Portfolio(s) printed together in one document. The Fund and Adviser agree that the prospectus (and semi-annual and annual reports) for the Designated Portfolio(s) will describe only the Designated Portfolio(s) and will not name or describe any other portfolios or series that may be in the Fund unless required by law. 3.2. If applicable state or federal laws or regulations require that the Statement of Additional Information ("SAI") for the Fund be distributed to all Contractowners, then the Fund, Distributor and/or the Adviser shall provide FirstGWL&A with copies of the Fund's SAI or documentation thereof for the Designated Portfolio(s) in such quantities, with expenses to be borne in accordance with Schedule E hereof, as FirstGWL&A may reasonably require to permit timely distribution thereof to Contractowners. The Adviser, Distributor and/or the Fund shall also provide SAIs to any Contractowner or prospective owner who requests such SAI from the Fund (although it is anticipated that such requests will be made to FirstGWL&A or Schwab). 3.3. The Fund, Distributor and/or Adviser shall provide FirstGWL&A and Schwab with copies of the Fund's proxy material, reports to stockholders and other communications to stockholders for the Designated Portfolio(s) in such quantity, with expenses to be borne in accordance with Schedule E hereof, as FirstGWL&A may reasonably require to permit timely distribution thereof to Contractowners. 3.4. It is understood and agreed that, except with respect to information regarding FirstGWL&A or Schwab provided in writing by that party, neither FirstGWL&A nor Schwab are responsible for the content of the prospectus or SAI for the Designated Portfolio(s). It is also understood and agreed that, except with respect to information regarding the Fund, the Distributor, the Adviser or the Designated Portfolio(s) provided in writing by the Fund, the Distributor or the Adviser, neither the Fund, Distributor nor Adviser are responsible for the content of the prospectus or SAI for the Contracts. 3.5. If and to the extent required by law FirstGWL&A shall: (i) solicit voting instructions from Contractowners; (ii) vote the Designated Portfolio(s) shares held in the Account in accordance with instructions received from Contractowners: and (iii)vote Designated Portfolio shares held in the Account for which no instructions have been received in the same proportion as Designated Portfolio(s) shares for which instructions have been received from Contractowners, so long as and to the extent that the SEC continues to interpret the 1940 Act to require pass-through voting privileges for variable contract owners. FirstGWL&A reserves the right to vote Fund shares held in any segregated asset account in its own right, to the extent permitted by law. 3.6. FirstGWL&A shall be responsible for assuring that each of its separate accounts holding shares of a Designated Portfolio calculates voting privileges as directed by the Fund and agreed to by FirstGWL&A and the Fund. The Fund agrees to promptly notify FirstGWL&A of any changes of interpretations or amendments of the Mixed and Shared Funding Exemptive Order. FirstGWL&A shall fulfill its obligations under, and abide by the terms of, the Mixed and Shared Funding Exemptive Order. 3.7. The Fund will comply with all provisions of the 1940 Act requiring voting by shareholders, and in particular the Fund will either provide for annual meetings (except insofar as the SEC may interpret Section 16 of the 1940 Act not to require such meetings) or, as the Fund currently intends, comply with Section 16(c) of the 1940 Act (although the Fund is not one of the trusts described in Section 16(c) of that Act) as well as with Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in accordance with the SEC's interpretation of the requirements of Section 16(a) with respect to periodic elections of directors or trustees and with whatever rules the Commission may promulgate with respect thereto. ARTICLE IV. Sales Material and Information 4.1. FirstGWL&A and Schwab shall furnish, or shall cause to be furnished, to the Fund or its designee, a copy of each piece of sales literature or other promotional material that FirstGWL&A or Schwab, respectively, develops or proposes to use and in which the Fund (or a Portfolio thereof), its Adviser or one of its sub-advisers or the Distributor is named in connection with the Contracts, at least ten (10) Business Days prior to its use. No such material shall be used if the Fund or its designee objects to such use within five (5) Business Days after receipt of such material. 4.2. FirstGWL&A and Schwab shall not give any information or make any representations or statements on behalf of the Fund in connection with the sale of the Con- tracts other than the information or representations contained in the registration statement or prospectus for the Fund shares, as such registration statement and prospectus may be amended or supplemented from time to time, or in reports or proxy statements for the Fund, or in sales literature or other promotional material approved by the Fund, Distributor or Adviser, except with the permission of the Fund, Distributor or Adviser. 4.3. The Fund or the Adviser shall furnish, or shall cause to be furnished, to FirstGWL&A and Schwab, a copy of each piece of sales literature or other promotional material in which FirstGWL&A and/or its separate account(s), or Schwab is named at least ten (10) Business Days prior to its use. No such material shall be used if FirstGWL&A or Schwab objects to such use within five (5) Business Days after receipt of such material. 4.4. The Fund, the Distributor and the Adviser shall not give any information or make any representations on behalf of FirstGWL&A or concerning FirstGWL&A, the Account, or the Contracts other than the information or representations contained in a registration statement or prospectus for the Contracts, as such registration statement and prospectus may be amended or supplemented from time to time, or in reports for the Account, or in sales literature or other promotional material approved by FirstGWL&A or its designee, except with the permission of FirstGWL&A. 4.5. FirstGWL&A, the Fund, the Distributor and the Adviser shall not give any information or make any representations on behalf of or concerning Schwab, or use Schwab's name except with the permission of Schwab. 4.6. The Fund will provide to FirstGWL&A and Schwab at least one complete copy of all registration statements, prospectuses, SAIs, reports, proxy statements, sales literature and other promotional materials, applications for exemptions, requests for no- action letters, and all amendments to any of the above, that relate to the Designated Port- folio(s), contemporaneously with the filing of such document(s) with the SEC or NASD or other regulatory authorities. 4.7. FirstGWL&A or Schwab will provide to the Fund at least one complete copy of all registration statements, prospectuses, SAIs, reports, solicitations for voting instructions, sales literature and other promotional materials, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Contracts or the Account, contemporaneously with the filing of such document(s) with the SEC, NASD, or other regulatory authority. 4.8. For purposes of Articles IV and VIII, the phrase "sales literature and other promotional material" includes, but is not limited to, advertisements (such as material published, or designed for use in, a newspaper, magazine, or other periodical, radio, television, telephone or tape recording, videotape display, signs or billboards, motion pictures, or other public media; e.g., on-line networks such as the Internet or other electronic media), sales literature (i.e., any written communication distributed or made generally available to customers or the public, including brochures, circulars, research reports, market letters, form letters, seminar texts, reprints or excerpts of any other advertisement, sales literature, or published article), educational or training materials or other communications distributed or made generally available to some or all agents or employees, and registration statements, prospectuses, SAIs, shareholder reports, and proxy materials and any other material constituting sales literature or advertising under the NASD rules, the 1933 Act or the 1940 Act. 4.9. At the request of any party to this Agreement, each other party will make available to the other party's independent auditors and/or representative of the appropriate regulatory agencies, all records, data and access to operating procedures that may be reasonably requested in connection with compliance and regulatory requirements related to this Agreement or any party's obligations under this Agreement. ARTICLE V. Fees and Expenses 5.1. The Fund, the Distributor and the Adviser shall pay no fee or other compen- sation to FirstGWL&A under this Agreement, and FirstGWL&A and Schwab shall pay no fee or other compensation to the Fund, Distributor or Adviser under this Agreement, although the parties hereto will bear certain expenses in accordance with Schedule E, Articles III, V, and other provisions of this Agreement. 5.2. All expenses incident to performance by the Fund, the Distributor and the Adviser under this Agreement shall be paid by the appropriate party, as further provided in Schedule E. The Fund shall see to it that all shares of the Designated Portfolio(s) are registered and authorized for issuance in accordance with applicable federal law and, if and to the extent required, in accordance with applicable state laws prior to their sale. 5.3. The parties shall bear the expenses of routine annual distribution (mailing costs) of the Fund's prospectus and distribution (mailing costs) of the Fund's proxy materials and reports to owners of Contracts offered by FirstGWL&A, in accordance with Schedule E. 5.4. The Fund, the Distributor and the Adviser acknowledge that a principal fea- ture of the Contracts is the Contractowner's ability to choose from a number of unaffiliated mutual funds (and portfolios or series thereof), including the Designated Portfolio(s) and the Unaffiliated Funds, and to transfer the Contract's cash value between funds and portfolios. The Fund, the Distributor and the Adviser agree to cooperate with FirstGWL&A and Schwab in facilitating the operation of the Account and the Contracts as described in the prospectus for the Contracts, including but not limited to cooperation in facilitating transfers between Unaffiliated Funds. 5.5. Schwab agrees to provide certain administrative services, specified in Schedule C attached hereto and incorporated herein by reference, in connection with the arrangements contemplated by this Agreement. The parties acknowledge and agree that the services referred to in this Section 5.5 are recordkeeping, shareholder communication, and other transaction facilitation and processing, and related administrative services only and are not the services of an underwriter or a principal underwriter of the Fund, and that Schwab is not an underwriter for the shares of the Designated Portfolio(s), within the meaning of the 1933 Act or the 1940 Act. 5.6. As compensation for the services specified in Schedule C hereto, the Adviser agrees to pay Schwab a monthly Administrative Service Fee based on the percentage per annum on Schedule C hereto applied to the average daily value of the shares of the Designated Portfolio(s) held in the Account with respect to Contracts sold by Schwab. This monthly Administrative Service Fee is due and payable before the 15th (fifteenth) day following the last day of the month to which it relates. ARTICLE VI. Diversification and Qualification 6.1. The Fund, the Distributor and the Adviser represent and warrant that the Fund will at all times sell its shares and invest its assets in such a manner as to ensure that the Contracts will be treated as annuity contracts under the Code, and the regulations issued thereunder. Without limiting the scope of the foregoing, the Fund, Distributor and Adviser represent and warrant that the Fund and each Designated Portfolio thereof will at all times comply with Section 817(h) of the Code and Treasury Regulation 1.817-5, as amended from time to time, and any Treasury interpretations thereof, relating to the diversification requirements for variable annuity, endowment, or life insurance contracts and any amendments or other modifications or successor provisions to such Section or Regulations. The Fund, the Distributor and the Adviser agree that shares of the Designated Portfolio(s) will be sold only to Participating Insurance Companies and their separate accounts and to Qualified Plans. 6.2. No shares of any Designated Portfolio of the Fund will be sold to the general public. 6.3. The Fund, the Distributor and the Adviser represent and warrant that the Fund and each Designated Portfolio is currently qualified as a Regulated Investment Company under Subchapter M of the Code, and that each Designated Portfolio will maintain such qualification (under Subchapter M or any successor or similar provisions) as long as this Agreement is in effect. 6.4. The Fund, Distributor or Adviser will notify FirstGWL&A immediately upon having a reasonable basis for believing that the Fund or any Designated Portfolio has ceased to comply with the aforesaid Section 817(h) diversification or Subchapter M qualification requirements or might not so comply in the future. 6.5. Without in any way limiting the effect of Sections 8.3, 8.4 and 8.5 hereof and without in any way limiting or restricting any other remedies available to FirstGWL&A or Schwab, the Adviser or Distributor will pay all costs associated with or arising out of any failure of the Fund or any Designated Portfolio to comply with Sections 6.1, 6.2, or 6.3 hereof, including all costs associated with reasonable and appropriate corrections or responses to any such failure; such costs may include, but are not limited to, the costs involved in creating, organizing, and registering a new investment company as a funding medium for the Contracts and/or the costs of obtaining whatever regulatory authorizations are required to substitute shares of another investment company for those of the failed Portfolio (including but not limited to an order pursuant to Section 26(b) of the 1940 Act); such costs are to include, but are not limited to, fees and expenses of legal counsel and other advisors to FirstGWL&A and any federal income taxes or tax penalties and interest thereon (or "toll charges" or exactments or amounts paid in settlement) incurred by FirstGWL&A with respect to itself or owners of its Contracts in connection with any such failure or anticipated or reasonably foreseeable failure. 6.6. The Fund at the Fund's expense shall provide FirstGWL&A or its designee with reports certifying compliance with the aforesaid Section 817(h) diversification and Subchapter M qualification requirements, at the times provided for and substantially in the form attached hereto as Schedule D and incorporated herein by reference; provided, however, that providing such reports does not relieve the Fund of its responsibility for such compliance or of its liability for any non-compliance. 6.7. FirstGWL&A agrees that if the Internal Revenue Service ("IRS") asserts in writing in connection with any governmental audit or review of FirstGWL&A or, to FirstGWL&A's knowledge, or any Contractowner that any Designated Portfolio has failed to comply with the diversification requirements of Section 817(h) of the Code or FirstGWL&A otherwise becomes aware of any facts that could give rise to any claim against the Fund, Distributor or Adviser as a result of such a failure or alleged failure: (a) FirstGWL&A shall promptly notify the Fund, the Distributor and the Adviser of such assertion or potential claim; (b) FirstGWL&A shall consult with the Fund, the Distributor and the Adviser as to how to minimize any liability that may arise as a result of such failure or alleged failure; (c) FirstGWL&A shall use its best efforts to minimize any liability of the Fund, the Distributor and the Adviser resulting from such failure, including, without limitation, demonstrating, pursuant to Treasury Regulations, Section 1.817-5(a)(2), to the commissioner of the IRS that such failure was inadvertent; (d) any written materials to be submitted by FirstGWL&A to the IRS, any Contractowner or any other claimant in connection with any of the foregoing proceedings or contests (including, without limitation, any such materials to be submitted to the IRS pursuant to Treasury Regulations, Section 1.817-5(a)(2)) shall be provided by FirstGWL&A to the Fund, the Distributor and the Adviser (together with any supporting information or analysis) within at least two (2) business days prior to submission; (e) FirstGWL&A shall provide the Fund, the Distributor and the Adviser with such cooperation as the Fund, the Distributor and the Adviser shall reasonably request (including, without limitation, by permitting the Fund, the Distributor and the Adviser to review the relevant books and records of FirstGWL&A) in order to facilitate review by the Fund, the Distributor and the Adviser of any written submissions provided to it or its assessment of the validity or amount of any claim against it arising from such failure or alleged failure; (f) FirstGWL&A shall not with respect to any claim of the IRS or any Contractowner that would give rise to a claim against the Fund, the Distributor and the Adviser (i) compromise or settle any claim, (ii) accept any adjustment on audit, or (iii) forego any allowable administrative or judicial appeals, without the express written consent of the Fund, the Distributor and the Adviser, which shall not be unreasonably withheld; provided that, FirstGWL&A shall not be required to appeal any adverse judicial decision unless the Fund and the Adviser shall have provided an opinion of independent counsel to the effect that a reasonable basis exists for taking such appeal; and further provided that the Fund, the Distributor and the Adviser shall bear the costs and expenses, including reasonable attorney's fees, incurred by FirstGWL&A in complying with this clause (f). ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order 7.1. The Board will monitor the Fund for the existence of any material irreconcilable conflict between the interests of the contract owners of all separate accounts investing in the Fund and the participants of all Qualified Plans investing in the Fund. An irreconcilable material conflict may arise for a variety of reasons, including: (a) an action by any state insurance regulatory authority; (b) a change in applicable federal or state insur- ance, tax, or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretative letter, or any similar action by insurance, tax, or securities regulatory author- ities; (c) an administrative or judicial decision in any relevant proceeding; (d) the manner in which the investments of any Portfolio are being managed; (e) a difference in voting in- structions given by variable annuity contract and variable life insurance contract owners or by contract owners of different Participating Insurance Companies; or (f) a decision by a Participating Insurance Company to disregard the voting instructions of contract owners. The Board shall promptly inform FirstGWL&A if it determines that an irreconcilable material conflict exists and the implications thereof. The directors of the Fund shall have sole authority to determine whether an irreconcilable material conflict exists and their determination shall be binding upon FirstGWL&A. 7.2. FirstGWL&A will report any potential or existing conflicts of which it is aware to the Board. FirstGWL&A will assist the Board in carrying out its responsibilities under the Mixed and Shared Funding Exemptive Order, by providing the Board with all information reasonably necessary for the Board to consider any issues raised. This includes, but is not limited to, an obligation by FirstGWL&A to inform the Board whenever contract owner voting instructions are to be disregarded. Such responsibilities shall be carried out by FirstGWL&A with a view only to the interests of its Contractowners. 7.3. If it is determined by a majority of the Board, or a majority of its directors who are not interested persons of the Fund, the Distributor, the Adviser or any sub-adviser to any of the Designated Portfolios (the "Independent Directors"), that a material irreconcilable conflict exists, FirstGWL&A and/or other Participating Insurance Companies or Qualified Plans shall, at their expense and to the extent reasonably practicable (as determined by a majority of the Independent Directors), take whatever steps are necessary to remedy or eliminate the irreconcilable material conflict, up to and including: (1) withdrawing the assets allocable to some or all of the separate accounts from the Fund or any Designated Portfolio and reinvesting such assets in a different investment medium, including (but not limited to) another portfolio of the Fund, or submitting the question whether such segregation should be implemented to a vote of all affected contract owners and, as appropriate, segregating the assets of any appropriate group (i.e., annuity contract owners, life insurance contract owners, or variable contract owners of one or more Participating Insurance Companies) that votes in favor of such segregation, or offering to the affected contract owners the option of making such a change; and (2) establishing a new registered management investment company or managed separate account and obtaining any necessary approvals or orders of the Commission in connection therewith. 7.4. If a material irreconcilable conflict arises because of a decision by FirstGWL&A to disregard contract owner voting instructions and that decision represents a minority position or would preclude a majority vote, FirstGWL&A may be required, at the Fund's election, to withdraw the Account's investment in the Fund and terminate this Agreement; provided, however that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the Independent Directors. Any such withdrawal and termination must take place within six (6) months after the Fund gives written notice that this provision is being implemented, and until the end of that six month period the Fund shall continue to accept and implement orders by FirstGWL&A for the purchase (and redemption) of shares of the Fund. 7.5. If a material irreconcilable conflict arises because a particular state insurance regulator's decision applicable to FirstGWL&A conflicts with the majority of other state regulators, then FirstGWL&A will withdraw the Account's investment in the Fund and terminate this Agreement within six months after the Board informs FirstGWL&A in writing that it has determined that such decision has created an irreconcilable material conflict; provided, however, that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the disinterested members of the Board. Until the end of the foregoing six month period, the Fund shall continue to accept and implement orders by FirstGWL&A for the purchase (and redemption) of shares of the Fund. 7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority of the disinterested members of the Board shall determine whether any proposed action adequately remedies any irreconcilable material conflict, but in no event will the Fund be required to establish a new funding medium for the Contracts. FirstGWL&A shall not be required by Section 7.3 to establish a new funding medium for the Contracts if an offer to do so has been declined by vote of a majority of Contractowners materially and adversely affected by the irreconcilable material conflict. In the event that the Board determines that any proposed action does not adequately remedy any irreconcilable material conflict, then FirstGWL&A will withdraw the Account's investment in the Fund and terminate this Agreement within six (6) months after the Board informs FirstGWL&A in writing of the foregoing determination; provided, however, that such withdrawal and termination shall be limited to the extent required by any such material irreconcilable conflict as determined by a majority of the Independent Directors. 7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act or the rules promulgated thereunder with respect to mixed or shared funding (as defined in the Mixed and Shared Funding Exemptive Order) on terms and conditions materially different from those contained in the Mixed and Shared Funding Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies, as appropriate, shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable: and (b) Sections 3.5, 3.6, 3.7, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall continue in effect only to the extent that terms and con- ditions substantially identical to such Sections are contained in such Rule(s) as so amended or adopted. ARTICLE VIII. Indemnification 8.1. Indemnification By FirstGWL&A 8.1(a). FirstGWL&A agrees to indemnify and hold harmless the Fund, the Distributor and the Adviser and each of their officers, directors or trustees, employees or agents and each person, if any, who controls the Fund, Distributor or Adviser within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.1) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of FirstGWL&A) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale, acquisition or redemption of the Fund's shares or the Contracts and: (i) arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in the registration statement or pro- spectus or SAI covering the Contracts or contained in the Contracts or sales literature or other promotional material for the Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser, Distributor or Fund for use in the registration statement, prospectus or SAI covering the Contracts or contained in the Contracts or sales literature or other promotional material for the Contracts (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, pro- spectus, SAI or sales literature or other promotional material of the Fund not supplied by FirstGWL&A or persons under its control) or wrongful conduct of FirstGWL&A or persons under its control, with respect to the sale or distribution of the Contracts or Fund Shares; or (iii)arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI or sales literature or other promotional material of the Fund, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such a statement or omission was made in reliance upon information furnished in writing to the Fund, Adviser or Distributor by or on behalf of FirstGWL&A; or (iv) arise as a result of any failure by FirstGWL&A to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by FirstGWL&A in this Agreement or arise out of or result from any other material breach of this Agreement by FirstGWL&A, including without limitation Section 2.11 and Section 6.7 hereof, as limited by and in accordance with the provisions of Sections 8.1(b) and 8.1(c) hereof. 8.1(b). FirstGWL&A shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.1(c). FirstGWL&A shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified FirstGWL&A in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify FirstGWL&A of any such claim shall not relieve FirstGWL&A from any liability which it may have to the Indemnified Party against whom such action is brought on account of this indemnification provision, except to the extent that FirstGWL&A has been prejudiced by such failure to give notice. In addition, any failure by the Indemnified Party to notify FirstGWL&A of any such claim shall not relieve FirstGWL&A from any liability which it may have to the Indemnified Party against whom the action is brought otherwise than on account of this indemnification provision. In case any such action is brought against the Indemnified Parties, FirstGWL&A shall be entitled to participate, at its own expense, in the defense of such action. FirstGWL&A also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action; provided, however, that if the Indemnified Party shall have reasonably concluded that there may be defenses available to it which are different from or additional to those available to FirstGWL&A, FirstGWL&A shall not have the right to assume said defense, but shall pay the costs and expenses thereof (except that in no event shall FirstGWL&A be liable for the fees and expenses of more than one counsel for Indemnified Parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances). After notice from FirstGWL&A to such party of FirstGWL&A's election to assume the defense thereof, and in the absence of such a reasonable conclusion that there may be different or additional defenses available to the Indemnified Party, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and FirstGWL&A will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.1(d).The Indemnified Parties will promptly notify FirstGWL&A of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund. 8.2. Indemnification by Schwab 8.2(a).Schwab agrees to indemnify and hold harmless the Fund, the Distributor and the Adviser and each of their officers, directors or trustees, employees or agents, and each person, if any, who controls the Fund, Distributor or Adviser within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.2) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of Schwab) or litigation (including reasonable legal and other expenses), to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale, acquisition or redemption of the Fund's shares or the Contracts and: (i) arise out of Schwab's dissemination of information regarding the Fund that is both (A) materially incorrect and (B) that was neither contained in the Fund's registration statement nor in the Fund's sales literature or other promotional material or provided in writing to Schwab, or approved in writing, by or on behalf of the Fund, Distributor or Adviser; or (ii) arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in sales literature or other promotional material prepared or approved by Schwab for the Contracts or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser, Distributor or the Fund or to Schwab by FirstGWL&A for use in the registration statement, prospectus or SAI covering the Contracts or contained in the Contracts or sales literature or other promotional material for the Contracts (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts; or (iii)arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI or sales literature or other promotional material of the Fund not supplied by Schwab or persons under its control) or wrongful conduct of Schwab or persons under its control, with respect to the sale or distribution of the Contracts; or (iv) arise as a result of any failure by Schwab to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by Schwab in this Agreement or arise out of or result from any other material breach of this Agreement by Schwab; as limited by and in accordance with the provisions of Sections 8.2(b) and 8.2(c) hereof. 8.2(b). Schwab shall not be liable under this indemnification provision with respect to any losses, claims, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.2(c). Schwab shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified Schwab in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify Schwab of any such claim shall not relieve Schwab from any liability which it may have to the Indemnified Party against whom such action is brought on account of this indemnification provision, except to the extent that Schwab has been prejudiced by such failure to give notice. In addition, any failure by the Indemnified Party to notify Schwab of any such claim shall not relieve Schwab from any liability which it may have to the Indemnified Party against whom the action is brought otherwise than on account of this indemnification provision. In case any such action is brought against the Indemnified Parties, Schwab shall be entitled to participate, at its own expense, in the defense of such action. Schwab also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action; provided, however, that if the Indemnified Party shall have reasonably concluded that there may be defenses available to it which are different from or additional to those available to Schwab, Schwab shall not have the right to assume said defense, but shall pay the costs and expenses thereof (except that in no event shall Schwab be liable for the fees and expenses of more than one counsel for Indemnified Parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances). After notice from Schwab to such party of Schwab's election to assume the defense thereof, and in the absence of such a reasonable conclusion that there may be different or additional defenses available to the Indemnified Party, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and Schwab will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.2(d). The Indemnified Parties will promptly notify Schwab of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund. 8.3. Indemnification by the Adviser 8.3(a). The Adviser agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their directors, officers, employees or agents, and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.3) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Adviser) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale, acquisition or redemption of the Fund's shares or the Contracts and: (i) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Adviser (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reli- ance upon and in conformity with information furnished in writing to the Adviser, the Distributor or the Fund by or on behalf of FirstGWL&A or Schwab for use in the registration statement, prospectus or SAI for the Fund or in sales literature or other promotional material (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or the Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI or sales literature or other promotional material for the Contracts not supplied by the Adviser or persons under its control) or wrongful conduct of the Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or (iii)arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, or sales literature or other promotional material covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser, the Distributor or the Fund; or (iv) arise as a result of any failure by the Adviser to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or (v) arise out of or result from any material breach of any representation and/or warranty made by the Adviser in this Agreement or arise out of or result from any other material breach of this Agreement by the Adviser; as limited by and in accordance with the provisions of Sections 8.3(b) and 8.3(c) hereof. This indemnification is in addition to and apart from the responsibilities and obligations of the Adviser specified in Article VI hereof. 8.3(b). The Adviser shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.3(c). The Adviser shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Adviser in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Adviser of any such claim shall not relieve the Adviser from any liability which it may have to the Indemnified Party against whom such action is brought on account of this indemnification provision, except to the extent that the Adviser has been prejudiced by such failure to give notice. In addition, any failure by the Indemnified Party to notify the Adviser of any such claim shall not relieve the Adviser from any liability which it may have to the Indemnified Party against whom the action is brought otherwise than on account of this indemnification provision. In case any such action is brought against the Indemnified Parties, the Adviser will be entitled to participate, at its own expense, in the defense thereof. The Adviser also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action; provided, however, that if the Indemnified Party shall have reasonably concluded that there may be defenses available to it which are different from or additional to those available to the Adviser, the Adviser shall not have the right to assume said defense, but shall pay the costs and expenses thereof (except that in no event shall the Adviser be liable for the fees and expenses of more than one counsel for Indemnified Parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances). After notice from the Adviser to such party of the Adviser's election to assume the defense thereof, and in the absence of such a reasonable conclusion that there may be different or additional defenses available to the Indemnified Party, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Adviser will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.3(d). FirstGWL&A and Schwab agree to promptly notify the Adviser of the commencement of any litigation or proceedings against FirstGWL&A or Schwab or any of their officers or directors in connection with the issuance or sale of the Contracts or the operation of the Account. 8.4. Indemnification By the Fund 8.4(a). The Fund agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their directors, officers, employees or agents and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.4) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Fund) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements, are related to the operations of the Fund and: (i) arise as a result of any failure by the Fund to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agree- ment); or (ii) arise out of or result from any material breach of any representation and/or warranty made by the Fund in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund; or (iii)arise out of or result from the incorrect or untimely calculation or reporting of the daily net asset value per share or dividend or capital gain distribution rate; as limited by and in accordance with the provisions of Sections 8.4(b) and 8.4(c) hereof. 8.4(b). The Fund shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.4(c). The Fund shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Fund in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Fund of any such claim shall not relieve it from any liability which it may have to the Indemnified Party against whom such action is brought on account of this indemnification provision, except to the extent that the Fund has been prejudiced by such failure to give notice. In addition, any failure by the Indemnified Party to notify the Fund of any such claim shall not relieve the Fund from any liability which it may have to the Indemnified Party against whom the action is brought otherwise than on account of this indemnification provision. In case any such action is brought against the Indemnified Parties, the Fund will be entitled to participate, at its own expense, in the defense thereof. The Fund shall also be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action; provided, however, that if the Indemnified Party shall have reasonably concluded that there may be defenses available to it which are different from or additional to those available to the Fund, the Fund shall not have the right to assume said defense, but shall pay the costs and expenses thereof (except that in no event shall the Fund be liable for the fees and expenses of more than one counsel for Indemnified Parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances). After notice from the Fund to such party of the Fund's election to assume the defense thereof, and in the absence of such a reasonable conclusion that there may be different or additional defenses available to the Indemnified Party, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Fund will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.4(d). FirstGWL&A and Schwab each agree to promptly notify the Fund of the commencement of any litigation or proceeding against FirstGWL&A or Schwab or any of their respective officers or directors in connection with the Agreement, the issuance or sale of the Contracts, the operation of the Account, or the sale or acquisition of shares of the Fund. 8.5. Indemnification by the Distributor 8.5(a).The Distributor agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their directors, officers, employees or agents and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.5) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Distributor) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale, acquisition or redemption of the Fund's shares or the contracts and: (i) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Distributor (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reli- ance upon and in conformity with information furnished in writing to the Adviser, the Distributor or Fund by or on behalf of FirstGWL&A or Schwab for use in the registration statement or SAI or prospectus for the Fund or in sales literature or other promotional material (or any amendment or supple- ment) or otherwise for use in connection with the sale of the Contracts or Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI, sales literature or other promotional material for the Contracts not supplied by the Distributor or persons under its control) or wrongful conduct of the Distributor or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or (iii)arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, sales literature or other promotional material covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser, the Distributor or Fund; or (iv) arise as a result of any failure by the Distributor to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or (v) arise out of or result from any material breach of any representation and/or warranty made by the Distributor in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund, Adviser or Distributor; as limited by and in accordance with the provisions of Sections 8.5(b) and 8.5(c) hereof. This indemnification is in addition to and apart from the responsibilities and obligations of the Distributor specified in Article VI hereof. 8.5(b).The Distributor shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance or such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.5(c)The Distributor shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Distributor in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Distributor of any such claim shall not relieve the Distributor from any liability which it may have to the Indemnified Party against whom such action is brought on account of this indemnification provision, except to the extent that the Distributor has been prejudiced by such failure to give notice. In addition, any failure by the Indemnified Party to notify the Distributor of any such claim shall not relieve the Distributor from any liability which it may have to the Indemnified Party against whom the action is brought otherwise than on account of this indemnification provision. In case any such action is brought against the Indemnified Parties, the Distributor will be entitled to participate, at its own expense, in the defense thereof. The Distributor also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action; provided, however, that if the Indemnified Party shall have reasonably concluded that there may be defenses available to it which are different from or additional to those available to the Distributor, the Distributor shall not have the right to assume said defense, but shall pay the costs and expenses thereof (except that in no event shall the Distributor be liable for the fees and expenses of more than one counsel for Indemnified Parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances). After notice from the Distributor to such party of the Distributor's election to assume the defense thereof, and in the absence of such a reasonable conclusion that there may be different or additional defenses available to the Indemnified Party, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Distributor will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.5(d)FirstGWL&A and Schwab agree to promptly notify the Distributor of the commencement of any litigation or proceedings against FirstGWL&A or Schwab or any of their officers or directors in connection with the issuance or sale of the Contracts or the operation of the Account. ARTICLE IX. Applicable Law 9.1. This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the State of New York, without regard to the New York Conflict of Laws provisions. 9.2. This Agreement shall be subject to the provisions of the 1933, 1934 and 1940 Acts, and the rules and regulations and rulings thereunder, including such exemptions from those statutes, rules and regulations as the Securities and Exchange Commission may grant (including, but not limited to, the Mixed and Shared Funding Exemptive Order) and the terms hereof shall be interpreted and construed in accordance therewith. ARTICLE X. Termination 10.1.This Agreement shall terminate: (a) at the option of any party, with or without cause, with respect to some or all Portfolios, upon six (6) months advance written notice delivered to the other parties; provided, however, that such notice shall not be given earlier than six (6) months following the date of this Agreement; or (b) at the option of FirstGWL&A or Schwab by written notice to the other parties with respect to any Portfolio based upon FirstGWL&A's or Schwab's determination that shares of such Portfolio are not reasonably available to meet the requirements of the Contracts; or (c) at the option of FirstGWL&A or Schwab by written notice to the other parties with respect to any Portfolio in the event any of the Portfolio's shares 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 FirstGWL&A; or (d) at the option of the Fund or the Adviser in the event that formal administrative proceedings are instituted against FirstGWL&A or Schwab by the NASD, the SEC, the Insurance Commissioner or like official of any state or any other regulatory body regarding FirstGWL&A's or Schwab's duties under this Agreement or related to the sale of the Contracts, the operation of any Account, or the purchase of the Fund shares, if, in each case, the Fund reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of FirstGWL&A or Schwab to perform its obligations under this Agreement; or (e) at the option of FirstGWL&A or Schwab in the event that formal administrative proceedings are instituted against the Fund, the Distributor or the Adviser by the NASD, the SEC, or any state securities or insurance department or any other regulatory body, if Schwab or FirstGWL&A reasonably 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 Fund, the Distributor or the Adviser to perform their obligations under this Agreement; or (f) at the option of FirstGWL&A by written notice to the Fund with respect to any Portfolio if FirstGWL&A reasonably believes that the Portfolio will fail to meet the Section 817(h) diversification requirements or Subchapter M qualifications specified in Article VI hereof; or (g) at the option of either the Fund, the Distributor or the Adviser, if (i) the Fund, Distributor or Adviser, respectively, shall determine, in their sole judgment reasonably exercised in good faith, that either FirstGWL&A or Schwab has suffered a material adverse change in their business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on FirstGWL&A's or Schwab's ability to perform its obligations under this Agreement, (ii) the Fund, Distributor or Adviser notifies FirstGWL&A or Schwab, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by FirstGWL&A or Schwab and any other changes in circumstances since the giving of such a notice, the determination of the Fund, Distributor or Adviser shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or (h) at the option of either FirstGWL&A or Schwab, if (i) FirstGWL&A or Schwab, respectively, shall determine, in its sole judgment reasonably exercised in good faith, that the Fund, Distributor or Adviser has suffered a material adverse change in its business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on the Fund's, Distributor's or Adviser's ability to perform its obligations under this Agreement, (ii) FirstGWL&A or Schwab notifies the Fund, Distributor or Adviser, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by the Fund, Distributor or Adviser and any other changes in circumstances since the giving of such a notice, the determination of FirstGWL&A or Schwab shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or (i) at the option of FirstGWL&A in the event that formal administrative proceedings are instituted against Schwab by the NASD, the Securities and Exchange Commission, or any state securities or insurance department or any other regulatory body regarding Schwab's duties under this Agreement or related to the sale of the Fund's shares or the Contracts, the operation of any Account, or the purchase of the Fund shares, provided, however, that FirstGWL&A determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of Schwab to perform its obligations related to the Contracts; or (j) at the option of Schwab in the event that formal administrative proceedings are instituted against FirstGWL&A by the NASD, the Securities and Exchange Commission, or any state securities or insurance department or any other regulatory body regarding FirstGWL&A's duties under this Agreement or related to the sale of the Fund's shares or the Contracts, the operation of any Account, or the purchase of the Fund shares, provided, however, that Schwab determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of FirstGWL&A to perform its obligations related to the Contracts; or (k) at the option of any non-defaulting party hereto in the event of a material breach of this Agreement by any party hereto (the "defaulting party") other than as described in 10.1(a)-(j); provided, that the non-defaulting party gives written notice thereof to the defaulting party, with copies of such notice to all other non-defaulting parties, and if such breach shall not have been remedied within thirty (30) days after such written notice is given, then the non- defaulting party giving such written notice may terminate this Agreement by giving thirty (30) days written notice of termination to the defaulting party. 10.2.Notice Requirement. No termination of this Agreement shall be effective unless and until the party terminating this Agreement gives prior written notice to all other parties of its intent to terminate, which notice shall set forth the basis for the termination. Furthermore, (a) in the event any termination is based upon the provisions of Article VII, or the provisions of Section 10.1(a), 10.1(g) or 10.1(h) of this Agreement, the prior written notice shall be given in advance of the effective date of termination as required by those provisions unless such notice period is shortened by mutual written agreement of the parties; (b) in the event any termination is based upon the provisions of Section 10.1(d), 10.1(e), 10.1(i) or 10.1(j) of this Agreement, the prior written notice shall be given at least sixty (60) days before the effective date of termination; and (c) in the event any termination is based upon the provisions of Section 10.1(b), 10.1(c) or 10.1(f), the prior written notice shall be given in advance of the effective date of termination, which date shall be determined by the party sending the notice. 10.3.Effect of Termination. Notwithstanding any termination of this Agreement, other than as a result of a failure by either the Fund or FirstGWL&A to meet Section 817(h) of the Code diversification requirements, the Fund, the Distributor and the Adviser shall, at the option of FirstGWL&A or Schwab, continue to make available additional shares of the Designated Portfolio(s) pursuant to the terms and conditions of this Agreement, for all Contracts in effect on the effective date of termination of this Agreement (hereinafter referred to as "Existing Contracts"). Specifically, without limitation, the owners of the Existing Contracts shall be permitted to reallocate investments in the Designated Portfolio(s), redeem investments in the Designated Portfolio(s) and/or invest in the Designated Portfolio(s) upon the making of additional purchase payments under the Existing Contracts. The parties agree that this Section 10.3 shall not apply to any terminations under Article VII and the effect of such Article VII terminations shall be governed by Article VII of this Agreement. 10.4.Surviving Provisions. Notwithstanding any termination of this Agreement, each party's obligations under Article VIII to indemnify other parties shall survive and not be affected by any termination of this Agreement. In addition, with respect to Existing Contracts, all provisions of this Agreement shall also survive and not be affected by any termination of this Agreement. 10.5.Survival of Agreement. A termination by Schwab shall terminate this Agreement only as to Schwab, and this Agreement shall remain in effect as to the other par- ties; provided, however, that in the event of a termination by Schwab the other parties shall have the option to terminate this Agreement upon 60 (sixty) days notice, rather than the six (6) months specified in Section 10.1(a). ARTICLE XI. Notices Any notice shall be sufficiently given when sent by registered or certified mail to the other party at the address of such party set forth below or at such other address as such party may from time to time specify in writing to the other party. If to the Fund: Berger Institutional Products Trust 210 University Boulevard, Suite 900 Denver, CO 80206 Attention: Kevin Fay If to FirstGWL&A: First Great-West Life & Annuity Insurance Company 8515 East Orchard Road Englewood, CO 80111 Attention:Assistant Vice President, Savings Products If to the Adviser: Berger Associates, Inc. 210 University Boulevard, Suite 900 Denver, CO 80206 Attention:Kevin Fay If to the Distributor: Berger Distributors, Inc. 210 University Boulevard, Suite 900 Denver, CO 80206 Attention: Craig D. Cloyed If to Schwab: Charles Schwab & Co., Inc. 101 Montgomery Street San Francisco, CA 94104 Attention:General Counsel ARTICLE XII. Miscellaneous 12.1.Subject to the requirements of legal process and regulatory authority, each party hereto shall treat as confidential the names and addresses of the owners of the Contracts and all information reasonably identified as confidential in writing by any other party hereto and, except as permitted by this Agreement, shall not disclose, disseminate or utilize such names and addresses and other confidential information without the express written consent of the affected party until such time as such information may come into the public domain. Without limiting the foregoing, no party hereto shall disclose any information that another party has designated as proprietary. 12.2.The captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provisions hereof or otherwise affect their construction or effect. 12.3.This Agreement may be executed simultaneously in two or more counterparts, each of which taken together shall constitute one and the same instrument. 12.4.If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby. 12.5.Each party hereto shall cooperate with each other party and all appropriate governmental authorities (including without limitation the SEC, the NASD and state insurance regulators) and shall permit such authorities reasonable access to its books and records in connection with any investigation or inquiry relating to this Agreement or the transactions contemplated hereby. Notwithstanding the generality of the foregoing, each party hereto further agrees to furnish the New York Insurance Commissioner with any information or reports in connection with services provided under this Agreement which such Commissioner may request in order to ascertain whether the variable annuity operations of FirstGWL&A are being conducted in a manner consistent with the New York Variable Annuity Regulations and any other applicable law or regulations. 12.6.Any controversy or claim arising out of or relating to this Agreement, or breach thereof, shall be settled by arbitration in a forum jointly selected by the relevant parties (but if applicable law requires some other forum, then such other forum) in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. 12.7.The rights, remedies and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies and obligations, at law or in equity, which the parties hereto are entitled to under state and federal laws. 12.8.This Agreement or any of the rights and obligations hereunder may not be assigned by any party without the prior written consent of all parties hereto. 12.9.Schwab and FirstGWL&A agree that the obligations assumed by the Fund, the Distributor and the Adviser pursuant to this Agreement shall be limited in any case to the Fund, the Distributor and Adviser and their respective assets and neither Schwab nor FirstGWL&A shall seek satisfaction of any such obligation from the shareholders of the Fund or the Adviser, the directors, officers, employees or agents of the Fund or Adviser, or any of them, except to the extent permitted under this Agreement. 12.10.The Fund, the Distributor and the Adviser agree that the obligations assumed by FirstGWL&A and Schwab pursuant to this Agreement shall be limited in any case to FirstGWL&A and Schwab and their respective assets and neither the Fund, Distributor nor Adviser shall seek satisfaction of any such obligation from the shareholders of the FirstGWL&A or Schwab, the directors, officers, employees or agents of the FirstGWL&A or Schwab, or any of them, except to the extent permitted under this Agreement. 12.11.No provision of this Agreement may be deemed or construed to modify or supersede any contractual rights, duties, or indemnifications, as between the Adviser and the Fund, and the Distributor and the Fund. IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in its name and on its behalf by its duly authorized representative and its seal to be hereunder affixed hereto as of the date specified below. FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY By its authorized officer, By:/s/ Robert K. Shaw Title: Vice President, Marketing & Product Development Date: April 1, 1997 BERGER INSTITUTIONAL PRODUCTS TRUST By its authorized officer, By:/s/ Gerard M. Lavin Title: Gerard M. Lavin, President Date: March 25, 1997 BERGER ASSOCIATES, INC. By its authorized officer, By:/s/ Gerard M. Lavin Title: Gerard M. Lavin, President Date: March 25, 1997 BERGER DISTRIBUTORS, INC. By its authorized officer, By:/s/ Craig D. Cloyed Title: Craig D. Cloyed, President Date: March 24, 1997 CHARLES SCHWAB & CO., INC. By its authorized officer, By:/s/ Jeff Benton Title:Vice President, Annuities & Life Insurance Date:March 31, 1997 Schwab Variable Annuity SCHEDULE A Contracts Form Numbers First Great-West Life & Annuity Insurance Company Group Variable/Fixed Annuity Contract J434NY SCHEDULE B Designated Portfolios Berger IPT-Small Company Growth Fund SCHEDULE C Administrative Services To be performed by Charles Schwab & Co., Inc. A. Schwab will provide the properly registered and licensed personnel and systems needed for all customer servicing and support - for both fund and annuity information and questions - including: respond to Contractowner inquiries delivery of prospectus - both fund and annuity; entry of initial and subsequent orders; transfer of cash to insurance company and/or funds; explanations of fund objectives and characteristics; entry of transfers between funds; fund balance and allocation inquiries; mail fund prospectus. B. For the services, Schwab shall receive a fee of 0.25% per annum applied to the average daily value of the shares of the fund held by Schwab's customers, payable by the Adviser directly to Schwab, such payments being due and payable within 15 (fifteen) days after the last day of the month to which such payment relates. C. The Fund will calculate and Schwab will verify with FirstGWL&A the asset balance for each day on which the fee is to be paid pursuant to this Agreement with respect to each Designated Portfolio. D. Schwab will communicate all purchase, withdrawal, and exchange orders it receives from its customers to FirstGWL&A who will retransmit them to each fund. SCHEDULE D Reports per Section 6.6 With regard to the reports relating to the quarterly testing of compliance with the requirements of Section 817(h) and Subchapter M under the Internal Revenue Code (the "Code") and the regulations thereunder, the Fund shall provide within twenty (20) Business Days of the close of the calendar quarter a report to FirstGWL&A in the Form D1 attached hereto and incorporated herein by reference, regarding the status under such sections of the Code of the Designated Portfolio(s), and if necessary, identification of any remedial action to be taken to remedy non-compliance. With regard to the reports relating to the year-end testing of compliance with the requirements of Subchapter M of the Code, referred to hereinafter as "RIC status," the Fund will provide the reports on the following basis: (i) the last quarter's quarterly reports can be supplied within the 20-day period, and (ii) a year-end report will be provided 45 days after the end of the calendar year. However, if a problem with regard to RIC status, as defined below, is identified in the third quarter report, on a weekly basis, starting the first week of December, additional interim reports will be provided specially addressing the problems identified in the third quarter report. If any interim report memorializes the cure of the problem, subsequent interim reports will not be required. A problem with regard to RIC status is defined as any violation of the following standards, as referenced to the applicable sections of the Code: (a) Less than ninety percent of gross income is derived from sources of income specified in Section 851(b)(2); (b) Thirty percent or greater gross income is derived from the sale or disposition of assets specified in Section 851(b)(3); (c) Less than fifty percent of the value of total assets consists of assets specified in Section 851(b)(4)(A); and (d) No more than twenty-five percent of the value of total assets is invested in the securities of one issuer, as that requirement is set forth in Section 851(b)(4)(B). FORM D1 CERTIFICATE OF COMPLIANCE I, , a duly authorized officer, director or agent of Fund hereby swear and affirm that Fund is in compliance with all requirements of Section 817(h) and Subchapter M of the Internal Revenue Code (the "Code") and the regulations thereunder as required in the Fund Participation Agreement among First Great-West Life & Annuity Insurance Company, Charles Schwab & Co., Inc. and other than the exceptions discussed below: Exceptions Remedial Action If no exception to report, please indicate "None." Signed this day of , . (Signature) By: (Type or Print Name and Title/Position) SCHEDULE E EXPENSES The Fund and/or the Distributor and/or Adviser, and FirstGWL&A will coordinate the functions and pay the costs of the completing these functions based upon an allocation of costs in the tables below. Costs shall be allocated to reflect the Fund's share of the total costs determined according to the number of pages of the Fund's respective portions of the documents. Item Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Prospectus Printing of combined prospectuses FirstGWL&A Fund, Distributor or Adviser, as applicable Fund, Distributor or Adviser shall supply FirstGWL&A with such numbers of the Designated Portfolio(s) prospectus(es) as FirstGWL&A shall reasonably request FirstGWL&A Fund, Distributor or Adviser, as applicable Distribution to New and Inforce Clients FirstGWL&A FirstGWL&A Distribution to Prospective Clients Schwab Schwab Product Prospectus Printing for Inforce Clients FirstGWL&A FirstGWL&A Printing for Prospective Clients FirstGWL&A Schwab Distribution to New and Inforce Clients FirstGWL&A FirstGWL&A Distribution to Prospective Clients Schwab Schwab Item Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Prospectus Update & Distribution If Required by Fund, Distributor or Adviser Fund, Distributor or Adviser Fund, Distributor or Adviser If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab Schwab Schwab Product Prospectus Update & Distribution If Required by Fund, Distributor or Adviser FirstGWL&A Fund, Distributor or Adviser Item Function Party Responsible for Coordination Party Responsible for Expense If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab Schwab Schwab Mutual Fund SAI Printing Fund, Distributor or Adviser Fund, Distributor or Adviser Distribution FirstGWL&A FirstGWL&A Product SAI Printing FirstGWL&A FirstGWL&A Distribution FirstGWL&A FirstGWL&A Item Function Party Responsible for Coordination Party Responsible for Expense Proxy Material for Mutual Fund: Printing if proxy required by Law Fund, Distributor or Adviser Fund, Distributor or Adviser Distribution (including labor) if proxy required by Law FirstGWL&A Fund, Distributor or Adviser Printing & distribution if required by FirstGWL&A FirstGWL&A FirstGWL&A Printing & distribution if required by Schwab FirstGWL&A Schwab Item Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Annual & Semi-Annual Report Printing of combined reports FirstGWL&A Fund, Distributor or Adviser Distribution FirstGWL&A FirstGWL&A and Schwab Other communication to New and Prospective clients If Required by the Fund, Distributor or Adviser Schwab Fund, Distributor or Adviser If Required by FirstGWL&A Schwab FirstGWL&A Item Function Party Responsible for Coordination Party Responsible for Expense If Required by Schwab Schwab Schwab Other communication to inforce Distribution (including labor) if required by the Fund, Distributor or Adviser FirstGWL&A Fund, Distributor or Adviser If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab FirstGWL&A Schwab Item Function Party Responsible for Coordination Party Responsible for Expense Errors in Share Price calculation pursuant to Section 1.10 Cost of error to participants FirstGWL&A Fund or Adviser Cost of administrative work to correct error FirstGWL&A Fund or Adviser Operations of the Fund All operations and related expenses, including the cost of registration and qualification of shares, taxes on the issuance or transfer of shares, cost of management of the business affairs of the Fund, and expenses paid or assumed by the fund pursuant to any Rule 12b-1 plan Fund, Distributor or Adviser Fund or Adviser Operations of the Account Federal registration of units of separate account (24f-2 fees) FirstGWL&A FirstGWL&A EX-8.4 11 EXHIBIT 8.4 FUND PARTICIPATION AGREEMENT Federated Insurance Series TABLE OF CONTENTS ARTICLE I. Sale of Fund Shares . . . . . . . . . . . . . . . .3 ARTICLE II. Representations and Warranties. . . . . . . . . . .7 ARTICLE III. Prospectuses and Proxy Statements; Voting . . . . 11 ARTICLE IV. Sales Material and Information. . . . . . . . . . 13 ARTICLE V. Fees and Expenses . . . . . . . . . . . . . . . . 16 ARTICLE VI. Diversification and Qualification . . . . . . . . 17 ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order . . . . 20 ARTICLE VIII.Indemnification . . . . . . . . . . . . . . . . . 23 ARTICLE IX. Applicable Law. . . . . . . . . . . . . . . . . . 35 ARTICLE X. Termination . . . . . . . . . . . . . . . . . . . 35 ARTICLE XI. Notices . . . . . . . . . . . . . . . . . . . . . 39 ARTICLE XII. Miscellaneous . . . . . . . . . . . . . . . . . . 40 SCHEDULE A Contracts . . . . . . . . . . . . . . . . . . . . 44 SCHEDULE B Designated Portfolios . . . . . . . . . . . . . . 45 SCHEDULE C Administrative Services . . . . . . . . . . . . . 46 SCHEDULE D Reports per Section 6.6 . . . . . . . . . . . . . 47 SCHEDULE E Expenses. . . . . . . . . . . . . . . . . . . . . 50 PARTICIPATION AGREEMENT Among FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY FEDERATED INSURANCE SERIES, FEDERATED ADVISERS, FEDERATED SECURITIES CORP. and CHARLES SCHWAB & CO., INC. THIS AGREEMENT, made and entered into as of this ____ day of _______________, 1997 by and among FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (hereinafter "FirstGWL&A"), a New York life insurance company, on its own behalf and on behalf of its Separate Account Variable Annuity-1 Series Account (the "Account"); FEDERATED INSURANCE SERIES,a business trust organized under the laws of Massachusetts (hereinafter the "Fund"); FEDERATED ADVISERS (hereinafter the "Adviser"), a Delaware business trust; FEDERATED SECURITIES CORP. (the "Distributor"), a Pennsylvania corporation; and CHARLES SCHWAB & CO., INC., a California corporation (hereinafter "Schwab"). WHEREAS, the Fund engages in business as an open-end management investment company and is available to act as the investment vehicle for separate accounts established for variable life insurance policies and/or variable annuity contracts (collectively, the "Variable Insurance Products") to be offered by insurance companies, including FirstGWL&A, which have entered into participation agreements similar to this Agreement (hereinafter "Participating Insurance Companies"); and WHEREAS, the beneficial interest in the Fund is divided into several series of shares, each designated a "Portfolio" and representing the interest in a particular managed portfolio of securities and other assets; and WHEREAS, the Fund has obtained an order from the Securities and Exchange Commission (hereinafter the "SEC"), dated December 29, 1993 (File No. 812-8620), granting Participating Insurance Companies and variable annuity and variable life insurance separate accounts exemptions from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended, (hereinafter the "1940 Act") and Rules 6e- 2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Fund to be sold to and held by variable annuity and variable life insurance separate accounts of life insurance companies that may or may not be affiliated with one another (hereinafter the "Mixed and Shared Funding Exemptive Order"); and WHEREAS, the Fund is registered as an open-end management investment company under the 1940 Act and shares of the Portfolio(s) are registered under the Securities Act of 1933, as amended (hereinafter the "1933 Act"); and WHEREAS, the Adviser is duly registered as an investment adviser under the Investment Advisers Act of 1940, as amended, and any applicable state securities laws; and WHEREAS, the Distributor is duly registered as a broker-dealer under the Securities Exchange Act of 1934, as amended, (the "1934 Act") and is a member in good standing of the National Association of Securities Dealers, Inc. (the "NASD"); and WHEREAS, FirstGWL&A has registered or will register certain variable annuity contracts supported wholly or partially by the Account (the "Contracts") under the 1933 Act and said Contracts are listed in Schedule A attached hereto and incorporated herein by reference, as it may be amended from time to time by mutual written agreement; and WHEREAS, the Account is a duly organized, validly existing segregated asset account, established by resolution of the Board of Directors of FirstGWL&A on January 15, 1997, to set aside and invest assets attributable to the Contracts; and WHEREAS, FirstGWL&A has registered or will register the Account as a unit investment trust under the 1940 Act and has registered or will register the securities deemed to be issued by the Account under the 1933 Act; and WHEREAS, to the extent permitted by applicable insurance laws and regulations, FirstGWL&A intends to purchase shares in the Portfolio(s) listed in Schedule B attached hereto and incorporated herein by reference, as it may be amended from time to time by mutual written agreement (the "Designated Portfolio(s)"), on behalf of the Account to fund the Contracts, and the Fund is authorized to sell such shares to unit investment trusts such as the Account at net asset value; and WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Account also intends to purchase shares in other open-end investment companies or series thereof not affiliated with the Fund (the "Unaffiliated Funds") on behalf of the Account to fund the Contracts; and WHEREAS, Schwab will perform certain services for the Fund in connection with the Contracts; NOW, THEREFORE, in consideration of their mutual promises, FirstGWL&A, Schwab, the Fund, the Distributor and the Adviser agree as follows: ARTICLE I. Sale of Fund Shares 1.1. The Fund agrees to sell to FirstGWL&A those shares of the Designated Portfolio(s) which the Account orders, executing such orders on each Business Day at the net asset value next computed after receipt by the Fund or its agent of the order for the shares of the Portfolios. For purposes of this Section 1.1, FirstGWL&A shall be the agent of the Fund for receipt of such orders and receipt by such agent shall constitute receipt by the Fund, provided that the Fund receives notice of any such order by 9:00 a.m. Eastern time on the next following Business Day. "Business Day" shall mean any day on which the New York Stock Exchange is open for trading and on which the Fund calculates its net asset value pursuant to the rules of the SEC. 1.2. The Fund agrees to make shares of the Designated Portfolio(s) available for purchase at the applicable net asset value per share by FirstGWL&A and the Account on those days on which the Fund calculates its Designated Portfolio(s)' net asset value pursuant to rules of the SEC, and the Fund shall calculate such net asset value on each day which the New York Stock Exchange is open for trading. Notwithstanding the foregoing, the Board of Trustees of the Fund (hereinafter the "Board") may refuse to sell shares of any Portfolio to any person, or suspend or terminate the offering of shares of any Portfolio if such action is required by law or by regulatory authorities having jurisdiction or is, in the sole discretion of the Board acting in good faith and in light of their fiduciary duties under federal and any applicable state laws, necessary in the best interests of the shareholders of such Portfolio. 1.3. The Fund will not sell shares of the Designated Portfolio(s) to any other Participating Insurance Company, separate account or any Qualified Plan unless an agreement containing provisions substantially the same as Sections 2.1, 3.5, 3.6, and Article VII of this Agreement is in effect to govern such sales. 1.4. The Fund agrees to redeem for cash, on FirstGWL&A's request, any full or fractional shares of the Fund held by FirstGWL&A, executing such requests on each Business Day at the net asset value next computed after receipt by the Fund or its agent of the request for redemption. Requests for redemption identified by FirstGWL&A, or its agent, as being in connection with surrenders, annuitizations, or death benefits under the Contracts, upon prior written notice, may be executed within seven (7) calendar days after receipt by the Fund or its agent of the requests for redemption. This Section 1.4 may be amended, in writing, by the parties consistent with the requirements of the 1940 Act and interpretations thereof. For purposes of this Section 1.4, FirstGWL&A shall be the agent of the Fund for receipt of requests for redemption and receipt by such agent shall constitute receipt by the Fund, provided that the Fund receives notice of any such request for redemption by 10:00 A.M. Eastern time on the next following Business Day. 1.5. The Parties hereto acknowledge that the arrangement contemplated by this Agreement is not exclusive; the Fund's shares may be sold to other Participating Insurance Companies (subject to Section 1.3 and Article VI hereof) and the cash value of the Con- tracts may be invested in other investment companies. 1.6. FirstGWL&A shall pay for Fund shares by 3:00 p.m. Eastern time on the next Business Day after an order to purchase Fund shares is made in accordance with the provisions of Section 1.1 hereof. Payment shall be in federal funds transmitted by wire and/or by a credit for any shares redeemed the same day as the purchase. 1.7. The Fund shall pay and transmit the proceeds of redemptions of Fund shares by 11:00 a.m. Eastern Time on the next Business Day after a redemption order is received in accordance with Section 1.4 hereof. Payment shall be in federal funds transmitted by wire and/or a credit for any shares purchased the same day as the redemption. 1.8. Issuance and transfer of the Fund's shares will be by book entry only. Stock certificates will not be issued to FirstGWL&A or the Account. Shares ordered from the Fund will be recorded in an appropriate title for the Account or the appropriate sub-account of the Account. 1.9. The Fund shall furnish same day notice (by wire or telephone, followed by written confirmation) to FirstGWL&A of any income, dividends or capital gain distributions payable on the Designated Portfolio(s)' shares. FirstGWL&A hereby elects to receive all such income dividends and capital gain distributions as are payable on the Portfolio shares in additional shares of that Portfolio. FirstGWL&A reserves the right to revoke this election and to receive all such income dividends and capital gain distributions in cash. The Fund shall notify FirstGWL&A by the end of the next following Business Day of the number of shares so issued as payment of such dividends and distributions. 1.10.The Fund shall make the net asset value per share for each Designated Portfolio available to FirstGWL&A on each Business Day as soon as reasonably practical after the net asset value per share is calculated and shall use its best efforts to make such net asset value per share available by 6:00 p.m. Eastern time. In the event of an error in the computation of a Designated Portfolio's net asset value per share ("NAV") or any dividend or capital gain distribution (each, a "pricing error"), the Adviser or the Fund shall immediately notify FirstGWL&A as soon as possible after discovery of the error. Such notification may be verbal, but shall be confirmed promptly in writing in accordance with Article XI of this Agreement. A pricing error shall be corrected as follows: (a) if the pricing error results in a difference between the erroneous NAV and the correct NAV of less than $0.01 per share, then no corrective action need be taken; (b) if the pricing error results in a difference between the erroneous NAV and the correct NAV equal to or greater than $0.01 per share, but less than 1/2 of 1% of the Designated Portfolio's NAV at the time of the error, then the Adviser shall reimburse the Designated Portfolio for any loss, after taking into consideration any positive effect of such error; however, no adjustments to Contractowner accounts need be made; and (c) if the pricing error results in a difference between the erroneous NAV and the correct NAV equal to or greater than 1/2 of 1% of the Designated Portfolio's NAV at the time of the error, then the Adviser shall reimburse the Designated Portfolio for any loss (without taking into consideration any positive effect of such error) and shall reimburse FirstGWL&A for the costs of adjustments made to correct Contractowner accounts in accordance with the provisions of Schedule E. If an adjustment is necessary to correct a material error which has caused Contractowners to receive less than the amount to which they are entitled, the number of shares of the applicable sub-account of such Contractowners will be adjusted and the amount of any underpayments shall be credited by the Adviser to FirstGWL&A for crediting of such amounts to the applicable Contractowners accounts. Upon notification by the Adviser of any overpayment due to a material error, FirstGWL&A or Schwab, as the case may be, shall promptly remit to Adviser any overpayment that has not been paid to Contractowners; however, Adviser acknowledges that Schwab and FirstGWL&A do not intend to seek additional payments from any Contractowner who, because of a pricing error, may have underpaid for units of interest credited to his/her account. In no event shall Schwab or FirstGWL&A be liable to Contractowners for any such adjustments or underpayment amounts. A pricing error within categories (b) or (c) above shall be deemed to be "materially incorrect" or constitute a "material error" for purposes of this Agreement. The standards set forth in this Section 1.10 are based on the Parties' understanding of the views expressed by the staff of the Securities and Exchange Commission ("SEC") as of the date of this Agreement. In the event the views of the SEC staff are later modified or superseded by SEC or judicial interpretation, the parties shall amend the foregoing provisions of this Agreement to comport with the appropriate applicable standards, on terms mutually satisfactory to all Parties. ARTICLE II. Representations and Warranties 2.1. FirstGWL&A represents and warrants that the securities deemed to be issued by the Account under the Contracts are or will be registered under the 1933 Act; that the Contracts will be issued and sold in compliance in all material respects with all applicable federal and state laws and that the sale of the Contracts shall comply in all material respects with state insurance suitability requirements. FirstGWL&A further represents and warrants that it is an insurance company duly organized and in good standing under applicable law and that it has legally and validly established the Account prior to any issuance or sale of units thereof as a segregated asset account under Section 4240 of the New York Insurance Law and has registered the Account as a unit investment trust in accordance with the provisions of the 1940 Act to serve as a segregated investment account for the Contracts. 2.2. The Fund represents and warrants that Designated Portfolio(s) shares sold pursuant to this Agreement shall be registered under the 1933 Act, duly authorized for issuance and sold in compliance with all applicable federal securities laws including without limitation the 1933 Act, the 1934 Act, and the 1940 Act and that the Fund is and shall remain registered under the 1940 Act. The Fund shall amend the registration statement for its shares under the 1933 Act and the 1940 Act from time to time as required in order to effect the continuous offering of its shares. 2.3. The Fund reserves the right to adopt a plan pursuant to Rule 12b-1 under the 1940 Act and to impose an asset-based or other charge to finance distribution expenses as permitted by applicable law and regulation. In any event, the Fund and Adviser agree to comply with applicable provisions and SEC staff interpretations of the 1940 Act to assure that the investment advisory or management fees paid to the Adviser by the Fund are in accordance with the requirements of the 1940 Act. To the extent that the Fund decides to finance distribution expenses pursuant to Rule 12b-1, the Fund undertakes to have its Board, a majority of whom are not interested persons of the Fund, formulate and approve any plan pursuant to Rule 12b-1 under the 1940 Act to finance distribution expenses. 2.4. The Fund represents and warrants that it will make every effort to ensure that the investment policies, fees and expenses of the Designated Portfolio(s) are and shall at all times remain in compliance with the insurance and other applicable laws of the State of New York and any other applicable state to the extent required to perform this Agreement. The Fund further represents and warrants that it will make every effort to ensure that Designated Portfolio(s) shares will be sold in compliance with the insurance laws of the State of New York and all applicable state insurance and securities laws. The Fund shall register and qualify the shares for sale in accordance with the laws of the various states if and to the extent required by applicable law. FirstGWL&A and the Fund will endeavor to mutually cooperate with respect to the implementation of any modifications necessitated by any change in state insurance laws, regulations or interpretations of the foregoing that affect the Designated Portfolio(s) (a "Law Change"), and to keep each other informed of any Law Change that becomes known to either party. In the event of a Law Change, the Fund agrees that it will implement the change, except in those circumstances where the Fund has advised FirstGWL&A that its Board of Directors has determined that implementation of a particular Law Change is not in the best interest of all of the Fund's shareholders. 2.5. The Fund represents and warrants that it is lawfully organized and validly existing under the laws of the Commonwealth of Massachusetts and that it does and will comply in all material respects with the 1940 Act. 2.6. The Adviser represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of the Commonwealth of Pennsylvania and any applicable state and federal securities laws. 2.7. The Distributor represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of the Commonwealth of Pennsylvania and any applicable state and federal securities laws. 2.8. The Fund, the Distributor and the Adviser represent and warrant that all of their respective officers, employees, investment advisers, and other individuals or entities dealing with the money and/or securities of the Fund are, and shall continue to be at all times, covered by a blanket fidelity bond or similar coverage for the benefit of the Fund in an amount not less than the minimal coverage required by Rule 17g-1 under the 1940 Act or related provisions as may be promulgated from time to time. The aforesaid bond shall include coverage for larceny and embezzlement and shall be issued by a reputable bonding company. 2.9. Schwab represents and warrants that it has completed, obtained and performed, in all material respects, all registrations, filings, approvals, and authorizations, consents and examinations required by any government or governmental authority as may be necessary to perform this Agreement. Schwab does and will comply, in all material respects, with all applicable laws, rules and regulations in the performance of its obligations under this Agreement. 2.10.The Fund will provide FirstGWL&A with as much advance notice as is reasonably practicable of any material change affecting the Designated Portfolio(s) (including, but not limited to, any material change in the registration statement or prospectus affecting the Designated Portfolio(s)) and any proxy solicitation affecting the Designated Portfolio(s) and consult with FirstGWL&A in order to implement any such change in an orderly manner, recognizing the expenses of changes and attempting to minimize such expenses by implementing them in conjunction with regular annual updates of the prospectus for the Contracts. The Fund agrees to share equitably in expenses incurred by FirstGWL&A as a result of actions taken by the Fund, consistent with the allocation of expenses contained in Schedule E attached hereto and incorporated herein by reference. 2.11.FirstGWL&A represents and warrants, for purposes other than diversification under Section 817 of the Internal Revenue Code of 1986 as amended ("the Code"), that the Contracts are currently treated as annuity contracts under applicable provisions of the Code, and that it will make every effort to maintain such treatment and that it will notify Schwab, the Fund, the Distributor and the Adviser immediately upon having a reasonable basis for believing that the Contracts have ceased to be so treated or that they might not be so treated in the future. In addition, FirstGWL&A represents and warrants that the Account is a "segregated asset account" and that interests in the Account are offered exclusively through the purchase of or transfer into a "variable contract" within the meaning of such terms under Section 817 of the Code and the regulations thereunder. FirstGWL&A will use every effort to continue to meet such definitional requirements, and it will notify Schwab, the Fund, the Distributor, and the Adviser immediately upon having a reasonable basis for believing that such requirements have ceased to be met or that they might not be met in the future. ARTICLE III. Prospectuses and Proxy Statements; Voting 3.1. At least annually, the Distributor shall provide FirstGWL&A and Schwab with as many copies of the Fund's current prospectus for the Designated Portfolio(s) as FirstGWL&A and Schwab may reasonably request for marketing purposes (including distribution to Contractowners with respect to new sales of a Contract). If requested by FirstGWL&A in lieu thereof, the Distributor or Fund shall provide such documentation (including a camera-ready copy and computer diskette of the current prospectus for the Designated Portfolio(s)) and other assistance as is reasonably necessary in order for FirstGWL&A once each year (or more frequently if the prospectuses for the Designated Portfolio(s) are amended) to have the prospectus for the Contracts and the Fund's prospectus for the Designated Portfolio(s) printed together in one document. The Fund and Adviser agree that the prospectuses (and semi-annual and annual reports) for the Designated Portfolio(s) will describe only the Designated Portfolio(s) and will not name or describe any other portfolios or series that may be in the Fund unless required by law. 3.2. If applicable state or federal laws or regulations require that the Statement of Additional Information ("SAI") for the Fund be distributed to all Contractowners, then the Fund and/or the Distributor shall provide FirstGWL&A with copies of the Fund's SAI or documentation thereof for the Designated Portfolio(s) in such quantities, with expenses to be borne in accordance with Schedule E hereof, as FirstGWL&A may reasonably require to permit timely distribution thereof to Contractowners. The Distributor and/or the Fund shall also provide SAIs to any Contractowner or prospective owner who requests such SAI from the Fund (although it is anticipated that such requests will be made to FirstGWL&A or Schwab). 3.3. The Fund and/or the Distributor shall provide FirstGWL&A and Schwab with copies of the Fund's proxy material, reports to stockholders and other communications to stockholders for the Designated Portfolio(s) in such quantity, with expenses to be borne in accordance with Schedule E hereof, as FirstGWL&A may reasonably require to permit timely distribution thereof to Contractowners. 3.4. It is understood and agreed that, except with respect to information regarding FirstGWL&A or Schwab provided in writing by that party, neither FirstGWL&A nor Schwab are responsible for the content of the prospectus or SAI for the Designated Portfolio(s). It is also understood and agreed that, except with respect to information regarding the Fund, the Distributor, Adviser or the Designated Portfolio(s) provided in writing by the Fund, the Distributor or Adviser, neither the Fund, the Distributor nor Adviser are responsible for the content of the prospectus or SAI for the Contracts. 3.5. If and to the extent required by law FirstGWL&A shall: (i) solicit voting instructions from Contractowners; (ii) vote the Designated Portfolio(s) shares in accordance with instructions received from Contractowners: and (iii)vote Designated Portfolio shares for which no instructions have been received in the same proportion as Designated Portfolio(s) shares for which instructions have been received from Contractowners, so long as and to the extent that the SEC continues to interpret the 1940 Act to require pass-through voting privileges for variable contract owners. 3.6. FirstGWL&A shall be responsible for assuring that each of its separate accounts holding shares of a Designated Portfolio calculates voting privileges as directed by the Fund and agreed to by FirstGWL&A and the Fund. The Fund agrees to promptly notify FirstGWL&A of any changes of interpretations or amendments of the Mixed and Shared Funding Exemptive Order. 3.7. The Fund will comply with all provisions of the 1940 Act requiring voting by shareholders, and in particular the Fund will either provide for annual meetings (except insofar as the SEC may interpret Section 16 of the 1940 Act not to require such meetings) or, as the Fund currently intends, comply with Section 16(c) of the 1940 Act (although the Fund is not one of the trusts described in Section 16(c) of that Act) as well as with Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in accordance with the SEC's interpretation of the requirements of Section 16(a) with respect to periodic elections of directors or trustees and with whatever rules the Commission may promulgate with respect thereto. 3.8. To the extent allowed under applicable federal and state law, neither FirstGWL&A nor Schwab shall in any way recommend or oppose or interfere with the solicitation of proxies for Fund shares held by the Account on behalf of Contractowners without the prior written consent of the Fund, which consent may be withheld in the Fund's sole discretion. Neither FirstGWL&A nor Schwab will initiate or solicit Contractowners to initiate any proxy solicitation except to the extent that the failure by FirstGWL&A or Schwab to so initiate or solicit would, under the circumstances, be in contravention with applicable federal or state law. ARTICLE IV. Sales Material and Information 4.1. FirstGWL&A and Schwab shall furnish, or shall cause to be furnished, to the Fund or its designee, a copy of each piece of sales literature or other promotional material that FirstGWL&A or Schwab, respectively, develops or proposes to use and in which the Fund (or a Portfolio thereof), its Adviser or one of its sub-advisers or the Distributor is named in connection with the Contracts, at least ten (10) Business Days prior to its use. No such material shall be used if the Fund objects in writing to such use within five (5) Business Days after receipt of such material. 4.2. FirstGWL&A and Schwab shall not give any information or make any representations or statements on behalf of the Fund in connection with the sale of the Con- tracts other than the information or representations contained in the registration statement or prospectus for the Fund shares, as such registration statement and prospectus may be amended or supplemented from time to time, or in reports or proxy statements for the Fund, or in sales literature or other promotional material approved by the Fund or by the Distributor, except with the permission of the Fund or the Distributor. 4.3. The Fund shall furnish, or shall cause to be furnished, to FirstGWL&A and Schwab, a copy of each piece of sales literature or other promotional material in which FirstGWL&A and/or its separate account(s), or Schwab is named at least ten (10) Business Days prior to its use. No such material shall be used if FirstGWL&A or Schwab objects in writing to such use within five (5) Business Days after receipt of such material. 4.4. The Fund, the Distributor, and the Adviser shall not give any information or make any representations on behalf of FirstGWL&A or concerning FirstGWL&A, the Account, or the Contracts other than the information or representations contained in a registration statement or prospectus for the Contracts, as such registration statement and prospectus may be amended or supplemented from time to time, or in reports for the Account, or in sales literature or other promotional material approved by FirstGWL&A or its designee, except with the permission of FirstGWL&A. 4.5. FirstGWL&A, the Fund, the Distributor and the Adviser shall not give any information or make any representations on behalf of or concerning Schwab, or use Schwab's name except with the permission of Schwab. 4.6. The Fund will provide to FirstGWL&A and Schwab at least one complete copy of all registration statements, prospectuses, SAIs, reports, proxy statements, sales literature and other promotional materials, applications for exemptions, requests for no- action letters, and all amendments to any of the above, that relate to the Designated Port- folio(s), contemporaneously with the filing of such document(s) with the SEC or NASD or other regulatory authorities. 4.7. FirstGWL&A or Schwab will provide to the Fund at least one complete copy of all registration statements, prospectuses, SAIs, reports, solicitations for voting instructions, sales literature and other promotional materials, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Contracts or the Account, contemporaneously with the filing of such document(s) with the SEC, NASD, or other regulatory authority. 4.8. For purposes of Articles IV and VIII, the phrase "sales literature and other promotional material" includes, but is not limited to, advertisements (such as material published, or designed for use in, a newspaper, magazine, or other periodical, radio, television, telephone or tape recording, videotape display, signs or billboards, motion pictures, or other public media; e.g., on-line networks such as the Internet or other electronic media) sales literature (i.e., any written communication distributed or made generally available to customers or the public, including brochures, circulars, research reports, market letters, form letters, seminar texts, reprints or excerpts of any other advertisement, sales literature, or published article), educational or training materials or other communications distributed or made generally available to some or all agents or employees, and registration statements, prospectuses, SAIs, shareholder reports, and proxy materials and any other material constituting sales literature or advertising under the NASD rules, the 1933 Act or the 1940 Act. 4.9. At the request of any party to this Agreement, each other party will make available to the other party's independent auditors and/or representative of the appropriate regulatory agencies, all records, data and access to operating procedures that may be reasonably requested in connection with compliance and regulatory requirements related to this Agreement or any party's obligations under this Agreement. ARTICLE V. Fees and Expenses 5.1. The Fund shall pay no fee or other compensation to FirstGWL&A under this Agreement, and FirstGWL&A shall pay no fee or other compensation to the Fund or Adviser under this Agreement, although the parties hereto will bear certain expenses in accordance with Schedule E, Articles III, V, and other provisions of this Agreement. 5.2. All expenses incident to performance by the Fund, the Adviser and the Distributor under this Agreement shall be paid by the appropriate party, as further provided in Schedule E. The Fund shall see to it that all shares of the Designated Portfolio(s) are registered and authorized for issuance in accordance with applicable federal law and, if and to the extent required, in accordance with applicable state laws prior to their sale. 5.3. The parties shall bear the expenses of routine annual distribution (mailing costs) of the Fund's prospectus and distribution (mailing costs) of the Fund's proxy materials and reports to owners of Contracts offered by FirstGWL&A, in accordance with Schedule E. 5.4. The Fund, the Distributor and the Adviser acknowledge that a principal fea- ture of the Contracts is the Contractowner's ability to choose from a number of unaffiliated mutual funds (and portfolios or series thereof), including the Designated Portfolio(s) and the Unaffiliated Funds, and to transfer the Contract's cash value between funds and portfolios. The Fund, the Distributor and the Adviser agree to cooperate with FirstGWL&A and Schwab in facilitating the operation of the Account and the Contracts as described in the prospectus for the Contracts, including but not limited to cooperation in facilitating transfers between Unaffiliated Funds. 5.5. Schwab agrees to provide certain administrative services, specified in Schedule C attached hereto and incorporated herein by reference, in connection with the arrangements contemplated by this Agreement. The parties acknowledge and agree that the services referred to in this Section 5.5 are recordkeeping, shareholder communication, and other transaction facilitation and processing, and related administrative services only and are not the services of an underwriter or a principal underwriter of the Fund and that Schwab is not an underwriter for the shares of the Designated Portfolio(s), within the meaning of the 1933 Act or the 1940 Act. 5.6. As compensation for the services specified in Schedule C hereto, the Adviser agrees to pay Schwab a monthly Administrative Service Fee based on the percentage per annum on Schedule C hereto applied to the average daily value of the shares of the Designated Portfolio(s) held in the Account with respect to Contracts sold by Schwab. This monthly Administrative Service Fee is due and payable before the 15th (fifteenth) day following the last day of the month to which it relates. ARTICLE VI. Diversification and Qualification 6.1. The Fund, the Adviser and the Distributor represent and warrant that the Fund will at all times sell its shares and invest its assets in such a manner as to ensure that the Contracts will be treated as annuity contracts under the Code, and the regulations issued thereunder. Without limiting the scope of the foregoing, the Fund, Distributor and Adviser represent and warrant that the Fund and each Designated Portfolio thereof will at all times comply with Section 817(h) of the Code and Treasury Regulation 1.817-5, as amended from time to time, and any Treasury interpretations thereof, relating to the diversification requirements for variable annuity, endowment, or life insurance contracts and any amendments or other modifications or successor provisions to such Section or Regulations. The Fund and the Distributor agree that shares of the Designated Portfolio(s) will be sold only to Participating Insurance Companies and their separate accounts and certain Qualified Plans. 6.2. No shares of any Designated Portfolio of the Fund will be sold to the general public. 6.3. The Fund, the Distributor and the Adviser represent and warrant that the Fund and each Designated Portfolio is currently qualified as a Regulated Investment Company under Subchapter M of the Code, and that each Designated Portfolio will maintain such qualification (under Subchapter M or any successor or similar provisions) as long as this Agreement is in effect. 6.4. The Fund, the Distributor or the Adviser will notify FirstGWL&A immediately upon having a reasonable basis for believing that the Fund or any Designated Portfolio has ceased to comply with the aforesaid Section 817(h) diversification or Subchapter M qualification requirements or might not so comply in the future. 6.5. Without in any way limiting the effect of Sections 8.3, 8.4 and 8.5 hereof and without in any way limiting or restricting any other remedies available to FirstGWL&A or Schwab, the Adviser or the Distributor will pay all costs associated with or arising out of any failure, or any anticipated or reasonably foreseeable failure, of the Fund or any Designated Portfolio to comply with Sections 6.1, 6.2, or 6.3 hereof, including all costs associated with reasonable and appropriate corrections or responses to any such failure; such costs may include, but are not limited to, the costs involved in creating, organizing, and registering a new investment company as a funding medium for the Contracts and/or the costs of obtaining whatever regulatory authorizations are required to substitute shares of another investment company for those of the failed Portfolio (including but not limited to an order pursuant to Section 26(b) of the 1940 Act); such costs are to include, but are not limited to, fees and expenses of legal counsel and other advisors to FirstGWL&A and any federal income taxes or tax penalties and interest thereon (or "toll charges" or exactments or amounts paid in settlement) incurred by FirstGWL&A with respect to itself or owners of its Contracts in connection with any such failure or anticipated or reasonably foreseeable failure. 6.6. The Fund at the Fund's expense shall provide FirstGWL&A or its designee with reports certifying compliance with the aforesaid Section 817(h) diversification and Subchapter M qualification requirements, at the times provided for and substantially in the form attached hereto as Schedule D and incorporated herein by reference; provided, however, that providing such reports does not relieve the Fund of its responsibility for such compliance or of its liability for any non-compliance. 6.7. FirstGWL&A agrees that if the Internal Revenue Service ("IRS") asserts in writing in connection with any governmental audit or review of FirstGWL&A or, to FirstGWL&A's knowledge, or any Contractowner that any Designated Portfolio has failed to comply with the diversification requirements of Section 817(h) of the Code or FirstGWL&A otherwise becomes aware of any facts that could give rise to any claim against the Fund, the Adviser or the Distributor as a result of such a failure or alleged failure: (a) FirstGWL&A shall promptly notify the Fund, the Adviser and the Distributor of such assertion or potential claim; (b) FirstGWL&A shall consult with the Fund, the Adviser and the Distributor as to how to minimize any liability that may arise as a result of such failure or alleged failure; (c) FirstGWL&A shall use its best efforts to minimize any liability of the Fund, the Adviser and the Distributor resulting from such failure, including, without limitation, demonstrating, pursuant to Treasury Regulations, Section 1.817-5(a)(2), to the commissioner of the IRS that such failure was inadvertent; (d) any written materials to be submitted by FirstGWL&A to the IRS, any Contractowner or any other claimant in connection with any of the foregoing proceedings or contests (including, without limitation, any such materials to be submitted to the IRS pursuant to Treasury Regulations, Section 1.817-5(a)(2)) shall be provided by FirstGWL&A to the Fund, the Distributor and the Adviser (together with any supporting information or analysis) within at least two (2) business days prior to submission; (e) FirstGWL&A shall provide the Fund, the Distributor and the Adviser with such cooperation as the Fund, the Distributor and the Adviser shall reasonably request (including, without limitation, by permitting the Fund, the Distributor and the Adviser to review the relevant books and records of FirstGWL&A) in order to facilitate review by the Fund, the Distributor and the Adviser of any written submissions provided to it or its assessment of the validity or amount of any claim against it arising from such failure or alleged failure; (f) FirstGWL&A shall not with respect to any claim of the IRS or any Contractowner that would give rise to a claim against the Fund, the Distributor and the Adviser (i) compromise or settle any claim, (ii) accept any adjustment on audit, or (iii) forego any allowable administrative or judicial appeals, without the express written consent of the Fund, the Distributor and the Adviser, which shall not be unreasonably withheld; provided that, FirstGWL&A shall not be required to appeal any adverse judicial decision unless the Fund, the Distributor and the Adviser shall have provided an opinion of independent counsel to the effect that a reasonable basis exists for taking such appeal; and further provided that the Fund, the Distributor and the Adviser shall bear the costs and expenses, including reasonable attorney's fees, incurred by FirstGWL&A in complying with this clause (f). ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order 7.1. The Board will monitor the Fund for the existence of any material irreconcilable conflict between the interests of the contract owners of all separate accounts investing in the Fund. An irreconcilable material conflict may arise for a variety of reasons, including: (a) an action by any state insurance regulatory authority; (b) a change in applicable federal or state insurance, tax, or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretative letter, or any similar action by insurance, tax, or securities regulatory authorities; (c) an administrative or judicial decision in any relevant proceeding; (d) the manner in which the investments of any Portfolio are being managed; (e) a difference in voting instructions given by variable annuity contract and variable life insurance contract owners or by contract owners of different Participating Insurance Companies; or (f) a decision by a Participating Insurance Company to disregard the voting instructions of contract owners. The Board shall promptly inform FirstGWL&A if it determines that an irreconcilable material conflict exists and the implications thereof. 7.2. FirstGWL&A will report any potential or existing conflicts of which it is aware to the Board. FirstGWL&A will assist the Board in carrying out its responsibilities under the Mixed and Shared Funding Exemptive Order, by providing the Board with all information reasonably necessary for the Board to consider any issues raised. This includes, but is not limited to, an obligation by FirstGWL&A to inform the Board whenever contract owner voting instructions are to be disregarded. Such responsibilities shall be carried out by FirstGWL&A with a view only to the interests of its Contractowners. 7.3. If it is determined by a majority of the Board, or a majority of its directors who are not interested persons of the Fund, the Distributor, the Adviser or any sub-adviser to any of the Designated Portfolios (the "Independent Directors"), that a material irreconcilable conflict exists, FirstGWL&A and other Participating Insurance Companies shall, at their expense and to the extent reasonably practicable (as determined by a majority of the Independent Directors), take whatever steps are necessary to remedy or eliminate the irreconcilable material conflict, up to and including: (1) withdrawing the assets allocable to some or all of the separate accounts from the Fund or any Designated Portfolio and reinvesting such assets in a different investment medium, including (but not limited to) another portfolio of the Fund, or submitting the question whether such segregation should be implemented to a vote of all affected contract owners and, as appropriate, segregating the assets of any appropriate group (i.e., annuity contract owners, life insurance contract owners, or variable contract owners of one or more Participating Insurance Companies) that votes in favor of such segregation, or offering to the affected contract owners the option of making such a change; and (2) establishing a new registered management investment company or managed separate account. 7.4. If a material irreconcilable conflict arises because of a decision by FirstGWL&A to disregard contract owner voting instructions and that decision represents a minority position or would preclude a majority vote, FirstGWL&A may be required, at the Fund's election, to withdraw the Account's investment in the Fund and terminate this Agreement; provided, however that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the Independent Directors. Any such withdrawal and termination must take place within six (6) months after the Fund gives written notice that this provision is being implemented, and until the end of that six month period, and subject to section 1.2, the Distributor and the Fund shall continue to accept and implement orders by FirstGWL&A for the purchase (and redemption) of shares of the Fund. 7.5. If a material irreconcilable conflict arises because a particular state insurance regulator's decision applicable to FirstGWL&A conflicts with the majority of other state regulators, then FirstGWL&A will withdraw the Account's investment in the Fund and terminate this Agreement within six months after the Board informs FirstGWL&A in writing that it has determined that such decision has created an irreconcilable material conflict; provided, however, that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the Independent Directors. Until the end of the foregoing six month period or the completion of the termination and withdrawal of the Account's investment in the Fund, whichever first occurs, and subject to section 1.2, the Fund shall continue to accept and implement orders by FirstGWL&A for the purchase (and redemption) of shares of the Fund. 7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority of the Independent Trustees shall determine whether any proposed action adequately remedies any irreconcilable material conflict, but in no event will the Fund, the Distributor or the Adviser be required to establish a new funding medium for the Contracts. FirstGWL&A shall not be required by Section 7.3 to establish a new funding medium for the Contracts if an offer to do so has been declined by vote of a majority of Contractowners affected by the irreconcilable material conflict. In the event that the Board determines that any proposed action does not adequately remedy any irreconcilable material conflict, then FirstGWL&A will withdraw the Account's investment in the Fund and terminate this Agreement within six (6) months after the Board informs FirstGWL&A in writing of the foregoing determination; provided, however, that such withdrawal and termination shall be limited to the extent required by any such material irreconcilable conflict as determined by a majority of the Independent Directors. 7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act or the rules promulgated thereunder with respect to mixed or shared funding (as defined in the Mixed and Shared Funding Exemptive Order) on terms and conditions materially different from those contained in the Mixed and Shared Funding Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies, as appropriate, shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable: and (b) Sections 3.5, 3.6, 3.7, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall continue in effect only to the extent that terms and con- ditions substantially identical to such Sections are contained in such Rule(s) as so amended or adopted. ARTICLE VIII. Indemnification 8.1. Indemnification By FirstGWL&A 8.1(a). FirstGWL&A agrees to indemnify and hold harmless the Fund, the Distributor and the Adviser and each of their officers and directors or trustees and each person, if any, who controls the Fund, Distributor or Adviser within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.1) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of FirstGWL&A) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in the registration statement or pro- spectus or SAI covering the Contracts or contained in the Contracts or sales literature for the Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or nec- essary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser, Distributor or Fund for use in the registration statement or prospectus for the Contracts or in the Contracts or sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, pro- spectus or sales literature of the Fund not supplied by FirstGWL&A or persons under its control) or wrongful conduct of FirstGWL&A or persons under its control, with respect to the sale or distribution of the Contracts or Fund Shares; or (iii)arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, or sales literature of the Fund, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such a statement or omission was made in reliance upon information furnished in writing to the Fund by or on behalf of FirstGWL&A; or (iv) arise as a result of any failure by FirstGWL&A to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by FirstGWL&A in this Agreement or arise out of or result from any other material breach of this Agreement by FirstGWL&A, including without limitation Section 2.11 and Section 6.7 hereof, as limited by and in accordance with the provisions of Sections 8.1(b) and 8.1(c) hereof. 8.1(b). FirstGWL&A shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.1(c). FirstGWL&A shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified FirstGWL&A in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify FirstGWL&A of any such claim shall not relieve FirstGWL&A from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that FirstGWL&A has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, FirstGWL&A shall be entitled to participate, at its own expense, in the defense of such action. FirstGWL&A also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from FirstGWL&A to such party of FirstGWL&A's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and FirstGWL&A will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.1(d). The Indemnified Parties will promptly notify FirstGWL&A of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund. 8.2. Indemnification by Schwab 8.2(a). Schwab agrees to indemnify and hold harmless the Fund, the Distributor and the Adviser and each of their officers and directors or trustees and each person, if any, who controls the Fund, Distributor or Adviser within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.2) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of Schwab) or litigation (including reasonable legal and other expenses), to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acqu- isition of the Fund's shares or the Contracts and: (i) arise out of Schwab's dissemination of information regarding the Fund that is both (A) materially incorrect and (B) that was neither contained in the Fund's registration statement or sales literature nor other promotional material of the Fund prepared by the Fund or provided in writing to Schwab, or approved in writing, by or on behalf of the Fund, the Distributor or the Adviser; or (ii) arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in sales literature or other promotional material prepared by Schwab for the Contracts or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser, the Distributor or Fund or to Schwab by FirstGWL&A for use in the registration statement or prospectus for the Contracts or in the Contracts or sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts; or (iii)arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus or sales literature of the Fund not supplied by Schwab or persons under its control) or wrongful conduct of Schwab or persons under its control, with respect to the sale or distribution of the Contracts; or (iv) arise as a result of any failure by Schwab to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by Schwab in this Agreement or arise out of or result from any other material breach of this Agreement by Schwab; as limited by and in accordance with the provisions of Sections 8.2(b) and 8.2(c) hereof. 8.2(b). Schwab shall not be liable under this indemnification provision with respect to any losses, claims, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.2(c). Schwab shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified Schwab in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify Schwab of any such claim shall not relieve Schwab from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that Schwab has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, Schwab shall be entitled to participate, at its own expense, in the defense of such action. Schwab also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from Schwab to such party of Schwab's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and Schwab will not be liable to such party under this Agreement for any legal or other ex- penses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.2(d). The Indemnified Parties will promptly notify Schwab of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund. 8.3. Indemnification by the Adviser 8.3(a). The Adviser agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their directors and officers and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.3) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Adviser) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Fund, Adviser or the Distributor (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information fur- nished in writing to the Adviser, the Distributor or the Fund by or on behalf of FirstGWL&A or Schwab for use in the registration statement or prospectus for the Fund or in sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or the Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI or sales literature or other promotional material for the Contracts not supplied by the Adviser or persons under its control) or wrongful conduct of the Fund, the Distributor or Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or (iii)arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, or sales literature covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser, the Distributor or the Fund; or (iv) arise as a result of any failure by the Fund, the Adviser or the Distributor to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or (v) arise out of or result from any material breach of any representation and/or warranty made by the Fund, the Adviser or the Distributor in this Agreement or arise out of or result from any other material breach of this Agreement by the Adviser, the Fund or the Distributor; or (vi) arise out of or result from the incorrect or untimely calculation or reporting of the daily net asset value per share or dividend or capital gain distribution rate; as limited by and in accordance with the provisions of Sections 8.3(b) and 8.3(c) hereof. This indemnification is in addition to and apart from the responsibilities and obligations of the Adviser specified in Article VI hereof. 8.3(b). The Adviser shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.3(c). The Adviser shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Adviser in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Adviser of any such claim shall not relieve the Adviser from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Adviser has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Adviser will be entitled to participate, at its own expense, in the defense thereof. The Adviser also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Adviser to such party of the Adviser's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Adviser will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.3(d). FirstGWL&A and Schwab agree promptly to notify the Adviser of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Account. 8.4. Indemnification By the Fund 8.4(a). The Fund agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their directors and officers and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.4) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Fund) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may be required to pay or become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements, are related to the operations of the Fund and: (i) arise as a result of any failure by the Fund to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agree- ment); or (ii) arise out of or result from any material breach of any representation and/or warranty made by the Fund in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund; or (iii)arise out of or result from the incorrect or untimely calculation or reporting of the daily net asset value per share or dividend or capital gain distribution rate; as limited by and in accordance with the provisions of Sections 8.4(b) and 8.4(c) hereof. 8.4(b). The Fund shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.4(c). The Fund shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Fund in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Fund of any such claim shall not relieve it from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Fund has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Fund will be entitled to participate, at its own expense, in the defense thereof. The Fund shall also be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Fund to such party of the Fund's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Fund will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.4(d). FirstGWL&A and Schwab each agree promptly to notify the Fund of the commencement of any litigation or proceeding against itself or any of its respective officers or directors in connection with the Agreement, the issuance or sale of the Contracts, the operation of the Account, or the sale or acquisition of shares of the Fund. 8.5. Indemnification by the Distributor 8.5(a).The Distributor agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their directors and officers and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.5) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Distributor) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the contracts and: (i) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Fund, Adviser or Distributor (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information fur- nished in writing to the Adviser, the Distributor or Fund by or on behalf of FirstGWL&A or Schwab for use in the registration statement or SAI or prospectus for the Fund or in sales literature or other promotional material (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI, sales literature or other promotional material for the Contracts not supplied by the Distributor or persons under its control) or wrongful conduct of the Fund, the Distributor or Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or (iii)arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, sales literature or other promotional material covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser, the Distributor or Fund; or (iv) arise as a result of any failure by the Fund, Adviser or Distributor to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or (v) arise out of or result from any material breach of any representation and/or warranty made by the Fund, Adviser or Distributor in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund, Adviser or Distributor; or (vi) arise out of or result from the incorrect or untimely calculation or reporting of the daily net asset value per share or dividend or capital gain distribution rate; as limited by and in accordance with the provisions of Sections 8.5(b) and 8.5(c) hereof. This indemnification is in addition to and apart from the responsibilities and obligations of the Distributor specified in Article VI hereof. 8.5(b).The Distributor shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance or such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.5(c)The Distributor shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Distributor in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Distributor of any such claim shall not relieve the Distributor from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Distributor has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Distributor will be entitled to participate, at its own expense, in the defense thereof. The Distributor also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Distributor to such party of the Distributor's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Distributor will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.5(d)FirstGWL&A and Schwab agree to promptly notify the Distributor of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Account. ARTICLE IX. Applicable Law 9.1. This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the State of New York, without regard to the New York Conflict of Laws provisions. 9.2. This Agreement shall be subject to the provisions of the 1933, 1934 and 1940 Acts, and the rules and regulations and rulings thereunder, including such exemptions from those statutes, rules and regulations as the Securities and Exchange Commission may grant (including, but not limited to, the Mixed and Shared Funding Exemptive Order) and the terms hereof shall be interpreted and construed in accordance therewith. ARTICLE X. Termination 10.1.This Agreement shall terminate: (a) at the option of any party, with or without cause, with respect to some or all Portfolios, upon six (6) months advance written notice delivered to the other parties; provided, however, that such notice shall not be given earlier than six (6) months following the date of this Agreement; or (b) at the option of FirstGWL&A or Schwab by written notice to the other parties with respect to any Portfolio based upon FirstGWL&A's or Schwab's determination that shares of such Portfolio are not reasonably available to meet the requirements of the Contracts; or (c) at the option of FirstGWL&A or Schwab by written notice to the other parties with respect to any Portfolio in the event any of the Portfolio's shares 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 FirstGWL&A; or (d) at the option of the Fund in the event that formal administrative proceedings are instituted against FirstGWL&A or Schwab by the NASD, the SEC, the Insurance Commissioner or like official of any state or any other regulatory body regarding FirstGWL&A's or Schwab's duties under this Agreement or related to the sale of the Contracts, the operation of any Account, or the purchase of the Fund shares, if, in each case, the Fund reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of FirstGWL&A or Schwab to perform its obligations under this Agreement; or (e) at the option of FirstGWL&A or Schwab in the event that formal administrative proceedings are instituted against the Fund, the Distributor or Adviser by the NASD, the SEC, or any state securities or insurance department or any other regulatory body, if Schwab or FirstGWL&A reasonably 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 Fund, the Distributor or Adviser to perform their obligations under this Agreement; or (f) at the option of FirstGWL&A by written notice to the Fund with respect to any Portfolio if FirstGWL&A reasonably believes that the Portfolio will fail to meet the Section 817(h) diversification requirements or Subchapter M qualifications specified in Article VI hereof; or (g) at the option of either the Fund, the Distributor or the Adviser, if (i) the Fund or Adviser, respectively, shall determine, in their sole judgment reasonably exercised in good faith, that either FirstGWL&A or Schwab has suffered a material adverse change in their business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on FirstGWL&A's or Schwab's ability to perform its obligations under this Agreement, (ii) the Fund, the Distributor or Adviser notifies FirstGWL&A or Schwab, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by FirstGWL&A or Schwab and any other changes in circumstances since the giving of such a notice, the determination of the Fund, the Distributor or Adviser shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or (h) at the option of either FirstGWL&A or Schwab, if (i) FirstGWL&A or Schwab, respectively, shall determine, in its sole judgment reasonably exercised in good faith, that either the Fund, the Distributor or the Adviser has suffered a material adverse change in its business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on the Fund's, the Distributor's or Adviser's ability to perform its obligations under this Agreement, (ii) FirstGWL&A or Schwab notifies the Fund, the Distributor or Adviser, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by the Fund, the Distributor or Adviser and any other changes in circumstances since the giving of such a notice, the determination of FirstGWL&A or Schwab shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or (i) at the option of FirstGWL&A in the event that formal administrative proceedings are instituted against Schwab by the NASD, the Securities and Exchange Commission, or any state securities or insurance department or any other regulatory body regarding Schwab's duties under this Agreement or related to the sale of the Fund's shares or the Contracts, the operation of any Account, or the purchase of the Fund shares, provided, however, that FirstGWL&A determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of Schwab to perform its obligations related to the Contracts; or (j) at the option of Schwab in the event that formal administrative proceedings are instituted against FirstGWL&A by the NASD, the Securities and Exchange Commission, or any state securities or insurance department or any other regulatory body regarding FirstGWL&A's duties under this Agreement or related to the sale of the Fund's shares or the Contracts, the operation of any Account, or the purchase of the Fund shares, provided, however, that Schwab determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of FirstGWL&A to perform its obligations related to the Contracts; or (k) at the option of any non-defaulting party hereto in the event of a material breach of this Agreement by any party hereto (the "defaulting party") other than as described in 10.1(a)-(j); provided, that the non-defaulting party gives written notice thereof to the defaulting party, with copies of such notice to all other non-defaulting parties, and if such breach shall not have been remedied within thirty (30) days after such written notice is given, then the non- defaulting party giving such written notice may terminate this Agreement by giving thirty (30) days written notice of termination to the defaulting party. 10.2.Notice Requirement. No termination of this Agreement shall be effective unless and until the party terminating this Agreement gives prior written notice to all other parties of its intent to terminate, which notice shall set forth the basis for the termination. Furthermore, (a) in the event any termination is based upon the provisions of Article VII, or the provisions of Section 10.1(a), 10.1(g) or 10.1(h) of this Agreement, the prior written notice shall be given in advance of the effective date of termination as required by those provisions unless such notice period is shortened by mutual written agreement of the parties; (b) in the event any termination is based upon the provisions of Section 10.1(d), 10.1(e), 10.1(i) or 10.1(j) of this Agreement, the prior written notice shall be given at least sixty (60) days before the effective date of termination; and (c) in the event any termination is based upon the provisions of Section 10.1(b), 10.1(c) or 10.1(f), the prior written notice shall be given in advance of the effective date of termination, which date shall be determined by the party sending the notice. 10.3.Effect of Termination. Notwithstanding any termination of this Agreement, other than as a result of a failure by either the Fund or FirstGWL&A to meet Section 817(h) of the Code diversification requirements, the Fund, the Adviser and the Distributor shall, at the option of FirstGWL&A or Schwab, continue to make available additional shares of the Designated Portfolios pursuant to the terms and conditions of this Agreement, for all Contracts in effect on the effective date of termination of this Agreement (hereinafter referred to as "Existing Contracts"). Specifically, without limitation, the owners of the Existing Contracts shall be permitted to reallocate investments in the Designated Portfolios, redeem investments in the Designated Portfolios and/or invest in the Designated Portfolios upon the making of additional purchase payments under the Existing Contracts. The parties agree that this Section 10.3 shall not apply to any terminations under Article VII and the effect of such Article VII terminations shall be governed by Article VII of this Agreement. 10.4.Surviving Provisions. Notwithstanding any termination of this Agreement, each party's obligations under Article VIII to indemnify other parties shall survive and not be affected by any termination of this Agreement. In addition, with respect to Existing Contracts, all provisions of this Agreement shall also survive and not be affected by any termination of this Agreement. 10.5.Survival of Agreement. A termination by Schwab shall terminate this Agreement only as to Schwab, and this Agreement shall remain in effect as to the other par- ties; provided, however, that in the event of a termination by Schwab the other parties shall have the option to terminate this Agreement upon 60 (sixty) days notice, rather than the six (6) months specified in Section 10.1(a). ARTICLE XI. Notices Any notice shall be sufficiently given when sent by registered or certified mail to the other party at the address of such party set forth below or at such other address as such party may from time to time specify in writing to the other party. If to the Fund: Federated Insurance Series Federated Investors Towers Pittsburgh, PA 15222-3779 Attention: John W. McGonigle, Esq. If to FirstGWL&A: First Great-West Life & Annuity Insurance Company 8515 East Orchard Road Englewood, CO 80111 Attention:Assistant Vice President, Savings Products If to the Adviser: Federated Advisers Federated Investors Towers Pittsburgh, PA 15222-3779 Attention: John W. McGonigle, Esq. If to the Distributor: Federated Securities Corp. Federated Investors Towers Pittsburgh, PA 15222-3779 Attention: John W. McGonigle, Esq. If to Schwab: Charles Schwab & Co., Inc. 101 Montgomery Street San Francisco, CA 94104 Attention: General Counsel ARTICLE XII. Miscellaneous 12.1.Subject to the requirements of legal process and regulatory authority, each party hereto shall treat as confidential the names and addresses of the owners of the Contracts and all information reasonably identified as confidential in writing by any other party hereto and, except as permitted by this Agreement, shall not disclose, disseminate or utilize such names and addresses and other confidential information without the express written consent of the affected party until such time as such information may come into the public domain. Without limiting the foregoing, no party hereto shall disclose any information that another party has designated as proprietary. 12.2.The captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provisions hereof or otherwise affect their construction or effect. 12.3.This Agreement may be executed simultaneously in two or more counterparts, each of which taken together shall constitute one and the same instrument. 12.4.If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby. 12.5.Each party hereto shall cooperate with each other party and all appropriate governmental authorities (including without limitation the SEC, the NASD and state insurance regulators) and shall permit such authorities reasonable access to its books and records in connection with any investigation or inquiry relating to this Agreement or the transactions contemplated hereby. Notwithstanding the generality of the foregoing, each party hereto further agrees to furnish the New York Insurance Commissioner with any information or reports in connection with services provided under this Agreement which such Commissioner may request in order to ascertain whether the variable annuity operations of FirstGWL&A are being conducted in a manner consistent with the New York Variable Annuity Regulations and any other applicable law or regulations. 12.6.Any controversy or claim arising out of or relating to this Agreement, or breach thereof, may be settled by arbitration in a forum jointly selected by the relevant parties (but if applicable law requires some other forum, then such other forum) in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. 12.7.The rights, remedies and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies and obligations, at law or in equity, which the parties hereto are entitled to under state and federal laws. 12.8.This Agreement or any of the rights and obligations hereunder may not be assigned by any party without the prior written consent of all parties hereto. 12.9.Schwab and FirstGWL&A are hereby expressly put on notice of the limitation of liability as set forth in the Declarations of Trust of the Fund and the Adviser and agree that the obligations assumed by the Fund and the Adviser pursuant to this Agreement shall be limited in any case to the Fund and Adviser and their respective assets and neither Schwab nor FirstGWL&A shall seek satisfaction of any such obligation from the shareholders of the Fund or the Adviser, the Trustees, officers, employees or agents of the Fund or Adviser, or any of them, except to the extent permitted under this Agreement. 12.10.The Fund, Adviser and Distributor agree that the obligations assumed by FirstGWL&A and Schwab pursuant to this Agreement shall be limited in any case to FirstGWL&A and Schwab and their respective assets and neither the Fund, Distributor nor Adviser shall seek satisfaction of any such obligation from the shareholders of the FirstGWL&A or Schwab, the directors, officers, employees or agents of the FirstGWL&A or Schwab, or any of them, except to the extent permitted under this Agreement. 12.11.No provision of this Agreement may be deemed or construed to modify or supersede any contractual rights, duties, or indemnifications, as between the Distributor and the Fund, and as between the Adviser and the Fund. IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in its name and on its behalf by its duly authorized representative and its seal to be hereunder affixed hereto as of the date specified below. FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY By its authorized officer, By:/s/ Robert K. Shaw Title: Vice President, Marketing & Product Development Date: April 1, 1997 FEDERATED INSURANCE SERIES By its authorized officer, By:/s/ John W. McGonigle Title: Executive Vice President Date: March 24, 1997 FEDERATED ADVISERS By its authorized officer, By:/s/ Stephen A. Keen Title: Vice President Date: March 24, 1997 FEDERATED SECURITIES CORP. By its authorized officer, By:/s/ Byron F. Bowman Title: Vice President Date: March 24, 1997 CHARLES SCHWAB & CO., INC. By its authorized officer, By:/s/ Jeff Benton Title:Vice President, Annuities & Life Insurance Date:March 31, 1997 Schwab Variable Annuity SCHEDULE A Contracts Form Numbers First Great-West Life & Annuity Insurance Company Group Variable/Fixed Annuity Contract J434NY SCHEDULE B Designated Portfolios Federated American Leaders Fund II Federated Fund for U.S. Government Securities II Federated Utility Fund II SCHEDULE C Administrative Services To be performed by Charles Schwab & Co., Inc. A. Schwab will provide the properly registered and licensed personnel and systems needed for all customer servicing and support - for both fund and annuity information and questions - including: respond to Contractowner inquiries delivery of prospectus - both fund and annuity; entry of initial and subsequent orders; transfer of cash to insurance company and/or funds; explanations of fund objectives and characteristics; entry of transfers between funds; fund balance and allocation inquiries; mail fund prospectus. B. For the services, Schwab shall receive a fee of 0.25% per annum applied to the average daily value of the shares of the fund held by Schwab's customers, payable by the Adviser directly to Schwab, such payments being due and payable within 15 (fifteen) days after the last day of the month to which such payment relates. C. The Fund will calculate and Schwab will verify with FirstGWL&A the asset balance for each day on which the fee is to be paid pursuant to this Agreement with respect to each Designated Portfolio. D. Schwab will communicate all purchase, withdrawal, and exchange orders it receives from its customers to FirstGWL&A who will retransmit them to each fund. SCHEDULE D Reports per Section 6.6 With regard to the reports relating to the quarterly testing of compliance with the requirements of Section 817(h) and Subchapter M under the Internal Revenue Code (the "Code") and the regulations thereunder, the Fund shall provide within twenty (20) Business Days of the close of the calendar quarter a report to FirstGWL&A in the Form D1 attached hereto and incorporated herein by reference, regarding the status under such sections of the Code of the Designated Portfolio(s), and if necessary, identification of any remedial action to be taken to remedy non-compliance. With regard to the reports relating to the year-end testing of compliance with the requirements of Subchapter M of the Code, referred to hereinafter as "RIC status," the Fund will provide the reports on the following basis: (i) the last quarter's quarterly reports can be supplied within the 20-day period, and (ii) a year-end report will be provided 45 days after the end of the calendar year. However, if a problem with regard to RIC status, as defined below, is identified in the third quarter report, on a weekly basis, starting the first week of December, additional interim reports will be provided specially addressing the problems identified in the third quarter report. If any interim report memorializes the cure of the problem, subsequent interim reports will not be required. A problem with regard to RIC status is defined as any violation of the following standards, as referenced to the applicable sections of the Code: (a) Less than ninety percent of gross income is derived from sources of income specified in Section 851(b)(2); (b) Thirty percent or greater gross income is derived from the sale or disposition of assets specified in Section 851(b)(3); (c) Less than fifty percent of the value of total assets consists of assets specified in Section 851(b)(4)(A); and (d) No more than twenty-five percent of the value of total assets is invested in the securities of one issuer, as that requirement is set forth in Section 851(b)(4)(B). FORM D1 CERTIFICATE OF COMPLIANCE I, , a duly authorized officer, director or agent of Fund hereby swear and affirm that Fund is in compliance with all requirements of Section 817(h) and Subchapter M of the Internal Revenue Code (the "Code") and the regulations thereunder as required in the Fund Participation Agreement among First Great-West Life & Annuity Insurance Company, Charles Schwab & Co., Inc. and other than the exceptions discussed below: Exceptions Remedial Action If no exception to report, please indicate "None." Signed this day of , . (Signature) By: (Type or Print Name and Title/Position) SCHEDULE E EXPENSES The Fund and/or Distributor and/or Adviser, and FirstGWL&A will coordinate the functions and pay the costs of the completing these functions based upon an allocation of costs in the tables below. Costs shall be allocated to reflect the Fund's share of the total costs determined according to the number of pages of the Fund's respective portions of the documents. Item Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Prospectus Printing of combined prospectuses FirstGWL&A Fund or Distributor, as applicable Distributor shall supply FirstGWL&A with such numbers of the Designated Portfolio(s) prospectus(es) as FirstGWL&A shall reasonably request FirstGWL&A Fund or Distributor, as applicable Distribution to New and Inforce Clients FirstGWL&A FirstGWL&A Distribution to Prospective Clients Schwab Schwab Product Prospectus Printing for Inforce Clients FirstGWL&A FirstGWL&A Printing for Prospective Clients FirstGWL&A Schwab Distribution to New and Inforce Clients FirstGWL&A FirstGWL&A Distribution to Prospective Clients Schwab SchwabMutual Fund Prospectus Update & Distribution If Required by Fund or Distributor Fund or Distributor Fund or Distributor If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by SchwabSchwab Schwab Product Prospectus Update & Distribution If Required by Fund or Distributor FirstGWL&A Fund or Distributor Item Function Party Responsible for Coordination Party Responsible for Expense If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab Schwab Schwab Mutual Fund SAI Printing Fund or Distributor Fund or Distributor Distribution FirstGWL&A FirstGWL&A Product SAI Printing FirstGWL&A FirstGWL&A Distribution FirstGWL&A FirstGWL&A Item Function Party Responsible for Coordination Party Responsible for Expense Proxy Material for Mutual Fund: Printing if proxy required by Law Fund or Distributor Fund or Distributor Distribution (including labor) if proxy required by Law FirstGWL&A Fund or Distributor Printing & distribution if required by FirstGWL&A FirstGWL&A FirstGWL&A Printing & distribution if required by Schwab FirstGWL&A Schwab Item Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Annual & Semi-Annual Report Printing of combined reports FirstGWL&A Fund or Distributor Distribution FirstGWL&A FirstGWL&A and Schwab Other communication to New and Prospective clients If Required by the Fund or Distributor Schwab Fund orDistributor If Required by FirstGWL&A Schwab FirstGWL&A Item Function Party Responsible for Coordination Party Responsible for Expense If Required by Schwab Schwab SchwabOther communication to inforce Distribution (including labor) if required by the Fund or Distributor FirstGWL&A Fund or Distributor If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab FirstGWL&A Schwab Item Function Party Responsible for Coordination Party Responsible for Expense Errors in Share Price calculation pursuant to Section 1.10 Cost of error to participants FirstGWL&A Fund or Adviser Cost of administrative work to correct error FirstGWL&A Fund or Adviser Operations of the Fund All operations and related expenses, including the cost of registration and qualification of shares, taxes on the issuance or transfer of shares, cost of management of the business affairs of the Fund, and expenses paid or assumed by the fund pursuant to any Rule 12b-1 plan Fund or Distributor Fund or Adviser Operations of the Account Federal registration of units of separate account (24f-2 fees) FirstGWL&A FirstGWL&A EX-8.5 12 EXHIBIT 8.5 FUND PARTICIPATION AGREEMENT INVESCO Variable Investment Funds, Inc. TABLE OF CONTENTS ARTICLE I. Sale of Fund Shares . . . . . . . . . . . . . . . .3 ARTICLE II. Representations and Warranties. . . . . . . . . . .7 ARTICLE III. Prospectuses and Proxy Statements; Voting . . . . 10 ARTICLE IV. Sales Material and Information. . . . . . . . . . 13 ARTICLE V. Fees and Expenses . . . . . . . . . . . . . . . . 15 ARTICLE VI. Diversification and Qualification . . . . . . . . 16 ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order . . . . 20 ARTICLE VIII.Indemnification . . . . . . . . . . . . . . . . . 23 ARTICLE IX. Applicable Law. . . . . . . . . . . . . . . . . . 31 ARTICLE X. Termination . . . . . . . . . . . . . . . . . . . 32 ARTICLE XI. Notices . . . . . . . . . . . . . . . . . . . . . 35 ARTICLE XII. Miscellaneous . . . . . . . . . . . . . . . . . . 36 SCHEDULE A Contracts . . . . . . . . . . . . . . . . . . . . 40 SCHEDULE B Designated Portfolios . . . . . . . . . . . . . . 41 SCHEDULE C Administrative Services . . . . . . . . . . . . . 42 SCHEDULE D Reports per Section 6.6 . . . . . . . . . . . . . 43 SCHEDULE E Expenses. . . . . . . . . . . . . . . . . . . . . 46 PARTICIPATION AGREEMENT Among FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY INVESCO VARIABLE INVESTMENT FUNDS, INC. INVESCO FUNDS GROUP, INC. and CHARLES SCHWAB & CO., INC. THIS AGREEMENT, made and entered into as of this ____ day of _______________, 1997 by and among FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (hereinafter "FirstGWL&A"), a New York life insurance company, on its own behalf and on behalf of its Separate Account Variable Annuity-1 Series Account (the "Account"); INVESCO VARIABLE INVESTMENT FUNDS, INC., a corporation organized under the laws of Maryland (hereinafter the "Fund"); INVESCO FUNDS GROUP, INC. (hereinafter the "Adviser"), a Delaware corporation; and CHARLES SCHWAB & CO., INC., a California corporation (hereinafter "Schwab"). WHEREAS, the Fund engages in business as an open-end management investment company and is available to act as the investment vehicle for separate accounts established for variable life insurance policies and/or variable annuity contracts (collectively, the "Variable Insurance Products") to be offered by insurance companies, including FirstGWL&A, which have entered into participation agreements similar to this Agreement (hereinafter "Participating Insurance Companies"); and WHEREAS, the beneficial interest in the Fund is divided into several series of shares, each designated a "Portfolio" and representing the interest in a particular managed portfolio of securities and other assets; and WHEREAS, the Fund has obtained an order from the Securities and Exchange Commission (hereinafter the "SEC"), dated December 29, 1993, File No. 812-8590, granting Participating Insurance Companies and variable annuity and variable life insurance separate accounts exemptions from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended, (hereinafter the "1940 Act") and Rules 6e- 2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Fund to be sold to and held by variable annuity and variable life insurance separate accounts of life insurance companies that may or may not be affiliated with one another (hereinafter the "Mixed and Shared Funding Exemptive Order"); and WHEREAS, the Fund is registered as an open-end management investment company under the 1940 Act and shares of the Portfolio(s) are registered under the Securities Act of 1933, as amended (hereinafter the "1933 Act"); and WHEREAS, the Adviser is duly registered as an investment adviser under the Investment Advisers Act of 1940, as amended, and any applicable state securities laws; and WHEREAS, FirstGWL&A has registered or will register certain variable annuity contracts supported wholly or partially by the Account (the "Contracts") under the 1933 Act and said Contracts are listed in Schedule A attached hereto and incorporated herein by reference, as it may be amended from time to time by mutual written agreement; and WHEREAS, the Account is a duly organized, validly existing segregated asset account, established by resolution of the Board of Directors of FirstGWL&A on January 15, 1997, to set aside and invest assets attributable to the Contracts; and WHEREAS, FirstGWL&A has registered or will register the Account as a unit investment trust under the 1940 Act and has registered or will register the securities deemed to be issued by the Account under the 1933 Act; and WHEREAS, to the extent permitted by applicable insurance laws and regulations, FirstGWL&A intends to purchase shares in the Portfolio(s) listed in Schedule B attached hereto and incorporated herein by reference, as it may be amended from time to time by mutual written agreement (the "Designated Portfolio(s)"), on behalf of the Account to fund the Contracts, and the Fund is authorized to sell such shares to unit investment trusts such as the Account at net asset value; and WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Account also intends to purchase shares in other open-end investment companies or series thereof not affiliated with the Fund (the "Unaffiliated Funds") on behalf of the Account to fund the Contracts; and WHEREAS, Schwab will perform certain services for the Fund in connection with the Contracts; NOW, THEREFORE, in consideration of their mutual promises, FirstGWL&A, Schwab, the Fund and the Adviser agree as follows: ARTICLE I. Sale of Fund Shares 1.1. The Fund agrees to sell to FirstGWL&A those shares of the Designated Portfolio(s) which the Account orders, executing such orders on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the order for the shares of the Portfolios. For purposes of this Section 1.1, FirstGWL&A shall be the designee of the Fund for receipt of such orders and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such order by 10:00 a.m. Eastern time on the next following Business Day. "Business Day" shall mean any day on which the New York Stock Exchange is open for trading and on which the Fund calculates its net asset value pursuant to the rules of the SEC. 1.2. The Fund agrees to make shares of the Designated Portfolio(s) available for purchase at the applicable net asset value per share by FirstGWL&A and the Account on those days on which the Fund calculates its Designated Portfolio(s)' net asset value pursuant to rules of the SEC, and the Fund shall calculate such net asset value on each day which the New York Stock Exchange is open for trading. Notwithstanding the foregoing, the Board of Directors of the Fund (hereinafter the "Board") may refuse to sell shares of any Portfolio to any person, or suspend or terminate the offering of shares of any Portfolio if such action is required by law or by regulatory authorities having jurisdiction or is, in the sole discretion of the Board acting in good faith and in light of their fiduciary duties under federal and any applicable state laws, necessary in the best interests of the shareholders of such Portfolio. 1.3. The Fund will not sell shares of the Designated Portfolio(s) to any other Participating Insurance Company or separate account unless an agreement containing provisions substantially the same as Sections 2.1, 3.5, 3.6, 3.7, and Article VII of this Agreement is in effect to govern such sales. 1.4. The Fund agrees to redeem for cash, on FirstGWL&A's request, any full or fractional shares of the Fund held by FirstGWL&A, executing such requests on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the request for redemption. Requests for redemption identified by FirstGWL&A, or its agent, as being in connection with surrenders, annuitizations, or death benefits under the Contracts, upon prior written notice, may be executed within seven (7) calendar days after receipt by the Fund or its designee of the requests for redemption. This Section 1.4 may be amended, in writing, by the parties consistent with the requirements of the 1940 Act and interpretations thereof. For purposes of this Section 1.4, FirstGWL&A shall be the designee of the Fund for receipt of requests for redemption and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such request for redemption by 10:00 A.M. Eastern time on the next following Business Day. 1.5. The Parties hereto acknowledge that the arrangement contemplated by this Agreement is not exclusive; the Fund's shares may be sold to other Participating Insurance Companies (subject to Section 1.3 and Article VI hereof) and the cash value of the Con- tracts may be invested in other investment companies. 1.6. FirstGWL&A shall pay for Fund shares by 3:00 p.m. Eastern time on the next Business Day after an order to purchase Fund shares is made in accordance with the provisions of Section 1.1 hereof. Payment shall be in federal funds transmitted by wire and/or by a credit for any shares redeemed the same day as the purchase. 1.7. The Fund shall pay and transmit the proceeds of redemptions of Fund shares by 11:00 a.m. Eastern Time on the next Business Day after a redemption order is received in accordance with Section 1.4 hereof. Payment shall be in federal funds transmitted by wire and/or a credit for any shares purchased the same day as the redemption. 1.8. Issuance and transfer of the Fund's shares will be by book entry only. Stock certificates will not be issued to FirstGWL&A or the Account. Shares ordered from the Fund will be recorded in an appropriate title for the Account or the appropriate sub-account of the Account. 1.9. The Fund shall furnish same day notice (by wire or telephone, followed by written confirmation) to FirstGWL&A of any income, dividends or capital gain distributions payable on the Designated Portfolio(s)' shares. FirstGWL&A hereby elects to receive all such income dividends and capital gain distributions as are payable on the Portfolio shares in additional shares of that Portfolio. FirstGWL&A reserves the right to revoke this election and to receive all such income dividends and capital gain distributions in cash. The Fund shall notify FirstGWL&A by the end of the next following Business Day of the number of shares so issued as payment of such dividends and distributions. 1.10.The Fund shall make the net asset value per share for each Designated Portfolio available to FirstGWL&A on each Business Day as soon as reasonably practical after the net asset value per share is calculated and shall use its best efforts to make such net asset value per share available by 6:00 p.m. Eastern time. In the event of an error in the computation of a Designated Portfolio's net asset value per share ("NAV") or any dividend or capital gain distribution (each, a "pricing error"), the Adviser or the Fund shall immediately notify FirstGWL&A as soon as possible after discovery of the error. Such notification may be verbal, but shall be confirmed promptly in writing in accordance with Article XI of this Agreement. A pricing error shall be corrected as follows: (a) if the pricing error results in a difference between the erroneous NAV and the correct NAV of less than $0.01 per share, then no corrective action need be taken; (b) if the pricing error results in a difference between the erroneous NAV and the correct NAV equal to or greater than $0.01 per share, but less than 1/2 of 1% of the Designated Portfolio's NAV at the time of the error, then the Adviser shall reimburse the Designated Portfolio for any loss, after taking into consideration any positive effect of such error; however, no adjustments to Contractowner accounts need be made; and (c) if the pricing error results in a difference between the erroneous NAV and the correct NAV equal to or greater than 1/2 of 1% of the Designated Portfolio's NAV at the time of the error, then the Adviser shall reimburse the Designated Portfolio for any loss (without taking into consideration any positive effect of such error) and shall reimburse FirstGWL&A for the costs of adjustments made to correct Contractowner accounts in accordance with the provisions of Schedule E. If an adjustment is necessary to correct a material error which has caused Contractowners to receive less than the amount to which they are entitled, the number of shares of the applicable sub-account of such Contractowners will be adjusted and the amount of any underpayments shall be credited by the Adviser to FirstGWL&A for crediting of such amounts to the applicable Contractowners accounts. Upon notification by the Adviser of any overpayment due to a material error, FirstGWL&A or Schwab, as the case may be, shall promptly remit to Adviser any overpayment that has not been paid to Contractowners; however, Adviser acknowledges that Schwab and FirstGWL&A do not intend to seek additional payments from any Contractowner who, because of a pricing error, may have underpaid for units of interest credited to his/her account. In no event shall Schwab or FirstGWL&A be liable to Contractowners for any such adjustments or underpayment amounts. A pricing error within categories (b) or (c) above shall be deemed to be "materially incorrect" or constitute a "material error" for purposes of this Agreement. The standards set forth in this Section 1.10 are based on the Parties' understanding of the views expressed by the staff of the Securities and Exchange Commission ("SEC") as of the date of this Agreement. In the event the views of the SEC staff are later modified or superseded by SEC or judicial interpretation, the parties shall amend the foregoing provisions of this Agreement to comport with the appropriate applicable standards, on terms mutually satisfactory to all Parties. ARTICLE II. Representations and Warranties 2.1. FirstGWL&A represents and warrants that the securities deemed to be issued by the Account under the Contracts are or will be registered under the 1933 Act; that the Contracts will be issued and sold in compliance in all material respects with all applicable federal and state laws and that the sale of the Contracts shall comply in all material respects with state insurance suitability requirements. FirstGWL&A further represents and warrants that it is an insurance company duly organized and in good standing under applicable law and that it has legally and validly established the Account prior to any issuance or sale of units thereof as a segregated asset account under Section 4240 of the New York Insurance Law and has registered the Account as a unit investment trust in accordance with the provisions of the 1940 Act to serve as a segregated investment account for the Contracts. 2.2. The Fund represents and warrants that Designated Portfolio(s) shares sold pursuant to this Agreement shall be registered under the 1933 Act, duly authorized for issuance and sold in compliance with all applicable federal securities laws including without limitation the 1933 Act, the 1934 Act, and the 1940 Act and that the Fund is and shall remain registered under the 1940 Act. The Fund shall amend the registration statement for its shares under the 1933 Act and the 1940 Act from time to time as required in order to effect the continuous offering of its shares. 2.3. The Fund reserves the right to adopt a plan pursuant to Rule 12b-1 under the 1940 Act and to impose an asset-based or other charge to finance distribution expenses as permitted by applicable law and regulation. To the extent that the Fund decides to finance distribution expenses pursuant to Rule 12b-1, the Fund undertakes to have its Board, a majority of whom are not interested persons of the Fund, formulate and approve any plan pursuant to Rule 12b-1 under the 1940 Act to finance distribution expenses. 2.4. The Fund represents and warrants that it will make every effort to ensure that the investment policies, fees and expenses of the Designated Portfolio(s) are and shall at all times remain in compliance with the insurance and other applicable laws of the State of New York and any other applicable state to the extent required to perform this Agreement. The Fund further represents and warrants that it will make every effort to ensure that Designated Portfolio(s) shares will be sold in compliance with all state and federal securities laws and all state insurance laws specifically designated by FirstGWL&A, in writing. The Fund shall register and qualify the shares for sale in accordance with the laws of the various states if and to the extent required by applicable law. FirstGWL&A and the Fund will endeavor to mutually cooperate with respect to the implementation of any modifications necessitated by any change in state insurance laws, regulations or interpretations of the foregoing that affect the Designated Portfolio(s) (a "Law Change"), and to keep each other informed of any Law Change that becomes known to either party. In the event of a Law Change, the Fund agrees that, except in those circumstances where the Fund has advised FirstGWL&A that its Board of Directors has determined that implementation of a particular Law Change is not in the best interest of all of the Fund's shareholders with an explanation regarding why such action is lawful, any action required by a Law Change will be taken. 2.5. The Fund represents and warrants that it is lawfully organized and validly existing under the laws of the State of Maryland and that it does and will comply in all material respects with the 1940 Act. 2.6. The Adviser represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of the State of New York and any applicable state and federal securities laws. 2.7. The Fund and the Adviser represent and warrant that all of their respective officers, employees, investment advisers, and other individuals or entities dealing with the money and/or securities of the Fund are, and shall continue to be at all times, covered by a blanket fidelity bond or similar coverage for the benefit of the Fund in an amount not less than the minimal coverage required by Rule 17g-1 under the 1940 Act or related provisions as may be promulgated from time to time. The aforesaid bond shall include coverage for larceny and embezzlement and shall be issued by a reputable bonding company. 2.8. Schwab represents and warrants that it has completed, obtained and performed, in all material respects, all registrations, filings, approvals, and authorizations, consents and examinations required by any government or governmental authority as may be necessary to perform this Agreement. Schwab does and will comply, in all material respects, with all applicable laws, rules and regulations in the performance of its obligations under this Agreement. 2.9. The Fund will provide FirstGWL&A with as much advance notice as is reasonably practicable of any material change affecting the Designated Portfolio(s) (including, but not limited to, any material change in the registration statement or prospectus affecting the Designated Portfolio(s)) and any proxy solicitation affecting the Designated Portfolio(s) and consult with FirstGWL&A in order to implement any such change in an orderly manner, recognizing the expenses of changes and attempting to minimize such expenses by implementing them in conjunction with regular annual updates of the prospectus for the Contracts. The Fund agrees to share equitably in expenses incurred by FirstGWL&A as a result of actions taken by the Fund, consistent with the allocation of expenses contained in Schedule E attached hereto and incorporated herein by reference. 2.10.FirstGWL&A represents and warrants, for purposes other than diversification under Section 817 of the Internal Revenue Code of 1986 as amended ("the Code"), that the Contracts are currently treated as annuity contracts under applicable provisions of the Code, and that it will make every effort to maintain such treatment and that it will notify Schwab, the Fund and the Adviser immediately upon having a reasonable basis for believing that the Contracts have ceased to be so treated or that they might not be so treated in the future. In addition, FirstGWL&A represents and warrants that the Account is a "segregated asset account" and that interests in the Account are offered exclusively through the purchase of or transfer into a "variable contract" within the meaning of such terms under Section 817 of the Code and the regulations thereunder. FirstGWL&A will use every effort to continue to meet such definitional requirements, and it will notify Schwab, the Fund, and the Adviser immediately upon having a reasonable basis for believing that such requirements have ceased to be met or that they might not be met in the future. ARTICLE III. Prospectuses and Proxy Statements; Voting 3.1. At least annually, the Adviser shall provide FirstGWL&A and Schwab with as many copies of the Fund's current prospectus for the Designated Portfolio(s) as FirstGWL&A and Schwab may reasonably request for marketing purposes (including distribution to Contractowners with respect to new sales of a Contract). If requested by FirstGWL&A in lieu thereof, the Adviser or Fund shall provide such documentation (including a camera-ready copy and computer diskette of the current prospectus for the Designated Portfolio(s)) and other assistance as is reasonably necessary in order for FirstGWL&A once each year (or more frequently if the prospectuses for the Designated Portfolio(s) are amended) to have the prospectus for the Contracts and the Fund's prospectus for the Designated Portfolio(s) printed together in one document. The Fund and Adviser agree that the prospectuses (and semi-annual and annual reports) for the Designated Portfolio(s) will describe only the Designated Portfolio(s) and will not name or describe any other portfolios or series that may be in the Fund unless, in the reasonable judgment of the Fund's counsel, such disclosure is required by law. 3.2. If applicable state or federal laws or regulations require that the Statement of Additional Information ("SAI") for the Fund be distributed to all Contractowners, then the Fund and/or the Adviser shall provide FirstGWL&A with copies of the Fund's SAI or docu- mentation thereof for the Designated Portfolio(s) in such quantities, with expenses to be borne in accordance with Schedule E hereof, as FirstGWL&A may reasonably require to permit timely distribution thereof to Contractowners. The SAIs may name or describe portfolios or series other than the Designated Portfolio(s) that may be in the Fund. The Adviser and/or the Fund shall also provide SAIs to any Contractowner or prospective owner who requests such SAI from the Fund (although it is anticipated that such requests will be made to FirstGWL&A or Schwab). 3.3. The Fund and/or the Adviser shall provide FirstGWL&A and Schwab with copies of the Fund's proxy material, reports to stockholders and other communications to stockholders for the Designated Portfolio(s) in such quantity, with expenses to be borne in accordance with Schedule E hereof, as FirstGWL&A may reasonably require to permit timely distribution thereof to Contractowners. 3.4. It is understood and agreed that, except with respect to information regarding FirstGWL&A or Schwab provided in writing by that party, neither FirstGWL&A nor Schwab are responsible for the content of the prospectus or SAI for the Designated Portfolio(s). It is also understood and agreed that, except with respect to information regarding the Fund, the Adviser or the Designated Portfolio(s) provided in writing by the Fund or the Adviser, neither the Fund nor Adviser are responsible for the content of the prospectus or SAI for the Contracts. 3.5. If and to the extent required by law FirstGWL&A shall: (i) solicit voting instructions from Contractowners; (ii) vote the Designated Portfolio(s) shares in accordance with instructions received from Contractowners: and (iii)vote Designated Portfolio shares for which no instructions have been received in the same proportion as Designated Portfolio(s) shares for which instructions have been received from Contractowners, so long as and to the extent that the SEC continues to interpret the 1940 Act to require pass-through voting privileges for variable contract owners. FirstGWL&A reserves the right to vote Fund shares held in any segregated asset account in its own right, to the extent permitted by law. 3.6. FirstGWL&A shall be responsible for assuring that each of its separate accounts holding shares of a Designated Portfolio calculates voting privileges as directed by the Fund and agreed to by FirstGWL&A and the Fund. The Fund agrees to promptly notify FirstGWL&A of any changes of interpretations or amendments of the Mixed and Shared Funding Exemptive Order. 3.7. The Fund will comply with all provisions of the 1940 Act requiring voting by shareholders, and in particular the Fund will either provide for annual meetings (except insofar as the SEC may interpret Section 16 of the 1940 Act not to require such meetings) or, as the Fund currently intends, comply with Section 16(c) of the 1940 Act (although the Fund is not one of the trusts described in Section 16(c) of that Act) as well as with Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in accordance with the SEC's interpretation of the requirements of Section 16(a) with respect to periodic elections of directors or trustees and with whatever rules the Commission may promulgate with respect thereto. ARTICLE IV. Sales Material and Information 4.1. FirstGWL&A and Schwab shall furnish, or shall cause to be furnished, to the Fund or its designee, a copy of each piece of sales literature or other promotional material that FirstGWL&A or Schwab, respectively, develops or proposes to use and in which the Fund (or a Portfolio thereof), its Adviser or one of its sub-advisers is named in connection with the Contracts, at least ten (10) Business Days prior to its use. No such material shall be used if the Fund objects to such use within five (5) Business Days after receipt of such material. 4.2. FirstGWL&A and Schwab shall not give any information or make any representations or statements on behalf of the Fund in connection with the sale of the Con- tracts other than the information or representations contained in the registration statement or prospectus for the Fund shares, as such registration statement and prospectus may be amended or supplemented from time to time, or in reports or proxy statements for the Fund, or in sales literature or other promotional material approved by the Fund or by the Adviser, except with the permission of the Fund or the Adviser. 4.3. The Fund shall furnish, or shall cause to be furnished, to FirstGWL&A and Schwab, a copy of each piece of sales literature or other promotional material in which FirstGWL&A and/or its separate account(s), or Schwab is named at least ten (10) Business Days prior to its use. No such material shall be used if FirstGWL&A or Schwab objects to such use within five (5) Business Days after receipt of such material. 4.4. The Fund and the Adviser shall not give any information or make any representations on behalf of FirstGWL&A or concerning FirstGWL&A, the Account, or the Contracts other than the information or representations contained in a registration statement or prospectus for the Contracts, as such registration statement and prospectus may be amended or supplemented from time to time, or in reports for the Account, or in sales literature or other promotional material approved by FirstGWL&A or its designee, except with the permission of FirstGWL&A. 4.5. FirstGWL&A, the Fund and the Adviser shall not give any information or make any representations on behalf of or concerning Schwab, or use Schwab's name except with the permission of Schwab. 4.6. The Fund will provide to FirstGWL&A and Schwab at least one complete copy of all registration statements, prospectuses, SAIs, reports, proxy statements, sales literature and other promotional materials, applications for exemptions, requests for no- action letters, and all amendments to any of the above, that relate to the Designated Port- folio(s), contemporaneously with the filing of such document(s) with the SEC or NASD or other regulatory authorities. 4.7. FirstGWL&A or Schwab will provide to the Fund at least one complete copy of all registration statements, prospectuses, SAIs, reports, solicitations for voting instructions, sales literature and other promotional materials, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Contracts or the Account, contemporaneously with the filing of such document(s) with the SEC, NASD, or other regulatory authority. 4.8. For purposes of Articles IV and VIII, the phrase "sales literature and other promotional material" includes, but is not limited to, advertisements (such as material published, or designed for use in, a newspaper, magazine, or other periodical, radio, television, telephone or tape recording, videotape display, signs or billboards, motion pictures, or other public media; e.g., on-line networks such as the Internet or other electronic media), sales literature (i.e., any written communication distributed or made generally available to customers or the public, including brochures, circulars, research reports, market letters, form letters, seminar texts, reprints or excerpts of any other advertisement, sales literature, or published article), educational or training materials or other communications distributed or made generally available to some or all agents or employees, and registration statements, prospectuses, SAIs, shareholder reports, and proxy materials and any other material constituting sales literature or advertising under the NASD rules, 1933 Act or the 1940 Act. 4.9. At the request of any party to this Agreement, each other party will make available to the other party's independent auditors and/or representative of the appropriate regulatory agencies, all records, data and access to operating procedures that may be reasonably requested in connection with compliance and regulatory requirements related to this Agreement or any party's obligations under this Agreement. ARTICLE V. Fees and Expenses 5.1. The Fund shall pay no fee or other compensation to FirstGWL&A under this Agreement, and FirstGWL&A shall pay no fee or other compensation to the Fund or Adviser under this Agreement, although the parties hereto will bear certain expenses in accordance with Schedule E, Articles III, V, and other provisions of this Agreement. 5.2. All expenses incident to performance by the Fund and the Adviser under this Agreement shall be paid by the appropriate party, as further provided in Schedule E. The Fund shall see to it that all shares of the Designated Portfolio(s) are registered and authorized for issuance in accordance with applicable federal law and, if and to the extent required, in accordance with applicable state laws prior to their sale. 5.3. The parties shall bear the expenses of routine annual distribution (mailing costs) of the Fund's prospectus and distribution (mailing costs) of the Fund's proxy materials and reports to owners of Contracts offered by FirstGWL&A, in accordance with Schedule E. 5.4. The Fund and the Adviser acknowledge that a principal feature of the Contracts is the Contractowner's ability to choose from a number of unaffiliated mutual funds (and portfolios or series thereof), including the Designated Portfolio(s) and the Unaffiliated Funds, and to transfer the Contract's cash value between funds and portfolios. The Fund and the Adviser agree to cooperate with FirstGWL&A and Schwab in facilitating the operation of the Account and the Contracts as described in the prospectus for the Contracts, including but not limited to cooperation in facilitating transfers within a Contract(s). 5.5. Schwab agrees to provide certain administrative services, specified in Schedule C attached hereto and incorporated herein by reference, in connection with the arrangements contemplated by this Agreement. The parties acknowledge and agree that the services referred to in this Section 5.5 are recordkeeping, shareholder communication, and other transaction facilitation and processing, and related administrative services only and are not the services of an underwriter or a principal underwriter of the Fund and that Schwab is not an underwriter for the shares of the Designated Portfolio(s), within the meaning of the 1933 Act or the 1940 Act. 5.6. As compensation for the services specified in Schedule C hereto, the Adviser agrees to pay Schwab a monthly Administrative Service Fee based on the percentage per annum on Schedule C hereto applied to the average daily value of the shares of the Designated Portfolio(s) held in the Account with respect to Contracts sold by Schwab. This monthly Administrative Service Fee is due and payable before the 15th (fifteenth) day following the last day of the month to which it relates. ARTICLE VI. Diversification and Qualification 6.1. The Fund and the Adviser represent and warrant that the Fund will at all times sell its shares and invest its assets in such a manner as to ensure that the Contracts will be treated as annuity contracts under the Code, and the regulations issued thereunder. Without limiting the scope of the foregoing, the Fund and Adviser represent and warrant that the Fund and each Designated Portfolio thereof will at all times comply with Section 817(h) of the Code and Treasury Regulation 1.817-5, as amended from time to time, and any Treasury interpretations thereof, relating to the diversification requirements for variable annuity, endowment, or life insurance contracts and any amendments or other modifications or successor provisions to such Section or Regulations. The Fund and the Adviser agree that shares of the Designated Portfolio(s) will be sold only to Participating Insurance Companies and their separate accounts. 6.2. No shares of any Designated Portfolio of the Fund will be sold to the general public. 6.3. The Fund and the Adviser represent and warrant that the Fund and each Designated Portfolio is currently qualified as a Regulated Investment Company under Subchapter M of the Code, and that each Designated Portfolio will maintain such qualification (under Subchapter M or any successor or similar provisions) as long as this Agreement is in effect. 6.4. The Fund or the Adviser will notify FirstGWL&A immediately upon having a reasonable basis for believing that the Fund or any Designated Portfolio has ceased to comply with the aforesaid Section 817(h) diversification or Subchapter M qualification requirements or might not so comply in the future. 6.5. Without in any way limiting the effect of Sections 8.3 and 8.4 hereof and with- out in any way limiting or restricting any other remedies available to FirstGWL&A or Schwab, the Adviser will pay all costs associated with or arising out of any failure, or any anticipated or reasonably foreseeable failure, of the Fund or any Designated Portfolio to comply with Sections 6.1, 6.2, or 6.3 hereof, including all costs associated with reasonable and appropriate corrections or responses to any such failure; such costs may include, but are not limited to, the costs involved in creating, organizing, and registering a new investment company as a funding medium for the Contracts and/or the costs of obtaining whatever regulatory authorizations are required to substitute shares of another investment company for those of the failed Portfolio (including but not limited to an order pursuant to Section 26(b) of the 1940 Act); such costs are to include, but are not limited to, fees and expenses of legal counsel and other advisors to FirstGWL&A and any federal income taxes or tax penalties and interest thereon (or "toll charges" or exactments or amounts paid in settlement) incurred by FirstGWL&A with respect to itself or owners of its Contracts in connection with any such failure. 6.6. The Fund at the Fund's expense shall provide FirstGWL&A or its designee with reports certifying compliance with the aforesaid Section 817(h) diversification and Subchapter M qualification requirements, at the times provided for and substantially in the form attached hereto as Schedule D and incorporated herein by reference; provided, however, that providing such reports does not relieve the Fund of its responsibility for such compliance or of its liability for any non-compliance. 6.7. FirstGWL&A agrees that if the Internal Revenue Service ("IRS") asserts in writing in connection with any governmental audit or review of FirstGWL&A or, to FirstGWL&A's knowledge, or any Contractowner that any Designated Portfolio has failed to comply with the diversification requirements of Section 817(h) of the Code or FirstGWL&A otherwise becomes aware of any facts that could give rise to any claim against the Fund or the Adviser as a result of such a failure or alleged failure: (a) FirstGWL&A shall promptly notify the Fund and the Adviser of such assertion or potential claim; (b) FirstGWL&A shall consult with the Fund and the Adviser as to how to minimize any liability that may arise as a result of such failure or alleged failure; (c) FirstGWL&A shall use its best efforts to minimize any liability of the Fund and the Adviser resulting from such failure, including, without limitation, demonstrating, pursuant to Treasury Regulations, Section 1.817-5(a)(2), to the commissioner of the IRS that such failure was inadvertent; (d) any written materials to be submitted by FirstGWL&A to the IRS, any Contractowner or any other claimant in connection with any of the foregoing proceedings or contests (including, without limitation, any such materials to be submitted to the IRS pursuant to Treasury Regulations, Section 1.817-5(a)(2)) shall be provided by FirstGWL&A to the Fund and the Adviser (together with any supporting information or analysis) within at least two (2) business days prior to submission; (e) FirstGWL&A shall provide the Fund and the Adviser with such cooperation as the Fund and the Adviser shall reasonably request (including, without limitation, by permitting the Fund and the Adviser to review the relevant books and records of FirstGWL&A) in order to facilitate review by the Fund and the Adviser of any written submissions provided to it or its assessment of the validity or amount of any claim against it arising from such failure or alleged failure; (f) FirstGWL&A shall not with respect to any claim of the IRS or any Contractowner that would give rise to a claim against the Fund and the Adviser (i) compromise or settle any claim, (ii) accept any adjustment on audit, or (iii) forego any allowable administrative or judicial appeals, without the express written consent of the Fund and the Adviser, which shall not be unreasonably withheld; provided that, FirstGWL&A shall not be required to appeal any adverse judicial decision unless the Fund and the Adviser shall have provided an opinion of independent counsel to the effect that a reasonable basis exists for taking such appeal; and further provided that the Fund and the Adviser shall bear the costs and expenses, including reasonable attorney's fees, incurred by FirstGWL&A in pursuing such judicial appeals. ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order 7.1. The Board will monitor the Fund for the existence of any material irreconcilable conflict between the interests of the contract owners of all separate accounts investing in the Fund. An irreconcilable material conflict may arise for a variety of reasons, including: (a) an action by any state insurance regulatory authority; (b) a change in applicable federal or state insurance, tax, or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretative letter, or any similar action by insurance, tax, or securities regulatory authorities; (c) an administrative or judicial decision in any relevant proceeding; (d) the manner in which the investments of any Portfolio are being managed; (e) a difference in voting instructions given by variable annuity contract and variable life insurance contract owners or by contract owners of different Participating Insurance Companies; or (f) a decision by a Participating Insurance Company to disregard the voting instructions of contract owners. The Board shall promptly inform FirstGWL&A if it determines that an irreconcilable material conflict exists and the implications thereof. 7.2. FirstGWL&A will report any potential or existing conflicts of which it is aware to the Board. FirstGWL&A will assist the Board in carrying out its responsibilities under the Mixed and Shared Funding Exemptive Order, by providing the Board with all information reasonably necessary for the Board to consider any issues raised. This includes, but is not limited to, an obligation by FirstGWL&A to inform the Board whenever contract owner voting instructions are to be disregarded. Such responsibilities shall be carried out by FirstGWL&A with a view only to the interests of its Contractowners. 7.3. If it is determined by a majority of the Board, or a majority of its directors who are not interested persons of the Fund, the Adviser or any sub-adviser to any of the Designated Portfolios (the "Independent Directors"), that a material irreconcilable conflict exists, FirstGWL&A and other Participating Insurance Companies shall, at their expense and to the extent reasonably practicable (as determined by a majority of the Independent Directors), take whatever steps are necessary to remedy or eliminate the irreconcilable material conflict, up to and including: (1) withdrawing the assets allocable to some or all of the separate accounts from the Fund or any Designated Portfolio and reinvesting such assets in a different investment medium, including (but not limited to) another portfolio of the Fund, or submitting the question whether such segregation should be implemented to a vote of all affected contract owners and, as appropriate, segregating the assets of any appropriate group (i.e., annuity contract owners, life insurance contract owners, or variable contract owners of one or more Participating Insurance Companies) that votes in favor of such segregation, or offering to the affected contract owners the option of making such a change; and (2) establishing a new registered management investment company or managed separate account. 7.4. If a material irreconcilable conflict arises because of a decision by FirstGWL&A to disregard contract owner voting instructions and that decision represents a minority position or would preclude a majority vote, FirstGWL&A may be required, at the Fund's election, to withdraw the Account's investment in the Fund and terminate this Agreement; provided, however that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the Independent Directors. Any such withdrawal and termination must take place within six (6) months after the Fund gives written notice that this provision is being implemented, and until the end of that six month period the Adviser and the Fund shall continue to accept and implement orders by FirstGWL&A for the purchase (and redemption) of shares of the Fund. 7.5. If a material irreconcilable conflict arises because a particular state insurance regulator's decision applicable to FirstGWL&A conflicts with the majority of other state regulators, then FirstGWL&A will withdraw the Account's investment in the Fund and terminate this Agreement within six months after the Board informs FirstGWL&A in writing that it has determined that such decision has created an irreconcilable material conflict; provided, however, that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the disinterested members of the Board. Until the end of the foregoing six month period, the Fund shall continue to accept and implement orders by FirstGWL&A for the purchase (and redemption) of shares of the Fund. 7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority of the Independent Directors shall determine whether any proposed action adequately remedies any irreconcilable material conflict, but in no event will the Fund be required to establish a new funding medium for the Contracts. FirstGWL&A shall not be required by Section 7.3 to establish a new funding medium for the Contracts if an offer to do so has been declined by vote of a majority of Contractowners affected by the irreconcilable material conflict. In the event that the Board determines that any proposed action does not adequately remedy any irreconcilable material conflict, then FirstGWL&A will withdraw the Account's investment in the Fund and terminate this Agreement within six (6) months after the Board informs FirstGWL&A in writing of the foregoing determination; provided, however, that such withdrawal and termination shall be limited to the extent required by any such material irreconcilable conflict as determined by a majority of the Independent Directors. 7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act or the rules promulgated thereunder with respect to mixed or shared funding (as defined in the Mixed and Shared Funding Exemptive Order) on terms and conditions materially different from those contained in the Mixed and Shared Funding Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies, as appropriate, shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable: and (b) Sections 3.5, 3.6, 3.7, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall continue in effect only to the extent that terms and con- ditions substantially identical to such Sections are contained in such Rule(s) as so amended or adopted. ARTICLE VIII. Indemnification 8.1. Indemnification By FirstGWL&A 8.1(a). FirstGWL&A agrees to indemnify and hold harmless the Fund and the Adviser and each of their officers and directors or trustees and each person, if any, who controls the Fund or the Adviser within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.1) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of FirstGWL&A) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in the registration statement or pro- spectus or SAI covering the Contracts or contained in the Contracts or sales literature for the Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or nec- essary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser or Fund for use in the registration statement or prospectus for the Contracts or in the Contracts or sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, pro- spectus or sales literature of the Fund not supplied by FirstGWL&A or persons under its control) or wrongful conduct of FirstGWL&A or persons under its control, with respect to the sale or distribution of the Contracts or Fund Shares; or (iii)arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, or sales literature of the Fund, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such a statement or omission was made in reliance upon information furnished in writing to the Fund by or on behalf of FirstGWL&A; or (iv) arise as a result of any failure by FirstGWL&A to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by FirstGWL&A in this Agreement or arise out of or result from any other material breach of this Agreement by FirstGWL&A, including without limitation Section 2.10 and Section 6.7 hereof, as limited by and in accordance with the provisions of Sections 8.1(b) and 8.1(c) hereof. 8.1(b). FirstGWL&A shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.1(c). FirstGWL&A shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified FirstGWL&A in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify FirstGWL&A of any such claim shall not relieve FirstGWL&A from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that FirstGWL&A has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, FirstGWL&A shall be entitled to participate, at its own expense, in the defense of such action. FirstGWL&A also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from FirstGWL&A to such party of FirstGWL&A's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and FirstGWL&A will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.1(d). The Indemnified Parties will promptly notify FirstGWL&A of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund. 8.2. Indemnification by Schwab 8.2(a). Schwab agrees to indemnify and hold harmless the Fund and the Adviser and each of their officers and directors or trustees and each person, if any, who controls the Fund or Adviser within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.2) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of Schwab) or litigation (including reasonable legal and other expenses), to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of Schwab's dissemination of information regarding the Fund that is both (A) materially incorrect and (B) that was neither contained in the Fund's registration statement or sales literature nor other promotional material of the Fund prepared by the Fund or provided in writing to Schwab, or approved in writing, by or on behalf of the Fund or the Adviser; or (ii) arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in sales literature or other promotional material prepared by Schwab for the Contracts or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser or the Fund or to Schwab by FirstGWL&A for use in the registration statement or prospectus for the Contracts or in the Contracts or sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts; or (iii)arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus or sales literature of the Fund not supplied by Schwab or persons under its control) or wrongful conduct of Schwab or persons under its control, with respect to the sale or distribution of the Contracts; or (iv) arise as a result of any failure by Schwab to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by Schwab in this Agreement or arise out of or result from any other material breach of this Agreement by Schwab; as limited by and in accordance with the provisions of Sections 8.2(b) and 8.2(c) hereof. 8.2(b). Schwab shall not be liable under this indemnification provision with respect to any losses, claims, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.2(c). Schwab shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified Schwab in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify Schwab of any such claim shall not relieve Schwab from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that Schwab has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, Schwab shall be entitled to participate, at its own expense, in the defense of such action. Schwab also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from Schwab to such party of Schwab's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and Schwab will not be liable to such party under this Agreement for any legal or other ex- penses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.2(d). The Indemnified Parties will promptly notify Schwab of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund. 8.3. Indemnification by the Adviser 8.3(a). The Adviser agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their directors and officers and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.3) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Adviser) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Fund or the Adviser (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reli- ance upon and in conformity with information furnished in writing to the Adviser or the Fund by or on behalf of FirstGWL&A or Schwab for use in the registration statement or prospectus for the Fund or in sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or the Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI or sales literature or other promotional material for the Contracts not supplied by the Adviser or persons under its control) or wrongful conduct of the Fund or the Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or (iii)arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, or sales literature covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser or the Fund; or (iv) arise as a result of any failure by the Fund or the Adviser to provide the services and furnish the materials under the terms of this Agreement (in- cluding a failure, whether unintentional or in good faith or otherwise, to com- ply with the diversification and other qualification requirements specified in Article VI of this Agreement); or (v) arise out of or result from any material breach of any representation and/or warranty made by the Fund or the Adviser in this Agreement or arise out of or result from any other material breach of this Agreement by the Adviser or the Fund; or (vi) arise out of or result from the materially incorrect or untimely calculation or reporting of the daily net asset value per share or dividend or capital gain distribution rate; as limited by and in accordance with the provisions of Sections 8.3(b) and 8.3(c) hereof. This indemnification is in addition to and apart from the responsibilities and obligations of the Adviser specified in Article VI hereof. 8.3(b). The Adviser shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.3(c). The Adviser shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Adviser in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Adviser of any such claim shall not relieve the Adviser from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Adviser has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Adviser will be entitled to participate, at its own expense, in the defense thereof. The Adviser also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Adviser to such party of the Adviser's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Adviser will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.3(d). FirstGWL&A and Schwab agree promptly to notify the Adviser of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Account. 8.4. Indemnification By the Fund 8.4(a). The Fund agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their directors and officers and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.4) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Fund) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may be required to pay or become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements, are related to the operations of the Fund and: (i) arise as a result of any failure by the Fund to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agree- ment); or (ii) arise out of or result from any material breach of any representation and/or warranty made by the Fund in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund; 8.4(b). The Fund shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.4(c). The Fund shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Fund in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Fund of any such claim shall not relieve it from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Fund has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Fund will be entitled to participate, at its own expense, in the defense thereof. The Fund shall also be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Fund to such party of the Fund's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Fund will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.4(d). FirstGWL&A and Schwab each agree promptly to notify the Fund of the commencement of any litigation or proceeding against itself or any of its respective officers or directors in connection with the Agreement, the issuance or sale of the Contracts, the operation of the Account, or the sale or acquisition of shares of the Fund. ARTICLE IX. Applicable Law 9.1. This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the State of New York, without regard to the New York Conflict of Laws provisions. 9.2. This Agreement shall be subject to the provisions of the 1933, 1934 and 1940 Acts, and the rules and regulations and rulings thereunder, including such exemptions from those statutes, rules and regulations as the Securities and Exchange Commission may grant (including, but not limited to, the Mixed and Shared Funding Exemptive Order) and the terms hereof shall be interpreted and construed in accordance therewith. ARTICLE X. Termination 10.1.This Agreement shall terminate: (a) at the option of any party, with or without cause, with respect to some or all Portfolios, upon six (6) months advance written notice delivered to the other parties; provided, however, that such notice shall not be given earlier than six (6) months following the date of this Agreement; or (b) at the option of FirstGWL&A or Schwab by written notice to the other parties with respect to any Portfolio based upon FirstGWL&A's or Schwab's reasonable determination that shares of such Portfolio are not reasonably available to meet the requirements of the Contracts; or (c) at the option of FirstGWL&A or Schwab by written notice to the other parties with respect to any Portfolio in the event any of the Portfolio's shares 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 FirstGWL&A; or (d) at the option of the Fund in the event that formal administrative proceedings are instituted against FirstGWL&A or Schwab by the NASD, the SEC, the Insurance Commissioner or like official of any state or any other regulatory body regarding FirstGWL&A's or Schwab's duties under this Agreement or related to the sale of the Contracts, the operation of any Account, or the purchase of the Fund shares, if, in each case, the Fund reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of FirstGWL&A or Schwab to perform its obligations under this Agreement or related to the Contracts; or (e) at the option of FirstGWL&A or Schwab in the event that formal administrative proceedings are instituted against the Fund or the Adviser by the NASD, the SEC, or any state securities or insurance department or any other regulatory body, if Schwab or FirstGWL&A reasonably 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 Fund or the Adviser to perform their obligations under this Agreement; or (f) at the option of FirstGWL&A by written notice to the Fund with respect to any Portfolio if FirstGWL&A reasonably believes that the Portfolio will fail to meet the Section 817(h) diversification requirements or Subchapter M qualifications specified in Article VI hereof; or (g) at the option of either the Fund or the Adviser, if (i) the Fund or Adviser, respectively, shall determine, in their sole judgment reasonably exercised in good faith, that either FirstGWL&A or Schwab has suffered a material adverse change in their business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on FirstGWL&A's or Schwab's ability to perform its obligations under this Agreement, (ii) the Fund or the Adviser notifies FirstGWL&A or Schwab, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by FirstGWL&A or Schwab and any other changes in circumstances since the giving of such a notice, the determination of the Fund or the Adviser shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or (h) at the option of either FirstGWL&A or Schwab, if (i) FirstGWL&A or Schwab, respectively, shall determine, in its sole judgment reasonably exercised in good faith, that either the Fund or the Adviser has suffered a material adverse change in its business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on the Fund's or the Adviser's ability to perform its obligations under this Agreement, (ii) FirstGWL&A or Schwab notifies the Fund or the Adviser, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by the Fund or the Adviser and any other changes in circumstances since the giving of such a notice, the determination of FirstGWL&A or Schwab shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or (i) at the option of FirstGWL&A in the event that formal administrative proceedings are instituted against Schwab by the NASD, the Securities and Exchange Commission, or any state securities or insurance department or any other regulatory body regarding Schwab's duties under this Agreement or related to the sale of the Fund's shares or the Contracts, the operation of any Account, or the purchase of the Fund shares, provided, however, that FirstGWL&A determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of Schwab to perform its obligations related to the Contracts; or (j) at the option of Schwab in the event that formal administrative proceedings are instituted against FirstGWL&A by the NASD, the Securities and Exchange Commission, or any state securities or insurance department or any other regulatory body regarding FirstGWL&A's duties under this Agreement or related to the sale of the Fund's shares or the Contracts, the operation of any Account, or the purchase of the Fund shares, provided, however, that Schwab determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of FirstGWL&A to perform its obligations related to the Contracts; or (k) at the option of any non-defaulting party hereto in the event of a material breach of this Agreement by any party hereto (the "defaulting party") other than as described in 10.1(a)-(j); provided, that the non-defaulting party gives written notice thereof to the defaulting party, with copies of such notice to all other non-defaulting parties, and if such breach shall not have been remedied within thirty (30) days after such written notice is given, then the non- defaulting party giving such written notice may terminate this Agreement by giving thirty (30) days written notice of termination to the defaulting party. 10.2.Notice Requirement. No termination of this Agreement shall be effective unless and until the party terminating this Agreement gives prior written notice to all other parties of its intent to terminate, which notice shall set forth the basis for the termination. Furthermore, (a) in the event any termination is based upon the provisions of Article VII, or the provisions of Section 10.1(a), 10.1(g) or 10.1(h) of this Agreement, the prior written notice shall be given in advance of the effective date of termination as required by those provisions unless such notice period is shortened by mutual written agreement of the parties; (b) in the event any termination is based upon the provisions of Section 10.1(d), 10.1(e), 10.1(i) or 10.1(j) of this Agreement, the prior written notice shall be given at least sixty (60) days before the effective date of termination; and (c) in the event any termination is based upon the provisions of Section 10.1(b), 10.1(c) or 10.1(f), the prior written notice shall be given in advance of the effective date of termination, which date shall be determined by the party sending the notice. 10.3.Effect of Termination. Notwithstanding any termination of this Agreement, other than as a result of a failure by either the Fund or FirstGWL&A to meet Section 817(h) of the Code diversification requirements, the Fund and the Adviser shall, at the option of FirstGWL&A or Schwab, continue to make available additional shares of the Designated Portfolios pursuant to the terms and conditions of this Agreement, for all Contracts in effect on the effective date of termination of this Agreement (hereinafter referred to as "Existing Contracts"). Specifically, without limitation, the owners of the Existing Contracts shall be permitted to reallocate investments in the Designated Portfolios, redeem investments in the Designated Portfolios and/or invest in the Designated Portfolios upon the making of additional purchase payments under the Existing Contracts. The parties agree that this Section 10.3 shall not apply to any terminations under Article VII and the effect of such Article VII terminations shall be governed by Article VII of this Agreement. 10.4.Surviving Provisions. Notwithstanding any termination of this Agreement, each party's obligations under Article VIII to indemnify other parties shall survive and not be affected by any termination of this Agreement. In addition, with respect to Existing Contracts, all provisions of this Agreement shall also survive and not be affected by any termination of this Agreement. 10.5.Survival of Agreement. A termination by Schwab shall terminate this Agreement only as to Schwab, and this Agreement shall remain in effect as to the other par- ties; provided, however, that in the event of a termination by Schwab the other parties shall have the option to terminate this Agreement upon 60 (sixty) days notice, rather than the six (6) months specified in Section 10.1(a). ARTICLE XI. Notices Any notice shall be sufficiently given when sent by registered or certified mail to the other party at the address of such party set forth below or at such other address as such party may from time to time specify in writing to the other party. If to the Fund: INVESCO Variable Investment Funds, Inc. 7800 East Union Avenue, Suite 800 Denver, CO 80237 Attention: General Counsel If to FirstGWL&A: First Great-West Life & Annuity Insurance Company 8515 East Orchard Road Englewood, CO 80111 Attention:Assistant Vice President, Savings Products If to the Adviser: INVESCO Funds Group, Inc. 7800 East Union Avenue, Suite 800 Denver, CO 80237 Attention: General Counsel If to Schwab: Charles Schwab & Co., Inc. 101 Montgomery Street San Francisco, CA 94104 Attention: General Counsel ARTICLE XII. Miscellaneous 12.1.Subject to the requirements of legal process and regulatory authority, each party hereto shall treat as confidential the names and addresses of the owners of the Contracts and all information reasonably identified as confidential in writing by any other party hereto and, except as permitted by this Agreement, shall not disclose, disseminate or utilize such names and addresses and other confidential information without the express written consent of the affected party until such time as such information may come into the public domain. Without limiting the foregoing, no party hereto shall disclose any information that another party has designated as proprietary. 12.2.The captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provisions hereof or otherwise affect their construction or effect. 12.3.This Agreement may be executed simultaneously in two or more counterparts, each of which taken together shall constitute one and the same instrument. 12.4.If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby. 12.5.Each party hereto shall cooperate with each other party and all appropriate governmental authorities (including without limitation the SEC, the NASD and state insurance regulators) and shall permit such authorities reasonable access to its books and records in connection with any investigation or inquiry relating to this Agreement or the transactions contemplated hereby. Notwithstanding the generality of the foregoing, each party hereto further agrees to furnish the New York Insurance Commissioner with any information or reports in connection with services provided under this Agreement which such Commissioner may request in order to ascertain whether the variable annuity operations of FirstGWL&A are being conducted in a manner consistent with the New York Variable Annuity Regulations and any other applicable law or regulations. 12.6.Any controversy or claim arising out of or relating to this Agreement, or breach thereof, may be settled by arbitration in a forum jointly selected by the relevant parties (but if applicable law requires some other forum, then such other forum) in accordance with the Commercial Arbitration Rules of the American Arbitration Association, or other arbitration rules as mutually agreed upon by the relevant parties, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. 12.7.The rights, remedies and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies and obligations, at law or in equity, which the parties hereto are entitled to under state and federal laws. 12.8.This Agreement or any of the rights and obligations hereunder may not be assigned by any party without the prior written consent of all parties hereto. 12.9.Schwab and FirstGWL&A are hereby expressly put on notice of the limitation of liability as set forth in the Articles of Incorporation of the Fund and the Adviser and agree that the obligations assumed by the Fund and the Adviser pursuant to this Agreement shall be limited in any case to the Fund and Adviser and their respective assets and neither Schwab nor FirstGWL&A shall seek satisfaction of any such obligation from the shareholders of the Fund or the Adviser, the Trustees, officers, employees or agents of the Fund or Adviser, or any of them, except to the extent permitted under this Agreement. 12.10.The Fund and the Adviser agree that the obligations assumed by FirstGWL&A and Schwab pursuant to this Agreement shall be limited in any case to FirstGWL&A and Schwab and their respective assets and neither the Fund nor the Adviser shall seek satisfaction of any such obligation from the shareholders of the FirstGWL&A or Schwab, the directors, officers, employees or agents of the FirstGWL&A or Schwab, or any of them, except to the extent permitted under this Agreement. 12.11.No provision of this Agreement may be deemed or construed to modify or supersede any contractual rights, duties, or indemnifications, as between the Adviser and the Fund. IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in its name and on its behalf by its duly authorized representative and its seal to be hereunder affixed hereto as of the date specified below. FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY By its authorized officer, By:/s/ Robert K. Shaw Title: Vice President, Marketing & Product Development Date: April 1, 1997 INVESCO VARIABLE INVESTMENT FUNDS, INC. By its authorized officer, By:/s/ Ronald Grooms Title: Treasurer Date: March 10, 1997 INVESCO FUNDS GROUP, INC.: By its authorized officer, By:/s/ Ronald Grooms Title: Senior Vice President and Treasurer Date: March 10, 1997 CHARLES SCHWAB & CO., INC. By its authorized officer, By:/s/ Jeff Benton Title:Vice President, Annuities & Life Insurance Date:March 31, 1997 Schwab Variable Annuity SCHEDULE A Contracts Form Numbers First Great-West Life & Annuity Insurance Company Group Variable/Fixed Annuity Contract J434NY SCHEDULE B Designated Portfolios INVESCO VIF-Industrial Income Portfolio INVESCO VIF-Total Return Portfolio INVESCO VIF-High Yield Portfolio SCHEDULE C Administrative Services To be performed by Charles Schwab & Co., Inc. A. Schwab will provide the properly registered and licensed personnel and systems needed for all customer servicing and support - for both fund and annuity information and questions - including: respond to Contractowner inquiries delivery of prospectus - both fund and annuity; entry of initial and subsequent orders; transfer of cash to insurance company and/or funds; explanations of fund objectives and characteristics; entry of transfers between funds; fund balance and allocation inquiries; mail fund prospectus. B. For the services, Schwab shall receive a fee of 0.25% per annum applied to the average daily value of the shares of the fund held by Schwab's customers, payable by the Adviser directly to Schwab, such payments being due and payable within 15 (fifteen) days after the last day of the month to which such payment relates. C. The Fund will calculate and Schwab will verify with FirstGWL&A the asset balance for each day on which the fee is to be paid pursuant to this Agreement with respect to each Designated Portfolio. D. Schwab will communicate all purchase, withdrawal, and exchange orders it receives from its customers to FirstGWL&A who will retransmit them to each fund. SCHEDULE D Reports per Section 6.6 With regard to the reports relating to the quarterly testing of compliance with the requirements of Section 817(h) and Subchapter M under the Internal Revenue Code (the "Code") and the regulations thereunder, the Fund shall provide within twenty (20) Business Days of the close of the calendar quarter a report to FirstGWL&A in the Form D1 attached hereto and incorporated herein by reference, regarding the status under such sections of the Code of the Designated Portfolio(s), and if necessary, identification of any remedial action to be taken to remedy non-compliance. With regard to the reports relating to the year-end testing of compliance with the requirements of Subchapter M of the Code, referred to hereinafter as "RIC status," the Fund will provide the reports on the following basis: (i) the last quarter's quarterly reports can be supplied within the 20-day period, and (ii) a year-end report will be provided 45 days after the end of the calendar year. However, if a problem with regard to RIC status, as defined below, is identified in the third quarter report, on a weekly basis, starting the first week of December, additional interim reports will be provided specially addressing the problems identified in the third quarter report. If any interim report memorializes the cure of the problem, subsequent interim reports will not be required. A problem with regard to RIC status is defined as any violation of the following standards, as referenced to the applicable sections of the Code: (a) Less than ninety percent of gross income is derived from sources of income specified in Section 851(b)(2); (b) Thirty percent or greater gross income is derived from the sale or disposition of assets specified in Section 851(b)(3); (c) Less than fifty percent of the value of total assets consists of assets specified in Section 851(b)(4)(A); and (d) No more than twenty-five percent of the value of total assets is invested in the securities of one issuer, as that requirement is set forth in Section 851(b)(4)(B). FORM D1 CERTIFICATE OF COMPLIANCE I, , a duly authorized officer, director or agent of Fund hereby swear and affirm that Fund is in compliance with all requirements of Section 817(h) and Subchapter M of the Internal Revenue Code (the "Code") and the regulations thereunder as required in the Fund Participation Agreement among First Great-West Life & Annuity Insurance Company, Charles Schwab & Co., Inc. and other than the exceptions discussed below: Exceptions Remedial Action If no exception to report, please indicate "None." Signed this day of , . (Signature) By: (Type or Print Name and Title/Position) SCHEDULE E EXPENSES The Fund and/or Adviser, and FirstGWL&A will coordinate the functions and pay the costs of the completing these functions based upon an allocation of costs in the tables below. Costs shall be allocated to reflect the Fund's share of the total costs determined according to the number of pages of the Fund's respective portions of the documents. Item Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Prospectus Printing of combined prospectuses FirstGWL&A Fund or Adviser, as applicable Fund or Adviser shall supply FirstGWL&A with such numbers of the Designated Portfolio(s) prospectus(es) as FirstGWL&A shall reasonably request FirstGWL&A Fund or Adviser, as applicable Distribution to New and Inforce Clients FirstGWL&A FirstGWL&A Distribution to Prospective Clients Schwab Schwab Product Prospectus Printing for Inforce Clients FirstGWL&A FirstGWL&A Printing for Prospective Clients FirstGWL&A Schwab Distribution to New and Inforce Clients FirstGWL&A FirstGWL&A Distribution to Prospective Clients Schwab SchwabItem Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Prospectus Update & Distribution If Required by Fund or Adviser Fund or Adviser Fund or Adviser If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab Schwab Schwab Product Prospectus Update & Distribution If Required by Fund or Adviser FirstGWL&A Fund or Adviser Item Function Party Responsible for Coordination Party Responsible for Expense If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab Schwab Schwab Mutual Fund SAI Printing Fund or Adviser Fund or Adviser Distribution FirstGWL&A FirstGWL&A Product SAI Printing FirstGWL&A FirstGWL&A Distribution FirstGWL&A FirstGWL&A Item Function Party Responsible for Coordination Party Responsible for Expense Proxy Material for Mutual Fund: Printing if proxy required by Law Fund or Adviser Fund or Adviser Distribution (including labor) if proxy required by Law FirstGWL&A Fund or Adviser Printing & distribution if required by FirstGWL&A FirstGWL&A FirstGWL&A Printing & distribution if required by Schwab FirstGWL&A Schwab Item Function Party Responsible for Coordination Party Responsible or Expense Mutual Fund Annual & Semi-Annual Report Printing of combined reports FirstGWL&A Fund or Adviser Distribution FirstGWL&A FirstGWL&A and Schwab Other communication to New and Prospective clients If Required by the Fund or Adviser Schwab Fund or Adviser If Required by FirstGWL&A Schwab FirstGWL&A Item Function Party Responsible for Coordination Party Responsible for Expense If Required by Schwab Schwab Schwab Other communication to inforce Distribution (including labor) if required by the Fund or Adviser FirstGWL&A Fund or Adviser If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab FirstGWL&A Schwab Item Function Party Responsible for Coordination Party Responsible for Expense Errors in Share Price calculation pursuant to Section 1.10 Cost of error to participants FirstGWL&A Fund or Adviser Cost of administrative work to correct error FirstGWL&A Fund or Adviser Operations of the Fund All operations and related expenses, including the cost of registration and qualification of shares, taxes on the issuance or transfer of shares, cost of management of the business affairs of the Fund, and expenses paid or assumed by the fund pursuant to any Rule 12b-1 plan Fund or Adviser Fund or Adviser Operations of the Account Federal registration of units of separate account (24f-2 fees) FirstGWL&A FirstGWL&A EX-8.6 13 EXHIBIT 8.6 FUND PARTICIPATION AGREEMENT Janus Aspen Series TABLE OF CONTENTS ARTICLE I. Sale of Fund Shares . . . . . . . . . . . . . . . .3 ARTICLE II. Representations and Warranties. . . . . . . . . . .7 ARTICLE III. Prospectuses and Proxy Statements; Voting . . . . 10 ARTICLE IV. Sales Material and Information. . . . . . . . . . 13 ARTICLE V. Fees and Expenses . . . . . . . . . . . . . . . . 16 ARTICLE VI. Diversification and Qualification . . . . . . . . 17 ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order . . . . 20 ARTICLE VIII.Indemnification . . . . . . . . . . . . . . . . . 23 ARTICLE IX. Applicable Law. . . . . . . . . . . . . . . . . . 32 ARTICLE X. Termination . . . . . . . . . . . . . . . . . . . 33 ARTICLE XI. Notices . . . . . . . . . . . . . . . . . . . . . 36 ARTICLE XII. Miscellaneous . . . . . . . . . . . . . . . . . . 37 SCHEDULE A Contracts . . . . . . . . . . . . . . . . . . . . 41 SCHEDULE B Designated Portfolios . . . . . . . . . . . . . . 42 SCHEDULE D Reports per Section 6.6 . . . . . . . . . . . . . 43 SCHEDULE E Expenses. . . . . . . . . . . . . . . . . . . . . 45 PARTICIPATION AGREEMENT Among FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY JANUS ASPEN SERIES, JANUS CAPITAL CORPORATION and CHARLES SCHWAB & CO., INC. THIS AGREEMENT, made and entered into as of this ____ day of _______________, 1997 by and among FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (hereinafter "FirstGWL&A"), a New York life insurance company, on its own behalf and on behalf of its Separate Account Variable Annuity-1 Series Account (the "Account"); JANUS ASPEN SERIES, a business trust organized under the laws of Delaware (hereinafter the "Fund"); JANUS CAPITAL CORPORATION (hereinafter the "Adviser"), a Colorado corporation; and CHARLES SCHWAB & CO., INC., a California corporation (hereinafter "Schwab"). WHEREAS, the Fund engages in business as an open-end management investment company and is available to act as the investment vehicle for separate accounts established for variable life insurance policies and/or variable annuity contracts (collectively, the "Variable Insurance Products") to be offered by insurance companies, including FirstGWL&A, which have entered into participation agreements similar to this Agreement (hereinafter "Participating Insurance Companies") and certain qualified pension and retirement plans; and WHEREAS, the beneficial interest in the Fund is divided into several series of shares, each designated a "Portfolio" and representing the interest in a particular managed portfolio of securities and other assets; and WHEREAS, the Fund has obtained an order from the Securities and Exchange Commission (hereinafter the "SEC"), dated March 12, 1994 (File No. 812-8408), granting Participating Insurance Companies and variable annuity and variable life insurance separate accounts exemptions from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended, (hereinafter the "1940 Act") and Rules 6e- 2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Fund to be sold to and held by variable annuity and variable life insurance separate accounts of life insurance companies that may or may not be affiliated with one another and certain qualified pension and retirement plans ("Qualified Plans") (hereinafter the "Mixed and Shared Funding Exemptive Order"); and WHEREAS, the Fund is registered as an open-end management investment company under the 1940 Act and shares of the Portfolio(s) are registered under the Securities Act of 1933, as amended (hereinafter the "1933 Act"); and WHEREAS, the Adviser is duly registered as an investment adviser under the Investment Advisers Act of 1940, as amended, and any applicable state securities laws; and WHEREAS, FirstGWL&A has registered or will register certain variable annuity contracts supported wholly or partially by the Account (the "Contracts") under the 1933 Act and said Contracts are listed in Schedule A attached hereto and incorporated herein by reference, as it may be amended from time to time by mutual written agreement; and WHEREAS, the Account is a duly organized, validly existing segregated asset account, established by resolution of the Board of Directors of FirstGWL&A on January 15, 1997, to set aside and invest assets attributable to the Contracts; and WHEREAS, FirstGWL&A has registered or will register the Account as a unit investment trust under the 1940 Act and has registered or will register the securities deemed to be issued by the Account under the 1933 Act; and WHEREAS, to the extent permitted by applicable insurance laws and regulations, FirstGWL&A intends to purchase shares in the Portfolio(s) listed in Schedule B attached hereto and incorporated herein by reference, as it may be amended from time to time by mutual written agreement (the "Designated Portfolio(s)"), on behalf of the Account to fund the Contracts, and the Fund is authorized to sell such shares to unit investment trusts such as the Account at net asset value; and WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Account also intends to purchase shares in other open-end investment companies or series thereof not affiliated with the Fund (the "Unaffiliated Funds") on behalf of the Account to fund the Contracts; and WHEREAS, Schwab will perform certain services for the Fund in connection with the Contracts pursuant to a separate Service Agreement; NOW, THEREFORE, in consideration of their mutual promises, FirstGWL&A, Schwab, the Fund and the Adviser agree as follows: ARTICLE I. Sale of Fund Shares 1.1. The Fund agrees to sell to FirstGWL&A those shares of the Designated Portfolio(s) which the Account orders, executing such orders on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the order for the shares of the Portfolios. For purposes of this Section 1.1, FirstGWL&A shall be the designee of the Fund for receipt of such orders and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such order by 10:00 a.m. Eastern time on the next following Business Day. "Business Day" shall mean any day on which the New York Stock Exchange is open for trading and on which the Fund calculates its net asset value pursuant to the rules of the SEC. 1.2. The Fund agrees to make shares of the Designated Portfolio(s) available for purchase at the applicable net asset value per share by FirstGWL&A and the Account on those days on which the Fund calculates its Designated Portfolio(s)' net asset value pursuant to rules of the SEC, and the Fund shall calculate such net asset value on each day which the New York Stock Exchange is open for trading. Notwithstanding the foregoing, the Board of Trustees of the Fund (hereinafter the "Board") may refuse to sell shares of any Portfolio to any person, or suspend or terminate the offering of shares of any Portfolio if such action is required by law or by regulatory authorities having jurisdiction or is, in the sole discretion of the Board acting in good faith and in light of their fiduciary duties under federal and any applicable state laws, necessary in the best interests of the shareholders of such Portfolio. 1.3. The Fund will not sell shares of the Designated Portfolio(s) to any other Participating Insurance Company, separate account or any Qualified Plan unless an agreement containing provisions substantially the same as Sections 2.1, 3.6, 3.7, 3.8, and Article VII of this Agreement is in effect to govern such sales. 1.4. The Fund agrees to redeem for cash, on FirstGWL&A's request, any full or fractional shares of the Fund held by FirstGWL&A, executing such requests on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the request for redemption. To the extent permitted by the 1940 Act, requests for redemption identified by FirstGWL&A, or its agent, as being in connection with surrenders, annuitizations, or death benefits under the Contracts, upon prior written notice, may be executed within seven (7) calendar days after receipt by the Fund or its designee of the requests for redemption. This Section 1.4 may be amended, in writing, by the parties consistent with the requirements of the 1940 Act and interpretations thereof. For purposes of this Section 1.4, FirstGWL&A shall be the designee of the Fund for receipt of requests for redemption and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such request for redemption by 10:00 A.M. Eastern time on the next following Business Day. 1.5. The Parties hereto acknowledge that the arrangement contemplated by this Agreement is not exclusive; the Fund's shares may be sold to other Participating Insurance Companies and Qualified Plans (subject to Section 1.3 and Article VI hereof) and the cash value of the Contracts may be invested in other investment companies. 1.6. FirstGWL&A shall pay for Fund shares by 11:00 a.m. Eastern time on the same Business Day that the Fund receives notice of the order in accordance with the provisions of Section 1.1 hereof. Payment shall be in federal funds transmitted by wire and/or by a credit for any shares redeemed the same day as the purchase. 1.7. The Fund shall pay and transmit the proceeds of redemptions of Fund shares by 2:00 a.m. Eastern Time on the same Business Day a redemption order is received in accordance with Section 1.4 hereof. Payment shall be in federal funds transmitted by wire and/or a credit for any shares purchased the same day as the redemption. 1.8. Issuance and transfer of the Fund's shares will be by book entry only. Stock certificates will not be issued to FirstGWL&A or the Account. Shares ordered from the Fund will be recorded in an appropriate title for the Account or the appropriate sub-account of the Account. 1.9. The Fund shall furnish same day notice (by wire or telephone, followed by written confirmation) to FirstGWL&A of any income, dividends or capital gain distributions payable on the Designated Portfolio(s)' shares. FirstGWL&A hereby elects to receive all such income dividends and capital gain distributions as are payable on the Portfolio shares in additional shares of that Portfolio. FirstGWL&A reserves the right to revoke this election and to receive all such income dividends and capital gain distributions in cash. The Fund shall notify FirstGWL&A by the end of the next following Business Day of the number of shares so issued as payment of such dividends and distributions. 1.10.The Fund shall make the net asset value per share for each Designated Portfolio available to FirstGWL&A on each Business Day as soon as reasonably practical after the net asset value per share is calculated and shall use its best efforts to make such net asset value per share available by 6:00 p.m. Eastern time. In the event of an error in the computation of a Designated Portfolio's net asset value per share ("NAV") or any dividend or capital gain distribution (each, a "pricing error"), the Adviser or the Fund shall immediately notify FirstGWL&A as soon as possible after discovery of the error. Such notification may be verbal, but shall be confirmed promptly in writing in accordance with Article XI of this Agreement. A pricing error shall be corrected as follows: (a) if the pricing error results in a difference between the erroneous NAV and the correct NAV of less than $0.01 per share, then no corrective action need be taken; (b) if the pricing error results in a difference between the erroneous NAV and the correct NAV equal to or greater than $0.01 per share, but less than 1/2 of 1% of the Designated Portfolio's NAV at the time of the error, then the Adviser shall reimburse the Designated Portfolio for any loss, after taking into consideration any positive effect of such error; however, no adjustments to Contractowner accounts need be made; and (c) if the pricing error results in a difference between the erroneous NAV and the correct NAV equal to or greater than 1/2 of 1% of the Designated Portfolio's NAV at the time of the error, then the Adviser shall reimburse the Designated Portfolio for any loss (without taking into consideration any positive effect of such error) and shall reimburse FirstGWL&A for the costs of adjustments made to correct Contractowner accounts in accordance with the provisions of Schedule E. If an adjustment is necessary to correct a material error which has caused Contractowners to receive less than the amount to which they are entitled, the number of shares of the applicable sub-account of such Contractowners will be adjusted and the amount of any underpayments shall be credited by the Adviser to FirstGWL&A for crediting of such amounts to the applicable Contractowners accounts. Upon notification by the Adviser of any overpayment due to a material error, FirstGWL&A or Schwab, as the case may be, shall promptly remit to Adviser any overpayment that has not been paid to Contractowners; however, Adviser acknowledges that Schwab and FirstGWL&A do not intend to seek additional payments from any Contractowner who, because of a pricing error, may have underpaid for units of interest credited to his/her account. In no event shall Schwab or FirstGWL&A be liable to Contractowners for any such adjustments or underpayment amounts. A pricing error within categories (b) or (c) above shall be deemed to be "materially incorrect" or constitute a "material error" for purposes of this Agreement. The standards set forth in this Section 1.10 are based on the Parties' understanding of the views expressed by the staff of the Securities and Exchange Commission ("SEC") as of the date of this Agreement. In the event the views of the SEC staff are later modified or superseded by SEC or judicial interpretation, the parties shall amend the foregoing provisions of this Agreement to comport with the appropriate applicable standards, on terms mutually satisfactory to all Parties. ARTICLE II. Representations and Warranties 2.1. FirstGWL&A represents and warrants that the securities deemed to be issued by the Account under the Contracts are or will be registered under the 1933 Act; that the Contracts will be issued and sold in compliance in all material respects with all applicable federal and state laws and that the sale of the Contracts shall comply in all material respects with state insurance suitability requirements. FirstGWL&A further represents and warrants that it is an insurance company duly organized and in good standing under applicable law and that it has legally and validly established the Account prior to any issuance or sale of units thereof as a segregated asset account under Section 4240 of the New York Insurance Law and has registered the Account as a unit investment trust in accordance with the provisions of the 1940 Act to serve as a segregated investment account for the Contracts. FirstGWL&A shall amend the Contracts' registration statement under the 1933 Act and the Account's registration statement under the 1940 Act from time to time as required in order to effect the continuous offering of the Contracts. FirstGWL&A shall register and qualify the Contracts for sale in accordance with the securities laws of the various states if and to the extent required by applicable law. 2.2. The Fund represents and warrants that Designated Portfolio(s) shares sold pursuant to this Agreement shall be registered under the 1933 Act, duly authorized for issuance and sold in compliance with all applicable federal securities laws including without limitation the 1933 Act, the 1934 Act, and the 1940 Act and that the Fund is and shall remain registered under the 1940 Act. The Fund shall amend the registration statement for its shares under the 1933 Act and the 1940 Act from time to time as required in order to effect the continuous offering of its shares. 2.3. The Fund reserves the right to adopt a plan pursuant to Rule 12b-1 under the 1940 Act and to impose an asset-based or other charge to finance distribution expenses as permitted by applicable law and regulation. In any event, the Fund and Adviser agree to comply with applicable provisions and SEC staff interpretations of the 1940 Act to assure that the investment advisory or management fees paid to the Adviser by the Fund are in accordance with the requirements of the 1940 Act. To the extent that the Fund decides to finance distribution expenses pursuant to Rule 12b-1, the Fund undertakes to have its Board, a majority of whom are not interested persons of the Fund, formulate and approve any plan pursuant to Rule 12b-1 under the 1940 Act to finance distribution expenses. 2.4. The Fund represents and warrants that it will make every effort to ensure that the investment policies, fees and expenses of the Designated Portfolio(s) are and shall at all times remain in compliance with the insurance and other applicable laws of the State of New York and any other applicable state to the extent required to perform this Agreement, to the extent FirstGWL&A notifies the Fund of such laws. The Fund further represents and warrants that it will make every effort to ensure that Designated Portfolio(s) shares will be sold in compliance with the insurance laws of the State of New York and all applicable state insurance and securities laws. The Fund shall register and qualify the shares for sale in accordance with the laws of the various states if and to the extent required by applicable law. FirstGWL&A and the Fund will endeavor to mutually cooperate with respect to the implementation of any modifications necessitated by any change in state insurance laws, regulations or interpretations of the foregoing that affect the Designated Portfolio(s) (a "Law Change"), and to keep each other informed of any Law Change that becomes known to either party. In the event of a Law Change, the Fund agrees that, except in those circumstances where the Fund has advised FirstGWL&A that its Board of Directors has determined that implementation of a particular Law Change is not in the best interest of all of the Fund's shareholders with an explanation regarding why such action is lawful, any action required by a Law Change will be taken. 2.5. The Fund represents and warrants that it is lawfully organized and validly existing under the laws of the State of Delaware and that it does and will comply in all material respects with the 1940 Act. 2.6. The Adviser represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of the State of Colorado and any applicable state and federal securities laws. 2.7. The Fund and the Adviser represent and warrant that all of their respective officers, employees, investment advisers, and other individuals or entities dealing with the money and/or securities of the Fund are, and shall continue to be at all times, covered by a blanket fidelity bond or similar coverage for the benefit of the Fund in an amount not less than the minimal coverage required by Rule 17g-1 under the 1940 Act or related provisions as may be promulgated from time to time. The aforesaid bond shall include coverage for larceny and embezzlement and shall be issued by a reputable bonding company. 2.8. Schwab represents and warrants that it has completed, obtained and performed, in all material respects, all registrations, filings, approvals, and authorizations, consents and examinations required by any government or governmental authority as may be necessary to perform this Agreement. Schwab does and will comply, in all material respects, with all applicable laws, rules and regulations in the performance of its obligations under this Agreement. 2.9. The Fund will provide FirstGWL&A with as much advance notice as is reasonably practicable of any material change affecting the Designated Portfolio(s) (including, but not limited to, any material change in the registration statement or prospectus affecting the Designated Portfolio(s)) and any proxy solicitation affecting the Designated Portfolio(s) and consult with FirstGWL&A in order to implement any such change in an orderly manner, recognizing the expenses of changes and attempting to minimize such expenses by implementing them in conjunction with regular annual updates of the prospectus for the Contracts. The Fund agrees to share equitably in expenses incurred by FirstGWL&A as a result of actions taken by the Fund, consistent with the allocation of expenses contained in Schedule E attached hereto and incorporated herein by reference. 2.10.FirstGWL&A represents and warrants, for purposes other than diversification under Section 817 of the Internal Revenue Code of 1986 as amended ("the Code"), that the Contracts are currently treated as annuity contracts under applicable provisions of the Code, and that it will make every effort to maintain such treatment and that it will notify Schwab, the Fund and the Adviser immediately upon having a reasonable basis for believing that the Contracts have ceased to be so treated or that they might not be so treated in the future. In addition, FirstGWL&A represents and warrants that the Account is a "segregated asset account" and that interests in the Account are offered exclusively through the purchase of or transfer into a "variable contract" within the meaning of such terms under Section 817 of the Code and the regulations thereunder. FirstGWL&A will use every effort to continue to meet such definitional requirements, and it will notify Schwab, the Fund, and the Adviser immediately upon having a reasonable basis for believing that such requirements have ceased to be met or that they might not be met in the future. ARTICLE III. Prospectuses and Proxy Statements; Voting 3.1. At least annually, the Adviser shall provide FirstGWL&A and Schwab with as many copies of the Fund's current prospectus for the Designated Portfolio(s) as FirstGWL&A and Schwab may reasonably request for marketing purposes (including distribution to Contractowners with respect to new sales of a Contract). If requested by FirstGWL&A in lieu thereof, the Adviser or Fund shall provide such documentation (including a camera-ready copy of the current prospectus for the Designated Portfolio(s)) and other assistance as is reasonably necessary in order for FirstGWL&A once each year (or more frequently if the prospectuses for the Designated Portfolio(s) are amended) to have the prospectus for the Contracts and the Fund's prospectus for the Designated Portfolio(s) printed together in one document. The Fund and Adviser agree that the prospectuses (and semi-annual and annual reports) for the Designated Portfolio(s) will describe only the Designated Portfolio(s) and will not name or describe any other portfolios or series that may be in the Fund unless required by law. 3.2. If applicable state or federal laws or regulations require that the Statement of Additional Information ("SAI") for the Fund be distributed to all Contractowners, then the Fund and/or the Adviser shall provide FirstGWL&A with copies of the Fund's SAI or docu- mentation thereof for the Designated Portfolio(s) in such quantities, with expenses to be borne in accordance with Schedule E hereof, as FirstGWL&A may reasonably require to permit timely distribution thereof to Contractowners. 3.3. The Fund and/or the Adviser shall provide FirstGWL&A and Schwab with copies of the Fund's proxy material, reports to stockholders and other communications to stockholders for the Designated Portfolio(s) in such quantity, with expenses to be borne in accordance with Schedule E hereof, as FirstGWL&A may reasonably require to permit timely distribution thereof to Contractowners. 3.4. FirstGWL&A and Schwab assume sole responsibility for ensuring that the materials provided by the Fund in accordance with Sections 3.1 through 3.3 are delivered to Contractowners and prospective Contractowners in accordance with applicable federal and state securities laws and applicable insurance law. 3.5. It is understood and agreed that, except with respect to information regarding FirstGWL&A or Schwab provided in writing by that party, neither FirstGWL&A nor Schwab are responsible for the content of the prospectus or SAI for the Designated Portfolio(s). It is also understood and agreed that, except with respect to information regarding the Fund, the Adviser or the Designated Portfolio(s) provided in writing by the Fund or the Adviser, neither the Fund nor Adviser are responsible for the content of the prospectus or SAI for the Contracts. 3.6. If and to the extent required by law FirstGWL&A shall: (i) solicit voting instructions from Contractowners; (ii) vote the Designated Portfolio(s) shares in accordance with instructions received from Contractowners: and (iii)vote Designated Portfolio shares for which no instructions have been received in the same proportion as Designated Portfolio(s) shares for which instructions have been received from Contractowners, so long as and to the extent that the SEC continues to interpret the 1940 Act to require pass-through voting privileges for variable contract owners. FirstGWL&A reserves the right to vote Fund shares held in any segregated asset account in its own right, to the extent permitted by law. 3.7. FirstGWL&A shall be responsible for assuring that each of its separate accounts holding shares of a Designated Portfolio calculates voting privileges as directed by the Fund and agreed to by the Fund and FirstGWL&A. The Fund agrees to promptly notify FirstGWL&A of any changes of interpretations or amendments of the Mixed and Shared Funding Exemptive Order. 3.8. The Fund will comply with all provisions of the 1940 Act requiring voting by shareholders, and in particular the Fund will either provide for annual meetings (except insofar as the SEC may interpret Section 16 of the 1940 Act not to require such meetings) or, as the Fund currently intends, comply with Section 16(c) of the 1940 Act (although the Fund is not one of the trusts described in Section 16(c) of that Act) as well as with Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in accordance with the SEC's interpretation of the requirements of Section 16(a) with respect to periodic elections of directors or trustees and with whatever rules the Commission may promulgate with respect thereto. 3.9. FirstGWL&A and Schwab shall in no way recommend or oppose or interfere with the solicitation of proxies for Fund shares held by Contractowners without the prior written consent of the Fund, which consent may be withheld in the Fund's sole discretion. Neither FirstGWL&A nor Schwab will initiate or solicit Contractowners to initiate any proxy solicitation except to the extent that the failure by FirstGWL&A or Schwab to so initiate or solicit would under the circumstances, be in contravention with applicable federal or state law. ARTICLE IV. Sales Material and Information 4.1. FirstGWL&A and Schwab shall furnish, or shall cause to be furnished, to the Fund or its designee, a copy of each piece of sales literature or other promotional material that FirstGWL&A or Schwab, respectively, develops or proposes to use and in which the Fund (or a Portfolio thereof), its Adviser or one of its sub-advisers is named in connection with the Contracts, at least ten (10) Business Days prior to its use. No such material shall be used if the Fund objects to such use within five (5) Business Days after receipt of such material. 4.2. FirstGWL&A and Schwab shall not give any information or make any representations or statements on behalf of the Fund or Adviser in connection with the sale of the Contracts other than the information or representations contained in the registration statement or prospectus for the Fund shares, as such registration statement and prospectus may be amended or supplemented from time to time, or in reports or proxy statements for the Fund, or in sales literature or other promotional material approved by the Fund or by the Adviser, except with the permission of the Fund or the Adviser. 4.3. The Fund shall furnish, or shall cause to be furnished, to FirstGWL&A and Schwab, a copy of each piece of sales literature or other promotional material in which FirstGWL&A and/or its separate account(s), or Schwab is named at least ten (10) Business Days prior to its use. No such material shall be used if FirstGWL&A or Schwab objects to such use within five (5) Business Days after receipt of such material. 4.4. The Fund and the Adviser shall not give any information or make any representations on behalf of FirstGWL&A or concerning FirstGWL&A, the Account, or the Contracts other than the information or representations contained in a registration statement or prospectus for the Contracts, as such registration statement and prospectus may be amended or supplemented from time to time, or in reports for the Account, or in sales literature or other promotional material approved by FirstGWL&A or its designee, except with the permission of FirstGWL&A. 4.5. FirstGWL&A, the Fund and the Adviser shall not give any information or make any representations on behalf of or concerning Schwab, or use Schwab's name except as required by legal process or regulatory authorities or with the permission of Schwab. 4.6. The Fund will provide to FirstGWL&A and Schwab at least one complete copy of all registration statements, prospectuses, SAIs, reports, proxy statements, sales literature and other promotional materials designed for use in connection with the Contracts, and all amendments to any of the above, that relate to the Designated Portfolio(s), contem- poraneously with the filing of such document(s) with the SEC or NASD or other regulatory authorities. The Fund will provide to FirstGWL&A and Schwab at least one copy of any exemptive application and requests for no-action letters at such time as the SEC staff may grant such application or request. 4.7. FirstGWL&A or Schwab will provide to the Fund at least one complete copy of all registration statements, prospectuses, SAIs, reports, solicitations for voting instructions, sales literature and other promotional materials, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Contracts or the Account, contemporaneously with the filing of such document(s) with the SEC, NASD, or other regulatory authority. 4.8. For purposes of Articles IV and VIII, the phrase "sales literature and other promotional material" includes, but is not limited to, advertisements (such as material published, or designed for use in, a newspaper, magazine, or other periodical, radio, television, telephone or tape recording, videotape display, signs or billboards, motion pictures, or other public media; e.g., on-line networks such as the Internet or other electronic media), sales literature (i.e., any written communication distributed or made generally available to customers or the public, including brochures, circulars, research reports, market letters, form letters, seminar texts, reprints or excerpts of any other advertisement, sales literature, or published article), educational or training materials or other communications distributed or made generally available to some or all agents or employees, and registration statements, prospectuses, SAIs, shareholder reports, and proxy materials and any other material constituting sales literature or advertising under the NASD rules, the 1933 Act or the 1940 Act. 4.9. At the request of any party to this Agreement, each other party will make available to the other party's independent auditors and/or representative of the appropriate regulatory agencies, all records, data and access to operating procedures that may be reasonably requested in connection with compliance and regulatory requirements related to this Agreement or any party's obligations under this Agreement. 4.10.FirstGWL&A and Schwab acknowledge and agree that the Adviser is the sole owner of the name and mark "Janus" and that all use of any designation comprised in whole or in part of Janus (a "Janus Mark") under this Agreement shall inure to the benefit of the Adviser. Except as provided in Sections 4.1 and 4.2, FirstGWL&A and Schwab shall not use any Janus Mark on its own behalf or on behalf of the Contracts or the Account in any registration statement, advertisement, sales literature or other materials relating to the Contracts or the Account without the prior written consent of the Adviser. Upon termination of this Agreement for any reason and except to the extent necessary to administer or service existing Contracts, FirstGWL&A and Schwab shall cease all use of any Janus Marks as soon as reasonably practical. ARTICLE V. Fees and Expenses 5.1. The Fund shall pay no fee or other compensation to FirstGWL&A under this Agreement, and FirstGWL&A shall pay no fee or other compensation to the Fund or Adviser under this Agreement, although the parties hereto will bear certain expenses in accordance with Schedule E, Articles III, V, and other provisions of this Agreement. 5.2. All expenses incident to performance by the Fund and the Adviser under this Agreement shall be paid by the appropriate party, as further provided in Schedule E. The Fund shall see to it that all shares of the Designated Portfolio(s) are registered and authorized for issuance in accordance with applicable federal law and, if and to the extent required, in accordance with applicable state laws prior to their sale. 5.3. The parties shall bear the expenses of routine annual distribution (mailing costs) of the Fund's prospectus and distribution (mailing costs) of the Fund's proxy materials and reports to owners of Contracts offered by FirstGWL&A, in accordance with Schedule E. 5.4. The Fund and the Adviser acknowledge that a principal feature of the Contracts is the Contractowner's ability to choose from a number of unaffiliated mutual funds (and portfolios or series thereof), including the Designated Portfolio(s) and the Unaffiliated Funds, and to transfer the Contract's cash value between funds and portfolios. The Fund and the Adviser agree to cooperate with FirstGWL&A and Schwab in facilitating the operation of the Account and the Contracts as described in the prospectus for the Contracts, including but not limited to cooperation in facilitating transfers between Unaffiliated Funds. ARTICLE VI. Diversification and Qualification 6.1. The Fund and the Adviser represent and warrant that the Fund will at all times sell its shares and invest its assets in such a manner as to ensure that the Contracts will be treated as annuity contracts under the Code, and the regulations issued thereunder. Without limiting the scope of the foregoing, the Fund and Adviser represent and warrant that the Fund and each Designated Portfolio thereof will at all times comply with Section 817(h) of the Code and Treasury Regulation 1.817-5, as amended from time to time, and any Treasury interpretations thereof, relating to the diversification requirements for variable annuity, endowment, or life insurance contracts and any amendments or other modifications or successor provisions to such Section or Regulations. The Fund and the Adviser agree that shares of the Designated Portfolio(s) will be sold only to Participating Insurance Companies and their separate accounts and certain Qualified Plans. 6.2. No shares of any Designated Portfolio of the Fund will be sold to the general public. 6.3. The Fund and the Adviser represent and warrant that the Fund and each Designated Portfolio is currently qualified as a Regulated Investment Company under Subchapter M of the Code, and that each Designated Portfolio will maintain such qualification (under Subchapter M or any successor or similar provisions) as long as this Agreement is in effect. 6.4. The Fund or the Adviser will notify FirstGWL&A immediately upon having a reasonable basis for believing that the Fund or any Designated Portfolio has ceased to comply with the aforesaid Section 817(h) diversification or Subchapter M qualification requirements or might not so comply in the future. 6.5. Without in any way limiting the effect of Sections 8.3 and 8.4 hereof and with- out in any way limiting or restricting any other remedies available to FirstGWL&A or Schwab, the Adviser will pay all costs associated with or arising out of any failure, or any anticipated or reasonably foreseeable failure, of the Fund or any Designated Portfolio to comply with Sections 6.1, 6.2, or 6.3 hereof, including all costs associated with reasonable and appropriate corrections or responses to any such failure; such costs may include, but are not limited to, the costs involved in creating, organizing, and registering a new investment company as a funding medium for the Contracts and/or the costs of obtaining whatever regulatory authorizations are required to substitute shares of another investment company for those of the failed Portfolio (including but not limited to an order pursuant to Section 26(b) of the 1940 Act); such costs are to include, but are not limited to, fees and expenses of legal counsel and other advisors to FirstGWL&A and any federal income taxes or tax penalties and interest thereon (or "toll charges" or exactments or amounts paid in settlement) incurred by FirstGWL&A with respect to itself or owners of its Contracts in connection with any such failure or anticipated or reasonably foreseeable failure. For purposes of this section 6.5 and Sections 8.3 and 8.4, a failure to comply with Section 817(h) diversification or Subchapter M qualification requirements shall not include any non- compliance with such sections that is corrected within any grace periods allowed under the Code. 6.6. The Fund at the Fund's expense shall provide FirstGWL&A or its designee with reports certifying compliance with the aforesaid Section 817(h) diversification and Subchapter M qualification requirements, at the times provided for and substantially in the form attached hereto as Schedule D and incorporated herein by reference; provided, however, that providing such reports does not relieve the Fund of its responsibility for such compliance or of its liability for any non-compliance. 6.7. FirstGWL&A agrees that if the Internal Revenue Service ("IRS") asserts in writing in connection with any governmental audit or review of FirstGWL&A or, to FirstGWL&A's knowledge, or any Contractowner that any Designated Portfolio has failed to comply with the diversification requirements of Section 817(h) of the Code or FirstGWL&A otherwise becomes aware of any facts that could give rise to any claim against the Fund or the Adviser as a result of such a failure or alleged failure: (a) FirstGWL&A shall promptly notify the Fund and the Adviser of such assertion or potential claim; (b) FirstGWL&A shall consult with the Fund and the Adviser as to how to minimize any liability that may arise as a result of such failure or alleged failure; (c) FirstGWL&A shall use its best efforts to minimize any liability of the Fund and the Adviser resulting from such failure, including, without limitation, demonstrating, pursuant to Treasury Regulations, Section 1.817-5(a)(2), to the commissioner of the IRS that such failure was inadvertent; (d) any written materials to be submitted by FirstGWL&A to the IRS, any Contractowner or any other claimant in connection with any of the foregoing proceedings or contests (including, without limitation, any such materials to be submitted to the IRS pursuant to Treasury Regulations, Section 1.817-5(a)(2)) shall be provided by FirstGWL&A to the Fund and the Adviser (together with any supporting information or analysis) within at least two (2) business days prior to submission; (e) FirstGWL&A shall provide the Fund and the Adviser with such cooperation as the Fund and the Adviser shall reasonably request (including, without limitation, by permitting the Fund and the Adviser to review the relevant books and records of FirstGWL&A) in order to facilitate review by the Fund and the Adviser of any written submissions provided to it or its assessment of the validity or amount of any claim against it arising from such failure or alleged failure; (f) FirstGWL&A shall not with respect to any claim of the IRS or any Contractowner that would give rise to a claim against the Fund and the Adviser (i) compromise or settle any claim, (ii) accept any adjustment on audit, or (iii) forego any allowable administrative or judicial appeals, without the express written consent of the Fund and the Adviser, which shall not be unreasonably withheld; provided that, FirstGWL&A shall not be required to appeal any adverse judicial decision unless the Fund and the Adviser shall have provided an opinion of independent counsel to the effect that a reasonable basis exists for taking such appeal; and further provided that the Fund and the Adviser shall bear the costs and expenses, including reasonable attorney's fees, incurred by FirstGWL&A in complying with this clause (f). ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order 7.1. The Board will monitor the Fund for the existence of any material irreconcilable conflict between the interests of the contract owners of all separate accounts investing in the Fund. An irreconcilable material conflict may arise for a variety of reasons, including: (a) an action by any state insurance regulatory authority; (b) a change in applicable federal or state insurance, tax, or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretative letter, or any similar action by insurance, tax, or securities regulatory authorities; (c) an administrative or judicial decision in any relevant proceeding; (d) the manner in which the investments of any Portfolio are being managed; (e) a difference in voting instructions given by variable annuity contract and variable life insurance contract owners or by contract owners of different Participating Insurance Companies; or (f) a decision by a Participating Insurance Company to disregard the voting instructions of contract owners. The Board shall promptly inform FirstGWL&A if it determines that an irreconcilable material conflict exists and the implications thereof. 7.2. FirstGWL&A will report any potential or existing conflicts of which it is aware to the Board. FirstGWL&A will assist the Board in carrying out its responsibilities under the Mixed and Shared Funding Exemptive Order, by providing the Board with all information reasonably necessary for the Board to consider any issues raised. This includes, but is not limited to, an obligation by FirstGWL&A to inform the Board whenever contract owner voting instructions are to be disregarded. Such responsibilities shall be carried out by FirstGWL&A with a view only to the interests of its Contractowners. 7.3. If it is determined by a majority of the Board, or a majority of its directors who are not interested persons of the Fund, the Adviser or any sub-adviser to any of the Designated Portfolios (the "Independent Directors"), that a material irreconcilable conflict exists, FirstGWL&A and other Participating Insurance Companies shall, at their expense and to the extent reasonably practicable (as determined by a majority of the Independent Directors), take whatever steps are necessary to remedy or eliminate the irreconcilable material conflict, up to and including: (1) withdrawing the assets allocable to some or all of the separate accounts from the Fund or any Designated Portfolio and reinvesting such assets in a different investment medium, including (but not limited to) another portfolio of the Fund, or submitting the question whether such segregation should be implemented to a vote of all affected contract owners and, as appropriate, segregating the assets of any appropriate group (i.e., annuity contract owners, life insurance contract owners, or variable contract owners of one or more Participating Insurance Companies) that votes in favor of such segregation, or offering to the affected contract owners the option of making such a change; and (2) establishing a new registered management investment company or managed separate account. 7.4. If a material irreconcilable conflict arises because of a decision by FirstGWL&A to disregard contract owner voting instructions and that decision represents a minority position or would preclude a majority vote, FirstGWL&A may be required, at the Fund's election, to withdraw the Account's investment in the Fund and terminate this Agreement; provided, however that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the Independent Directors. Any such withdrawal and termination must take place within six (6) months after the Fund gives written notice that this provision is being implemented, and until the end of that six month period the Adviser and the Fund shall continue to accept and implement orders by FirstGWL&A for the purchase (and redemption) of shares of the Fund. 7.5. If a material irreconcilable conflict arises because a particular state insurance regulator's decision applicable to FirstGWL&A conflicts with the majority of other state regulators, then FirstGWL&A will withdraw the Account's investment in the Fund and terminate this Agreement within six months after the Board informs FirstGWL&A in writing that it has determined that such decision has created an irreconcilable material conflict; provided, however, that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the disinterested members of the Board. Until the end of the foregoing six month period, the Fund shall continue to accept and implement orders by FirstGWL&A for the purchase (and redemption) of shares of the Fund. 7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority of the Independent Directors shall determine whether any proposed action adequately remedies any irreconcilable material conflict, but in no event will the Fund be required to establish a new funding medium for the Contracts. FirstGWL&A shall not be required by Section 7.3 to establish a new funding medium for the Contracts if an offer to do so has been declined by vote of a majority of Contractowners affected by the irreconcilable material conflict. In the event that the Board determines that any proposed action does not adequately remedy any irreconcilable material conflict, then FirstGWL&A will withdraw the Account's investment in the Fund and terminate this Agreement within six (6) months after the Board informs FirstGWL&A in writing of the foregoing determination; provided, however, that such withdrawal and termination shall be limited to the extent required by any such material irreconcilable conflict as determined by a majority of the Independent Directors. 7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act or the rules promulgated thereunder with respect to mixed or shared funding (as defined in the Mixed and Shared Funding Exemptive Order) on terms and conditions materially different from those contained in the Mixed and Shared Funding Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies, as appropriate, shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable: and (b) Sections 3.6, 3.7, 3.8, 7.1, 7.2, 7.3, 7.4, 7.5 and 7.6 of this Agreement shall continue in effect only to the extent that terms and conditions substantially identical to such Sections are contained in such Rule(s) as so amended or adopted. ARTICLE VIII. Indemnification 8.1. Indemnification By FirstGWL&A 8.1(a). FirstGWL&A agrees to indemnify and hold harmless the Fund and the Adviser and each of their officers and directors or trustees and each person, if any, who controls the Fund or the Adviser within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.1) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of FirstGWL&A) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in the registration statement or pro- spectus or SAI covering the Contracts or contained in the Contracts or sales literature for the Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or nec- essary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser or Fund for use in the registration statement or prospectus for the Contracts or in the Contracts or sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, pro- spectus or sales literature of the Fund not supplied by FirstGWL&A or persons under its control) or wrongful conduct of FirstGWL&A or persons under its control, with respect to the sale or distribution of the Contracts or Fund Shares; or (iii)arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, or sales literature of the Fund, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such a statement or omission was made in reliance upon information furnished in writing to the Fund by or on behalf of FirstGWL&A; or (iv) arise as a result of any failure by FirstGWL&A to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by FirstGWL&A in this Agreement or arise out of or result from any other material breach of this Agreement by FirstGWL&A, including without limitation Section 2.10 and Section 6.7 hereof, as limited by and in accordance with the provisions of Sections 8.1(b) and 8.1(c) hereof. 8.1(b). FirstGWL&A shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.1(c). FirstGWL&A shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified FirstGWL&A in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify FirstGWL&A of any such claim shall not relieve FirstGWL&A from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that FirstGWL&A has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, FirstGWL&A shall be entitled to participate, at its own expense, in the defense of such action. FirstGWL&A also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from FirstGWL&A to such party of FirstGWL&A's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and FirstGWL&A will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.1(d). The Indemnified Parties will promptly notify FirstGWL&A of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund for which the Indemnified Parties intend to seek indemnification from FirstGWL&A. 8.2. Indemnification by Schwab 8.2(a). Schwab agrees to indemnify and hold harmless the Fund and the Adviser and each of their officers and directors or trustees and each person, if any, who controls the Fund or Adviser within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.2) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of Schwab) or litigation (including reasonable legal and other expenses), to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of Schwab's dissemination of information regarding the Fund that is both (A) materially incorrect and (B) that was neither contained in the Fund's registration statement or sales literature nor other promotional material of the Fund prepared by the Fund or provided in writing to Schwab, or approved in writing, by or on behalf of the Fund or the Adviser; or (ii) arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in the registration statement, prospectus or SAI for the Contracts or in sales literature or other promotional material prepared by Schwab for the Contracts or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser or the Fund or to Schwab by FirstGWL&A for use in the registration state- ment or prospectus for the Contracts or in the Contracts or sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts; or (iii)arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus or sales literature of the Fund not supplied by Schwab or persons under its control) or wrongful conduct of Schwab or persons under its control, with respect to the sale or distribution of the Contracts; or (iv) arise as a result of any failure by Schwab to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by Schwab in this Agreement or arise out of or result from any other material breach of this Agreement by Schwab; as limited by and in accordance with the provisions of Sections 8.2(b) and 8.2(c) hereof. 8.2(b). Schwab shall not be liable under this indemnification provision with respect to any losses, claims, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.2(c). Schwab shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified Schwab in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify Schwab of any such claim shall not relieve Schwab from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that Schwab has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, Schwab shall be entitled to participate, at its own expense, in the defense of such action. Schwab also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from Schwab to such party of Schwab's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and Schwab will not be liable to such party under this Agreement for any legal or other ex- penses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.2(d). The Indemnified Parties will promptly notify Schwab of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund for which the Indemnified Parties intend to seek indemnification from Schwab. 8.3. Indemnification by the Adviser 8.3(a). The Adviser agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their directors and officers and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.3) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Adviser) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Fund or the Adviser (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reli- ance upon and in conformity with information furnished in writing to the Adviser or the Fund by or on behalf of FirstGWL&A or Schwab for use in the registration statement or prospectus for the Fund or in sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or the Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI or sales literature or other promotional material for the Contracts not supplied by the Adviser or persons under its control) or wrongful conduct of the Fund or the Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or (iii)arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, or sales literature covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser or the Fund; or (iv) arise as a result of any failure by the Fund or the Adviser to provide the services and furnish the materials under the terms of this Agreement (in- cluding a failure, whether unintentional or in good faith or otherwise, to com- ply with the diversification and other qualification requirements specified in Article VI of this Agreement); or (v) arise out of or result from any material breach of any representation and/or warranty made by the Fund or the Adviser in this Agreement or arise out of or result from any other material breach of this Agreement by the Adviser or the Fund; or (vi) to the extent set forth in Section 1.10, arise out of or result from the incorrect or untimely calculation or reporting of the daily net asset value per share or dividend or capital gain distribution rate; as limited by and in accordance with the provisions of Sections 8.3(b) and 8.3(c) hereof. This indemnification is in addition to and apart from the responsibilities and obligations of the Adviser specified in Article VI hereof. 8.3(b). The Adviser shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.3(c). The Adviser shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Adviser in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Adviser of any such claim shall not relieve the Adviser from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Adviser has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Adviser will be entitled to participate, at its own expense, in the defense thereof. The Adviser also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Adviser to such party of the Adviser's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Adviser will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.3(d). FirstGWL&A and Schwab agree promptly to notify the Adviser of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Account for which FirstGWL&A or Schwab intend to seek indemnification from the Adviser. 8.4. Indemnification By the Fund 8.4(a). The Fund agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their directors and officers and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.4) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Fund) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may be required to pay or become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements, are related to the operations of the Fund and: (i) arise as a result of any failure by the Fund to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agree- ment); or (ii) arise out of or result from any material breach of any representation and/or warranty made by the Fund in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund; or (iii)arise out of or result from the incorrect or untimely calculation or reporting of the daily net asset value per share or dividend or capital gain distribution rate; as limited by and in accordance with the provisions of Sections 8.4(b) and 8.4(c) hereof. 8.4(b). The Fund shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.4(c). The Fund shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Fund in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Fund of any such claim shall not relieve it from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Fund has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Fund will be entitled to participate, at its own expense, in the defense thereof. The Fund shall also be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Fund to such party of the Fund's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Fund will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.4(d). FirstGWL&A and Schwab each agree promptly to notify the Fund of the commencement of any litigation or proceeding against itself or any of its respective officers or directors in connection with the Agreement, the issuance or sale of the Contracts, the operation of the Account, or the sale or acquisition of shares of the Fund for which FirstGWL&A or Schwab intend to seek indemnification from the Fund. ARTICLE IX. Applicable Law 9.1. This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the State of New York, without regard to the New York Conflict of Laws provisions. 9.2. This Agreement shall be subject to the provisions of the 1933, 1934 and 1940 Acts, and the rules and regulations and rulings thereunder, including such exemptions from those statutes, rules and regulations as the Securities and Exchange Commission may grant (including, but not limited to, the Mixed and Shared Funding Exemptive Order) and the terms hereof shall be interpreted and construed in accordance therewith. ARTICLE X. Termination 10.1.This Agreement shall terminate: (a) at the option of any party, with or without cause, with respect to some or all Portfolios, upon six (6) months advance written notice delivered to the other parties; provided, however, that such notice shall not be given earlier than six (6) months following the date of this Agreement; or (b) at the option of FirstGWL&A or Schwab by written notice to the other parties with respect to any Portfolio based upon FirstGWL&A's or Schwab's determination that shares of such Portfolio are not reasonably available to meet the requirements of the Contracts; or (c) at the option of FirstGWL&A or Schwab by written notice to the other parties with respect to any Portfolio in the event any of the Portfolio's shares 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 FirstGWL&A; or (d) at the option of the Fund or Adviser in the event that formal administrative proceedings are instituted against FirstGWL&A or Schwab by the NASD, the SEC, the Insurance Commissioner or like official of any state or any other regulatory body regarding FirstGWL&A's or Schwab's duties under this Agreement or related to the sale of the Contracts, the operation of any Account, or the purchase of the Fund shares, if, in each case, the Fund reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of FirstGWL&A or Schwab to perform its obligations under this Agreement; or (e) at the option of FirstGWL&A or Schwab in the event that formal administrative proceedings are instituted against the Fund or the Adviser by the NASD, the SEC, or any state securities or insurance department or any other regulatory body, if Schwab or FirstGWL&A reasonably 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 Fund or the Adviser to perform their obligations under this Agreement; or (f) at the option of FirstGWL&A by written notice to the Fund with respect to any Portfolio if FirstGWL&A reasonably believes that the Portfolio will fail to meet the Section 817(h) diversification requirements or Subchapter M qualifications specified in Article VI hereof; or (g) at the option of either the Fund or the Adviser, if (i) the Fund or Adviser, respectively, shall determine, in their sole judgment reasonably exercised in good faith, that either FirstGWL&A or Schwab has suffered a material adverse change in their business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on FirstGWL&A's or Schwab's ability to perform its obligations under this Agreement, (ii) the Fund or the Adviser notifies FirstGWL&A or Schwab, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by FirstGWL&A or Schwab and any other changes in circumstances since the giving of such a notice, the determination of the Fund or the Adviser shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or (h) at the option of either FirstGWL&A or Schwab, if (i) FirstGWL&A or Schwab, respectively, shall determine, in its sole judgment reasonably exercised in good faith, that either the Fund or the Adviser has suffered a material adverse change in its business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on the Fund's or the Adviser's ability to perform its obligations under this Agreement, (ii) FirstGWL&A or Schwab notifies the Fund or the Adviser, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by the Fund or the Adviser and any other changes in circumstances since the giving of such a notice, the determination of FirstGWL&A or Schwab shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or (i) at the option of FirstGWL&A in the event that formal administrative proceedings are instituted against Schwab by the NASD, the Securities and Exchange Commission, or any state securities or insurance department or any other regulatory body regarding Schwab's duties under this Agreement or related to the sale of the Fund's shares or the Contracts, the operation of any Account, or the purchase of the Fund shares, provided, however, that FirstGWL&A determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of Schwab to perform its obligations related to the Contracts; or (j) at the option of Schwab in the event that formal administrative proceedings are instituted against FirstGWL&A by the NASD, the Securities and Exchange Commission, or any state securities or insurance department or any other regulatory body regarding FirstGWL&A's duties under this Agreement or related to the sale of the Fund's shares or the Contracts, the operation of any Account, or the purchase of the Fund shares, provided, however, that Schwab determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of FirstGWL&A to perform its obligations related to the Contracts; or (k) at the option of any non-defaulting party hereto in the event of a material breach of this Agreement by any party hereto (the "defaulting party") other than as described in 10.1(a)-(j); provided, that the non-defaulting party gives written notice thereof to the defaulting party, with copies of such notice to all other non-defaulting parties, and if such breach shall not have been remedied within thirty (30) days after such written notice is given, then the non- defaulting party giving such written notice may terminate this Agreement by giving thirty (30) days written notice of termination to the defaulting party. 10.2.Notice Requirement. No termination of this Agreement shall be effective unless and until the party terminating this Agreement gives prior written notice to all other parties of its intent to terminate, which notice shall set forth the basis for the termination. Furthermore, (a) in the event any termination is based upon the provisions of Article VII, or the provisions of Section 10.1(a), 10.1(g), 10.1(h) or 10.1(k) of this Agreement, the prior written notice shall be given in advance of the effective date of termination as required by those provisions unless such notice period is shortened by mutual written agreement of the parties; (b) in the event any termination is based upon the provisions of Section 10.1(d), 10.1(e), 10.1(i) or 10.1(j) of this Agreement, the prior written notice shall be given at least sixty (60) days before the effective date of termination; and (c) in the event any termination is based upon the provisions of Section 10.1(b), 10.1(c) or 10.1(f), the prior written notice shall be given in advance of the effective date of termination, which date shall be determined by the party sending the notice. 10.3.Effect of Termination. Notwithstanding any termination of this Agreement, other than as a result of a failure by either the Fund or FirstGWL&A to meet Section 817(h) of the Code diversification requirements, the Fund and the Adviser shall, at the option of FirstGWL&A or Schwab, continue to make available additional shares of the Designated Portfolios pursuant to the terms and conditions of this Agreement, for all Contracts in effect on the effective date of termination of this Agreement (hereinafter referred to as "Existing Contracts"). Specifically, without limitation, the owners of the Existing Contracts shall be permitted to reallocate investments in the Designated Portfolios, redeem investments in the Designated Portfolios and/or invest in the Designated Portfolios upon the making of additional purchase payments under the Existing Contracts. The parties agree that this Section 10.3 shall not apply to any terminations under Article VII and the effect of such Article VII terminations shall be governed by Article VII of this Agreement. 10.4.Surviving Provisions. Notwithstanding any termination of this Agreement, each party's obligations under Article VIII to indemnify other parties shall survive and not be affected by any termination of this Agreement. In addition, with respect to Existing Contracts, all provisions of this Agreement shall also survive and not be affected by any termination of this Agreement. 10.5.Survival of Agreement. A termination by Schwab shall terminate this Agreement only as to Schwab, and this Agreement shall remain in effect as to the other par- ties; provided, however, that in the event of a termination by Schwab the other parties shall have the option to terminate this Agreement upon 60 (sixty) days notice, rather than the six (6) months specified in Section 10.1(a). ARTICLE XI. Notices Any notice shall be sufficiently given when sent by registered or certified mail to the other party at the address of such party set forth below or at such other address as such party may from time to time specify in writing to the other party. If to the Fund: Janus Aspen Series 100 Fillmore Street Denver, CO 80206 Attention: General Counsel If to FirstGWL&A: First Great-West Life & Annuity Insurance Company 8515 East Orchard Road Englewood, CO 80111 Attention:Assistant Vice President, Savings Products If to the Adviser: Janus Capital Corporation 100 Fillmore Street Denver, CO 80206 Attention: General Counsel If to Schwab: Charles Schwab & Co., Inc. 101 Montgomery Street San Francisco, CA 94104 Attention: General Counsel ARTICLE XII. Miscellaneous 12.1.Subject to the requirements of legal process and regulatory authority, each party hereto shall treat as confidential the names and addresses of the owners of the Contracts and all information reasonably identified as confidential in writing by any other party hereto and, except as permitted by this Agreement, shall not disclose, disseminate or utilize such names and addresses and other confidential information without the express written consent of the affected party until such time as such information may come into the public domain. Without limiting the foregoing, no party hereto shall disclose any information that another party has designated as proprietary. 12.2.The captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provisions hereof or otherwise affect their construction or effect. 12.3.This Agreement may be executed simultaneously in two or more counterparts, each of which taken together shall constitute one and the same instrument. 12.4.If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby. 12.5.Each party hereto shall cooperate with each other party and all appropriate governmental authorities (including without limitation the SEC, the NASD and state insurance regulators) and shall permit such authorities reasonable access to its books and records in connection with any investigation or inquiry relating to this Agreement or the transactions contemplated hereby. Notwithstanding the generality of the foregoing, each party hereto further agrees to furnish the New York Insurance Commissioner with any information or reports in connection with services provided under this Agreement which such Commissioner may request in order to ascertain whether the variable annuity operations of FirstGWL&A are being conducted in a manner consistent with the New York Variable Annuity Regulations and any other applicable law or regulations. 12.6.Any controversy or claim arising out of or relating to this Agreement, or breach thereof, may, upon the agreement of all parties, be settled by arbitration in a forum jointly selected by the relevant parties (but if applicable law requires some other forum, then such other forum) in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. 12.7.The rights, remedies and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies and obligations, at law or in equity, which the parties hereto are entitled to under state and federal laws. 12.8.This Agreement or any of the rights and obligations hereunder may not be assigned by any party without the prior written consent of all parties hereto. 12.9.Schwab and FirstGWL&A are hereby expressly put on notice of the limitation of liability as set forth in the Trust Instrument of the Fund and agree that the obligations assumed by the Fund pursuant to this Agreement shall be limited in any case to the Fund and its assets and neither Schwab nor FirstGWL&A shall seek satisfaction of any such obligation from the shareholders of the Fund or the Adviser, the Trustees, officers, employees or agents of the Fund, or any of them, except to the extent permitted under this Agreement. 12.10.Schwab and FirstGWL&A agree that the obligations assumed by the Adviser pursuant to this Agreement shall be limited in any case to the Adviser and its assets and neither Schwab nor FirstGWL&A shall seek satisfaction of any such obligation from the shareholders of the Adviser, the directors, officers, employees or agents of the Adviser, or any of them, except to the extent permitted under this Agreement. 12.11.The Fund and the Adviser agree that the obligations assumed by FirstGWL&A and Schwab pursuant to this Agreement shall be limited in any case to FirstGWL&A and Schwab and their respective assets and neither the Fund nor the Adviser shall seek satisfaction of any such obligation from the shareholders of the FirstGWL&A or Schwab, the directors, officers, employees or agents of the FirstGWL&A or Schwab, or any of them, except to the extent permitted under this Agreement. 12.12.No provision of this Agreement may be deemed or construed to modify or supersede any contractual rights, duties, or indemnifications, as between the Adviser and the Fund. IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in its name and on its behalf by its duly authorized representative and its seal to be hereunder affixed hereto as of the date specified below. FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY By its authorized officer, By:/s/ Robert K. Shaw Title: Vice President, Marketing & Product Development Date: April 1, 1997 JANUS ASPEN SERIES By its authorized officer, By:/s/ Bonnie Howe Title: Assistant Vice President Date: March 25, 1997 JANUS CAPITAL CORPORATION By its authorized officer, By:/s/ Stephen Stieneker Title: Vice President of Compliance Date: March 25, 1997 CHARLES SCHWAB & CO., INC. By its authorized officer, By:/s/ Jeff Benton Title:Vice President, Annuities & Life Insurance Date:March 31, 1997 Schwab Variable Annuity SCHEDULE A Contracts Form Numbers First Great-West Life & Annuity Insurance Company Group Variable/Fixed Annuity Contract J434NY SCHEDULE B Designated Portfolios Janus Aspen Aggressive Growth Portfolio Janus Aspen Growth Portfolio Janus Aspen Worldwide Growth Portfolio SCHEDULE D Reports per Section 6.6 With regard to the reports relating to the quarterly testing of compliance with the requirements of Section 817(h) and Subchapter M under the Internal Revenue Code (the "Code") and the regulations thereunder, the Fund shall provide within twenty (20) Business Days of the close of the calendar quarter (45 days for the last quarter) a report to FirstGWL&A in the Form D1 attached hereto and incorporated herein by reference, regarding the status under such sections of the Code of the Designated Portfolio(s), and if necessary, identification of any remedial action to be taken to remedy non-compliance. With regard to the reports relating to the year-end testing of compliance with the requirements of Subchapter M of the Code, referred to hereinafter as "RIC status," the Fund will provide a year-end report within 45 days after the end of the calendar year. However, if a problem with regard to RIC status, as defined below, is identified in any of the quarterly reports, on a weekly basis thereafter, additional interim reports will be provided specifically addressing the problems identified in such report. If any interim report memorializes the cure of the problem, subsequent interim reports will not be required. A problem with regard to RIC status is defined as any violation of the following standards, as referenced to the applicable sections of the Code: (a) If, at the Fund's fiscal year end, less than ninety percent of gross income is derived from sources of income specified in Section 851(b)(2); (b) If, at the end of the Fund's fiscal year end, thirty percent or greater gross income is derived from the sale or disposition of assets specified in Section 851(b)(3); (c) If, at the end of each fiscal quarter end, less than fifty percent of the value of the Fund's total assets consists of assets specified in Section 851(b)(4)(A); and (d) If, at the end of each fiscal quarter end, no more than twenty-five percent of the value of total assets of the Fund is invested in the securities of one issuer, as that requirement is set forth in Section 851(b)(4)(B). FORM D1 CERTIFICATE OF COMPLIANCE I, , a duly authorized officer, director or agent of Fund hereby certify that Fund is in compliance with all requirements of Section 817(h) and Subchapter M of the Internal Revenue Code (the "Code") and the regulations thereunder as required in the Fund Participation Agreement among First Great-West Life & Annuity Insurance Company, Charles Schwab & Co., Inc. and other than the exceptions discussed below: Exceptions Remedial Action If no exception to report, please indicate "None." Signed this day of , . (Signature) By: (Type or Print Name and Title/Position) SCHEDULE E EXPENSES The Fund and/or Adviser, and FirstGWL&A will coordinate the functions and pay the costs of the completing these functions based upon an allocation of costs in the tables below. Costs shall be allocated to reflect the Fund's share of the total costs determined according to the number of pages of the Fund's respective portions of the documents. Item Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Prospectus Printing of combined prospectuses FirstGWL&A Fund or Adviser, as applicable Fund or Adviser shall supply FirstGWL&A film/disk or such number of Designated Portfolio(s) prospectus(es) as FirstGWL&A requires for printing combined prospectus FirstGWL&A Fund or Adviser, as applicable Distribution to New and Inforce Clients FirstGWL&A FirstGWL&A Distribution to Prospective Clients Schwab Schwab Product Prospectus Printing for Inforce Clients FirstGWL&A FirstGWL&A Printing for Prospective Clients FirstGWL&A Schwab Distribution to New and Inforce Clients FirstGWL&A FirstGWL&A Distribution to Prospective Clients Schwab Schwab Mutual Fund Prospectus Update & Distribution If Required by Fund or Adviser Fund or Adviser Fund or Adviser If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab Schwab Schwab Product Prospectus Update & Distribution If Required by Fund or Adviser FirstGWL&A Fund or Adviser Item Function Party Responsible for Coordination Party Responsible for Expense If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab Schwab Schwab Mutual Fund SAI Printing Fund or Adviser Fund or Adviser Distribution FirstGWL&A FirstGWL&A Product SAI Printing FirstGWL&A FirstGWL&A Distribution FirstGWL&A FirstGWL&A Item Function Party Responsible for Coordination Party Responsible for Expense Proxy Material for Mutual Fund: Printing if proxy required by Law Fund or Adviser Fund or Adviser Distribution (including labor) if proxy required by Law FirstGWL&A Fund or Adviser Printing & distribution if required by FirstGWL&A FirstGWL&A FirstGWL&A Printing & distribution if required by Schwab FirstGWL&A Schwab Item Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Annual & Semi-Annual Report Printing of combined reports FirstGWL&A Fund or Adviser Distribution FirstGWL&A FirstGWL&A and Schwab Other communication to New and Prospective clients If Required by the Fund or Adviser Schwab Fund or Adviser If Required by FirstGWL&A Schwab FirstGWL&A Item Function Party Responsible for Coordination Party Responsible for Expense If Required by Schwab Schwab Schwab Other communication to inforce Distribution (including labor) if required by the Fund or Adviser FirstGWL&A Fund or Adviser If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab FirstGWL&A Schwab Item Function Party Responsible for Coordination Party Responsible for Expense Errors in Share Price calculation pursuant to Section 1.10 Cost of error to participants FirstGWL&A Fund or Adviser Cost of administrative work to correct error FirstGWL&A Fund or Adviser Operations of the Fund All operations and related expenses, including the cost of registration and qualification of shares, taxes on the issuance or transfer of shares, cost of management of the business affairs of the Fund, and expenses paid or assumed by the fund pursuant to any Rule 12b-1 plan Fund or Adviser Fund or Adviser Operations of the Account Federal registration of units of separate account (24f-2 fees) FirstGWL&A FirstGWL&A EX-8.7 14 EXHIBIT 8.7 FUND PARTICIPATION AGREEMENT Lexington Emerging Markets Fund, Inc. TABLE OF CONTENTS ARTICLE I. Sale of Fund Shares . . . . . . . . . . . . . . . .3 ARTICLE II. Representations and Warranties. . . . . . . . . . .7 ARTICLE III. Prospectuses and Proxy Statements; Voting . . . . 10 ARTICLE IV. Sales Material and Information. . . . . . . . . . 13 ARTICLE V. Fees and Expenses . . . . . . . . . . . . . . . . 15 ARTICLE VI. Diversification and Qualification . . . . . . . . 16 ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order . . . . 20 ARTICLE VIII.Indemnification . . . . . . . . . . . . . . . . . 23 ARTICLE IX. Applicable Law. . . . . . . . . . . . . . . . . . 32 ARTICLE X. Termination . . . . . . . . . . . . . . . . . . . 32 ARTICLE XI. Notices . . . . . . . . . . . . . . . . . . . . . 36 ARTICLE XII. Miscellaneous . . . . . . . . . . . . . . . . . . 36 SCHEDULE A Contracts . . . . . . . . . . . . . . . . . . . . 40 SCHEDULE B Designated Portfolios . . . . . . . . . . . . . . 41 SCHEDULE C Administrative Services . . . . . . . . . . . . . 42 SCHEDULE D Reports per Section 6.6 . . . . . . . . . . . . . 43 SCHEDULE E Expenses. . . . . . . . . . . . . . . . . . . . . 46 PARTICIPATION AGREEMENT Among FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY LEXINGTON EMERGING MARKETS FUND, INC. LEXINGTON MANAGEMENT CORPORATION and CHARLES SCHWAB & CO., INC. THIS AGREEMENT, made and entered into as of this ____ day of _______________, 1997 by and among FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (hereinafter "FirstGWL&A"), a New York life insurance company, on its own behalf and on behalf of its Separate Account Variable Annuity-1 Series Account (the "Account"); LEXINGTON EMERGING MARKETS FUND, INC., a corporation organized under the laws of Maryland (hereinafter the "Fund"); LEXINGTON MANAGEMENT CORPORATION (hereinafter the "Adviser"), a Delaware corporation; and CHARLES SCHWAB & CO., INC., a California corporation (hereinafter "Schwab"). WHEREAS, the Fund engages in business as an open-end management investment company and is available to act as the investment vehicle for separate accounts established for variable life insurance policies and/or variable annuity contracts (collectively, the "Variable Insurance Products") to be offered by insurance companies, including FirstGWL&A, which have entered into participation agreements similar to this Agreement (hereinafter "Participating Insurance Companies"); and WHEREAS, the beneficial interest in the Fund is divided into several series of shares, each designated a "Portfolio" and representing the interest in a particular managed portfolio of securities and other assets; and WHEREAS, the Fund has obtained an order from the Securities and Exchange Commission (hereinafter the "SEC"), dated November 30, 1994 (File No. 812-8910), granting Participating Insurance Companies and variable annuity and variable life insurance separate accounts exemptions from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended, (hereinafter the "1940 Act") and Rules 6e- 2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Fund to be sold to and held by variable annuity and variable life insurance separate accounts of life insurance companies that may or may not be affiliated with one another and plans established under Sections 401(a), 403(a) and (b), 408(a), (b) and (k), 414(d) 457(b) or 501(c)(18) of the Internal Revenue Code ("Qualified Plans") (hereinafter the "Mixed and Shared Funding Exemptive Order"); and WHEREAS, the Fund is registered as an open-end management investment company under the 1940 Act and shares of the Portfolio(s) are registered under the Securities Act of 1933, as amended (hereinafter the "1933 Act"); and WHEREAS, the Adviser is duly registered as an investment adviser under the Investment Advisers Act of 1940, as amended, and any applicable state securities laws; and WHEREAS, FirstGWL&A has registered or will register certain variable annuity contracts supported wholly or partially by the Account (the "Contracts") under the 1933 Act and said Contracts are listed in Schedule A attached hereto and incorporated herein by reference, as it may be amended from time to time by mutual written agreement; and WHEREAS, the Account is a duly organized, validly existing segregated asset account, established by resolution of the Board of Directors of FirstGWL&A on January 15, 1997, to set aside and invest assets attributable to the Contracts; and WHEREAS, FirstGWL&A has registered or will register the Account as a unit investment trust under the 1940 Act and has registered or will register the securities deemed to be issued by the Account under the 1933 Act; and WHEREAS, to the extent permitted by applicable insurance laws and regulations, FirstGWL&A intends to purchase shares in the Portfolio(s) listed in Schedule B attached hereto and incorporated herein by reference, as it may be amended from time to time by mutual written agreement (the "Designated Portfolio(s)"), on behalf of the Account to fund the Contracts, and the Fund is authorized to sell such shares to unit investment trusts such as the Account at net asset value; and WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Account also intends to purchase shares in other open-end investment companies or series thereof not affiliated with the Fund (the "Unaffiliated Funds") on behalf of the Account to fund the Contracts; and WHEREAS, Schwab will perform certain services for the Fund in connection with the Contracts; NOW, THEREFORE, in consideration of their mutual promises, FirstGWL&A, Schwab, the Fund and the Adviser agree as follows: ARTICLE I. Sale of Fund Shares 1.1. The Fund agrees to sell to FirstGWL&A those shares of the Designated Portfolio(s) which the Account orders, executing such orders on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the order for the shares of the Portfolios. For purposes of this Section 1.1, FirstGWL&A shall be the designee of the Fund for receipt of such orders and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such order by 10:00 a.m. Eastern time on the next following Business Day. "Business Day" shall mean any day on which the New York Stock Exchange is open for trading and on which the Fund calculates its net asset value pursuant to the rules of the SEC. 1.2. The Fund agrees to make shares of the Designated Portfolio(s) available for purchase at the applicable net asset value per share by FirstGWL&A and the Account on those days on which the Fund calculates its Designated Portfolio(s)' net asset value pursuant to rules of the SEC, and the Fund shall calculate such net asset value on each day which the New York Stock Exchange is open for trading. Notwithstanding the foregoing, the Board of Directors of the Fund (hereinafter the "Board") may refuse to sell shares of any Portfolio to any person, or suspend or terminate the offering of shares of any Portfolio if such action is required by law or by regulatory authorities having jurisdiction or is, in the sole discretion of the Board acting in good faith and in light of their fiduciary duties under federal and any applicable state laws, necessary in the best interests of the shareholders of such Portfolio. 1.3. The Fund will not sell shares of the Designated Portfolio(s) to any other Participating Insurance Company, separate account or any Qualified Plan unless an agreement containing provisions substantially the same as Sections 2.1, 3.5, 3.6, 3.7, and Article VII of this Agreement is in effect to govern such sales. 1.4. The Fund agrees to redeem for cash, on FirstGWL&A's request, any full or fractional shares of the Fund held by FirstGWL&A, executing such requests on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the request for redemption. Requests for redemption identified by FirstGWL&A, or its agent, as being in connection with surrenders, annuitizations, or death benefits under the Contracts, upon prior written notice, may be executed within seven (7) calendar days after receipt by the Fund or its designee of the requests for redemption. This Section 1.4 may be amended, in writing, by the parties consistent with the requirements of the 1940 Act and interpretations thereof. For purposes of this Section 1.4, FirstGWL&A shall be the designee of the Fund for receipt of requests for redemption and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such request for redemption by 10:00 A.M. Eastern time on the next following Business Day. 1.5. The Parties hereto acknowledge that the arrangement contemplated by this Agreement is not exclusive; the Fund's shares may be sold to other Participating Insurance Companies (subject to Section 1.3 and Article VI hereof) and the cash value of the Con- tracts may be invested in other investment companies. 1.6. FirstGWL&A shall pay for Fund shares by 3:00 p.m. Eastern time on the next Business Day after an order to purchase Fund shares is made in accordance with the provisions of Section 1.1 hereof. Payment shall be in federal funds transmitted by wire and/or by a credit for any shares redeemed the same day as the purchase. 1.7. The Fund shall pay and transmit the proceeds of redemptions of Fund shares by 11:00 a.m. Eastern Time on the next Business Day after a redemption order is received in accordance with Section 1.4 hereof. Payment shall be in federal funds transmitted by wire and/or a credit for any shares purchased the same day as the redemption. 1.8. Issuance and transfer of the Fund's shares will be by book entry only. Stock certificates will not be issued to FirstGWL&A or the Account. Shares ordered from the Fund will be recorded in an appropriate title for the Account or the appropriate sub-account of the Account. 1.9. The Fund shall furnish same day notice (by wire or telephone, followed by written confirmation) to FirstGWL&A of any income, dividends or capital gain distributions payable on the Designated Portfolio(s)' shares. FirstGWL&A hereby elects to receive all such income dividends and capital gain distributions as are payable on the Portfolio shares in additional shares of that Portfolio. FirstGWL&A reserves the right to revoke this election and to receive all such income dividends and capital gain distributions in cash. The Fund shall notify FirstGWL&A by the end of the next following Business Day of the number of shares so issued as payment of such dividends and distributions. 1.10.The Fund shall make the net asset value per share for each Designated Portfolio available to FirstGWL&A on each Business Day as soon as reasonably practical after the net asset value per share is calculated and shall use its best efforts to make such net asset value per share available by 6:00 p.m. Eastern time. In the event of an error in the computation of a Designated Portfolio's net asset value per share ("NAV") or any dividend or capital gain distribution (each, a "pricing error"), the Adviser or the Fund shall immediately notify FirstGWL&A as soon as possible after discovery of the error. Such notification may be verbal, but shall be confirmed promptly in writing in accordance with Article XI of this Agreement. A pricing error shall be corrected as follows: (a) if the pricing error results in a difference between the erroneous NAV and the correct NAV of less than $0.01 per share, then no corrective action need be taken; (b) if the pricing error results in a difference between the erroneous NAV and the correct NAV equal to or greater than $0.01 per share, but less than 1/2 of 1% of the Designated Portfolio's NAV at the time of the error, then the Adviser shall reimburse the Designated Portfolio for any loss, after taking into consideration any positive effect of such error; however, no adjustments to Contractowner accounts need be made; and (c) if the pricing error results in a difference between the erroneous NAV and the correct NAV equal to or greater than 1/2 of 1% of the Designated Portfolio's NAV at the time of the error, then the Adviser shall reimburse the Designated Portfolio for any loss (without taking into consideration any positive effect of such error) and shall reimburse FirstGWL&A for the costs of adjustments made to correct Contractowner accounts in accordance with the provisions of Schedule E. If an adjustment is necessary to correct a material error which has caused Contractowners to receive less than the amount to which they are entitled, the number of shares of the applicable sub-account of such Contractowners will be adjusted and the amount of any underpayments shall be credited by the Adviser to FirstGWL&A for crediting of such amounts to the applicable Contractowners accounts. Upon notification by the Adviser of any overpayment due to a material error, FirstGWL&A or Schwab, as the case may be, shall promptly remit to Adviser any overpayment that has not been paid to Contractowners; however, Adviser acknowledges that Schwab and FirstGWL&A do not intend to seek additional payments from any Contractowner who, because of a pricing error, may have underpaid for units of interest credited to his/her account. In no event shall Schwab or FirstGWL&A be liable to Contractowners for any such adjustments or underpayment amounts. A pricing error within categories (b) or (c) above shall be deemed to be "materially incorrect" or constitute a "material error" for purposes of this Agreement. The standards set forth in this Section 1.10 are based on the Parties' understanding of the views expressed by the staff of the Securities and Exchange Commission ("SEC") as of the date of this Agreement. In the event the views of the SEC staff are later modified or superseded by SEC or judicial interpretation, the parties shall amend the foregoing provisions of this Agreement to comport with the appropriate applicable standards, on terms mutually satisfactory to all Parties. ARTICLE II. Representations and Warranties 2.1. FirstGWL&A represents and warrants that the securities deemed to be issued by the Account under the Contracts are or will be registered under the 1933 Act; that the Contracts will be issued and sold in compliance in all material respects with all applicable federal and state laws and that the sale of the Contracts shall comply in all material respects with state insurance suitability requirements. FirstGWL&A further represents and warrants that it is an insurance company duly organized and in good standing under applicable law and that it has legally and validly established the Account prior to any issuance or sale of units thereof as a segregated asset account under Section 4240 of the New York Insurance Law and has registered the Account as a unit investment trust in accordance with the provisions of the 1940 Act to serve as a segregated investment account for the Contracts. 2.2. The Fund represents and warrants that Designated Portfolio(s) shares sold pursuant to this Agreement shall be registered under the 1933 Act, duly authorized for issuance and sold in compliance with all applicable federal securities laws including without limitation the 1933 Act, the 1934 Act, and the 1940 Act and that the Fund is and shall remain registered under the 1940 Act. The Fund shall amend the registration statement for its shares under the 1933 Act and the 1940 Act from time to time as required in order to effect the continuous offering of its shares. 2.3. The Fund reserves the right to adopt a plan pursuant to Rule 12b-1 under the 1940 Act and to impose an asset-based or other charge to finance distribution expenses as permitted by applicable law and regulation. In any event, the Fund and Adviser agree to comply with applicable provisions and SEC staff interpretations of the 1940 Act to assure that the investment advisory or management fees paid to the Adviser by the Fund are in accordance with the requirements of the 1940 Act. To the extent that the Fund decides to finance distribution expenses pursuant to Rule 12b-1, the Fund undertakes to have its Board, a majority of whom are not interested persons of the Fund, formulate and approve any plan pursuant to Rule 12b-1 under the 1940 Act to finance distribution expenses. 2.4. The Fund represents and warrants that it will make every effort to ensure that the investment policies, fees and expenses of the Designated Portfolio(s) are and shall at all times remain in compliance with the insurance and other applicable laws of the State of New York and any other applicable state to the extent required to perform this Agreement. The Fund further represents and warrants that it will make every effort to ensure that Designated Portfolio(s) shares will be sold in compliance with the insurance laws of the State of New York and all applicable state insurance and securities laws. The Fund shall register and qualify the shares for sale in accordance with the laws of the various states if and to the extent required by applicable law. FirstGWL&A and the Fund will endeavor to mutually cooperate with respect to the implementation of any modifications necessitated by any change in state insurance laws, regulations or interpretations of the foregoing that affect the Designated Portfolio(s) (a "Law Change"), and to keep each other informed of any Law Change that becomes known to either party. In the event of a Law Change, the Fund agrees that, except in those circumstances where the Fund has advised FirstGWL&A that its Board of Directors has determined that implementation of a particular Law Change is not in the best interest of all of the Fund's shareholders with an explanation regarding why such action is lawful, any action required by a Law Change will be taken. 2.5. The Fund represents and warrants that it is lawfully organized and validly existing under the laws of the State of Maryland and that it does and will comply in all material respects with the 1940 Act. 2.6. The Adviser represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of the State of New Jersey and any applicable state and federal securities laws. 2.7. The Fund and the Adviser represent and warrant that all of their respective officers, employees, investment advisers, and other individuals or entities dealing with the money and/or securities of the Fund are, and shall continue to be at all times, covered by a blanket fidelity bond or similar coverage for the benefit of the Fund in an amount not less than the minimal coverage required by Rule 17g-1 under the 1940 Act or related provisions as may be promulgated from time to time. The aforesaid bond shall include coverage for larceny and embezzlement and shall be issued by a reputable bonding company. 2.8. Schwab represents and warrants that it has completed, obtained and performed, in all material respects, all registrations, filings, approvals, and authorizations, consents and examinations required by any government or governmental authority as may be necessary to perform this Agreement. Schwab does and will comply, in all material respects, with all applicable laws, rules and regulations in the performance of its obligations under this Agreement. 2.9. The Fund will provide FirstGWL&A with as much advance notice as is reasonably practicable of any material change affecting the Designated Portfolio(s) (including, but not limited to, any material change in the registration statement or prospectus affecting the Designated Portfolio(s)) and any proxy solicitation affecting the Designated Portfolio(s) and consult with FirstGWL&A in order to implement any such change in an orderly manner, recognizing the expenses of changes and attempting to minimize such expenses by implementing them in conjunction with regular annual updates of the prospectus for the Contracts. The Fund agrees to share equitably in expenses incurred by FirstGWL&A as a result of actions taken by the Fund, consistent with the allocation of expenses contained in Schedule E attached hereto and incorporated herein by reference. 2.10.FirstGWL&A represents and warrants, for purposes other than diversification under Section 817 of the Internal Revenue Code of 1986 as amended ("the Code"), that the Contracts are currently treated as annuity contracts under applicable provisions of the Code, and that it will make every effort to maintain such treatment and that it will notify Schwab, the Fund and the Adviser immediately upon having a reasonable basis for believing that the Contracts have ceased to be so treated or that they might not be so treated in the future. In addition, FirstGWL&A represents and warrants that the Account is a "segregated asset account" and that interests in the Account are offered exclusively through the purchase of or transfer into a "variable contract" within the meaning of such terms under Section 817 of the Code and the regulations thereunder. FirstGWL&A will use every effort to continue to meet such definitional requirements, and it will notify Schwab, the Fund, and the Adviser immediately upon having a reasonable basis for believing that such requirements have ceased to be met or that they might not be met in the future. ARTICLE III. Prospectuses and Proxy Statements; Voting 3.1. At least annually, the Adviser shall provide FirstGWL&A and Schwab with as many copies of the Fund's current prospectus for the Designated Portfolio(s) as FirstGWL&A and Schwab may reasonably request for marketing purposes (including distribution to Contractowners with respect to new sales of a Contract). If requested by FirstGWL&A in lieu thereof, the Adviser or Fund shall provide such documentation (including a camera-ready copy and computer diskette of the current prospectus for the Designated Portfolio(s)) and other assistance as is reasonably necessary in order for FirstGWL&A once each year (or more frequently if the prospectuses for the Designated Portfolio(s) are amended) to have the prospectus for the Contracts and the Fund's prospectus for the Designated Portfolio(s) printed together in one document. The Fund and Adviser agree that the prospectuses (and semi-annual and annual reports) for the Designated Portfolio(s) will describe only the Designated Portfolio(s) and will not name or describe any other portfolios or series that may be in the Fund unless required by law. 3.2. If applicable state or federal laws or regulations require that the Statement of Additional Information ("SAI") for the Fund be distributed to all Contractowners, then the Fund and/or the Adviser shall provide FirstGWL&A with copies of the Fund's SAI or docu- mentation thereof for the Designated Portfolio(s) in such quantities, with expenses to be borne in accordance with Schedule E hereof, as FirstGWL&A may reasonably require to permit timely distribution thereof to Contractowners. The Adviser and/or the Fund shall also provide SAIs to any Contractowner or prospective owner who requests such SAI from the Fund (although it is anticipated that such requests will be made to FirstGWL&A or Schwab). 3.3. The Fund and/or the Adviser shall provide FirstGWL&A and Schwab with copies of the Fund's proxy material, reports to stockholders and other communications to stockholders for the Designated Portfolio(s) in such quantity, with expenses to be borne in accordance with Schedule E hereof, as FirstGWL&A may reasonably require to permit timely distribution thereof to Contractowners. 3.4. It is understood and agreed that, except with respect to information regarding FirstGWL&A or Schwab provided in writing by that party, neither FirstGWL&A nor Schwab are responsible for the content of the prospectus or SAI for the Designated Portfolio(s). It is also understood and agreed that, except with respect to information regarding the Fund, the Adviser or the Designated Portfolio(s) provided in writing by the Fund or the Adviser, neither the Fund nor Adviser are responsible for the content of the prospectus or SAI for the Contracts. 3.5. If and to the extent required by law FirstGWL&A shall: (i) solicit voting instructions from Contractowners; (ii) vote the Designated Portfolio(s) shares in accordance with instructions received from Contractowners: and (iii)vote Designated Portfolio shares for which no instructions have been received in the same proportion as Designated Portfolio(s) shares for which instructions have been received from Contractowners, so long as and to the extent that the SEC continues to interpret the 1940 Act to require pass-through voting privileges for variable contract owners. FirstGWL&A reserves the right to vote Fund shares held in any segregated asset account in its own right, to the extent permitted by law. 3.6. FirstGWL&A shall be responsible for assuring that each of its separate accounts holding shares of a Designated Portfolio calculates voting privileges as directed by the Fund and agreed to by FirstGWL&A and the Fund. The Fund agrees to promptly notify FirstGWL&A of any changes of interpretations or amendments of the Mixed and Shared Funding Exemptive Order. 3.7. The Fund will comply with all provisions of the 1940 Act requiring voting by shareholders, and in particular the Fund will either provide for annual meetings (except insofar as the SEC may interpret Section 16 of the 1940 Act not to require such meetings) or, as the Fund currently intends, comply with Section 16(c) of the 1940 Act (although the Fund is not one of the trusts described in Section 16(c) of that Act) as well as with Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in accordance with the SEC's interpretation of the requirements of Section 16(a) with respect to periodic elections of directors or trustees and with whatever rules the Commission may promulgate with respect thereto. ARTICLE IV. Sales Material and Information 4.1. FirstGWL&A and Schwab shall furnish, or shall cause to be furnished, to the Fund or its designee, a copy of each piece of sales literature or other promotional material that FirstGWL&A or Schwab, respectively, develops or proposes to use and in which the Fund (or a Portfolio thereof), its Adviser or one of its sub-advisers is named in connection with the Contracts, at least ten (10) Business Days prior to its use. No such material shall be used if the Fund objects to such use within five (5) Business Days after receipt of such material. 4.2. FirstGWL&A and Schwab shall not give any information or make any representations or statements on behalf of the Fund in connection with the sale of the Con- tracts other than the information or representations contained in the registration statement or prospectus for the Fund shares, as such registration statement and prospectus may be amended or supplemented from time to time, or in reports or proxy statements for the Fund, or in sales literature or other promotional material approved by the Fund or by the Adviser, except with the permission of the Fund or the Adviser. 4.3. The Fund shall furnish, or shall cause to be furnished, to FirstGWL&A and Schwab, a copy of each piece of sales literature or other promotional material in which FirstGWL&A and/or its separate account(s), or Schwab is named at least ten (10) Business Days prior to its use. No such material shall be used if FirstGWL&A or Schwab objects to such use within five (5) Business Days after receipt of such material. 4.4. The Fund and the Adviser shall not give any information or make any representations on behalf of FirstGWL&A or concerning FirstGWL&A, the Account, or the Contracts other than the information or representations contained in a registration statement or prospectus for the Contracts, as such registration statement and prospectus may be amended or supplemented from time to time, or in reports for the Account, or in sales literature or other promotional material approved by FirstGWL&A or its designee, except with the permission of FirstGWL&A. 4.5. FirstGWL&A, the Fund and the Adviser shall not give any information or make any representations on behalf of or concerning Schwab, or use Schwab's name except with the permission of Schwab. 4.6. The Fund will provide to FirstGWL&A and Schwab at least one complete copy of all registration statements, prospectuses, SAIs, reports, proxy statements, sales literature and other promotional materials, applications for exemptions, requests for no- action letters, and all amendments to any of the above, that relate to the Designated Port- folio(s), contemporaneously with the filing of such document(s) with the SEC or NASD or other regulatory authorities. 4.7. FirstGWL&A or Schwab will provide to the Fund at least one complete copy of all registration statements, prospectuses, SAIs, reports, solicitations for voting instructions, sales literature and other promotional materials, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Contracts or the Account, contemporaneously with the filing of such document(s) with the SEC, NASD, or other regulatory authority. 4.8. For purposes of Articles IV and VIII, the phrase "sales literature and other promotional material" includes, but is not limited to, advertisements (such as material published, or designed for use in, a newspaper, magazine, or other periodical, radio, television, telephone or tape recording, videotape display, signs or billboards, motion pictures, or other public media; e.g., on-line networks such as the Internet and other electronic media), sales literature (i.e., any written communication distributed or made generally available to customers or the public, including brochures, circulars, research reports, market letters, form letters, seminar texts, reprints or excerpts of any other advertisement, sales literature, or published article), educational or training materials or other communications distributed or made generally available to some or all agents or employees, and registration statements, prospectuses, SAIs, shareholder reports, and proxy materials and any other material constituting sales literature or advertising under the NASD rules, the 1933 Act or the 1940 Act. 4.9. At the request of any party to this Agreement, each other party will make available to the other party's independent auditors and/or representative of the appropriate regulatory agencies, all records, data and access to operating procedures that may be reasonably requested in connection with compliance and regulatory requirements related to this Agreement or any party's obligations under this Agreement. ARTICLE V. Fees and Expenses 5.1. The Fund shall pay no fee or other compensation to FirstGWL&A under this Agreement, and FirstGWL&A shall pay no fee or other compensation to the Fund or Adviser under this Agreement, although the parties hereto will bear certain expenses in accordance with Schedule E, Articles III, V, and other provisions of this Agreement. 5.2. All expenses incident to performance by the Fund and the Adviser under this Agreement shall be paid by the appropriate party, as further provided in Schedule E. The Fund shall see to it that all shares of the Designated Portfolio(s) are registered and authorized for issuance in accordance with applicable federal law and, if and to the extent required, in accordance with applicable state laws prior to their sale. 5.3. The parties shall bear the expenses of routine annual distribution (mailing costs) of the Fund's prospectus and distribution (mailing costs) of the Fund's proxy materials and reports to owners of Contracts offered by FirstGWL&A, in accordance with Schedule E. 5.4. The Fund and the Adviser acknowledge that a principal feature of the Contracts is the Contractowner's ability to choose from a number of unaffiliated mutual funds (and portfolios or series thereof), including the Designated Portfolio(s) and the Unaffiliated Funds, and to transfer the Contract's cash value between funds and portfolios. The Fund and the Adviser agree to cooperate with FirstGWL&A and Schwab in facilitating the operation of the Account and the Contracts as described in the prospectus for the Contracts, including but not limited to cooperation in facilitating transfers between Unaffiliated Funds. 5.5. Schwab agrees to provide certain administrative services, specified in Schedule C attached hereto and incorporated herein by reference, in connection with the arrangements contemplated by this Agreement. The parties acknowledge and agree that the services referred to in this Section 5.5 are recordkeeping, shareholder communication, and other transaction facilitation and processing, and related administrative services only and are not the services of an underwriter or a principal underwriter of the Fund and that Schwab is not an underwriter for the shares of the Designated Portfolio(s), within the meaning of the 1933 Act or the 1940 Act. 5.6. As compensation for the services specified in Schedule C hereto, the Adviser agrees to pay Schwab a monthly Administrative Service Fee based on the percentage per annum on Schedule C hereto applied to the average daily value of the shares of the Designated Portfolio(s) held in the Account with respect to Contracts sold by Schwab. This monthly Administrative Service Fee is due and payable before the 15th (fifteenth) day following the last day of the month to which it relates. ARTICLE VI. Diversification and Qualification 6.1. The Fund and the Adviser represent and warrant that the Fund will at all times sell its shares and invest its assets in such a manner as to ensure that the Contracts will be treated as annuity contracts under the Code, and the regulations issued thereunder. Without limiting the scope of the foregoing, the Fund and Adviser represent and warrant that the Fund and each Designated Portfolio thereof will at all times comply with Section 817(h) of the Code and Treasury Regulation 1.817-5, as amended from time to time, and any Treasury interpretations thereof, relating to the diversification requirements for variable annuity, endowment, or life insurance contracts and any amendments or other modifications or successor provisions to such Section or Regulations. The Fund and the Adviser agree that shares of the Designated Portfolio(s) will be sold only to Participating Insurance Companies and their separate accounts and certain Qualified Plans. 6.2. No shares of any Designated Portfolio of the Fund will be sold to the general public. 6.3. The Fund and the Adviser represent and warrant that the Fund and each Designated Portfolio is currently qualified as a Regulated Investment Company under Subchapter M of the Code, and that each Designated Portfolio will maintain such qualification (under Subchapter M or any successor or similar provisions) as long as this Agreement is in effect. 6.4. The Fund or the Adviser will notify FirstGWL&A immediately upon having a reasonable basis for believing that the Fund or any Designated Portfolio has ceased to comply with the aforesaid Section 817(h) diversification or Subchapter M qualification requirements or might not so comply in the future. 6.5. Without in any way limiting the effect of Sections 8.3 and 8.4 hereof and with- out in any way limiting or restricting any other remedies available to FirstGWL&A or Schwab, the Adviser will pay all costs associated with or arising out of any failure, or any anticipated or reasonably foreseeable failure, of the Fund or any Designated Portfolio to comply with Sections 6.1, 6.2, or 6.3 hereof, including all costs associated with reasonable and appropriate corrections or responses to any such failure; such costs may include, but are not limited to, the costs involved in creating, organizing, and registering a new investment company as a funding medium for the Contracts and/or the costs of obtaining whatever regulatory authorizations are required to substitute shares of another investment company for those of the failed Portfolio (including but not limited to an order pursuant to Section 26(b) of the 1940 Act); such costs are to include, but are not limited to, fees and expenses of legal counsel and other advisors to FirstGWL&A and any federal income taxes or tax penalties and interest thereon (or "toll charges" or exactments or amounts paid in settlement) incurred by FirstGWL&A with respect to itself or owners of its Contracts in connection with any such failure or anticipated or reasonably foreseeable failure. 6.6. The Fund at the Fund's expense shall provide FirstGWL&A or its designee with reports certifying compliance with the aforesaid Section 817(h) diversification and Subchapter M qualification requirements, at the times provided for and substantially in the form attached hereto as Schedule D and incorporated herein by reference; provided, however, that providing such reports does not relieve the Fund of its responsibility for such compliance or of its liability for any non-compliance. 6.7. FirstGWL&A agrees that if the Internal Revenue Service ("IRS") asserts in writing in connection with any governmental audit or review of FirstGWL&A or, to FirstGWL&A's knowledge, or any Contractowner that any Designated Portfolio has failed to comply with the diversification requirements of Section 817(h) of the Code or FirstGWL&A otherwise becomes aware of any facts that could give rise to any claim against the Fund or the Adviser as a result of such a failure or alleged failure: (a) FirstGWL&A shall promptly notify the Fund and the Adviser of such assertion or potential claim; (b) FirstGWL&A shall consult with the Fund and the Adviser as to how to minimize any liability that may arise as a result of such failure or alleged failure; (c) FirstGWL&A shall use its best efforts to minimize any liability of the Fund and the Adviser resulting from such failure, including, without limitation, demonstrating, pursuant to Treasury Regulations, Section 1.817-5(a)(2), to the commissioner of the IRS that such failure was inadvertent; (d) any written materials to be submitted by FirstGWL&A to the IRS, any Contractowner or any other claimant in connection with any of the foregoing proceedings or contests (including, without limitation, any such materials to be submitted to the IRS pursuant to Treasury Regulations, Section 1.817-5(a)(2)) shall be provided by FirstGWL&A to the Fund and the Adviser (together with any supporting information or analysis) within at least two (2) business days prior to submission; (e) FirstGWL&A shall provide the Fund and the Adviser with such cooperation as the Fund and the Adviser shall reasonably request (including, without limitation, by permitting the Fund and the Adviser to review the relevant books and records of FirstGWL&A) in order to facilitate review by the Fund and the Adviser of any written submissions provided to it or its assessment of the validity or amount of any claim against it arising from such failure or alleged failure; (f) FirstGWL&A shall not with respect to any claim of the IRS or any Contractowner that would give rise to a claim against the Fund and the Adviser (i) compromise or settle any claim, (ii) accept any adjustment on audit, or (iii) forego any allowable administrative or judicial appeals, without the express written consent of the Fund and the Adviser, which shall not be unreasonably withheld; provided that, FirstGWL&A shall not be required to appeal any adverse judicial decision unless the Fund and the Adviser shall have provided an opinion of independent counsel to the effect that a reasonable basis exists for taking such appeal; and further provided that the Fund and the Adviser shall bear the costs and expenses, including reasonable attorney's fees, incurred by FirstGWL&A in complying with this clause (f). ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order 7.1. The Board will monitor the Fund for the existence of any material irreconcilable conflict between the interests of the contract owners of all separate accounts investing in the Fund. An irreconcilable material conflict may arise for a variety of reasons, including: (a) an action by any state insurance regulatory authority; (b) a change in applicable federal or state insurance, tax, or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretative letter, or any similar action by insurance, tax, or securities regulatory authorities; (c) an administrative or judicial decision in any relevant proceeding; (d) the manner in which the investments of any Portfolio are being managed; (e) a difference in voting instructions given by variable annuity contract and variable life insurance contract owners or by contract owners of different Participating Insurance Companies; or (f) a decision by a Participating Insurance Company to disregard the voting instructions of contract owners. The Board shall promptly inform FirstGWL&A if it determines that an irreconcilable material conflict exists and the implications thereof. 7.2. FirstGWL&A will report any potential or existing conflicts of which it is aware to the Board. FirstGWL&A will assist the Board in carrying out its responsibilities under the Mixed and Shared Funding Exemptive Order, by providing the Board with all information reasonably necessary for the Board to consider any issues raised. This includes, but is not limited to, an obligation by FirstGWL&A to inform the Board whenever contract owner voting instructions are to be disregarded. Such responsibilities shall be carried out by FirstGWL&A with a view only to the interests of its Contractowners. 7.3. If it is determined by a majority of the Board, or a majority of its directors who are not interested persons of the Fund, the Adviser or any sub-adviser to any of the Designated Portfolios (the "Independent Directors"), that a material irreconcilable conflict exists, FirstGWL&A and other Participating Insurance Companies shall, at their expense and to the extent reasonably practicable (as determined by a majority of the Independent Directors), take whatever steps are necessary to remedy or eliminate the irreconcilable material conflict, up to and including: (1) withdrawing the assets allocable to some or all of the separate accounts from the Fund or any Designated Portfolio and reinvesting such assets in a different investment medium, including (but not limited to) another portfolio of the Fund, or submitting the question whether such segregation should be implemented to a vote of all affected contract owners and, as appropriate, segregating the assets of any appropriate group (i.e., annuity contract owners, life insurance contract owners, or variable contract owners of one or more Participating Insurance Companies) that votes in favor of such segregation, or offering to the affected contract owners the option of making such a change; and (2) establishing a new registered management investment company or managed separate account. 7.4. If a material irreconcilable conflict arises because of a decision by FirstGWL&A to disregard contract owner voting instructions and that decision represents a minority position or would preclude a majority vote, FirstGWL&A may be required, at the Fund's election, to withdraw the Account's investment in the Fund and terminate this Agreement; provided, however that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the Independent Directors. Any such withdrawal and termination must take place within six (6) months after the Fund gives written notice that this provision is being implemented, and until the end of that six month period the Adviser and the Fund shall continue to accept and implement orders by FirstGWL&A for the purchase (and redemption) of shares of the Fund. 7.5. If a material irreconcilable conflict arises because a particular state insurance regulator's decision applicable to FirstGWL&A conflicts with the majority of other state regulators, then FirstGWL&A will withdraw the Account's investment in the Fund and terminate this Agreement within six months after the Board informs FirstGWL&A in writing that it has determined that such decision has created an irreconcilable material conflict; provided, however, that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the disinterested members of the Board. Until the end of the foregoing six month period, the Fund shall continue to accept and implement orders by FirstGWL&A for the purchase (and redemption) of shares of the Fund. 7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority of the Independent Directors shall determine whether any proposed action adequately remedies any irreconcilable material conflict, but in no event will the Fund be required to establish a new funding medium for the Contracts. FirstGWL&A shall not be required by Section 7.3 to establish a new funding medium for the Contracts if an offer to do so has been declined by vote of a majority of Contractowners affected by the irreconcilable material conflict. In the event that the Board determines that any proposed action does not adequately remedy any irreconcilable material conflict, then FirstGWL&A will withdraw the Account's investment in the Fund and terminate this Agreement within six (6) months after the Board informs FirstGWL&A in writing of the foregoing determination; provided, however, that such withdrawal and termination shall be limited to the extent required by any such material irreconcilable conflict as determined by a majority of the Independent Directors. 7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act or the rules promulgated thereunder with respect to mixed or shared funding (as defined in the Mixed and Shared Funding Exemptive Order) on terms and conditions materially different from those contained in the Mixed and Shared Funding Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies, as appropriate, shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable: and (b) Sections 3.5, 3.6, 3.7, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall continue in effect only to the extent that terms and con- ditions substantially identical to such Sections are contained in such Rule(s) as so amended or adopted. ARTICLE VIII. Indemnification 8.1. Indemnification By FirstGWL&A 8.1(a). FirstGWL&A agrees to indemnify and hold harmless the Fund and the Adviser and each of their officers and directors or trustees and each person, if any, who controls the Fund or the Adviser within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.1) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of FirstGWL&A) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in the registration statement or pro- spectus or SAI covering the Contracts or contained in the Contracts or sales literature for the Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or nec- essary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser or Fund for use in the registration statement or prospectus for the Contracts or in the Contracts or sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, pro- spectus or sales literature of the Fund not supplied by FirstGWL&A or persons under its control) or wrongful conduct of FirstGWL&A or persons under its control, with respect to the sale or distribution of the Contracts or Fund Shares; or (iii)arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, or sales literature of the Fund, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such a statement or omission was made in reliance upon information furnished in writing to the Fund by or on behalf of FirstGWL&A; or (iv) arise as a result of any failure by FirstGWL&A to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by FirstGWL&A in this Agreement or arise out of or result from any other material breach of this Agreement by FirstGWL&A, including without limitation Section 2.10 and Section 6.7 hereof, as limited by and in accordance with the provisions of Sections 8.1(b) and 8.1(c) hereof. 8.1(b). FirstGWL&A shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.1(c). FirstGWL&A shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified FirstGWL&A in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify FirstGWL&A of any such claim shall not relieve FirstGWL&A from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that FirstGWL&A has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, FirstGWL&A shall be entitled to participate, at its own expense, in the defense of such action. FirstGWL&A also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from FirstGWL&A to such party of FirstGWL&A's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and FirstGWL&A will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.1(d). The Indemnified Parties will promptly notify FirstGWL&A of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund. 8.2. Indemnification by Schwab 8.2(a). Schwab agrees to indemnify and hold harmless the Fund and the Adviser and each of their officers and directors or trustees and each person, if any, who controls the Fund or Adviser within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.2) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of Schwab) or litigation (including reasonable legal and other expenses), to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of Schwab's dissemination of information regarding the Fund that is both (A) materially incorrect and (B) that was neither contained in the Fund's registration statement or sales literature nor other promotional material of the Fund prepared by the Fund or provided in writing to Schwab, or approved in writing, by or on behalf of the Fund or the Adviser; or (ii) arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in sales literature or other promotional material prepared by Schwab for the Contracts or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser or the Fund or to Schwab by FirstGWL&A for use in the registration statement or prospectus for the Contracts or in the Contracts or sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts; or (iii)arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus or sales literature of the Fund not supplied by Schwab or persons under its control) or wrongful conduct of Schwab or persons under its control, with respect to the sale or distribution of the Contracts; or (iv) arise as a result of any failure by Schwab to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by Schwab in this Agreement or arise out of or result from any other material breach of this Agreement by Schwab; as limited by and in accordance with the provisions of Sections 8.2(b) and 8.2(c) hereof. 8.2(b). Schwab shall not be liable under this indemnification provision with respect to any losses, claims, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.2(c). Schwab shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified Schwab in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify Schwab of any such claim shall not relieve Schwab from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that Schwab has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, Schwab shall be entitled to participate, at its own expense, in the defense of such action. Schwab also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from Schwab to such party of Schwab's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and Schwab will not be liable to such party under this Agreement for any legal or other ex- penses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.2(d). The Indemnified Parties will promptly notify Schwab of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund. 8.3. Indemnification by the Adviser 8.3(a). The Adviser agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their directors and officers and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.3) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Adviser) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Fund or the Adviser (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reli- ance upon and in conformity with information furnished in writing to the Adviser or the Fund by or on behalf of FirstGWL&A or Schwab for use in the registration statement or prospectus for the Fund or in sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or the Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI or sales literature or other promotional material for the Contracts not supplied by the Adviser or persons under its control) or wrongful conduct of the Fund or the Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or (iii)arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, or sales literature covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser or the Fund; or (iv) arise as a result of any failure by the Fund or the Adviser to provide the services and furnish the materials under the terms of this Agreement (in- cluding a failure, whether unintentional or in good faith or otherwise, to com- ply with the diversification and other qualification requirements specified in Article VI of this Agreement); or (v) arise out of or result from any material breach of any representation and/or warranty made by the Fund or the Adviser in this Agreement or arise out of or result from any other material breach of this Agreement by the Adviser or the Fund; or (vi) arise out of or result from the incorrect or untimely calculation or reporting of the daily net asset value per share or dividend or capital gain distribution rate; as limited by and in accordance with the provisions of Sections 8.3(b) and 8.3(c) hereof. This indemnification is in addition to and apart from the responsibilities and obligations of the Adviser specified in Article VI hereof. 8.3(b). The Adviser shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.3(c). The Adviser shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Adviser in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Adviser of any such claim shall not relieve the Adviser from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Adviser has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Adviser will be entitled to participate, at its own expense, in the defense thereof. The Adviser also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Adviser to such party of the Adviser's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Adviser will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.3(d). FirstGWL&A and Schwab agree promptly to notify the Adviser of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Account. 8.4. Indemnification By the Fund 8.4(a). The Fund agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their directors and officers and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.4) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Fund) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may be required to pay or become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements, are related to the operations of the Fund and: (i) arise as a result of any failure by the Fund to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agree- ment); or (ii) arise out of or result from any material breach of any representation and/or warranty made by the Fund in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund; or (iii)arise out of or result from the incorrect or untimely calculation or reporting of the daily net asset value per share or dividend or capital gain distribution rate; as limited by and in accordance with the provisions of Sections 8.4(b) and 8.4(c) hereof. 8.4(b). The Fund shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.4(c). The Fund shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Fund in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Fund of any such claim shall not relieve it from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Fund has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Fund will be entitled to participate, at its own expense, in the defense thereof. The Fund shall also be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Fund to such party of the Fund's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Fund will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.4(d). FirstGWL&A and Schwab each agree promptly to notify the Fund of the commencement of any litigation or proceeding against itself or any of its respective officers or directors in connection with the Agreement, the issuance or sale of the Contracts, the operation of the Account, or the sale or acquisition of shares of the Fund. ARTICLE IX. Applicable Law 9.1. This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the State of New York, without regard to the New York Conflict of Laws provisions. 9.2. This Agreement shall be subject to the provisions of the 1933, 1934 and 1940 Acts, and the rules and regulations and rulings thereunder, including such exemptions from those statutes, rules and regulations as the Securities and Exchange Commission may grant (including, but not limited to, the Mixed and Shared Funding Exemptive Order) and the terms hereof shall be interpreted and construed in accordance therewith. ARTICLE X. Termination 10.1.This Agreement shall terminate: (a) at the option of any party, with or without cause, with respect to some or all Portfolios, upon six (6) months advance written notice delivered to the other parties; provided, however, that such notice shall not be given earlier than six (6) months following the date of this Agreement; or (b) at the option of FirstGWL&A or Schwab by written notice to the other parties with respect to any Portfolio based upon FirstGWL&A's or Schwab's determination that shares of such Portfolio are not reasonably available to meet the requirements of the Contracts; or (c) at the option of FirstGWL&A or Schwab by written notice to the other parties with respect to any Portfolio in the event any of the Portfolio's shares 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 FirstGWL&A; or (d) at the option of the Fund in the event that formal administrative proceedings are instituted against FirstGWL&A or Schwab by the NASD, the SEC, the Insurance Commissioner or like official of any state or any other regulatory body regarding FirstGWL&A's or Schwab's duties under this Agreement or related to the sale of the Contracts, the operation of any Account, or the purchase of the Fund shares, if, in each case, the Fund reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of FirstGWL&A or Schwab to perform its obligations under this Agreement; or (e) at the option of FirstGWL&A or Schwab in the event that formal administrative proceedings are instituted against the Fund or the Adviser by the NASD, the SEC, or any state securities or insurance department or any other regulatory body, if Schwab or FirstGWL&A reasonably 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 Fund or the Adviser to perform their obligations under this Agreement; or (f) at the option of FirstGWL&A by written notice to the Fund with respect to any Portfolio if FirstGWL&A reasonably believes that the Portfolio will fail to meet the Section 817(h) diversification requirements or Subchapter M qualifications specified in Article VI hereof; or (g) at the option of either the Fund or the Adviser, if (i) the Fund or Adviser, respectively, shall determine, in their sole judgment reasonably exercised in good faith, that either FirstGWL&A or Schwab has suffered a material adverse change in their business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on FirstGWL&A's or Schwab's ability to perform its obligations under this Agreement, (ii) the Fund or the Adviser notifies FirstGWL&A or Schwab, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by FirstGWL&A or Schwab and any other changes in circumstances since the giving of such a notice, the determination of the Fund or the Adviser shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or (h) at the option of either FirstGWL&A or Schwab, if (i) FirstGWL&A or Schwab, respectively, shall determine, in its sole judgment reasonably exercised in good faith, that either the Fund or the Adviser has suffered a material adverse change in its business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on the Fund's or the Adviser's ability to perform its obligations under this Agreement, (ii) FirstGWL&A or Schwab notifies the Fund or the Adviser, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by the Fund or the Adviser and any other changes in circumstances since the giving of such a notice, the determination of FirstGWL&A or Schwab shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or (i) at the option of FirstGWL&A in the event that formal administrative proceedings are instituted against Schwab by the NASD, the Securities and Exchange Commission, or any state securities or insurance department or any other regulatory body regarding Schwab's duties under this Agreement or related to the sale of the Fund's shares or the Contracts, the operation of any Account, or the purchase of the Fund shares, provided, however, that FirstGWL&A determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of Schwab to perform its obligations related to the Contracts; or (j) at the option of Schwab in the event that formal administrative proceedings are instituted against FirstGWL&A by the NASD, the Securities and Exchange Commission, or any state securities or insurance department or any other regulatory body regarding FirstGWL&A's duties under this Agreement or related to the sale of the Fund's shares or the Contracts, the operation of any Account, or the purchase of the Fund shares, provided, however, that Schwab determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of FirstGWL&A to perform its obligations related to the Contracts; or (k) at the option of any non-defaulting party hereto in the event of a material breach of this Agreement by any party hereto (the "defaulting party") other than as described in 10.1(a)-(j); provided, that the non-defaulting party gives written notice thereof to the defaulting party, with copies of such notice to all other non-defaulting parties, and if such breach shall not have been remedied within thirty (30) days after such written notice is given, then the non- defaulting party giving such written notice may terminate this Agreement by giving thirty (30) days written notice of termination to the defaulting party. 10.2.Notice Requirement. No termination of this Agreement shall be effective unless and until the party terminating this Agreement gives prior written notice to all other parties of its intent to terminate, which notice shall set forth the basis for the termination. Furthermore, (a) in the event any termination is based upon the provisions of Article VII, or the provisions of Section 10.1(a), 10.1(g) or 10.1(h) of this Agreement, the prior written notice shall be given in advance of the effective date of termination as required by those provisions unless such notice period is shortened by mutual written agreement of the parties; (b) in the event any termination is based upon the provisions of Section 10.1(d), 10.1(e), 10.1(i) or 10.1(j) of this Agreement, the prior written notice shall be given at least sixty (60) days before the effective date of termination; and (c) in the event any termination is based upon the provisions of Section 10.1(b), 10.1(c) or 10.1(f), the prior written notice shall be given in advance of the effective date of termination, which date shall be determined by the party sending the notice. 10.3.Effect of Termination. Notwithstanding any termination of this Agreement, other than as a result of a failure by either the Fund or FirstGWL&A to meet Section 817(h) of the Code diversification requirements, the Fund and the Adviser shall, at the option of FirstGWL&A or Schwab, continue to make available additional shares of the Designated Portfolios pursuant to the terms and conditions of this Agreement, for all Contracts in effect on the effective date of termination of this Agreement (hereinafter referred to as "Existing Contracts"). Specifically, without limitation, the owners of the Existing Contracts shall be permitted to reallocate investments in the Designated Portfolios, redeem investments in the Designated Portfolios and/or invest in the Designated Portfolios upon the making of additional purchase payments under the Existing Contracts. The parties agree that this Section 10.3 shall not apply to any terminations under Article VII and the effect of such Article VII terminations shall be governed by Article VII of this Agreement. 10.4.Surviving Provisions. Notwithstanding any termination of this Agreement, each party's obligations under Article VIII to indemnify other parties shall survive and not be affected by any termination of this Agreement. In addition, with respect to Existing Contracts, all provisions of this Agreement shall also survive and not be affected by any termination of this Agreement. 10.5.Survival of Agreement. A termination by Schwab shall terminate this Agreement only as to Schwab, and this Agreement shall remain in effect as to the other par- ties; provided, however, that in the event of a termination by Schwab the other parties shall have the option to terminate this Agreement upon 60 (sixty) days notice, rather than the six (6) months specified in Section 10.1(a). ARTICLE XI. Notices Any notice shall be sufficiently given when sent by registered or certified mail to the other party at the address of such party set forth below or at such other address as such party may from time to time specify in writing to the other party. If to the Fund: Lexington Emerging Markets Fund, Inc. Park 80 West Plaza Two Saddle Brook, NJ 07663 Attention: Lisa Curcio If to FirstGWL&A: First Great-West Life & Annuity Insurance Company 8515 East Orchard Road Englewood, CO 80111 Attention:Assistant Vice President, Savings Products If to the Adviser: Lexington Management Corporation Park 80 West Plaza Two Saddle Brook, NJ 07663 Attention: Lawrence Kantor If to Schwab: Charles Schwab & Co., Inc. 101 Montgomery Street San Francisco, CA 94104 Attention: General Counsel ARTICLE XII. Miscellaneous 12.1.Subject to the requirements of legal process and regulatory authority, each party hereto shall treat as confidential the names and addresses of the owners of the Contracts and all information reasonably identified as confidential in writing by any other party hereto and, except as permitted by this Agreement, shall not disclose, disseminate or utilize such names and addresses and other confidential information without the express written consent of the affected party until such time as such information may come into the public domain. Without limiting the foregoing, no party hereto shall disclose any information that another party has designated as proprietary. 12.2.The captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provisions hereof or otherwise affect their construction or effect. 12.3.This Agreement may be executed simultaneously in two or more counterparts, each of which taken together shall constitute one and the same instrument. 12.4.If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby. 12.5.Each party hereto shall cooperate with each other party and all appropriate governmental authorities (including without limitation the SEC, the NASD and state insurance regulators) and shall permit such authorities reasonable access to its books and records in connection with any investigation or inquiry relating to this Agreement or the transactions contemplated hereby. Notwithstanding the generality of the foregoing, each party hereto further agrees to furnish the New York Insurance Commissioner with any information or reports in connection with services provided under this Agreement which such Commissioner may request in order to ascertain whether the variable annuity operations of FirstGWL&A are being conducted in a manner consistent with the New York Variable Annuity Regulations and any other applicable law or regulations. 12.6.Any controversy or claim arising out of or relating to this Agreement, or breach thereof, shall be settled by arbitration in a forum jointly selected by the relevant parties (but if applicable law requires some other forum, then such other forum) in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. 12.7.The rights, remedies and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies and obligations, at law or in equity, which the parties hereto are entitled to under state and federal laws. 12.8.This Agreement or any of the rights and obligations hereunder may not be assigned by any party without the prior written consent of all parties hereto. 12.9.Schwab and FirstGWL&A agree that the obligations assumed by the Fund and the Adviser pursuant to this Agreement shall be limited to the Fund and Adviser and their respective assets and neither Schwab nor FirstGWL&A shall seek satisfaction of any such obligation from the shareholders of the Fund or the Adviser, the directors, officers, employees or agents of the Fund or Adviser, or any of them, except to the extent permitted under this Agreement. 12.10.The Fund and the Adviser agree that the obligations assumed by FirstGWL&A and Schwab pursuant to this Agreement shall be limited in any case to FirstGWL&A and Schwab and their respective assets and neither the Fund nor the Adviser shall seek satisfaction of any such obligation from the shareholders of the FirstGWL&A or Schwab, the directors, officers, employees or agents of the FirstGWL&A or Schwab, or any of them, except to the extent permitted under this Agreement. 12.11.No provision of this Agreement may be deemed or construed to modify or supersede any contractual rights, duties, or indemnifications, as between the Adviser and the Fund. IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in its name and on its behalf by its duly authorized representative and its seal to be hereunder affixed hereto as of the date specified below. FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY By its authorized officer, By:/s/ Robert K. Shaw Title: Vice President, Marketing & Product Development Date: April 1, 1997 LEXINGTON EMERGING MARKETS FUND, INC. By its authorized officer, By:/s/ Lawrence Kantor Title: Vice President Date: March 12, 1997 LEXINGTON MANAGEMENT CORPORATION By its authorized officer, By:/s/ Lawrence Kantor Title: Executive Vice President Date: March 12, 1997 CHARLES SCHWAB & CO., INC. By its authorized officer, By:/s/ Jeff Benton Title:Vice President, Annuities & Life Insurance Date:March 31, 1997 Schwab Variable Annuity SCHEDULE A Contracts Form Numbers First Great-West Life & Annuity Insurance Company Group Variable/Fixed Annuity Contract J434NY SCHEDULE B Designated Portfolios Lexington Emerging Markets Fund SCHEDULE C Administrative Services To be performed by Charles Schwab & Co., Inc. A. Schwab will provide the properly registered and licensed personnel and systems needed for all customer servicing and support - for both fund and annuity information and questions - including: respond to Contractowner inquiries delivery of prospectus - both fund and annuity; entry of initial and subsequent orders; transfer of cash to insurance company and/or funds; explanations of fund objectives and characteristics; entry of transfers between funds; fund balance and allocation inquiries; mail fund prospectus. B. For the services, Schwab shall receive a fee of 0.25% per annum applied to the average daily value of the shares of the fund held by Schwab's customers, payable by the Adviser directly to Schwab, such payments being due and payable within 15 (fifteen) days after the last day of the month to which such payment relates. C. The Fund will calculate and Schwab will verify with FirstGWL&A the asset balance for each day on which the fee is to be paid pursuant to this Agreement with respect to each Designated Portfolio. D. Schwab will communicate all purchase, withdrawal, and exchange orders it receives from its customers to FirstGWL&A who will retransmit them to each fund. SCHEDULE D Reports per Section 6.6 With regard to the reports relating to the quarterly testing of compliance with the requirements of Section 817(h) and Subchapter M under the Internal Revenue Code (the "Code") and the regulations thereunder, the Fund shall provide within twenty (20) Business Days of the close of the calendar quarter a report to FirstGWL&A in the Form D1 attached hereto and incorporated herein by reference, regarding the status under such sections of the Code of the Designated Portfolio(s), and if necessary, identification of any remedial action to be taken to remedy non-compliance. With regard to the reports relating to the year-end testing of compliance with the requirements of Subchapter M of the Code, referred to hereinafter as "RIC status," the Fund will provide the reports on the following basis: (i) the last quarter's quarterly reports can be supplied within the 20-day period, and (ii) a year-end report will be provided 45 days after the end of the calendar year. However, if a problem with regard to RIC status, as defined below, is identified in the third quarter report, on a weekly basis, starting the first week of December, additional interim reports will be provided specially addressing the problems identified in the third quarter report. If any interim report memorializes the cure of the problem, subsequent interim reports will not be required. A problem with regard to RIC status is defined as any violation of the following standards, as referenced to the applicable sections of the Code: (a) Less than ninety percent of gross income is derived from sources of income specified in Section 851(b)(2); (b) Thirty percent or greater gross income is derived from the sale or disposition of assets specified in Section 851(b)(3); (c) Less than fifty percent of the value of total assets consists of assets specified in Section 851(b)(4)(A); and (d) No more than twenty-five percent of the value of total assets is invested in the securities of one issuer, as that requirement is set forth in Section 851(b)(4)(B). FORM D1 CERTIFICATE OF COMPLIANCE I, , a duly authorized officer, director or agent of Fund hereby swear and affirm that Fund is in compliance with all requirements of Section 817(h) and Subchapter M of the Internal Revenue Code (the "Code") and the regulations thereunder as required in the Fund Participation Agreement among First Great-West Life & Annuity Insurance Company, Charles Schwab & Co., Inc. and other than the exceptions discussed below: Exceptions Remedial Action If no exception to report, please indicate "None." Signed this day of , . (Signature) By: (Type or Print Name and Title/Position) SCHEDULE E EXPENSES The Fund and/or Adviser, and FirstGWL&A will coordinate the functions and pay the costs of the completing these functions based upon an allocation of costs in the tables below. Costs shall be allocated to reflect the Fund's share of the total costs determined according to the number of pages of the Fund's respective portions of the documents. Item Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Prospectus Printing of combined prospectuses FirstGWL&A Fund or Adviser, as applicable Fund or Adviser shall supply FirstGWL&A with such numbers of the Designated Portfolio(s) prospectus(es) as FirstGWL&A shall reasonably request FirstGWL&A Fund or Adviser, as applicable Distribution to New and Inforce Clients FirstGWL&A FirstGWL&A Distribution to Prospective Clients Schwab Schwab Product Prospectus Printing for Inforce Clients FirstGWL&A FirstGWL&A Printing for Prospective Clients FirstGWL&A Schwab Distribution to New and Inforce Clients FirstGWL&A FirstGWL&A Distribution to Prospective Clients Schwab SchwabItem Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Prospectus Update & Distribution If Required by Fund or Adviser Fund or Adviser Fund or Adviser If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab Schwab Schwab Product Prospectus Update & Distribution If Required by Fund or Adviser FirstGWL&A Fund or Adviser Item Function Party Responsible for Coordination Party Responsible for Expense If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab Schwab Schwab Mutual Fund SAI Printing Fund or Adviser Fund or Adviser Distribution FirstGWL&A FirstGWL&A Product SAI Printing FirstGWL&A FirstGWL&A Distribution FirstGWL&A FirstGWL&A Item Function Party Responsible for Coordination Party Responsible for Expense Proxy Material for Mutual Fund: Printing if proxy required by Law Fund or Adviser Fund or Adviser Distribution (including labor) if proxy required by Law FirstGWL&A Fund or Adviser Printing & distribution if required by FirstGWL&A FirstGWL&A FirstGWL&A Printing & distribution if required by Schwab FirstGWL&A Schwab Item Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Annual & Semi-Annual Report Printing of combined reports FirstGWL&A Fund or Adviser Distribution FirstGWL&A FirstGWL&A and Schwab Other communication to New and Prospective clients If Required by the Fund or Adviser Schwab Fund or Adviser If Required by FirstGWL&A Schwab FirstGWL&A Item Function Party Responsible for Coordination Party Responsible for Expense If Required by Schwab Schwab Schwab Other communication to inforce Distribution (including labor) if required by the Fund or Adviser FirstGWL&A Fund or Adviser If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab FirstGWL&A Schwab Item Function Party Responsible for Coordination Party Responsible for Expense Errors in Share Price calculation pursuant to Section 1.10 Cost of error to participants FirstGWL&A Fund or Adviser Cost of administrative work to correct error FirstGWL&A Fund or Adviser Operations of the Fund All operations and related expenses, including the cost of registration and qualification of shares, taxes on the issuance or transfer of shares, cost of management of the business affairs of the Fund, and expenses paid or assumed by the fund pursuant to any Rule 12b-1 plan Fund or Adviser Fund or Adviser Operations of the Account Federal registration of units of separate account (24f-2 fees) FirstGWL&A FirstGWL&A EX-8.8 15 EXHIBIT 8.8 FUND PARTICIPATION AGREEMENT Montgomery Funds III TABLE OF CONTENTS ARTICLE I. Sale of Fund Shares . . . . . . . . . . . . . . . .3 ARTICLE II. Representations and Warranties. . . . . . . . . . .7 ARTICLE III. Prospectuses and Proxy Statements; Voting . . . . 11 ARTICLE IV. Sales Material and Information. . . . . . . . . . 13 ARTICLE V. Fees and Expenses . . . . . . . . . . . . . . . . 15 ARTICLE VI. Diversification and Qualification . . . . . . . . 17 ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order . . . . 20 ARTICLE VIII.Indemnification . . . . . . . . . . . . . . . . . 23 ARTICLE IX. Applicable Law. . . . . . . . . . . . . . . . . . 32 ARTICLE X. Termination . . . . . . . . . . . . . . . . . . . 32 ARTICLE XI. Notices . . . . . . . . . . . . . . . . . . . . . 36 ARTICLE XII. Miscellaneous . . . . . . . . . . . . . . . . . . 37 SCHEDULE A Contracts . . . . . . . . . . . . . . . . . . . . 41 SCHEDULE B Designated Portfolios . . . . . . . . . . . . . . 42 SCHEDULE C Administrative Services . . . . . . . . . . . . . 43 SCHEDULE D Reports per Section 6.6 . . . . . . . . . . . . . 44 SCHEDULE E Expenses. . . . . . . . . . . . . . . . . . . . . 47 PARTICIPATION AGREEMENT Among FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY MONTGOMERY FUNDS III, MONTGOMERY ASSET MANAGEMENT, L.P. and CHARLES SCHWAB & CO., INC. THIS AGREEMENT, made and entered into as of this ____ day of _______________, 1997 by and among FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (hereinafter "FirstGWL&A"), a New York life insurance company, on its own behalf and on behalf of its Separate Account Variable Annuity-1 Series Account (the "Account"); MONTGOMERY FUNDS III, a business trust organized under the laws of Delaware (hereinafter the "Fund"); MONTGOMERY ASSET MANAGEMENT, L.P. (hereinafter the "Adviser"), a limited partnership organized under the laws of California; and CHARLES SCHWAB & CO., INC., a California corporation (hereinafter "Schwab"). WHEREAS, the Fund engages in business as an open-end management investment company and is available to act as the investment vehicle for separate accounts established for variable life insurance policies and/or variable annuity contracts (collectively, the "Variable Insurance Products") to be offered by insurance companies, including FirstGWL&A, which have entered into participation agreements similar to this Agreement (hereinafter "Participating Insurance Companies"); and WHEREAS, the beneficial interest in the Fund is divided into several series of shares, each designated a "Portfolio" and representing the interest in a particular managed portfolio of securities and other assets; and WHEREAS, the Fund has obtained an order from the Securities and Exchange Commission (hereinafter the "SEC"), dated May 11, 1995 (File No. 812-9272), granting Participating Insurance Companies and variable annuity and variable life insurance separate accounts exemptions from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended, (hereinafter the "1940 Act") and Rules 6e- 2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Fund to be sold to and held by variable annuity and variable life insurance separate accounts of life insurance companies that may or may not be affiliated with one another and qualified pension and retirement plans ("Qualified Plans") (hereinafter the "Mixed and Shared Funding Exemptive Order"); and WHEREAS, the Fund is registered as an open-end management investment company under the 1940 Act and shares of the Portfolio(s) are registered under the Securities Act of 1933, as amended (hereinafter the "1933 Act"); and WHEREAS, the Adviser is duly registered as an investment adviser under the Investment Advisers Act of 1940, as amended, and any applicable state securities laws; and WHEREAS, FirstGWL&A has registered or will register certain variable annuity contracts supported wholly or partially by the Account (the "Contracts") under the 1933 Act and said Contracts are listed in Schedule A attached hereto and incorporated herein by reference, as such Schedule may be amended from time to time by mutual written agreement; and WHEREAS, the Account is a duly organized, validly existing segregated asset account, established by resolution of the Board of Directors of FirstGWL&A on January 15, 1997, under the insurance laws of the State of New York, to set aside and invest assets attributable to the Contracts; and WHEREAS, FirstGWL&A has registered or will register the Account as a unit investment trust under the 1940 Act and has registered or will register the securities deemed to be issued by the Account under the 1933 Act; and WHEREAS, to the extent permitted by applicable insurance laws and regulations, FirstGWL&A intends to purchase shares in the Portfolio(s) listed in Schedule B attached hereto and incorporated herein by reference, as such Schedule may be amended from time to time by mutual written agreement (the "Designated Portfolio(s)"), on behalf of the Account to fund the Contracts, and the Fund is authorized to sell such shares to unit investment trusts such as the Account at net asset value; and WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Account also intends to purchase shares in other open-end investment companies or series thereof not affiliated with the Fund (the "Unaffiliated Funds") on behalf of the Account to fund the Contracts; and WHEREAS, Schwab will perform certain services for the Fund in connection with the Contracts; NOW, THEREFORE, in consideration of their mutual promises, FirstGWL&A, Schwab, the Fund and the Adviser agree as follows: ARTICLE I. Sale of Fund Shares 1.1. The Fund agrees to sell to FirstGWL&A those shares of the Designated Portfolio(s) which the Account orders, executing such orders on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the order for the shares of the Portfolios. For purposes of this Section 1.1, FirstGWL&A shall be the designee of the Fund for receipt of such orders and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such order by 10:00 a.m. Eastern time on the next following Business Day. "Business Day" shall mean any day on which the New York Stock Exchange is open for trading and on which the Fund calculates its net asset value pursuant to the rules of the SEC. 1.2. The Fund agrees to make shares of the Designated Portfolio(s) available for purchase at the applicable net asset value per share by FirstGWL&A and the Account on those days on which the Fund calculates its Designated Portfolio(s)' net asset value pursuant to rules of the SEC, and the Fund shall calculate such net asset value on each day which the New York Stock Exchange is open for trading. Notwithstanding the foregoing, the Board of Trustees of the Fund (hereinafter the "Board") may refuse to sell shares of any Portfolio to any person, or suspend or terminate the offering of shares of any Portfolio if such action is required by law or by regulatory authorities having jurisdiction or is, in the sole discretion of the Board acting in good faith and in light of its fiduciary duties under federal and any applicable state laws, necessary in the best interests of the shareholders of such Portfolio. 1.3. The Fund will not sell shares of the Designated Portfolio(s) to any other Participating Insurance Company separate account unless an agreement containing provisions substantially the same as Sections 2.1, 3.5, 3.6, 3.7, and Article VII of this Agreement is in effect to govern such sales. 1.4. The Fund agrees to redeem for cash, on FirstGWL&A's request, any full or fractional shares of the Fund held by FirstGWL&A, executing such requests on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the request for redemption. Requests for redemption identified by FirstGWL&A, or its agent, as being in connection with surrenders, annuitizations, or death benefits under the Contracts, upon prior written notice, may be executed within seven (7) calendar days after receipt by the Fund or its designee of the requests for redemption. This Section 1.4 may be amended, in writing, by the parties consistent with the requirements of the 1940 Act and interpretations thereof. For purposes of this Section 1.4, FirstGWL&A shall be the designee of the Fund for receipt of requests for redemption and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such request for redemption by 10:00 A.M. Eastern time on the next following Business Day. 1.5. The Parties hereto acknowledge that the arrangement contemplated by this Agreement is not exclusive; the Fund's shares may be sold to other Participating Insurance Companies (subject to Section 1.3 and Article VI hereof) and the cash value of the Con- tracts may be invested in other investment companies. 1.6. FirstGWL&A shall pay for Fund shares by 3:00 p.m. Eastern time on the next Business Day after an order to purchase Fund shares is made in accordance with the provisions of Section 1.1 hereof. Payment shall be in federal funds transmitted by wire and/or by a credit for any shares redeemed the same day as the purchase. 1.7. The Fund shall pay and transmit the proceeds of redemptions of Fund shares by 11:00 a.m. Eastern Time on the next Business Day after a redemption order is received in accordance with Section 1.4 hereof. Payment shall be in federal funds transmitted by wire and/or a credit for any shares purchased the same day as the redemption. 1.8. Issuance and transfer of the Fund's shares will be by book entry only. Stock certificates will not be issued to FirstGWL&A or the Account. Shares ordered from the Fund will be recorded in an appropriate title for the Account or the appropriate sub-account of the Account. 1.9. The Fund shall furnish same day notice (by wire or telephone, followed by written confirmation) to FirstGWL&A of any income, dividends or capital gain distributions payable on the Designated Portfolio(s)' shares. FirstGWL&A hereby elects to receive all such income dividends and capital gain distributions as are payable on the Portfolio shares in additional shares of that Portfolio. FirstGWL&A reserves the right to revoke this election and to receive all such income dividends and capital gain distributions in cash. The Fund shall notify FirstGWL&A by the end of the next following Business Day of the number of shares so issued as payment of such dividends and distributions. 1.10.The Fund shall make the net asset value per share for each Designated Portfolio available to FirstGWL&A on each Business Day as soon as reasonably practical after the net asset value per share is calculated and shall use its best efforts to make such net asset value per share available by 6:00 p.m. Eastern time. In the event of an error in the computation of a Designated Portfolio's net asset value per share ("NAV") or any dividend or capital gain distribution (each, a "pricing error"), the Adviser or the Fund shall immediately notify FirstGWL&A as soon as possible after discovery of the error. Such notification may be verbal, but shall be confirmed promptly in writing in accordance with Article XI of this Agreement. A pricing error shall be corrected as follows: (a) if the pricing error results in a difference between the erroneous NAV and the correct NAV of less than $0.01 per share, then no corrective action need be taken; (b) if the pricing error results in a difference between the erroneous NAV and the correct NAV equal to or greater than $0.01 per share, but less than 1/2 of 1% of the Designated Portfolio's NAV at the time of the error, then the Adviser shall reimburse the Designated Portfolio for any loss, after taking into consideration any positive effect of such error; however, no adjustments to Contractowner accounts need be made; and (c) if the pricing error results in a difference between the erroneous NAV and the correct NAV equal to or greater than 1/2 of 1% of the Designated Portfolio's NAV at the time of the error, then the Adviser shall reimburse the Designated Portfolio for any loss (without taking into consideration any positive effect of such error) and shall reimburse FirstGWL&A for the costs of adjustments made to correct Contractowner accounts in accordance with the provisions of Schedule E. If an adjustment is necessary to correct a material error which has caused Contractowners to receive less than the amount to which they are entitled, the number of shares of the applicable sub-account of such Contractowners will be adjusted and the amount of any underpayments shall be credited by the Adviser to FirstGWL&A for crediting of such amounts to the applicable Contractowners accounts. Upon notification by the Adviser of any overpayment due to a material error, FirstGWL&A or Schwab, as the case may be, shall promptly remit to Adviser any overpayment that has not been paid to Contractowners; however, Adviser acknowledges that Schwab and FirstGWL&A do not intend to seek additional payments from any Contractowner who, because of a pricing error, may have underpaid for units of interest credited to his/her account. In no event shall Schwab or FirstGWL&A be liable to Contractowners for any such adjustments or underpayment amounts. A pricing error within categories (b) or (c) above shall be deemed to be "materially incorrect" or constitute a "material error" for purposes of this Agreement. The standards set forth in this Section 1.10 are based on the Parties' understanding of the views expressed by the staff of the Securities and Exchange Commission ("SEC") as of the date of this Agreement. In the event the views of the SEC staff are later modified or superseded by SEC or judicial interpretation, the parties shall amend the foregoing provisions of this Agreement to comport with the appropriate applicable standards, on terms mutually satisfactory to all Parties. ARTICLE II. Representations and Warranties 2.1. FirstGWL&A represents and warrants that the Contracts and the securities deemed to be issued by the Account under the Contracts are or will be registered under the 1933 Act; that the Contracts will be issued and sold in compliance in all material respects with all applicable federal and state laws and that the sale of the Contracts shall comply in all material respects with state insurance suitability requirements. FirstGWL&A further represents and warrants that it is an insurance company duly organized and in good standing under applicable law and that it has legally and validly established the Account prior to any issuance or sale of units thereof as a segregated asset account under Section 4240 of the New York Insurance Law and has registered the Account as a unit investment trust in accordance with the provisions of the 1940 Act to serve as a segregated investment account for the Contracts and that it will maintain such registration for so long as any Contracts are outstanding as required by applicable law. 2.2. The Fund represents and warrants that Designated Portfolio(s) shares sold pursuant to this Agreement shall be registered under the 1933 Act, duly authorized for issuance and sold in compliance with all applicable federal securities laws including without limitation the 1933 Act, the 1934 Act, and the 1940 Act and that the Fund is and shall remain registered under the 1940 Act. The Fund shall amend the registration statement for its shares under the 1933 Act and the 1940 Act from time to time as required in order to effect the continuous offering of its shares. 2.3. The Fund reserves the right to adopt a plan pursuant to Rule 12b-1 under the 1940 Act and to impose an asset-based or other charge to finance distribution expenses as permitted by applicable law and regulation. In any event, the Fund and Adviser agree to comply with applicable provisions and SEC staff interpretations of the 1940 Act to assure that the investment advisory or management fees paid to the Adviser by the Fund are in accordance with the requirements of the 1940 Act. To the extent that the Fund decides to finance distribution expenses pursuant to Rule 12b-1, the Fund undertakes to have its Board, a majority of whom are not interested persons of the Fund, formulate and approve any plan pursuant to Rule 12b-1 under the 1940 Act to finance distribution expenses. 2.4. The Fund represents and warrants that it will make every effort to ensure that the investment policies, fees and expenses of the Designated Portfolio(s) are and shall at all times remain in compliance with the insurance and other applicable laws of the State of New York and any other applicable state to the extent required to perform this Agreement. The Fund further represents and warrants that it will make every effort to ensure that Designated Portfolio(s) shares will be sold in compliance with the insurance laws of the State of New York and all applicable state insurance and securities laws. The Fund shall register and qualify the shares for sale in accordance with the laws of the various states if and to the extent required by applicable law. FirstGWL&A and the Fund will endeavor to mutually cooperate with respect to the implementation of any modifications necessitated by any change in state insurance laws, regulations or interpretations of the foregoing that affect the Designated Portfolio(s) (a "Law Change"), and to keep each other informed of any Law Change that becomes known to either party. In the event of a Law Change, the Fund agrees that, except in those circumstances where the Fund has advised FirstGWL&A that its Board of Directors has determined that implementation of a particular Law Change is not in the best interest of all of the Fund's shareholders with an explanation regarding why such action is lawful, any action required by a Law Change will be taken. 2.5. The Fund represents and warrants that it is lawfully organized and validly existing under the laws of the State of Delaware and that it does and will comply in all material respects with the 1940 Act. 2.6. The Adviser represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of the State of California and any applicable state and federal securities laws. 2.7. The Fund and the Adviser represent and warrant that all of their respective officers, employees, investment advisers, and other individuals or entities dealing with the money and/or securities of the Fund are, and shall continue to be at all times, covered by one or more blanket fidelity bonds or similar coverage for the benefit of the Fund in an amount not less than the minimal coverage required by Rule 17g-1 under the 1940 Act or related provisions as may be promulgated from time to time. The aforesaid bonds shall include coverage for larceny and embezzlement and shall be issued by a reputable bonding company. 2.8. Schwab represents and warrants that it has completed, obtained and performed, in all material respects, all registrations, filings, approvals, and authorizations, consents and examinations required by any government or governmental authority as may be necessary to perform this Agreement. Schwab does and will comply, in all material respects, with all applicable laws, rules and regulations in the performance of its obligations under this Agreement. 2.9. The Fund will provide FirstGWL&A with as much advance notice as is reasonably practicable of any material change affecting the Designated Portfolio(s) (including, but not limited to, any material change in the registration statement or prospectus affecting the Designated Portfolio(s)) and any proxy solicitation affecting the Designated Portfolio(s) and consult with FirstGWL&A in order to implement any such change in an orderly manner, recognizing the expenses of changes and attempting to minimize such expenses by implementing them in conjunction with regular annual updates of the prospectus for the Contracts. The Fund agrees to share equitably in expenses incurred by FirstGWL&A as a result of actions taken by the Fund, consistent with the allocation of expenses contained in Schedule E attached hereto and incorporated herein by reference. 2.10.FirstGWL&A represents and warrants, for purposes other than diversification under Section 817 of the Internal Revenue Code of 1986 as amended ("the Code"), that the Contracts are currently and at the time of issuance will be treated as annuity contracts under applicable provisions of the Code, and that it will make every effort to maintain such treatment and that it will notify Schwab, the Fund and the Adviser immediately upon having a reasonable basis for believing that the Contracts have ceased to be so treated or that they might not be so treated in the future. In addition, FirstGWL&A represents and warrants that the Account is a "segregated asset account" and that interests in the Account are offered exclusively through the purchase of or transfer into a "variable contract" within the meaning of such terms under Section 817 of the Code and the regulations thereunder. FirstGWL&A will use every effort to continue to meet such definitional requirements, and it will notify Schwab, the Fund, and the Adviser immediately upon having a reasonable basis for believing that such requirements have ceased to be met or that they might not be met in the future. FirstGWL&A represents and warrants that it will not purchase Fund shares with assets derived from tax-qualified retirement plans except, indirectly, through Contracts purchased in connection with such plans. ARTICLE III. Prospectuses and Proxy Statements; Voting 3.1. At least annually, the Adviser shall provide FirstGWL&A and Schwab with as many copies of the Fund's current prospectus for the Designated Portfolio(s) as FirstGWL&A and Schwab may reasonably request for marketing purposes (including distribution to Contractowners with respect to new sales of a Contract), with expenses to be borne in accordance with Schedule E hereof. If requested by FirstGWL&A in lieu thereof, the Adviser or Fund shall provide such documentation (including a camera-ready copy and computer diskette of the current prospectus for the Designated Portfolio(s)) and other assistance as is reasonably necessary in order for FirstGWL&A once each year (or more fre- quently if the prospectuses for the Designated Portfolio(s) are amended) to have the prospectus for the Contracts and the Fund's prospectus for the Designated Portfolio(s) printed together in one document. The Fund and Adviser agree that the prospectus (and semi-annual and annual reports) for the Designated Portfolio(s) will describe only the Designated Portfolio(s) and will not name or describe any other portfolios or series that may be in the Fund unless required by law. 3.2. If applicable state or federal laws or regulations require that the Statement of Additional Information ("SAI") for the Fund be distributed to all Contractowners, then the Fund and/or the Adviser shall provide FirstGWL&A with copies of the Fund's SAI or docu- mentation thereof for the Designated Portfolio(s) in such quantities, with expenses to be borne in accordance with Schedule E hereof, as FirstGWL&A may reasonably require to permit timely distribution thereof to Contractowners. The Adviser and/or the Fund shall also provide SAIs to any Contractowner or prospective owner who requests such SAI from the Fund (although it is anticipated that such requests will be made to FirstGWL&A or Schwab). 3.3. The Fund and/or the Adviser shall provide FirstGWL&A and Schwab with copies of the Fund's proxy material, reports to stockholders and other communications to stockholders for the Designated Portfolio(s) in such quantity, with expenses to be borne in accordance with Schedule E hereof, as FirstGWL&A may reasonably require to permit timely distribution thereof to Contractowners. 3.4. It is understood and agreed that, except with respect to information regarding FirstGWL&A or Schwab provided in writing by that party, neither FirstGWL&A nor Schwab are responsible for the content of the prospectus or SAI for the Designated Portfolio(s). It is also understood and agreed that, except with respect to information regarding the Fund, the Adviser or the Designated Portfolio(s) provided in writing by the Fund or the Adviser, neither the Fund nor Adviser are responsible for the content of the prospectus or SAI for the Contracts. 3.5. If and to the extent required by law FirstGWL&A shall: (i) solicit voting instructions from Contractowners; (ii) vote the Designated Portfolio(s) shares held in the Account in accordance with instructions received from Contractowners: and (iii)vote Designated Portfolio shares held in the Account for which no instructions have been received in the same proportion as Designated Portfolio(s) shares for which instructions have been received from Contractowners, so long as and to the extent that the SEC continues to interpret the 1940 Act to require pass-through voting privileges for variable contract owners. FirstGWL&A reserves the right to vote Fund shares held in any segregated asset account in its own right, to the extent permitted by law. 3.6. FirstGWL&A shall be responsible for assuring that each of its separate accounts holding shares of a Designated Portfolio calculates voting privileges as directed by the Fund and agreed to by FirstGWL&A and the Fund. The Fund agrees to promptly notify FirstGWL&A of any changes of interpretations or amendments of the Mixed and Shared Funding Exemptive Order. 3.7. The Fund will comply with all provisions of the 1940 Act requiring voting by shareholders, and in particular the Fund will either provide for annual meetings (except insofar as the SEC may interpret Section 16 of the 1940 Act not to require such meetings) or, as the Fund currently intends, comply with Section 16(c) of the 1940 Act (although the Fund is not one of the trusts described in Section 16(c) of that Act) as well as with Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in accordance with the SEC's interpretation of the requirements of Section 16(a) with respect to periodic elections of directors or trustees and with whatever rules the Commission may promulgate with respect thereto. ARTICLE IV. Sales Material and Information 4.1. FirstGWL&A and Schwab shall furnish, or shall cause to be furnished, to the Fund or its designee, a copy of each piece of sales literature or other promotional material that FirstGWL&A or Schwab, respectively, develops or proposes to use and in which the Fund (or a Portfolio thereof), its Adviser or one of its sub-advisers is named in connection with the Contracts, at least ten (10) Business Days prior to its use. No such material shall be used if the Fund objects to such use within five (5) Business Days after receipt of such material. 4.2. FirstGWL&A and Schwab shall not give any information or make any representations or statements on behalf of the Fund in connection with the sale of the Con- tracts other than the information or representations contained in the registration statement or prospectus for the Fund shares, as such registration statement and prospectus may be amended or supplemented from time to time, or in reports or proxy statements for the Fund, or in sales literature or other promotional material approved by the Fund or by the Adviser, except with the permission of the Fund or the Adviser. 4.3. The Fund or the Adviser shall furnish, or shall cause to be furnished, to FirstGWL&A and Schwab, a copy of each piece of sales literature or other promotional material in which FirstGWL&A and/or its separate account(s), or Schwab is named at least ten (10) Business Days prior to its use. No such material shall be used if FirstGWL&A or Schwab objects to such use within five (5) Business Days after receipt of such material. 4.4. The Fund and the Adviser shall not give any information or make any representations on behalf of FirstGWL&A or concerning FirstGWL&A, the Account, or the Contracts other than the information or representations contained in a registration statement or prospectus for the Contracts, as such registration statement and prospectus may be amended or supplemented from time to time, or in reports for the Account, or in sales literature or other promotional material approved by FirstGWL&A or its designee, except with the permission of FirstGWL&A. 4.5. FirstGWL&A, the Fund and the Adviser shall not give any information or make any representations on behalf of or concerning Schwab, or use Schwab's name except with the permission of Schwab. 4.6. The Fund will provide to FirstGWL&A and Schwab at least one complete copy of all registration statements, prospectuses, SAIs, reports, proxy statements, sales literature and other promotional materials, applications for exemptions, requests for no- action letters, and all amendments to any of the above, that relate to the Designated Port- folio(s), contemporaneously with the filing of such document(s) with the SEC or NASD or other regulatory authorities. 4.7. FirstGWL&A or Schwab will provide to the Fund at least one complete copy of all registration statements, prospectuses, SAIs, reports, solicitations for voting instructions, sales literature and other promotional materials, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Contracts or the Account, contemporaneously with the filing of such document(s) with the SEC, NASD, or other regulatory authority. 4.8. For purposes of Articles IV and VIII, the phrase "sales literature and other promotional material" includes, but is not limited to, advertisements (such as material published, or designed for use in, a newspaper, magazine, or other periodical, radio, television, telephone or tape recording, videotape display, signs or billboards, motion pictures, or other public media; e.g., on-line networks such as the Internet or other electronic messages), sales literature (i.e., any written communication distributed or made generally available to customers or the public, including brochures, circulars, research reports, market letters, form letters, seminar texts, reprints or excerpts of any other advertisement, sales literature, or published article), educational or training materials or other communications distributed or made generally available to some or all agents or employees, registration statements, prospectuses, SAIs, shareholder reports, proxy materials and any other material constituting sales literature or advertising under the NASD rules, the 1933 Act of the 1940 Act. 4.9. At the request of any party to this Agreement, each other party will make available to the other party's independent auditors and/or representative of the appropriate regulatory agencies, all records, data and access to operating procedures that may be reasonably requested in connection with compliance and regulatory requirements related to this Agreement or any party's obligations under this Agreement. ARTICLE V. Fees and Expenses 5.1. The Fund and the Adviser shall pay no fee or other compensation to FirstGWL&A under this Agreement, and FirstGWL&A shall pay no fee or other compensation to the Fund or Adviser under this Agreement, although the parties hereto will bear certain expenses in accordance with Schedule E, Articles III, V, and other provisions of this Agreement. 5.2. All expenses incident to performance by the Fund and the Adviser under this Agreement shall be paid by the appropriate party, as further provided in Schedule E. The Fund shall see to it that all shares of the Designated Portfolio(s) are registered and authorized for issuance in accordance with applicable federal law and, if and to the extent required, in accordance with applicable state laws prior to their sale. 5.3. The parties shall bear the expenses of routine annual distribution (mailing costs) of the Fund's prospectus and distribution (mailing costs) of the Fund's proxy materials and reports to owners of Contracts offered by FirstGWL&A, in accordance with Schedule E. 5.4. The Fund and the Adviser acknowledge that a principal feature of the Contracts is the Contractowner's ability to choose from a number of unaffiliated mutual funds (and portfolios or series thereof), including the Designated Portfolio(s) and the Unaffiliated Funds, and to transfer the Contract's cash value between funds and portfolios. The Fund and the Adviser agree to cooperate with FirstGWL&A and Schwab in facilitating the operation of the Account and the Contracts as described in the prospectus for the Contracts, including but not limited to cooperation in facilitating transfers between Unaffiliated Funds. 5.5. Schwab agrees to provide certain administrative services, specified in Schedule C attached hereto and incorporated herein by reference, in connection with the arrangements contemplated by this Agreement. The parties acknowledge and agree that the services referred to in this Section 5.5 are recordkeeping, shareholder communication, and other transaction facilitation and processing, and related administrative services only and are not the services of an underwriter or a principal underwriter of the Fund, and that Schwab is not an underwriter for the shares of the Designated Portfolio(s), within the meaning of the 1933 Act or the 1940 Act. 5.6. As compensation for the services specified in Schedule C hereto, the Adviser agrees to pay Schwab a monthly Administrative Service Fee based on the percentage per annum on Schedule C hereto applied to the average daily value of the shares of the Designated Portfolio(s) held in the Account with respect to Contracts sold by Schwab. This monthly Administrative Service Fee is due and payable before the 15th (fifteenth) day following the last day of the month to which it relates. ARTICLE VI. Diversification and Qualification 6.1. The Fund and the Adviser represent and warrant that the Fund will at all times sell its shares and invest its assets in such a manner as to ensure that the Contracts will be treated as annuity contracts under the Code, and the regulations issued thereunder. Without limiting the scope of the foregoing, the Fund and Adviser represent and warrant that the Fund and each Designated Portfolio thereof will at all times comply with Section 817(h) of the Code and Treasury Regulation 1.817-5, as amended from time to time, and any Treasury interpretations thereof, relating to the diversification requirements for variable annuity, endowment, or life insurance contracts and any amendments or other modifications or successor provisions to such Section or Regulations. The Fund and the Adviser agree that shares of the Designated Portfolio(s) will be sold only to Participating Insurance Companies and their separate accounts and to Qualified Plans. 6.2. No shares of any Designated Portfolio of the Fund will be sold to the general public. 6.3. The Fund and the Adviser represent and warrant that the Fund and each Designated Portfolio is currently qualified as a Regulated Investment Company under Subchapter M of the Code, and that each Designated Portfolio will maintain such qualification (under Subchapter M or any successor or similar provisions) as long as this Agreement is in effect. 6.4. The Fund or the Adviser will notify FirstGWL&A immediately upon having a reasonable basis for believing that the Fund or any Designated Portfolio has ceased to comply with the aforesaid Section 817(h) diversification or Subchapter M qualification requirements or might not so comply in the future. 6.5. Without in any way limiting the effect of Sections 8.3 and 8.4 hereof and with- out in any way limiting or restricting any other remedies available to FirstGWL&A or Schwab, the Adviser will pay all costs associated with or arising out of any failure, or any anticipated or reasonably foreseeable failure, of the Fund or any Designated Portfolio to comply with Sections 6.1, 6.2, or 6.3 hereof, including all costs associated with reasonable and appropriate corrections or responses to any such failure; such costs may include, but are not limited to, the costs involved in creating, organizing, and registering a new investment company as a funding medium for the Contracts and/or the costs of obtaining whatever regulatory authorizations are required to substitute shares of another investment company for those of the failed Portfolio (including but not limited to an order pursuant to Section 26(b) of the 1940 Act); such costs are to include, but are not limited to, fees and expenses of legal counsel and other advisors to FirstGWL&A and any federal income taxes or tax penalties and interest thereon (or "toll charges" or exactments or amounts paid in settlement) incurred by FirstGWL&A with respect to itself or owners of its Contracts in connection with any such failure or anticipated or reasonably foreseeable failure. 6.6. The Fund at the Fund's expense shall provide FirstGWL&A or its designee with reports certifying compliance with the aforesaid Section 817(h) diversification and Subchapter M qualification requirements, at the times provided for and substantially in the form attached hereto as Schedule D and incorporated herein by reference; provided, however, that providing such reports does not relieve the Fund of its responsibility for such compliance or of its liability for any non-compliance. 6.7. FirstGWL&A agrees that if the Internal Revenue Service ("IRS") asserts in writing in connection with any governmental audit or review of FirstGWL&A or, to FirstGWL&A's knowledge, of any Contractowner that any Designated Portfolio has failed to comply with the diversification requirements of Section 817(h) of the Code or FirstGWL&A otherwise becomes aware of any facts that could give rise to any claim against the Fund or the Adviser as a result of such a failure or alleged failure: (a) FirstGWL&A shall promptly notify the Fund and the Adviser of such assertion or potential claim; (b) FirstGWL&A shall consult with the Fund and the Adviser as to how to minimize any liability that may arise as a result of such failure or alleged failure; (c) FirstGWL&A shall use its best efforts to minimize any liability of the Fund and the Adviser resulting from such failure, including, without limitation, demonstrating, pursuant to Treasury Regulations, Section 1.817-5(a)(2), to the commissioner of the IRS that such failure was inadvertent; (d) any written materials to be submitted by FirstGWL&A to the IRS, any Contractowner or any other claimant in connection with any of the foregoing proceedings or contests (including, without limitation, any such materials to be submitted to the IRS pursuant to Treasury Regulations, Section 1.817-5(a)(2)) shall be provided by FirstGWL&A to the Fund and the Adviser (together with any supporting information or analysis) within at least two (2) business days prior to submission; (e) FirstGWL&A shall provide the Fund and the Adviser with such cooperation as the Fund and the Adviser shall reasonably request (including, without limitation, by permitting the Fund and the Adviser to review the relevant books and records of FirstGWL&A) in order to facilitate review by the Fund and the Adviser of any written submissions provided to it or its assessment of the validity or amount of any claim against it arising from such failure or alleged failure; (f) FirstGWL&A shall not with respect to any claim of the IRS or any Contractowner that would give rise to a claim against the Fund and the Adviser (i) compromise or settle any claim, (ii) accept any adjustment on audit, or (iii) forego any allowable administrative or judicial appeals, without the express written consent of the Fund and the Adviser, which shall not be unreasonably withheld; provided that, FirstGWL&A shall not be required to appeal any adverse judicial decision unless the Fund and the Adviser shall have provided an opinion of independent counsel to the effect that a reasonable basis exists for taking such appeal; and further provided that the Fund and the Adviser shall bear the costs and expenses, including reasonable attorney's fees, incurred by FirstGWL&A in complying with this clause (f). ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order 7.1. The Board will monitor the Fund for the existence of any material irreconcilable conflict between the interests of the contract owners of all separate accounts investing in the Fund. An irreconcilable material conflict may arise for a variety of reasons, including: (a) an action by any state insurance regulatory authority; (b) a change in applicable federal or state insurance, tax, or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretative letter, or any similar action by insurance, tax, or securities regulatory authorities; (c) an administrative or judicial decision in any relevant proceeding; (d) the manner in which the investments of any Portfolio are being managed; (e) a difference in voting instructions given by variable annuity contract and variable life insurance contract owners or by contract owners of different Participating Insurance Companies; or (f) a decision by a Participating Insurance Company to disregard the voting instructions of contract owners. The Board shall promptly inform FirstGWL&A if it determines that an irreconcilable material conflict exists and the implications thereof. 7.2. FirstGWL&A will report any potential or existing conflicts of which it is aware to the Board. FirstGWL&A will assist the Board in carrying out its responsibilities under the Mixed and Shared Funding Exemptive Order, by providing the Board with all information reasonably necessary for the Board to consider any issues raised. This includes, but is not limited to, an obligation by FirstGWL&A to inform the Board whenever contract owner voting instructions are to be disregarded. Such responsibilities shall be carried out by FirstGWL&A with a view only to the interests of its Contractowners. 7.3. If it is determined by a majority of the Board, or a majority of its directors who are not interested persons of the Fund, the Adviser or any sub-adviser to any of the Designated Portfolios (the "Independent Directors"), that a material irreconcilable conflict exists, FirstGWL&A and other Participating Insurance Companies shall, at their expense and to the extent reasonably practicable (as determined by a majority of the Independent Directors), take whatever steps are necessary to remedy or eliminate the irreconcilable material conflict, up to and including: (1) withdrawing the assets allocable to some or all of the separate accounts from the Fund or any Designated Portfolio and reinvesting such assets in a different investment medium, including (but not limited to) another portfolio of the Fund, or submitting the question whether such segregation should be implemented to a vote of all affected contract owners and, as appropriate, segregating the assets of any appropriate group (i.e., annuity contract owners, life insurance contract owners, or variable contract owners of one or more Participating Insurance Companies) that votes in favor of such segregation, or offering to the affected contract owners the option of making such a change; and (2) establishing a new registered management investment company or managed separate account. 7.4. If a material irreconcilable conflict arises because of a decision by FirstGWL&A to disregard contract owner voting instructions and that decision represents a minority position or would preclude a majority vote, FirstGWL&A may be required, at the Fund's election, to withdraw the Account's investment in the Fund and terminate this Agreement; provided, however that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the Independent Directors. Any such withdrawal and termination must take place within six (6) months after the Fund gives written notice that this provision is being implemented, and until the end of that six month period the Adviser and the Fund shall continue to accept and implement orders by FirstGWL&A for the purchase (and redemption) of shares of the Fund. 7.5. If a material irreconcilable conflict arises because a particular state insurance regulator's decision applicable to FirstGWL&A conflicts with the majority of other state regulators, then FirstGWL&A will withdraw the Account's investment in the Fund and terminate this Agreement within six months after the Board informs FirstGWL&A in writing that it has determined that such decision has created an irreconcilable material conflict; provided, however, that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the disinterested members of the Board. Until the end of the foregoing six month period, the Fund shall continue to accept and implement orders by FirstGWL&A for the purchase (and redemption) of shares of the Fund. 7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority of the Independent Directors shall determine whether any proposed action adequately remedies any irreconcilable material conflict, but in no event will the Fund be required to establish a new funding medium for the Contracts. FirstGWL&A shall not be required by Section 7.3 to establish a new funding medium for the Contracts if an offer to do so has been declined by vote of a majority of Contractowners affected by the irreconcilable material conflict. In the event that the Board determines that any proposed action does not adequately remedy any irreconcilable material conflict, then FirstGWL&A will withdraw the Account's investment in the Fund and terminate this Agreement within six (6) months after the Board informs FirstGWL&A in writing of the foregoing determination; provided, however, that such withdrawal and termination shall be limited to the extent required by any such material irreconcilable conflict as determined by a majority of the Independent Directors. 7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act or the rules promulgated thereunder with respect to mixed or shared funding (as defined in the Mixed and Shared Funding Exemptive Order) on terms and conditions materially different from those contained in the Mixed and Shared Funding Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies, as appropriate, shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable: and (b) Sections 3.5, 3.6, 3.7, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall continue in effect only to the extent that terms and con- ditions substantially identical to such Sections are contained in such Rule(s) as so amended or adopted. ARTICLE VIII. Indemnification 8.1. Indemnification By FirstGWL&A 8.1(a). FirstGWL&A agrees to indemnify and hold harmless the Fund and the Adviser and each of their officers and directors or trustees and each person, if any, who controls the Fund or the Adviser within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.1) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of FirstGWL&A) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in the registration statement or pro- spectus or SAI covering the Contracts or contained in the Contracts or sales literature or other promotional material for the Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser or Fund for use in the registration statement or prospectus for the Contracts or in the Contracts or sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, pro- spectus or sales literature of the Fund not supplied by FirstGWL&A or persons under its control) or wrongful conduct of FirstGWL&A or persons under its control, with respect to the sale or distribution of the Contracts or Fund Shares; or (iii)arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, or sales literature of the Fund, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such a statement or omission was made in reliance upon information furnished in writing to the Fund by or on behalf of FirstGWL&A; or (iv) arise as a result of any failure by FirstGWL&A to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by FirstGWL&A in this Agreement or arise out of or result from any other material breach of this Agreement by FirstGWL&A, including without limitation Section 2.10 and Section 6.7 hereof, as limited by and in accordance with the provisions of Sections 8.1(b) and 8.1(c) hereof. 8.1(b). FirstGWL&A shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.1(c). FirstGWL&A shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified FirstGWL&A in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify FirstGWL&A of any such claim shall not relieve FirstGWL&A from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that FirstGWL&A has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, FirstGWL&A shall be entitled to participate, at its own expense, in the defense of such action. FirstGWL&A also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from FirstGWL&A to such party of FirstGWL&A's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and FirstGWL&A will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.1(d). The Indemnified Parties will promptly notify FirstGWL&A of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund. 8.2. Indemnification by Schwab 8.2(a). Schwab agrees to indemnify and hold harmless the Fund and the Adviser and each of their officers and directors or trustees and each person, if any, who controls the Fund or Adviser within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.2) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of Schwab) or litigation (including reasonable legal and other expenses), to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of Schwab's dissemination of information regarding the Fund that is both (A) materially incorrect and (B) that was neither contained in the Fund's registration statement nor in the Fund's sales literature and other promotional material or provided in writing to Schwab, or approved in writing, by or on behalf of the Fund or the Adviser; or (ii) arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in sales literature or other promotional material prepared or approved by Schwab for the Contracts or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser or the Fund or to Schwab by FirstGWL&A for use in the registration statement or prospectus for the Contracts or in the Contracts or sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts; or (iii)arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus or sales literature of the Fund not supplied by Schwab or persons under its control) or wrongful conduct of Schwab or persons under its control, with respect to the sale or distribution of the Contracts; or (iv) arise as a result of any failure by Schwab to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by Schwab in this Agreement or arise out of or result from any other material breach of this Agreement by Schwab; as limited by and in accordance with the provisions of Sections 8.2(b) and 8.2(c) hereof. 8.2(b). Schwab shall not be liable under this indemnification provision with respect to any losses, claims, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.2(c). Schwab shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified Schwab in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify Schwab of any such claim shall not relieve Schwab from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that Schwab has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, Schwab shall be entitled to participate, at its own expense, in the defense of such action. Schwab also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from Schwab to such party of Schwab's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and Schwab will not be liable to such party under this Agreement for any legal or other ex- penses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.2(d). The Indemnified Parties will promptly notify Schwab of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund. 8.3. Indemnification by the Adviser 8.3(a). The Adviser agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their directors and officers and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.3) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Adviser) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Fund or the Adviser (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reli- ance upon and in conformity with information furnished in writing to the Adviser or the Fund by or on behalf of FirstGWL&A or Schwab for use in the registration statement or prospectus for the Fund or in sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or the Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI or sales literature or other promotional material for the Contracts not supplied by the Adviser or persons under its control) or wrongful conduct of the Fund or the Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or (iii)arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, or sales literature covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser or the Fund; or (iv) arise as a result of any failure by the Fund or the Adviser to provide the services and furnish the materials under the terms of this Agreement (in- cluding a failure, whether unintentional or in good faith or otherwise, to com- ply with the diversification and other qualification requirements specified in Article VI of this Agreement); or (v) arise out of or result from any material breach of any representation and/or warranty made by the Fund or the Adviser in this Agreement or arise out of or result from any other material breach of this Agreement by the Adviser or the Fund; or (vi) arise out of or result from the incorrect or untimely calculation or reporting by the Fund or the Adviser of the daily net asset value per share or dividend or capital gain distribution rate; as limited by and in accordance with the provisions of Sections 8.3(b) and 8.3(c) hereof. This indemnification is in addition to and apart from the responsibilities and obligations of the Adviser specified in Article VI hereof. 8.3(b). The Adviser shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.3(c). The Adviser shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Adviser in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Adviser of any such claim shall not relieve the Adviser from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Adviser has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Adviser will be entitled to participate, at its own expense, in the defense thereof. The Adviser also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Adviser to such party of the Adviser's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Adviser will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.3(d). FirstGWL&A and Schwab agree promptly to notify the Adviser of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Account. 8.4. Indemnification By the Fund 8.4(a). The Fund agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their directors and officers and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.4) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Fund) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may be required to pay or become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements, are related to the operations of the Fund and: (i) arise as a result of any failure by the Fund to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agree- ment); or (ii) arise out of or result from any material breach of any representation and/or warranty made by the Fund in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund; or (iii)arise out of or result from the incorrect or untimely calculation or reporting of the daily net asset value per share or dividend or capital gain distribution rate; as limited by and in accordance with the provisions of Sections 8.4(b) and 8.4(c) hereof. 8.4(b). The Fund shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.4(c). The Fund shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Fund in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Fund of any such claim shall not relieve it from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Fund has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Fund will be entitled to participate, at its own expense, in the defense thereof. The Fund shall also be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Fund to such party of the Fund's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Fund will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.4(d). FirstGWL&A and Schwab each agree promptly to notify the Fund of the commencement of any litigation or proceeding against itself or any of its respective officers or directors in connection with the Agreement, the issuance or sale of the Contracts, the operation of the Account, or the sale or acquisition of shares of the Fund. ARTICLE IX. Applicable Law 9.1. This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the State of New York, without regard to the New York Conflict of Laws provisions. 9.2. This Agreement shall be subject to the provisions of the 1933, 1934 and 1940 Acts, and the rules and regulations and rulings thereunder, including such exemptions from those statutes, rules and regulations as the Securities and Exchange Commission may grant (including, but not limited to, the Mixed and Shared Funding Exemptive Order) and the terms hereof shall be interpreted and construed in accordance therewith. ARTICLE X. Termination 10.1.This Agreement shall terminate: (a) at the option of any party, with or without cause, with respect to some or all Portfolios, upon six (6) months advance written notice delivered to the other parties; provided, however, that such notice shall not be given earlier than six (6) months following the date of this Agreement; or (b) at the option of FirstGWL&A or Schwab by written notice to the other parties with respect to any Portfolio based upon FirstGWL&A's or Schwab's determination that shares of such Portfolio are not reasonably available to meet the requirements of the Contracts; or (c) at the option of FirstGWL&A or Schwab by written notice to the other parties with respect to any Portfolio in the event any of the Portfolio's shares 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 FirstGWL&A; or (d) at the option of the Fund in the event that formal administrative proceedings are instituted against FirstGWL&A or Schwab by the NASD, the SEC, the Insurance Commissioner or like official of any state or any other regulatory body regarding FirstGWL&A's or Schwab's duties under this Agreement or related to the sale of the Contracts, the operation of any Account, or the purchase of the Fund shares, if, in each case, the Fund reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of FirstGWL&A or Schwab to perform its obligations under this Agreement; or (e) at the option of FirstGWL&A or Schwab in the event that formal administrative proceedings are instituted against the Fund or the Adviser by the NASD, the SEC, or any state securities or insurance department or any other regulatory body, if Schwab or FirstGWL&A reasonably 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 Fund or the Adviser to perform their obligations under this Agreement; or (f) at the option of FirstGWL&A by written notice to the Fund with respect to any Portfolio if FirstGWL&A reasonably believes that the Portfolio will fail to meet the Section 817(h) diversification requirements or Subchapter M qualifications specified in Article VI hereof; or (g) at the option of either the Fund or the Adviser, if (i) the Fund or Adviser, respectively, shall determine, in their sole judgment reasonably exercised in good faith, that either FirstGWL&A or Schwab has suffered a material adverse change in their business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on FirstGWL&A's or Schwab's ability to perform its obligations under this Agreement, (ii) the Fund or the Adviser notifies FirstGWL&A or Schwab, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by FirstGWL&A or Schwab and any other changes in circumstances since the giving of such a notice, the determination of the Fund or the Adviser shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or (h) at the option of either FirstGWL&A or Schwab, if (i) FirstGWL&A or Schwab, respectively, shall determine, in its sole judgment reasonably exercised in good faith, that either the Fund or the Adviser has suffered a material adverse change in its business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on the Fund's or the Adviser's ability to perform its obligations under this Agreement, (ii) FirstGWL&A or Schwab notifies the Fund or the Adviser, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by the Fund or the Adviser and any other changes in circumstances since the giving of such a notice, the determination of FirstGWL&A or Schwab shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or (i) at the option of FirstGWL&A in the event that formal administrative proceedings are instituted against Schwab by the NASD, the Securities and Exchange Commission, or any state securities or insurance department or any other regulatory body regarding Schwab's duties under this Agreement or related to the sale of the Fund's shares or the Contracts, the operation of any Account, or the purchase of the Fund shares, provided, however, that FirstGWL&A determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of Schwab to perform its obligations related to the Contracts; or (j) at the option of Schwab in the event that formal administrative proceedings are instituted against FirstGWL&A by the NASD, the Securities and Exchange Commission, or any state securities or insurance department or any other regulatory body regarding FirstGWL&A's duties under this Agreement or related to the sale of the Fund's shares or the Contracts, the operation of any Account, or the purchase of the Fund shares, provided, however, that Schwab determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of FirstGWL&A to perform its obligations related to the Contracts; or (k) at the option of any non-defaulting party hereto in the event of a material breach of this Agreement by any party hereto (the "defaulting party") other than as described in 10.1(a)-(j); provided, that the non-defaulting party gives written notice thereof to the defaulting party, with copies of such notice to all other non-defaulting parties, and if such breach shall not have been remedied within thirty (30) days after such written notice is given, then the non- defaulting party giving such written notice may terminate this Agreement by giving thirty (30) days written notice of termination to the defaulting party. 10.2.Notice Requirement. No termination of this Agreement shall be effective unless and until the party terminating this Agreement gives prior written notice to all other parties of its intent to terminate, which notice shall set forth the basis for the termination. Furthermore, (a) in the event any termination is based upon the provisions of Article VII, or the provisions of Section 10.1(a), 10.1(g) or 10.1(h) of this Agreement, the prior written notice shall be given in advance of the effective date of termination as required by those provisions unless such notice period is shortened by mutual written agreement of the parties; (b) in the event any termination is based upon the provisions of Section 10.1(d), 10.1(e), 10.1(i) or 10.1(j) of this Agreement, the prior written notice shall be given at least sixty (60) days before the effective date of termination; and (c) in the event any termination is based upon the provisions of Section 10.1(b), 10.1(c) or 10.1(f), the prior written notice shall be given in advance of the effective date of termination, which date shall be determined by the party sending the notice. 10.3.Effect of Termination. Notwithstanding any termination of this Agreement, other than as a result of a failure by either the Fund or FirstGWL&A to meet Section 817(h) of the Code diversification requirements, the Fund and the Adviser shall, at the option of FirstGWL&A or Schwab, continue to make available additional shares of the Designated Portfolio(s) pursuant to the terms and conditions of this Agreement, for all Contracts in effect on the effective date of termination of this Agreement (hereinafter referred to as "Existing Contracts"). Specifically, without limitation, the owners of the Existing Contracts shall be permitted to reallocate investments in the Designated Portfolio(s), redeem investments in the Designated Portfolio(s) and/or invest in the Designated Portfolio(s) upon the making of additional purchase payments under the Existing Contracts. The parties agree that this Section 10.3 shall not apply to any terminations under Article VII and the effect of such Article VII terminations shall be governed by Article VII of this Agreement. 10.4.Surviving Provisions. Notwithstanding any termination of this Agreement, each party's obligations under Article VIII to indemnify other parties shall survive and not be affected by any termination of this Agreement. In addition, with respect to Existing Contracts, all provisions of this Agreement shall also survive and not be affected by any termination of this Agreement. 10.5.Survival of Agreement. A termination by Schwab shall terminate this Agreement only as to Schwab, and this Agreement shall remain in effect as to the other par- ties; provided, however, that in the event of a termination by Schwab the other parties shall have the option to terminate this Agreement upon 60 (sixty) days notice, rather than the six (6) months specified in Section 10.1(a). ARTICLE XI. Notices Any notice shall be sufficiently given when sent by registered or certified mail to the other party at the address of such party set forth below or at such other address as such party may from time to time specify in writing to the other party. If to the Fund: Montgomery Funds III 101 California Street San Francisco, CA 94111 Attention:John Story, Executive Vice President If to FirstGWL&A: First Great-West Life & Annuity Insurance Company 8515 East Orchard Road Englewood, CO 80111 Attention:Assistant Vice President, Savings Products If to the Adviser: Montgomery Asset Management, L.P. 101 California Street San Francisco, CA 94111 Attention:John Story, Executive Vice President If to Schwab: Charles Schwab & Co., Inc. 101 Montgomery Street San Francisco, CA 94104 Attention:General Counsel ARTICLE XII. Miscellaneous 12.1.Subject to the requirements of legal process and regulatory authority, each party hereto shall treat as confidential the names and addresses of the owners of the Contracts and all information reasonably identified as confidential in writing by any other party hereto and, except as permitted by this Agreement, shall not disclose, disseminate or utilize such names and addresses and other confidential information without the express written consent of the affected party until such time as such information may come into the public domain. Without limiting the foregoing, no party hereto shall disclose any information that another party has designated as proprietary. 12.2.The captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provisions hereof or otherwise affect their construction or effect. 12.3.This Agreement may be executed simultaneously in two or more counterparts, each of which taken together shall constitute one and the same instrument. 12.4.If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby. 12.5.Each party hereto shall cooperate with each other party and all appropriate governmental authorities (including without limitation the SEC, the NASD and state insurance regulators) and shall permit such authorities reasonable access to its books and records in connection with any investigation or inquiry relating to this Agreement or the transactions contemplated hereby. Notwithstanding the generality of the foregoing, each party hereto further agrees to furnish the New York Insurance Commissioner with any information or reports in connection with services provided under this Agreement which such Commissioner may request in order to ascertain whether the variable annuity operations of FirstGWL&A are being conducted in a manner consistent with the New York Variable Annuity Regulations and any other applicable law or regulations. 12.6.Any controversy or claim arising out of or relating to this Agreement, or breach thereof, shall be settled by arbitration in a forum jointly selected by the relevant parties (but if applicable law requires some other forum, then such other forum) in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. 12.7.The rights, remedies and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies and obligations, at law or in equity, which the parties hereto are entitled to under state and federal laws. 12.8.This Agreement or any of the rights and obligations hereunder may not be assigned by any party without the prior written consent of all parties hereto. 12.9.Schwab and FirstGWL&A are hereby expressly put on notice of the limitation of liability as set forth in the Declarations of Trust of the Fund and agree that the obligations assumed by the Fund and the Adviser pursuant to this Agreement shall be limited in any case to the Fund and Adviser and their respective assets and neither Schwab nor FirstGWL&A shall seek satisfaction of any such obligation from the shareholders of the Fund or the Adviser, the Trustees, officers, employees or agents of the Fund or Adviser, or any of them. 12.10.The Fund and the Adviser agree that the obligations assumed by FirstGWL&A and Schwab pursuant to this Agreement shall be limited in any case to FirstGWL&A and Schwab and their respective assets and neither the Fund nor the Adviser shall seek satisfaction of any such obligation from the shareholders of the FirstGWL&A or Schwab, the directors, officers, employees or agents of the FirstGWL&A or Schwab, or any of them, except to the extent permitted under this Agreement. 12.11.No provision of this Agreement may be deemed or construed to modify or supersede any contractual rights, duties, or indemnifications, as between the Adviser and the Fund. 12.12.It is understood that the name Montgomery or any derivative thereof or logo associated with that name is the valuable property of the Adviser and its affiliates, and that FirstGWL&A and Schwab have the right to use such name (or derivative or logo) only so long as this Agreement is in effect. Upon termination of this Agreement, FirstGWL&A and Schwab agree that they will cease to use such name (or derivative or logo), except as provided in Section 10.3. IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in its name and on its behalf by its duly authorized representative and its seal to be hereunder affixed hereto as of the date specified below. FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY By its authorized officer, By:/s/ Robert K. Shaw Title: Vice President, Marketing & Product Development Date: April 1, 1997 MONTGOMERY FUNDS III By its authorized officer, By:/s/ John Story Title: Executive Vice President Date: March 11, 1997 MONTGOMERY ASSET MANAGEMENT, L.P. By its authorized officer, By:/s/ John Story Title: Executive Vice President Date: March 11, 1997 CHARLES SCHWAB & CO., INC. By its authorized officer, By:/s/ Jeff Benton Title:Vice President, Annuities & Life Insurance Date:March 31, 1997 Schwab Variable Annuity SCHEDULE A Contracts Form Numbers First Great-West Life & Annuity Insurance Company Group Variable/Fixed Annuity Contract J434NY SCHEDULE B Designated Portfolios Montgomery Growth Fund Montgomery International Small Cap Fund SCHEDULE C Administrative Services To be performed by Charles Schwab & Co., Inc. A. Schwab will provide the properly registered and licensed personnel and systems needed for all customer servicing and support - for both fund and annuity information and questions - including: respond to Contractowner inquiries delivery of prospectus - both fund and annuity; entry of initial and subsequent orders; transfer of cash to insurance company and/or funds; explanations of fund objectives and characteristics; entry of transfers between funds; fund balance and allocation inquiries; mail fund prospectus. B. For the services, Schwab shall receive a fee of 0.25% per annum applied to the average daily value of the shares of the fund held by Schwab's customers, payable by the Adviser directly to Schwab, such payments being due and payable within 15 (fifteen) days after the last day of the month to which such payment relates. C. The Fund will calculate and Schwab will verify with FirstGWL&A the asset balance for each day on which the fee is to be paid pursuant to this Agreement with respect to each Designated Portfolio. D. Schwab will communicate all purchase, withdrawal, and exchange orders it receives from its customers to FirstGWL&A who will retransmit them to each fund. SCHEDULE D Reports per Section 6.6 With regard to the reports relating to the quarterly testing of compliance with the requirements of Section 817(h) and Subchapter M under the Internal Revenue Code (the "Code") and the regulations thereunder, the Fund shall provide within twenty (20) Business Days of the close of the calendar quarter a report to FirstGWL&A in the Form D1 attached hereto and incorporated herein by reference, regarding the status under such sections of the Code of the Designated Portfolio(s), and if necessary, identification of any remedial action to be taken to remedy non-compliance. With regard to the reports relating to the year-end testing of compliance with the requirements of Subchapter M of the Code, referred to hereinafter as "RIC status," the Fund will provide the reports on the following basis: (i) the last quarter's quarterly reports can be supplied within the 20-day period, and (ii) a year-end report will be provided 45 days after the end of the calendar year. However, if a problem with regard to RIC status, as defined below, is identified in the third quarter report, on a weekly basis, starting the first week of December, additional interim reports will be provided specially addressing the problems identified in the third quarter report. If any interim report memorializes the cure of the problem, subsequent interim reports will not be required. A problem with regard to RIC status is defined as any violation of the following standards, as referenced to the applicable sections of the Code: (a) Less than ninety percent of gross income is derived from sources of income specified in Section 851(b)(2); (b) Thirty percent or greater gross income is derived from the sale or disposition of assets specified in Section 851(b)(3); (c) Less than fifty percent of the value of total assets consists of assets specified in Section 851(b)(4)(A); and (d) No more than twenty-five percent of the value of total assets is invested in the securities of one issuer, as that requirement is set forth in Section 851(b)(4)(B). FORM D1 CERTIFICATE OF COMPLIANCE I, , a duly authorized officer, director or agent of Fund hereby swear and affirm that Fund is in compliance with all requirements of Section 817(h) and Subchapter M of the Internal Revenue Code (the "Code") and the regulations thereunder as required in the Fund Participation Agreement among First Great-West Life & Annuity Insurance Company, Charles Schwab & Co., Inc. and other than the exceptions discussed below: Exceptions Remedial Action If no exception to report, please indicate "None." Signed this day of , . (Signature) By: (Type or Print Name and Title/Position) SCHEDULE E EXPENSES The Fund and/or Adviser, and FirstGWL&A will coordinate the functions and pay the costs of the completing these functions based upon an allocation of costs in the tables below. Costs shall be allocated to reflect the Fund's share of the total costs determined according to the number of pages of the Fund's respective portions of the documents. Item Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Prospectus Printing of combined prospectuses FirstGWL&A Fund or Adviser, as applicable Fund or Adviser shall supply FirstGWL&A with such numbers of the Designated Portfolio(s) prospectus(es) as FirstGWL&A shall reasonably request FirstGWL&A Fund or Adviser, as applicable Distribution to New and Inforce Clients FirstGWL&A FirstGWL&A Distribution to Prospective Clients Schwab Schwab Product Prospectus Printing for Inforce Clients FirstGWL&A FirstGWL&A Printing for Prospective Clients FirstGWL&A Schwab Distribution to New and Inforce Clients FirstGWL&A FirstGWL&A Distribution to Prospective Clients Schwab SchwabItem Function Party Responsible for Coordination Party Responsiblefor Expense Mutual Fund Prospectus Update & Distribution If Required by Fund or Adviser Fund or Adviser Fund or Adviser If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab Schwab Schwab Product Prospectus Update & Distribution If Required by Fund or Adviser FirstGWL&A Fund or Adviser Item Function Party Responsible for Coordination Party Responsible for Expense If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab Schwab Schwab Mutual Fund SAI Printing Fund or Adviser Fund or Adviser Distribution FirstGWL&A FirstGWL&A Product SAI Printing FirstGWL&A FirstGWL&A Distribution FirstGWL&A FirstGWL&A Item Function Party Responsible for Coordination Party Responsible for Expense Proxy Material for Mutual Fund: Printing if proxy required by Law Fund or Adviser Fund or Adviser Distribution (including labor) if proxy required by Law FirstGWL&A Fund or Adviser Printing & distribution if required by FirstGWL&A FirstGWL&A FirstGWL&A Printing & distribution if required by Schwab FirstGWL&A Schwab Item Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Annual & Semi-Annual Report Printing of combined reports FirstGWL&A Fund or Adviser Distribution FirstGWL&A FirstGWL&A and Schwab Other communication to New and Prospective clients If Required by the Fund or Adviser Schwab Fund or Adviser If Required by FirstGWL&A Schwab FirstGWL&A Item Function Party Responsible for Coordination Party Responsible for Expense If Required by Schwab Schwab Schwab Other communication to inforce Distribution (including labor) if required by the Fund or Adviser FirstGWL&A Fund or Adviser If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab FirstGWL&A Schwab Item Function Party Responsible for Coordination Party Responsible for Expense Errors in Share Price calculation pursuant to Section 1.10 Cost of error to participants FirstGWL&A Fund or Adviser Cost of administrative work to correct error FirstGWL&A Fund or Adviser Operations of the Fund All operations and related expenses, including the cost of registration and qualification of shares, taxes on the issuance or transfer of shares, cost of management of the business affairs of the Fund, and expenses paid or assumed by the fund pursuant to any Rule 12b-1 plan Fund or Adviser Fund or Adviser Operations of the Account Federal registration of units of separate account (24f-2 fees) FirstGWL&A FirstGWL&A EX-8.9 16 EXHIBIT 8.9 FUND PARTICIPATION AGREEMENT SAFECO Resource Series Trust TABLE OF CONTENTS ARTICLE I. Sale of Fund Shares . . . . . . . . . . . . . . . .4 ARTICLE II. Representations and Warranties. . . . . . . . . . .7 ARTICLE III. Prospectuses and Proxy Statements; Voting . . . . 11 ARTICLE IV. Sales Material and Information. . . . . . . . . . 13 ARTICLE V. Fees and Expenses . . . . . . . . . . . . . . . . 16 ARTICLE VI. Diversification and Qualification . . . . . . . . 17 ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order . . . . 21 ARTICLE VIII.Indemnification . . . . . . . . . . . . . . . . . 24 ARTICLE IX. Applicable Law. . . . . . . . . . . . . . . . . . 35 ARTICLE X. Termination . . . . . . . . . . . . . . . . . . . 35 ARTICLE XI. Notices . . . . . . . . . . . . . . . . . . . . . 39 ARTICLE XII. Miscellaneous . . . . . . . . . . . . . . . . . . 40 SCHEDULE A Contracts . . . . . . . . . . . . . . . . . . . . 44 SCHEDULE B Designated Portfolios . . . . . . . . . . . . . . 45 SCHEDULE C Administrative Services . . . . . . . . . . . . . 46 SCHEDULE D Reports per Section 6.6 . . . . . . . . . . . . . 47 SCHEDULE E Expenses. . . . . . . . . . . . . . . . . . . . . 50 PARTICIPATION AGREEMENT Among FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY SAFECO RESOURCE SERIES TRUST SAFECO ASSET MANAGEMENT COMPANY SAFECO SECURITIES, INC., and CHARLES SCHWAB & CO., INC. THIS AGREEMENT, made and entered into as of this ____ day of _______________, 1997 by and among FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (hereinafter "FirstGWL&A"), a New York life insurance company, on its own behalf and on behalf of its Separate Account Variable Annuity-1 Series Account (the "Account"); SAFECO RESOURCE SERIES TRUST, a business trust organized under the laws of Delaware (hereinafter the "Fund"); SAFECO ASSET MANAGEMENT COMPANY (hereinafter the "Adviser"), a corporation organized under the laws of Washington; SAFECO SECURITIES, INC., a corporation organized under the laws of Washington (hereinafter the "Distributor"); and CHARLES SCHWAB & CO., INC., a California corporation (hereinafter "Schwab"). WHEREAS, the Fund engages in business as an open-end management investment company and is available to act as the investment vehicle for separate accounts established for variable life insurance policies and/or variable annuity contracts (collectively, the "Variable Insurance Products") to be offered by insurance companies, including FirstGWL&A, which have entered into participation agreements with the Fund (hereinafter "Participating Insurance Companies"); and WHEREAS, the beneficial interest in the Fund is divided into several series of shares, each designated a "Portfolio" and representing the interest in a particular managed portfolio of securities and other assets; and WHEREAS, the Fund has obtained an order from the Securities and Exchange Commission (hereinafter the "SEC"), dated January 17, 1996 (File No. 812-9658), granting Participating Insurance Companies and variable annuity and variable life insurance separate accounts exemptions from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended, (hereinafter the "1940 Act") and Rules 6e- 2(a)(2), 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Fund to be sold to and held by variable annuity and variable life insurance separate accounts of life insurance companies that may or may not be affiliated with one another and qualified pension and retirement plans ("Qualified Plans") (hereinafter the "Mixed and Shared Funding Exemptive Order"); and WHEREAS, the Fund is registered as an open-end management investment company under the 1940 Act and shares of the Portfolio(s) are registered under the Securities Act of 1933, as amended (hereinafter the "1933 Act"); and WHEREAS, the Adviser is duly registered as an investment adviser under the Investment Advisers Act of 1940, as amended, and any applicable state securities laws; and WHEREAS, the Distributor is duly registered as a broker-dealer under the Securities Exchange Act of 1934, as amended, (the "1934 Act") and is a member in good standing of the National Association of Securities Dealers, Inc. (the "NASD"); and WHEREAS, FirstGWL&A has registered or will register certain variable annuity contracts supported wholly or partially by the Account (the "Contracts") under the 1933 Act and said Contracts are listed in Schedule A attached hereto and incorporated herein by reference, as such Schedule may be amended from time to time by mutual written agreement; and WHEREAS, the Account is a duly organized, validly existing segregated asset account, established by resolution of the Board of Directors of FirstGWL&A on January 15, 1997, under the insurance laws of the State of New York, to set aside and invest assets attributable to the Contracts; and WHEREAS, FirstGWL&A has registered or will register the Account as a unit investment trust under the 1940 Act and has registered or will register the securities deemed to be issued by the Account under the 1933 Act; and WHEREAS, to the extent permitted by applicable insurance laws and regulations, FirstGWL&A intends to purchase shares in the Portfolio(s) listed in Schedule B attached hereto and incorporated herein by reference, as such Schedule may be amended from time to time by mutual written agreement (the "Designated Portfolio(s)"), on behalf of the Account to fund the Contracts, and the Fund is authorized to sell such shares to unit investment trusts such as the Account at net asset value; and WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Account also intends to purchase shares in other open-end investment companies or series thereof not affiliated with the Fund (the "Unaffiliated Funds") on behalf of the Account to fund the Contracts; and WHEREAS, Schwab will perform certain services for the Fund in connection with the Contracts; NOW, THEREFORE, in consideration of their mutual promises, FirstGWL&A, Schwab, the Fund, the Distributor and the Adviser agree as follows: ARTICLE I. Sale of Fund Shares 1.1. The Fund and Distributor agree to sell to FirstGWL&A those shares of the Designated Portfolio(s) which the Account orders, executing such orders on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the order for the shares of the Portfolios. For purposes of this Section 1.1, FirstGWL&A shall be the designee of the Fund for receipt of such orders and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such order by 10:00 a.m. Eastern time on the next following Business Day. "Business Day" shall mean any day on which the New York Stock Exchange is open for trading and on which the Fund calculates its net asset value pursuant to the rules of the SEC. 1.2. The Fund and Distributor agree to make shares of the Designated Portfolio(s) available for purchase at the applicable net asset value per share by FirstGWL&A and the Account on those days on which the Adviser calculates the Designated Portfolio(s)' net asset value pursuant to rules of the SEC, and the Adviser shall calculate such net asset value on each day which the New York Stock Exchange is open for trading. Notwithstanding the foregoing, the Board of Trustees of the Fund (hereinafter the "Board") may refuse to sell shares of any Portfolio to any person, or suspend or terminate the offering of shares of any Portfolio if such action is required by law or by regulatory authorities having jurisdiction or is, in the sole discretion of the Board acting in good faith and in light of its fiduciary duties under federal and any applicable state laws, necessary in the best interests of the shareholders of such Portfolio. 1.3. The Fund will not sell shares of the Designated Portfolio(s) to any other Participating Insurance Company separate account unless an agreement containing provisions substantially the same as Sections 2.1, 3.5, 3.6, 3.7, and Article VII of this Agreement is in effect to govern such sales. 1.4. The Fund agrees to redeem for cash, on FirstGWL&A's request, any full or fractional shares of the Fund held by FirstGWL&A, executing such requests on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the request for redemption. Requests for redemption identified by FirstGWL&A, or its agent, as being in connection with surrenders, annuitizations, or death benefits under the Contracts, upon prior written notice, may be executed within seven (7) calendar days after receipt by the Fund or its designee of the requests for redemption. This Section 1.4 may be amended, in writing, by the parties consistent with the requirements of the 1940 Act and interpretations thereof. For purposes of this Section 1.4, FirstGWL&A shall be the designee of the Fund for receipt of requests for redemption and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such request for redemption by 10:00 A.M. Eastern time on the next following Business Day. 1.5. The Parties hereto acknowledge that the arrangement contemplated by this Agreement is not exclusive; the Fund's shares may be sold to other Participating Insurance Companies (subject to Section 1.3 and Article VI hereof) and the cash value of the Con- tracts may be invested in other investment companies. 1.6. FirstGWL&A shall pay for Fund shares by 2:00 p.m. Eastern time on the next Business Day after an order to purchase Fund shares is made in accordance with the provisions of Section 1.1 hereof. Payment shall be in federal funds transmitted by wire and/or by a credit for any shares redeemed the same day as the purchase. 1.7. The Fund shall pay and transmit the proceeds of redemptions of Fund shares by 2:00 p.m. Eastern Time on the next Business Day after a redemption order is received in accordance with Section 1.4 hereof. Payment shall be in federal funds transmitted by wire and/or a credit for any shares purchased the same day as the redemption. 1.8. Issuance and transfer of the Fund's shares will be by book entry only. Stock certificates will not be issued to FirstGWL&A or the Account. Shares ordered from the Fund will be recorded in an appropriate title for the Account or the appropriate sub-account of the Account. 1.9. The Adviser shall furnish same day notice (by wire or telephone, followed by written confirmation) to FirstGWL&A of any income, dividends or capital gain distributions payable on the Designated Portfolio(s)' shares. FirstGWL&A hereby elects to receive all such income dividends and capital gain distributions as are payable on the Portfolio shares in additional shares of that Portfolio. FirstGWL&A reserves the right to revoke this election and to receive all such income dividends and capital gain distributions in cash. The Adviser shall notify FirstGWL&A by the end of the next following Business Day of the number of shares so issued as payment of such dividends and distributions. 1.10.The Fund shall make the net asset value per share for each Designated Portfolio available to FirstGWL&A on each Business Day as soon as reasonably practical after the net asset value per share is calculated and shall use its best efforts to make such net asset value per share available by 6:00 p.m. Eastern time. In the event of an error in the computation of a Designated Portfolio's net asset value per share ("NAV") or any dividend or capital gain distribution (each, a "pricing error"), the Adviser or the Fund shall immediately notify FirstGWL&A as soon as possible after discovery of any material error. Such notification may be verbal, but shall be confirmed promptly in writing in accordance with Article XI of this Agreement. A pricing error shall be corrected as follows: (a) if the pricing error results in a difference between the erroneous NAV and the correct NAV of less than $0.01 per share, then no corrective action need be taken; (b) if the pricing error results in a difference between the erroneous NAV and the correct NAV equal to or greater than $0.01 per share, but less than 1/2 of 1% of the Designated Portfolio's NAV at the time of the error, then the Adviser shall reimburse the Designated Portfolio for any loss, after taking into consideration any positive effect of such error; however, no adjustments to Contractowner accounts need be made; and (c) if the pricing error results in a difference between the erroneous NAV and the correct NAV equal to or greater than 1/2 of 1% of the Designated Portfolio's NAV at the time of the error, then the Adviser shall reimburse the Designated Portfolio for any loss (without taking into consideration any positive effect of such error) and shall reimburse FirstGWL&A for the reasonable costs of adjustments made to correct Contractowner accounts in accordance with the provisions of Schedule E. If an adjustment is necessary to correct a material error which has caused Contractowners to receive less than the amount to which they are entitled, the number of shares of the applicable sub-account of such Contractowners will be adjusted and the amount of any underpayments shall be credited by the Adviser to FirstGWL&A for crediting of such amounts to the applicable Contractowners accounts. Upon notification by the Adviser of any overpayment due to a material error, FirstGWL&A or Schwab, as the case may be, shall promptly remit to Adviser any overpayment that has not been paid to Contractowners; however, Adviser acknowledges that Schwab and FirstGWL&A do not intend to seek additional payments from any Contractowner who, because of a pricing error, may have underpaid for units of interest credited to his/her account. In no event shall Schwab or FirstGWL&A be liable to Contractowners for any such adjustments or underpayment amounts. A pricing error within categories (b) or (c) above shall be deemed to be "materially incorrect" or constitute a "material error" for purposes of this Agreement. The standards set forth in this Section 1.10 are based on the Parties' understanding of the views expressed by the staff of the SEC as of the date of this Agreement. In the event the views of the SEC staff are later modified or superseded by SEC or judicial interpretation, the parties shall amend the foregoing provisions of this Agreement to comport with the appropriate applicable standards, on terms mutually satisfactory to all Parties. ARTICLE II. Representations and Warranties 2.1. FirstGWL&A represents and warrants that the Contracts and the securities deemed to be issued by the Account under the Contracts are or will be registered under the 1933 Act, that the Contracts will be issued and sold in compliance in all material respects with all applicable federal and state laws and that the sale of the Contracts shall comply in all material respects with state insurance suitability requirements. FirstGWL&A further represents and warrants that it is an insurance company duly organized and in good standing under applicable law and that it has legally and validly established the Account prior to any issuance or sale of units thereof as a segregated asset account under Section 4240 of the New York Insurance Law and has registered the Account as a unit investment trust in accordance with the provisions of the 1940 Act to serve as a segregated investment account for the Contracts and that it will maintain such registration for so long as any Contracts are outstanding as required by applicable law. 2.2. The Adviser represents and warrants that Designated Portfolio(s) shares sold pursuant to this Agreement shall be registered under the 1933 Act, duly authorized for issuance and sold in compliance with all applicable federal securities laws including without limitation the 1933 Act, the 1934 Act, and the 1940 Act and that the Fund is and shall remain registered under the 1940 Act. The Fund shall amend the registration statement for its shares under the 1933 Act and the 1940 Act from time to time as required in order to effect the continuous offering of its shares. 2.3. The Fund reserves the right to adopt a plan pursuant to Rule 12b-1 under the 1940 Act and to impose an asset-based or other charge to finance distribution expenses as permitted by applicable law and regulation. In any event, the Fund and Adviser agree to comply with applicable provisions and written SEC staff interpretations of the 1940 Act to assure that the investment advisory or management fees paid to the Adviser by the Fund are in accordance with the requirements of the 1940 Act. To the extent that the Fund decides to finance distribution expenses pursuant to Rule 12b-1, the Fund undertakes to have its Board, a majority of whom are not interested persons of the Fund, formulate and approve any plan pursuant to Rule 12b-1 under the 1940 Act to finance distribution expenses. 2.4. The Fund represents and warrants that it will make every effort to ensure that the investment policies, fees and expenses of the Designated Portfolio(s) are and shall at all times remain in compliance with the insurance and other applicable laws of the State of New York and any other applicable state to the extent the Fund is notified of such applicable insurance laws by FirstGWL&A and as required to perform this Agreement. The Distributor represents and warrants that it will make every effort to ensure that Designated Portfolio(s) shares will be sold in compliance with the insurance laws of the State of New York and all applicable state insurance laws, to the extent the Distributor is notified of such applicable insurance laws by FirstGWL&A, and applicable securities laws. The Fund shall register and qualify the shares for sale in accordance with the laws of the various states if and to the extent required by applicable law. FirstGWL&A and the Fund will endeavor to mutually cooperate with respect to the implementation of any modifications necessitated by any change in state insurance laws, regulations or interpretations of the foregoing that affect the Designated Portfolio(s) (a "Law Change"), and to keep each other informed of any Law Change that becomes known to either party. In the event of a Law Change, the Fund agrees that, except in those circumstances where the Fund has advised FirstGWL&A that its Board of Directors has determined that implementation of a particular Law Change is not in the best interest of all of the Fund's shareholders with an explanation regarding why such action is lawful, any action required by a Law Change will be taken. 2.5. The Fund represents and warrants that it is lawfully organized and validly existing under the laws of the State of Delaware and that it does and will comply in all material respects with the 1940 Act. 2.6. The Adviser represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of the State of Washington and any applicable state and federal securities laws. 2.7. The Distributor represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of the State of Washington and any applicable state and federal securities laws. 2.8. The Fund and the Adviser represent and warrant that all of their respective officers, employees, investment advisers, and other individuals or entities dealing with the money and/or securities of the Fund are, and shall continue to be at all times, covered by one or more blanket fidelity bonds or similar coverage for the benefit of the Fund in an amount not less than the minimal coverage required by Rule 17g-1 under the 1940 Act or related provisions as may be promulgated from time to time. The aforesaid bonds shall include coverage for larceny and embezzlement and shall be issued by a reputable bonding company. 2.9. Schwab represents and warrants that it has completed, obtained and performed, in all material respects, all registrations, filings, approvals, and authorizations, consents and examinations required by any government or governmental authority as may be necessary to perform this Agreement. Schwab does and will comply, in all material respects, with all applicable laws, rules and regulations in the performance of its obligations under this Agreement. 2.10.The Fund will provide FirstGWL&A with as much advance notice as is reasonably practicable of any material change affecting the Designated Portfolio(s) (including, but not limited to, any material change in the registration statement or prospectus affecting the Designated Portfolio(s)) and any proxy solicitation affecting the Designated Portfolio(s) and consult with FirstGWL&A in order to implement any such change in an orderly manner, recognizing the expenses of changes and attempting to minimize such expenses by implementing them in conjunction with regular annual updates of the prospectus for the Contracts. The Fund agrees to share equitably in expenses incurred by FirstGWL&A as a result of actions taken by the Fund, consistent with the allocation of expenses contained in Schedule E attached hereto and incorporated herein by reference. 2.11.FirstGWL&A represents and warrants, for purposes other than investment diversification of the Fund under Section 817 of the Internal Revenue Code of 1986 as amended ("the Code"), that the Contracts are currently and at the time of issuance will be treated as annuity contracts under applicable provisions of the Code, including revenue rulings and regulations issued by the Department of Treasury and/or the Internal Revenue Service, and that it will make every effort to maintain such treatment and that it will notify Schwab, the Fund, the Distributor and the Adviser immediately upon having a reasonable basis for believing that the Contracts have ceased to be so treated or that they might not be so treated in the future. In addition, FirstGWL&A represents and warrants that the Account is a "segregated asset account" and that interests in the Account are offered exclusively through the purchase of or transfer into a "variable contract" within the meaning of such terms under Section 817 of the Code and the regulations thereunder. FirstGWL&A will use every effort to continue to meet such definitional requirements, and it will notify Schwab, the Fund, the Distributor and the Adviser immediately upon having a reasonable basis for believing that such requirements have ceased to be met or that they might not be met in the future. FirstGWL&A represents and warrants that it will not purchase Fund shares with assets derived from tax-qualified retirement plans except, indirectly, through Contracts purchased in connection with such plans. ARTICLE III. Prospectuses and Proxy Statements; Voting 3.1. At least annually, the Adviser or Distributor shall provide FirstGWL&A and Schwab with as many copies of the Fund's current prospectus for the Designated Portfolio(s) as FirstGWL&A and Schwab may reasonably request for marketing purposes (including distribution to Contractowners with respect to new sales of a Contract), with expenses to be borne in accordance with Schedule E hereof. If requested by FirstGWL&A in lieu thereof, the Adviser, Distributor or Fund shall provide such documentation (including a camera-ready copy and computer diskette of the current prospectus for the Designated Portfolio(s)) and other assistance as is reasonably necessary in order for FirstGWL&A once each year (or more frequently if the prospectuses for the Designated Portfolio(s) are amended) to have the prospectus for the Contracts and the Fund's prospectus for the Designated Portfolio(s) printed together in one document. The Fund and Adviser agree that the prospectus (and semi-annual and annual reports) for the Designated Portfolio(s) will describe only the Designated Portfolio(s) and will not name or describe any other portfolios or series that may be in the Fund unless required by law. 3.2. If applicable state or federal laws or regulations require that the Statement of Additional Information ("SAI") for the Fund be distributed to all Contractowners, then the Fund, Distributor and/or the Adviser shall provide FirstGWL&A with copies of the Fund's SAI or documentation thereof for the Designated Portfolio(s) in such quantities, with expenses to be borne in accordance with Schedule E hereof, as FirstGWL&A may reasonably require to permit timely distribution thereof to Contractowners. The Adviser, Distributor and/or the Fund shall also provide SAIs to any Contractowner or prospective owner who requests such SAI from the Fund (although it is anticipated that such requests will be made to FirstGWL&A or Schwab). 3.3. The Fund, Distributor and/or Adviser shall provide FirstGWL&A and Schwab with copies of the Fund's proxy material, reports to stockholders and other communications to stockholders for the Designated Portfolio(s) in such quantity, with expenses to be borne in accordance with Schedule E hereof, as FirstGWL&A may reasonably require to permit timely distribution thereof to Contractowners. 3.4. It is understood and agreed that, except with respect to information regarding FirstGWL&A or Schwab provided in writing by that party, neither FirstGWL&A nor Schwab are responsible for the content of the prospectus or SAI for the Designated Portfolio(s). It is also understood and agreed that, except with respect to information regarding the Fund, the Distributor, the Adviser or the Designated Portfolio(s) provided in writing by the Fund, the Distributor or the Adviser, neither the Fund, the Distributor nor Adviser are responsible for the content of the prospectus or SAI for the Contracts. 3.5. If and to the extent required by law FirstGWL&A shall: (i) solicit voting instructions from Contractowners; (ii) vote the Designated Portfolio(s) shares held in the Account in accordance with instructions received from Contractowners: and (iii)vote Designated Portfolio shares held in the Account for which no instructions have been received in the same proportion as Designated Portfolio(s) shares for which instructions have been received from Contractowners, so long as and to the extent that the SEC continues to interpret the 1940 Act to require pass-through voting privileges for variable contract owners. FirstGWL&A reserves the right to vote Fund shares held in any segregated asset account in its own right, to the extent permitted by law. 3.6. FirstGWL&A shall be responsible for assuring that each of its separate accounts holding shares of a Designated Portfolio calculates voting privileges as directed by the Fund and agreed to by FirstGWL&A and the Fund. The Fund agrees to promptly notify FirstGWL&A of any changes of interpretations or amendments of the Mixed and Shared Funding Exemptive Order. 3.7. The Fund will comply with all provisions of the 1940 Act requiring voting by shareholders. Further, the Fund will act in accordance with the SEC's interpretation of the requirements of Section 16(a) with respect to periodic elections of directors or trustees and with whatever rules the Commission may promulgate with respect thereto. ARTICLE IV. Sales Material and Information 4.1. FirstGWL&A and Schwab shall furnish, or shall cause to be furnished, to the Fund or its designee, a copy of each piece of sales literature or other promotional material that FirstGWL&A or Schwab, respectively, develops or proposes to use and in which the Fund (or a Portfolio thereof), its Adviser or one of its sub-advisers or the Distributor is named in connection with the Contracts, at least ten (10) Business Days prior to its use. No such material shall be used if the Fund objects to such use within five (5) Business Days after receipt of such material. 4.2. FirstGWL&A and Schwab shall not give any information or make any representations or statements on behalf of the Fund in connection with the sale of the Con- tracts other than the information or representations contained in the registration statement, prospectus or SAI for the Fund shares, as the same may be amended or supplemented from time to time, or in sales literature or other promotional material approved by the Fund, Distributor or Adviser, except with the permission of the Fund, Distributor or Adviser. 4.3. The Fund or the Adviser shall furnish, or shall cause to be furnished, to FirstGWL&A and Schwab, a copy of each piece of sales literature or other promotional material in which FirstGWL&A and/or its separate account(s), or Schwab is named at least ten (10) Business Days prior to its use. No such material shall be used if FirstGWL&A or Schwab objects to such use within five (5) Business Days after receipt of such material. 4.4. The Fund, the Distributor and the Adviser shall not give any information or make any representations on behalf of FirstGWL&A or concerning FirstGWL&A, the Account, or the Contracts other than the information or representations contained in a registration statement, prospectus or SAI for the Contracts, as the same may be amended or supplemented from time to time, or in sales literature or other promotional material approved by FirstGWL&A or its designee, except with the permission of FirstGWL&A. 4.5. FirstGWL&A, the Fund, the Distributor and the Adviser shall not give any information or make any representations on behalf of or concerning Schwab, or use Schwab's name except with the permission of Schwab. 4.6. The Fund will provide to FirstGWL&A and Schwab at least one complete copy of all registration statements, prospectuses, SAIs, sales literature and other promotional materials, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Designated Portfolio(s) (but excluding sales literature and other promotional materials relating to other Participating Insurance Companies) con- temporaneously with the filing of such document(s) with the SEC or NASD or other regulatory authorities. 4.7. FirstGWL&A or Schwab will provide to the Fund at least one complete copy of all registration statements, prospectuses, SAIs, sales literature and other promotional materials, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Contracts or the Account and include references to the Fund, the Adviser, the Distributor or the Designated Portfolios, contemporaneously with the filing of such document(s) with the SEC, NASD, or other regulatory authority. 4.8. For purposes of Articles IV and VIII, the phrase "sales literature and other promotional material" includes, but is not limited to, advertisements (such as material published, or designed for use in, a newspaper, magazine, or other periodical, radio, television, telephone or tape recording, videotape display, signs or billboards, motion pictures, or other public media; e.g., on-line networks such as the Internet or other electronic media), sales literature (i.e., any written communication distributed or made generally available to customers or the public, including brochures, circulars, research reports, market letters, form letters, seminar texts, reprints or excerpts of any other advertisement, sales literature, or published article), educational or training materials or other communications distributed or made generally available to some or all agents or employees, and shareholder reports, and proxy materials (including solicitations for voting instructions) and any other material constituting sales literature or advertising under the NASD rules, the 1933 Act or the 1940 Act. 4.9. At the request of any party to this Agreement, each other party will make available to the other party's independent auditors and/or representative of the appropriate regulatory agencies, all records, data and access to operating procedures that may be reasonably requested in connection with compliance and regulatory requirements related to this Agreement or any party's obligations under this Agreement. ARTICLE V. Fees and Expenses 5.1. The Fund and the Adviser shall pay no fee or other compensation to FirstGWL&A under this Agreement, and FirstGWL&A shall pay no fee or other compensation to the Fund or Adviser under this Agreement, although the parties hereto will bear certain expenses in accordance with Schedule E, Articles III, V, and other provisions of this Agreement. 5.2. All expenses incident to performance by the Fund, the Distributor and the Adviser under this Agreement shall be paid by the appropriate party, as further provided in Schedule E. The Fund shall see to it that all shares of the Designated Portfolio(s) are registered and authorized for issuance in accordance with applicable federal law and, if and to the extent required, in accordance with applicable state laws prior to their sale. 5.3. The parties shall bear the expenses of routine annual distribution (mailing costs) of the Fund's prospectus and distribution (mailing costs) of the Fund's proxy materials and reports to owners of Contracts offered by FirstGWL&A, in accordance with Schedule E. 5.4. The Fund, the Distributor and the Adviser acknowledge that a principal fea- ture of the Contracts is the Contractowner's ability to choose from a number of unaffiliated mutual funds (and portfolios or series thereof), including the Designated Portfolio(s) and the Unaffiliated Funds, and to transfer the Contract's cash value between funds and portfolios. The Fund, the Distributor and the Adviser agree to periodically consult with FirstGWL&A and Schwab as necessary or appropriate to facilitate the operation of the Account and the Contracts as described in the prospectus for the Contracts, including but not limited to facilitating transfers between the Fund and Unaffiliated Funds, and further agree to take all mutually agreeable steps necessary or appropriate to give effect to the same. 5.5. Schwab agrees to provide certain administrative services, specified in Schedule C attached hereto and incorporated herein by reference, in connection with the arrangements contemplated by this Agreement. The parties acknowledge and agree that the services referred to in this Section 5.5 are recordkeeping, shareholder communication, and other transaction facilitation and processing, and related administrative services only and are not the services of an underwriter or a principal underwriter of the Fund, and that Schwab is not an underwriter for the shares of the Designated Portfolio(s), within the meaning of the 1933 Act or the 1940 Act. 5.6. As compensation for the services specified in Schedule C hereto, the Adviser agrees to pay Schwab a monthly Administrative Service Fee based on the percentage per annum on Schedule C hereto applied to the average daily value of the shares of the Designated Portfolio(s) held in the Account with respect to Contracts sold by Schwab. This monthly Administrative Service Fee is due and payable before the 15th (fifteenth) day following the last day of the month to which it relates. ARTICLE VI. Diversification and Qualification 6.1. The Fund, the Distributor and the Adviser represent and warrant that the Fund will at all times sell its shares and invest its assets in such a manner as to ensure that the Contracts will be treated as annuity contracts under the Code, and the regulations issued thereunder. Without limiting the scope of the foregoing, the Fund, Distributor and Adviser represent and warrant that the Fund and each Designated Portfolio thereof will at all times comply with Section 817(h) of the Code and Treasury Regulation 1.817-5, as amended from time to time, and any Treasury interpretations thereof, relating to the diversification requirements for variable annuity, endowment, or life insurance contracts and any amendments or other modifications or successor provisions to such Section or Regulations. The Fund, the Distributor and the Adviser agree that shares of the Designated Portfolio(s) will be sold only to Participating Insurance Companies and their separate accounts and to Qualified Plans. 6.2. No shares of any Designated Portfolio of the Fund will be sold to the general public. 6.3. The Fund, the Distributor and the Adviser represent and warrant that the Fund and each Designated Portfolio is currently qualified as a Regulated Investment Company under Subchapter M of the Code, and that each Designated Portfolio will maintain such qualification (under Subchapter M or any successor or similar provisions) as long as this Agreement is in effect. 6.4. The Fund, Distributor or Adviser will notify FirstGWL&A immediately upon having a reasonable basis for believing that the Fund or any Designated Portfolio has ceased to comply with the aforesaid Section 817(h) diversification or Subchapter M qualification requirements or might not so comply in the future. 6.5. Without in any way limiting the effect of Sections 8.3, 8.4 and 8.5 hereof and without in any way limiting or restricting any other remedies available to FirstGWL&A or Schwab, the Adviser or Distributor will pay all costs associated with or arising out of any failure, or any anticipated or reasonably foreseeable failure, of the Fund or any Designated Portfolio to comply with Sections 6.1, 6.2, or 6.3 hereof, including all costs associated with reasonable and appropriate corrections or responses to any such failure; such costs may include, but are not limited to, the costs involved in creating, organizing, and registering a new investment company as a funding medium for the Contracts and/or the costs of obtaining whatever regulatory authorizations are required to substitute shares of another investment company for those of the failed Portfolio (including but not limited to an order pursuant to Section 26(b) of the 1940 Act); such costs are to include, but are not limited to, fees and expenses of legal counsel and other advisors to FirstGWL&A and any federal income taxes or tax penalties and interest thereon (or "toll charges" or exactments or amounts paid in settlement) incurred by FirstGWL&A with respect to itself or owners of its Contracts in connection with any such failure or anticipated or reasonably foreseeable failure. 6.6. The Fund at the Fund's expense shall provide FirstGWL&A or its designee with reports certifying compliance with the aforesaid Section 817(h) diversification and Subchapter M qualification requirements, at the times provided for and substantially in the form attached hereto as Schedule D and incorporated herein by reference; provided, however, that providing such reports does not relieve the Fund of its responsibility for such compliance or of its liability for any non-compliance. 6.7. FirstGWL&A agrees that if the Internal Revenue Service ("IRS") asserts in writing in connection with any governmental audit or review of FirstGWL&A or, to FirstGWL&A's knowledge, or any Contractowner that any Designated Portfolio has failed to comply with the diversification requirements of Section 817(h) of the Code or FirstGWL&A otherwise becomes aware of any facts that could give rise to any claim against the Fund, Distributor or Adviser as a result of such a failure or alleged failure: (a) FirstGWL&A shall promptly notify the Fund, the Distributor and the Adviser of such assertion or potential claim; (b) FirstGWL&A shall consult with the Fund, the Distributor and the Adviser as to how to minimize any liability that may arise as a result of such failure or alleged failure; (c) FirstGWL&A shall use its best efforts to minimize any liability of the Fund, the Distributor and the Adviser resulting from such failure, including, without limitation, demonstrating, pursuant to Treasury Regulations, Section 1.817-5(a)(2), to the commissioner of the IRS that such failure was inadvertent; (d) any written materials to be submitted by FirstGWL&A to the IRS, any Contractowner or any other claimant in connection with any of the foregoing proceedings or contests (including, without limitation, any such materials to be submitted to the IRS pursuant to Treasury Regulations, Section 1.817-5(a)(2)) shall be provided by FirstGWL&A to the Fund, the Distributor and the Adviser (together with any supporting information or analysis) at least five (5) business days prior to submission unless facts and circumstances do not reasonably permit FirstGWL&A to give such advance notice, in which case FirstGWL&A shall endeavor to give as much advance notice as is reasonably practicable; (e) FirstGWL&A shall provide the Fund, the Distributor and the Adviser with such cooperation as the Fund, the Distributor and the Adviser shall reasonably request (including, without limitation, by permitting the Fund, the Distributor and the Adviser to review the relevant books and records of FirstGWL&A) in order to facilitate review by the Fund, the Distributor and the Adviser of any written submissions provided to it or its assessment of the validity or amount of any claim against it arising from such failure or alleged failure; (f) FirstGWL&A shall not with respect to any claim of the IRS or any Contractowner that would give rise to a claim against the Fund, the Distributor and the Adviser (i) compromise or settle any claim, (ii) accept any adjustment on audit, or (iii) forego any allowable administrative or judicial appeals, without the express written consent of the Fund, the Distributor and the Adviser, which shall not be unreasonably withheld; provided that, FirstGWL&A shall not be required to appeal any adverse judicial decision unless the Fund and the Adviser shall have provided an opinion of independent counsel to the effect that a reasonable basis exists for taking such appeal; and further provided that the Fund, the Distributor and the Adviser shall bear the costs and expenses, including reasonable attorney's fees, incurred by FirstGWL&A in complying with this clause (f). ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order 7.1. The Board will monitor the Fund for the existence of any material irreconcilable conflict between the interests of the contract owners of all separate accounts investing in the Fund. An irreconcilable material conflict may arise for a variety of reasons, including: (a) an action by any state insurance regulatory authority; (b) a change in applicable federal or state insurance, tax, or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretative letter, or any similar action by insurance, tax, or securities regulatory authorities; (c) an administrative or judicial decision in any relevant proceeding; (d) the manner in which the investments of any Portfolio are being managed; (e) a difference in voting instructions given by variable annuity contract and variable life insurance contract owners or by contract owners of different Participating Insurance Companies; or (f) a decision by a Participating Insurance Company to disregard the voting instructions of contract owners. The Board shall promptly inform FirstGWL&A if it determines that an irreconcilable material conflict exists and the implications thereof. 7.2. FirstGWL&A will report any potential or existing conflicts of which it is aware to the Board. FirstGWL&A will assist the Board in carrying out its responsibilities under the Mixed and Shared Funding Exemptive Order, by providing the Board with all information reasonably necessary for the Board to consider any issues raised. This includes, but is not limited to, an obligation by FirstGWL&A to inform the Board whenever contract owner voting instructions are to be disregarded. Such responsibilities shall be carried out by FirstGWL&A with a view only to the interests of its Contractowners. 7.3. If it is determined by a majority of the Board, or a majority of its trustees who are not interested persons of the Fund, the Distributor, the Adviser or any sub-adviser to any of the Designated Portfolios (the "Independent Trustees"), that a material irreconcilable conflict exists, FirstGWL&A and other Participating Insurance Companies shall, at their expense and to the extent reasonably practicable (as determined by a majority of the Independent Trustees), take whatever steps are necessary to remedy or eliminate the irreconcilable material conflict, up to and including: (1) withdrawing the assets allocable to some or all of the separate accounts from the Fund or any Designated Portfolio and reinvesting such assets in a different investment medium, including (but not limited to) another portfolio of the Fund, or submitting the question whether such segregation should be implemented to a vote of all affected contract owners and, as appropriate, segregating the assets of any appropriate group (i.e., annuity contract owners, life insurance contract owners, or variable contract owners of one or more Participating Insurance Companies) that votes in favor of such segregation, or offering to the affected contract owners the option of making such a change; and (2) establishing a new registered management investment company or managed separate account. 7.4. If a material irreconcilable conflict arises because of a decision by FirstGWL&A to disregard contract owner voting instructions and that decision represents a minority position or would preclude a majority vote, FirstGWL&A may be required, at the Fund's election, to withdraw the Account's investment in the Fund and terminate this Agreement; provided, however that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the Independent Trustees and no charge or penalty will be imposed as a result of such withdrawal. Any such withdrawal and termination must take place within six (6) months after the Fund gives written notice that this provision is being implemented, and until the end of that six month period the Adviser, the Distributor and the Fund shall continue to accept and implement orders by FirstGWL&A for the purchase (and redemption) of shares of the Fund. 7.5. If a material irreconcilable conflict arises because a particular state insurance regulator's decision applicable to FirstGWL&A conflicts with the majority of other state regulators, then FirstGWL&A will withdraw the Account's investment in the Fund and terminate this Agreement within six months after the Board informs FirstGWL&A in writing that it has determined that such decision has created an irreconcilable material conflict; provided, however, that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the disinterested members of the Board. Until the end of the foregoing six month period, the Fund shall continue to accept and implement orders by FirstGWL&A for the purchase (and redemption) of shares of the Fund. 7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority of the disinterested members of the Board shall determine whether any proposed action adequately remedies any irreconcilable material conflict, but in no event will the Fund be required to establish a new funding medium for the Contracts. FirstGWL&A shall not be required by Section 7.3 to establish a new funding medium for the Contracts if an offer to do so has been declined by vote of a majority of Contractowners affected by the irreconcilable material conflict. In the event that the Board determines that any proposed action does not adequately remedy any irreconcilable material conflict, then FirstGWL&A will withdraw the Account's investment in the Fund and terminate this Agreement within six (6) months after the Board informs FirstGWL&A in writing of the foregoing determination; provided, however, that such withdrawal and termination shall be limited to the extent required by any such material irreconcilable conflict as determined by a majority of the Independent Trustees. 7.7. If and to the extent the SEC amends Rule 6e-2 and Rule 6e-3(T) or adopts Rule 6e-3, or takes any other action, to provide exemptive relief from any provision of the 1940 Act or the rules promulgated thereunder with respect to mixed or shared funding (as defined in the Mixed and Shared Funding Exemptive Order) on terms and conditions materially different from those contained in the Mixed and Shared Funding Exemptive Order, then (a) the Fund and/or FirstGWL&A, as appropriate, shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable: and (b) Sections 3.5, 3.6, 3.7, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall continue in effect only to the extent that terms and con- ditions substantially identical to such Sections are contained in such Rule(s) as so amended or adopted, or are otherwise required by the SEC. ARTICLE VIII. Indemnification 8.1. Indemnification By FirstGWL&A 8.1(a). FirstGWL&A agrees to indemnify and hold harmless the Fund, the Distributor and the Adviser and each of their respective officers and directors or trustees and each person, if any, who controls the Fund, Distributor or Adviser within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.1) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of FirstGWL&A) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages or liabilities (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in the registration statement or pro- spectus or SAI covering the Contracts or contained in the Contracts or sales literature or other promotional material for the Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser, Distributor or Fund for use in the registration statement or prospectus for the Contracts or in the Contracts or sales literature or other promotional material (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, pro- spectus or sales literature or other promotional material of the Fund not sup- plied by FirstGWL&A or persons under its control) or wrongful conduct of FirstGWL&A or persons under its control, with respect to the sale or distribution of the Contracts or Fund Shares; or (iii)arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, or sales literature or other promotional material of the Fund, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such a statement or omission was made in reliance upon information furnished in writing to the Fund by or on behalf of FirstGWL&A; or (iv) arise as a result of any failure by FirstGWL&A to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by FirstGWL&A in this Agreement or arise out of or result from any other material breach of this Agreement by FirstGWL&A, including without limitation Section 2.11 and Section 6.7 hereof, as limited by and in accordance with the provisions of Sections 8.1(b) and 8.1(c) hereof. 8.1(b). FirstGWL&A shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.1(c). FirstGWL&A shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified FirstGWL&A in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify FirstGWL&A of any such claim shall not relieve FirstGWL&A from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that FirstGWL&A has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, FirstGWL&A shall be entitled to participate, at its own expense, in the defense of such action. FirstGWL&A also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from FirstGWL&A to such party of FirstGWL&A's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and FirstGWL&A will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.1(d).The Indemnified Parties will promptly notify FirstGWL&A of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund. 8.2. Indemnification by Schwab 8.2(a).Schwab agrees to indemnify and hold harmless the Fund, the Distributor and the Adviser and each of their respective officers and directors or trustees and each person, if any, who controls the Fund, Distributor or Adviser within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.2) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of Schwab) or litigation (including reasonable legal and other expenses), to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acqu- isition of the Fund's shares or the Contracts and: (i) arise out of Schwab's dissemination of information regarding the Fund that is both (A) materially incorrect and (B) that was neither contained in the Fund's registration statement nor in the Fund's sales literature and other promotional material or provided in writing to Schwab, or approved in writing, by or on behalf of the Fund, Distributor or Adviser; or (ii) arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in sales literature or other promotional material prepared or approved by Schwab for the Contracts or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser, Distributor or the Fund for use in the registra- tion statement, prospectus or SAI for the Contracts or in the Contracts or sales literature or other promotional material (or any amendment or supplement to any of the foregoing) or otherwise for use in connection with the sale of the Contracts; or (iii)arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI, or sales literature or other promotional material of the Fund not supplied by Schwab or persons under its control) or wrongful conduct of Schwab or persons under its control, with respect to the sale or distribution of the Contracts; or (iv) arise as a result of any failure by Schwab to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by Schwab in this Agreement or arise out of or result from any other material breach of this Agreement by Schwab; as limited by and in accordance with the provisions of Sections 8.2(b) and 8.2(c) hereof. 8.2(b). Schwab shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.2(c). Schwab shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified Schwab in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify Schwab of any such claim shall not relieve Schwab from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that Schwab has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, Schwab shall be entitled to participate, at its own expense, in the defense of such action. Schwab also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from Schwab to such party of Schwab's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and Schwab will not be liable to such party under this Agreement for any legal or other ex- penses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.2(d). The Indemnified Parties will promptly notify Schwab of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund. 8.3. Indemnification by the Adviser 8.3(a). The Adviser agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their respective directors and officers and each person, if any, who con- trols FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.3) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Adviser) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement, prospectus or SAI of the Fund prepared by the Adviser (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information fur- nished in writing to the Adviser, the Distributor or the Fund by or on behalf of FirstGWL&A or Schwab for use in the registration statement or prospectus or SAI for the Fund (or any amendment or supplement to any of the foregoing) or otherwise for use in connection with the sale of the Contracts or the Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI or sales literature or other promotional material for the Contracts not supplied by the Adviser or persons under its control) or wrongful conduct of the Adviser or persons under its control, with respect to the sale or distribution of the Contracts or Fund shares; or (iii)arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, or sales literature or other promotional material covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser; or (iv) arise as a result of any failure by the Adviser to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or (v) arise out of or result from any material breach of any representation and/or warranty made by the Adviser in this Agreement or arise out of or result from any other material breach of this Agreement by the Adviser; or (vi) arise out of or result from the incorrect or untimely calculation or reporting by the Adviser of the daily net asset value per share or dividend or capital gain distribution rate; as limited by and in accordance with the provisions of Sections 8.3(b) and 8.3(c) hereof. This indemnification is in addition to and apart from the responsibilities and obligations of the Adviser specified in Article VI hereof. 8.3(b). The Adviser shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.3(c). The Adviser shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Adviser in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Adviser of any such claim shall not relieve the Adviser from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Adviser has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Adviser will be entitled to participate, at its own expense, in the defense thereof. The Adviser also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Adviser to such party of the Adviser's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Adviser will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.3(d). FirstGWL&A and Schwab agree promptly to notify the Adviser of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Account. 8.4. Indemnification By the Fund 8.4(a). The Fund agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their respective directors and officers and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.4) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written con- sent of the Fund) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may be required to pay or become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements, are related to the operations of the Fund and: (i) arise as a result of any failure by the Fund to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agree- ment); or (ii) arise out of or result from any material breach of any representation and/or warranty made by the Fund in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund; as limited by and in accordance with the provisions of Sections 8.4(b) and 8.4(c) hereof. 8.4(b). The Fund shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.4(c). The Fund shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Fund in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Fund of any such claim shall not relieve it from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Fund has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Fund will be entitled to participate, at its own expense, in the defense thereof. The Fund shall also be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Fund to such party of the Fund's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Fund will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.4(d). FirstGWL&A and Schwab each agree promptly to notify the Fund of the commencement of any litigation or proceeding against itself or any of its respective officers or directors in connection with the Agreement, the issuance or sale of the Contracts, the operation of the Account, or the sale or acquisition of shares of the Fund. 8.5. Indemnification by the Distributor 8.5(a).The Distributor agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their respective directors and officers and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.5) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of the Distributor) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages or liabilities (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the sales literature or other promotional material of the Fund prepared by the Distributor (or any amend- ment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to the Adviser, the Distributor or Fund by or on behalf of FirstGWL&A or Schwab for use in the sales literature or other promotional material for the Fund or otherwise for use in connection with the sale of the Contracts or Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI, sales literature or other promotional material for the Contracts not supplied by the Distributor or persons under its control) or wrongful conduct of the Distributor or persons under its control, with respect to the sale or distribution of the Contracts or Fund shares; or (iii)arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, sales literature or other promotional material covering the Fund or the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Distributor; or (iv) arise as a result of any failure by the Distributor to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by the Distributor in this Agreement or arise out of or result from any other material breach of this Agreement by the Distributor; as limited by and in accordance with the provisions of Sections 8.5(b) and 8.5(c) hereof. This indemnification is in addition to and apart from the responsibilities and obligations of the Distributor specified in Article VI hereof. 8.5(b).The Distributor shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance or such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.5(c)The Distributor shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Distributor in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Distributor of any such claim shall not relieve the Distributor from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Distributor has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Distributor will be entitled to participate, at its own expense, in the defense thereof. The Distributor also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Distributor to such party of the Distributor's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Distributor will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.5(d)FirstGWL&A and Schwab agree to promptly notify the Distributor of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Account. ARTICLE IX. Applicable Law 9.1. This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the State of New York, without regard to the New York Conflict of Laws provisions. 9.2. This Agreement shall be subject to the provisions of the 1933, 1934 and 1940 Acts, and the rules and regulations and rulings thereunder, including such exemptions from those statutes, rules and regulations as the SEC may grant (including, but not limited to, the Mixed and Shared Funding Exemptive Order) and the terms hereof shall be interpreted and construed in accordance therewith. ARTICLE X. Termination 10.1.This Agreement shall terminate: (a) at the option of any party, with or without cause, with respect to some or all Portfolios, upon six (6) months advance written notice delivered to the other parties; provided, however, that such notice shall not be given earlier than six (6) months following the date of this Agreement; or (b) at the option of FirstGWL&A or Schwab by written notice to the other parties with respect to any Portfolio based upon FirstGWL&A's or Schwab's determination that shares of such Portfolio are not reasonably available to meet the requirements of the Contracts; or (c) at the option of FirstGWL&A or Schwab by written notice to the other parties with respect to any Portfolio in the event any of the Portfolio's shares 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 FirstGWL&A; or (d) at the option of the Fund, Distributor or Adviser in the event that formal administrative proceedings are instituted against FirstGWL&A or Schwab by the NASD, the SEC, the Insurance Commissioner or like official of any state or any other regulatory body regarding FirstGWL&A's or Schwab's duties under this Agreement or related to the sale of the Contracts, the operation of any Account, or the purchase of the Fund shares, if, in each case, the Fund, Distributor or Adviser, as the case may be, reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of FirstGWL&A or Schwab to perform its obligations under this Agreement; or (e) at the option of FirstGWL&A or Schwab in the event that formal administrative proceedings are instituted against the Fund, the Distributor or the Adviser by the NASD, the SEC, or any state securities or insurance department or any other regulatory body, if Schwab or FirstGWL&A reasonably 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 Fund, the Distributor or the Adviser to perform their obligations under this Agreement; or (f) at the option of FirstGWL&A by written notice to the Fund with respect to any Portfolio if FirstGWL&A reasonably believes that the Portfolio will fail to meet the Section 817(h) diversification requirements or Subchapter M qualifications specified in Article VI hereof; or (g) at the option of either the Fund, the Distributor or the Adviser, if (i) the Fund, Distributor or Adviser, respectively, shall determine, in its sole judgment reasonably exercised in good faith, that either FirstGWL&A or Schwab has suffered a material adverse change in its business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on FirstGWL&A's or Schwab's ability to perform its obligations under this Agreement, (ii) the Fund, Distributor or Adviser notifies FirstGWL&A or Schwab, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by FirstGWL&A or Schwab and any other changes in circumstances since the giving of such a notice, the determination of the Fund, Distributor or Adviser shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or (h) at the option of either FirstGWL&A or Schwab, if (i) FirstGWL&A or Schwab, respectively, shall determine, in its sole judgment reasonably exercised in good faith, that the Fund, Distributor or Adviser has suffered a material adverse change in its business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on the Fund's, Distributor's or Adviser's ability to perform its obligations under this Agreement, (ii) FirstGWL&A or Schwab notifies the Fund, Distributor or Adviser, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by the Fund, Distributor or Adviser and any other changes in circumstances since the giving of such a notice, the determination of FirstGWL&A or Schwab shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or (i) at the option of FirstGWL&A in the event that formal administrative proceedings are instituted against Schwab by the NASD, the SEC, or any state securities or insurance department or any other regulatory body regarding Schwab's duties under this Agreement or related to the sale of the Fund's shares or the Contracts, the operation of any Account, or the purchase of the Fund shares, provided, however, that FirstGWL&A determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of Schwab to perform its obligations related to the Contracts; or (j) at the option of Schwab in the event that formal administrative proceedings are instituted against FirstGWL&A by the NASD, the SEC, or any state securities or insurance department or any other regulatory body regarding FirstGWL&A's duties under this Agreement or related to the sale of the Fund's shares or the Contracts, the operation of any Account, or the purchase of the Fund shares, provided, however, that Schwab determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of FirstGWL&A to perform its obligations related to the Contracts; or (k) at the option of any non-defaulting party hereto in the event of a material breach of this Agreement by any party hereto (the "defaulting party") other than as described in 10.1(a)-(j); provided, that the non-defaulting party gives written notice thereof to the defaulting party, with copies of such notice to all other non-defaulting parties, and if such breach shall not have been remedied within thirty (30) days after such written notice is given, then the non- defaulting party giving such written notice may terminate this Agreement by giving thirty (30) days written notice of termination to the defaulting party. 10.2.Notice Requirement. No termination of this Agreement shall be effective unless and until the party terminating this Agreement gives prior written notice to all other parties of its intent to terminate, which notice shall set forth the basis for the termination. Furthermore, (a) in the event any termination is based upon the provisions of Article VII, or the provisions of Section 10.1(a), 10.1(g) or 10.1(h) of this Agreement, the prior written notice shall be given in advance of the effective date of termination as required by those provisions unless such notice period is shortened by mutual written agreement of the parties; (b) in the event any termination is based upon the provisions of Section 10.1(d), 10.1(e), 10.1(i) or 10.1(j) of this Agreement, the prior written notice shall be given at least sixty (60) days before the effective date of termination; and (c) in the event any termination is based upon the provisions of Section 10.1(b), 10.1(c) or 10.1(f), the prior written notice shall be given in advance of the effective date of termination, which date shall be determined by the party sending the notice. 10.3.Effect of Termination. Notwithstanding any termination of this Agreement, other than as a result of a failure by either the Fund or FirstGWL&A to satisfy the applicable provisions of Section 817 of the Code, the Fund, the Distributor and the Adviser shall, at the option of FirstGWL&A or Schwab, continue to make available additional shares of the Designated Portfolio(s) pursuant to the terms and conditions of this Agreement, for all Contracts in effect on the effective date of termination of this Agreement (hereinafter referred to as "Existing Contracts") unless such further sale of shares of the Designated Portfolios is proscribed by law or the SEC or any other regulatory body. Specifically, without limitation, the owners of the Existing Contracts shall be permitted to reallocate investments in the Designated Portfolio(s), redeem investments in the Designated Portfolio(s) and/or invest in the Designated Portfolio(s) upon the making of additional purchase payments under the Existing Contracts. The parties agree that this Section 10.3 shall not apply to any terminations under Article VII and the effect of such Article VII terminations shall be governed by Article VII of this Agreement. 10.4.Surviving Provisions. Notwithstanding any termination of this Agreement, each party's obligations under Article VIII to indemnify other parties shall survive and not be affected by any termination of this Agreement. In addition, with respect to Existing Contracts, all provisions of this Agreement shall also survive and not be affected by any termination of this Agreement. 10.5.Survival of Agreement. A termination by Schwab shall terminate this Agreement only as to Schwab, and this Agreement shall remain in effect as to the other par- ties; provided, however, that in the event of a termination by Schwab the other parties shall have the option to terminate this Agreement upon 60 (sixty) days notice, rather than the six (6) months specified in Section 10.1(a). ARTICLE XI. Notices Any notice shall be sufficiently given when sent by registered or certified mail to the other party at the address of such party set forth below or at such other address as such party may from time to time specify in writing to the other party. If to the Fund: SAFECO Resource Series Trust 4333 Brooklyn Avenue, N.W. Seattle, WA 98105 Attention: Neal A. Fuller, Vice President If to FirstGWL&A: First Great-West Life & Annuity Insurance Company 8515 East Orchard Road Englewood, CO 80111 Attention:Assistant Vice President, Savings Products If to the Adviser: SAFECO Asset Management Company 4333 Brooklyn Avenue, N.W. Seattle, WA 98105 Attention:Leslie Eggerling, Vice President - Retirement Services If to the Distributor: SAFECO Securities, Inc. 4333 Brooklyn Avenue, N.W. Seattle, WA 98105 Attention: Keith Anderson, Compliance Officer If to Schwab: Charles Schwab & Co., Inc. 101 Montgomery Street San Francisco, CA 94104 Attention:General Counsel ARTICLE XII. Miscellaneous 12.1.Subject to the requirements of legal process and regulatory authority, each party hereto shall treat as confidential the names and addresses of the owners of the Contracts and all information reasonably identified as confidential in writing by any other party hereto and, except as permitted by this Agreement, shall not disclose, disseminate or utilize such names and addresses and other confidential information without the express written consent of the affected party until such time as such information may come into the public domain. Without limiting the foregoing, no party hereto shall disclose any information that another party has designated as proprietary. 12.2.The captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provisions hereof or otherwise affect their construction or effect. 12.3.This Agreement may be executed simultaneously in two or more counterparts, each of which taken together shall constitute one and the same instrument. 12.4.If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby. 12.5.Each party hereto shall cooperate with each other party and all appropriate governmental authorities (including without limitation the SEC, the NASD and state insurance regulators) and shall permit such authorities reasonable access to its books and records in connection with any investigation or inquiry relating to this Agreement or the transactions contemplated hereby. Notwithstanding the generality of the foregoing, each party hereto further agrees to furnish the New York Insurance Commissioner with any information or reports in connection with services provided under this Agreement which such Commissioner may request in order to ascertain whether the variable annuity operations of FirstGWL&A are being conducted in a manner consistent with the New York Variable Annuity Regulations and any other applicable law or regulations. 12.6.Any controversy or claim arising out of or relating to this Agreement, or breach thereof, shall be settled by arbitration in a forum jointly selected by the relevant parties (but if applicable law requires some other forum, then such other forum) in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. 12.7.The rights, remedies and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies and obligations, at law or in equity, which the parties hereto are entitled to under state and federal laws. 12.8.This Agreement or any of the rights and obligations hereunder may not be assigned by any party without the prior written consent of all parties hereto. 12.9.Schwab and FirstGWL&A are hereby expressly put on notice of the limitation of liability as set forth in the Trust Instrument of the Fund and agree that the obligations assumed by the Fund, the Distributor and the Adviser pursuant to this Agreement shall be limited in any case to the Fund, Distributor and Adviser and their respective assets and neither Schwab nor FirstGWL&A shall seek satisfaction of any such obligation from the shareholders of the Fund, the Distributor or the Adviser, the Trustees, officers, employees or agents of the Fund, Distributor or Adviser, or any of them. 12.10.The Fund, the Distributor and the Adviser agree that the obligations assumed by FirstGWL&A and Schwab pursuant to this Agreement shall be limited in any case to FirstGWL&A and Schwab and their respective assets and neither the Fund, Distributor nor Adviser shall seek satisfaction of any such obligation from the shareholders of FirstGWL&A or Schwab, the directors, officers, employees or agents of the FirstGWL&A or Schwab, or any of them, except to the extent permitted under this Agreement. 12.11.No provision of this Agreement may be deemed or construed to modify or supersede any contractual rights, duties, or indemnifications, as between the Adviser and the Fund, and the Distributor and the Fund. IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in its name and on its behalf by its duly authorized representative and its seal to be hereunder affixed hereto as of the date specified below. FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY By its authorized officer, By:/s/ Robert K. Shaw Title: Vice President, Marketing and Product Development Date: April 8, 1997 SAFECO RESOURCE SERIES TRUST By its authorized officer, By:/s/ David F. Hill Title:President Date:April 4, 1997 SAFECO ASSET MANAGEMENT COMPANY By its authorized officer, By:/s/ Leslie Eggerling Title:Vice President Date:April 4, 1997 SAFECO SECURITIES, INC. By its authorized officer, By:/s/ Neal A. Fuller Title: Vice President Date: April 4, 1997 CHARLES SCHWAB & CO., INC. By its authorized officer, By:/s/ Jeff Benton Title: Vice President, Annuities and Life Insurance Date: April 7, 1997 Schwab Variable Annuity SCHEDULE A Contracts Form Numbers First Great-West Life & Annuity Insurance Company Group Variable/Fixed Annuity Contract J434NY SCHEDULE B Designated Portfolios Equity Portfolio SCHEDULE C Administrative Services To be performed by Charles Schwab & Co., Inc. A. Schwab will provide the properly registered and licensed personnel and systems needed for all customer servicing and support - for both Fund and Contract information and questions - including: respond to Contractowner inquiries; delivery of prospectus - both Fund and Contract; entry of initial and subsequent orders; transfer of cash to insurance company and/or Fund; explanations of Fund objectives and characteristics; entry of transfers between Unaffiliated Funds, including the Designated Portfolios; Contract balance and allocation inquiries; communicate all purchase, withdrawal, and exchange orders it receives from its customers to FirstGWL&A which will transmit them to each Fund; mail Fund prospectus. B. For the services, Schwab shall receive a fee of 0.25% per annum applied to the average daily value of the shares of the Fund held by Schwab's customers, payable by the Adviser directly to Schwab, such payments being due and payable within 15 (fifteen) days after the last day of the month to which such payment relates. C. The Fund will calculate and Schwab will verify with FirstGWL&A the asset balance for each day on which the fee is to be paid pursuant to this Agreement with respect to each Designated Portfolio. SCHEDULE D Reports per Section 6.6 With regard to the reports relating to the quarterly testing of compliance with the requirements of Section 817(h) and Subchapter M under the Internal Revenue Code (the "Code") and the regulations thereunder, the Fund shall provide within twenty (20) Business Days of the close of the calendar quarter a report to FirstGWL&A in the Form D1 attached hereto and incorporated herein by reference, regarding the status under such sections of the Code of the Designated Portfolio(s), and if necessary, identification of any remedial action to be taken to remedy non-compliance. With regard to the reports relating to the year-end testing of compliance with the requirements of Subchapter M of the Code, referred to hereinafter as "RIC status," the Fund will provide the reports on the following basis: (i) the last quarter's quarterly reports can be supplied within the 20-day period, and (ii) a year-end report will be provided 45 days after the end of the calendar year. However, if a problem with regard to RIC status, as defined below, is identified in the third quarter report, on a weekly basis, starting the first week of December, additional interim reports will be provided specially addressing the problems identified in the third quarter report. If any interim report memorializes the cure of the problem, subsequent interim reports will not be required. A problem with regard to RIC status is defined as any violation of the following standards, as referenced to the applicable sections of the Code: (a) Less than ninety percent of gross income is derived from sources of income specified in Section 851(b)(2); (b) Thirty percent or greater gross income is derived from the sale or disposition of assets specified in Section 851(b)(3); (c) Less than fifty percent of the value of total assets consists of assets specified in Section 851(b)(4)(A); and (d) No more than twenty-five percent of the value of total assets is invested in the securities of one issuer, as that requirement is set forth in Section 851(b)(4)(B). FORM D1 CERTIFICATE OF COMPLIANCE I, , a duly authorized officer, director or agent of Fund hereby swear and affirm that Fund is in compliance with all requirements of Section 817(h) and Subchapter M of the Internal Revenue Code (the "Code") and the regulations thereunder as required in the Fund Participation Agreement among First Great-West Life & Annuity Insurance Company, Charles Schwab & Co., Inc. and other than the exceptions discussed below: Exceptions Remedial Action If no exception to report, please indicate "None." Signed this day of , . (Signature) By: (Type or Print Name and Title/Position) SCHEDULE E EXPENSES The Fund and/or the Distributor and/or Adviser, and FirstGWL&A will coordinate the functions and pay the costs of the completing these functions based upon an allocation of costs in the tables below. Costs shall be allocated to reflect the Fund's share of the total costs determined on a pro rata basis according to the number of pages of the Fund's respective portions of the documents. Item Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Prospectus Printing of combined prospectuses FirstGWL&A Fund, Distributor or Adviser, as applicable Fund, Distributor or Adviser shall supply FirstGWL&A with such numbers of the Designated Portfolio(s) prospectus(es) as FirstGWL&A shall reasonably request FirstGWL&A Fund, Distributor or Adviser, as applicable Distribution to New and Inforce Clients FirstGWL&A FirstGWL&A Distribution to Prospective Clients Schwab Schwab Product Prospectus Printing for Inforce Clients FirstGWL&A FirstGWL&A Printing for Prospective Clients FirstGWL&A Schwab Distribution to New and Inforce Clients FirstGWL&A FirstGWL&A Distribution to Prospective Clients Schwab Schwab Item Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Prospectus Update & Distribution If Required by Fund, Distributor or Adviser Fund, Distributor or Adviser Fund, Distributor or Adviser If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab Schwab Schwab Product Prospectus Update & Distribution If Required by Fund, Distributor or Adviser FirstGWL&A Fund, Distributor or Adviser Item Function Party Responsible for Coordination Party Responsible for Expense If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab Schwab Schwab Mutual Fund SAI Printing Fund, Distributor or Adviser Fund, Distributor or Adviser Distribution FirstGWL&A FirstGWL&A Product SAI Printing FirstGWL&A FirstGWL&A Distribution FirstGWL&A FirstGWL&A Item Function Party Responsible for Coordination Party Responsible for Expense Proxy Material for Mutual Fund: Printing if proxy required by Law Fund, Distributor or Adviser Fund, Distributor or Adviser Distribution (including labor) if proxy required by Law FirstGWL&A Fund, Distributor or Adviser Printing & distribution if required by FirstGWL&A FirstGWL&A FirstGWL&A Printing & distribution if required by Schwab FirstGWL&A Schwab Item Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Annual & Semi-Annual Report Printing of combined reports FirstGWL&A Fund, Distributor or Adviser Distribution FirstGWL&A FirstGWL&A and Schwab Other communication to New and Prospective clients If Required by the Fund, Distributor or Adviser Schwab Fund, Distributor or Adviser If Required by FirstGWL&A Schwab FirstGWL&A Item Function Party Responsible for Coordination Party Responsible for Expense If Required by Schwab Schwab Schwab Other communication to inforce Distribution (including labor and printing) if required by the Fund, Distributor or Adviser FirstGWL&A Fund, Distributor or Adviser Distribution (including labor and printing) if required by FirstGWL&A FirstGWL&A FirstGWL&A Distribution (including labor and printing) if required by Schwab FirstGWL&A Schwab Item Function Party Responsible for Coordination Party Responsible for Expense Errors in Share Price calculation pursuant to Section 1.10 Cost of error to participants, if any FirstGWL&A Fund or Adviser Cost of administrative work to correct error, if any FirstGWL&A Fund or Adviser Operations of the Fund All operations and related expenses, including the cost of registration and qualification of shares, taxes on the issuance or transfer of shares, cost of management of the business affairs of the Fund, and expenses paid or assumed by the fund pursuant to any Rule 12b-1 plan Fund, Distributor or Adviser Fund or Adviser Operations of the Account Federal registration of units of separate account (24f-2 fees) FirstGWL&A FirstGWL&A EX-8.10 17 EXHIBIT 8.10 FUND PARTICIPATION AGREEMENT SCHWAB ANNUITY PORTFOLIOS TABLE OF CONTENTS ARTICLE I. Sale of Fund Shares . . . . . . . . . . . . . . . .3 ARTICLE II. Representations and Warranties. . . . . . . . . . .7 ARTICLE III. Prospectuses and Proxy Statements; Voting . . . . 11 ARTICLE IV. Sales Material and Information. . . . . . . . . . 13 ARTICLE V. Fees and Expenses . . . . . . . . . . . . . . . . 15 ARTICLE VI. Diversification and Qualification . . . . . . . . 17 ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order . . . . 20 ARTICLE VIII.Indemnification . . . . . . . . . . . . . . . . . 23 ARTICLE IX. Applicable Law. . . . . . . . . . . . . . . . . . 36 ARTICLE X. Termination . . . . . . . . . . . . . . . . . . . 36 ARTICLE XI. Notices . . . . . . . . . . . . . . . . . . . . . 40 ARTICLE XII. Miscellaneous . . . . . . . . . . . . . . . . . . 41 SCHEDULE A Contracts . . . . . . . . . . . . . . . . . . . . 45 SCHEDULE B Designated Portfolios . . . . . . . . . . . . . . 46 SCHEDULE C Administrative Services . . . . . . . . . . . . . 47 SCHEDULE D Reports per Section 6.6 . . . . . . . . . . . . . 48 SCHEDULE E Expenses. . . . . . . . . . . . . . . . . . . . . 51 PARTICIPATION AGREEMENT Among FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY SCHWAB ANNUITY PORTFOLIOS, CHARLES SCHWAB INVESTMENT MANAGEMENT, INC. and CHARLES SCHWAB & CO., INC. THIS AGREEMENT, made and entered into as of this ____ day of _______________, 1997 by and among FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (hereinafter "FirstGWL&A"), a New York life insurance company, on its own behalf and on behalf of its Separate Account Variable Annuity-1 Series Account (the "Account"); SCHWAB ANNUITY PORTFOLIOS a business trust organized under the laws of Massachusetts (hereinafter the "Fund"); CHARLES SCHWAB INVESTMENT MANAGEMENT, INC. (hereinafter the "Adviser"), a Delaware corporation; and CHARLES SCHWAB & CO., INC., a California corporation (hereinafter "Schwab" or the "Distributor"). WHEREAS, the Fund engages in business as an open-end management investment company and is available to act as the investment vehicle for separate accounts established for variable life insurance policies and/or variable annuity contracts (collectively, the "Variable Insurance Products") to be offered by insurance companies, including FirstGWL&A, which have entered into participation agreements similar to this Agreement (hereinafter "Participating Insurance Companies"); and WHEREAS, the beneficial interest in the Fund is divided into several series of shares, each designated a "Portfolio" and representing the interest in a particular managed portfolio of securities and other assets; and WHEREAS, the Fund has obtained an order from the Securities and Exchange Commission (hereinafter the "SEC"), dated September 25, 1996 (File No. 812-10052), granting Participating Insurance Companies and variable annuity and variable life insurance separate accounts exemptions from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended, (hereinafter the "1940 Act") and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Fund to be sold to and held by variable annuity and variable life insurance separate accounts of life insurance companies that may or may not be affiliated with one another and plans established under Sections 401(a), 403(a) and (b), 408(a), (b) and (k), 414(d) 457(b) or 501(c)(18) of the Internal Revenue Code ("Qualified Plans") (hereinafter the "Mixed and Shared Funding Exemptive Order"); and WHEREAS, the Fund is registered as an open-end management investment company under the 1940 Act and shares of the Portfolio(s) are registered under the Securities Act of 1933, as amended (hereinafter the "1933 Act"); and WHEREAS, the Adviser is duly registered as an investment adviser under the Investment Advisers Act of 1940, as amended, and any applicable state securities laws; and WHEREAS, the Distributor is duly registered as a broker-dealer under the Securities Exchange Act of 1934, as amended (the "1934 Act") and is a member in good standing of the National Association of Securities Dealers, Inc. (the "NASD"); and WHEREAS, FirstGWL&A has registered or will register certain variable annuity contracts supported wholly or partially by the Account (the "Contracts") under the 1933 Act and said Contracts are listed in Schedule A attached hereto and incorporated herein by reference, as it may be amended from time to time by mutual written agreement; and WHEREAS, the Account is a duly organized, validly existing segregated asset account, established by resolution of the Board of Directors of FirstGWL&A on January 15, 1997, to set aside and invest assets attributable to the Contracts; and WHEREAS, FirstGWL&A has registered or will register the Account as a unit investment trust under the 1940 Act and has registered or will register the securities deemed to be issued by the Account under the 1933 Act; and WHEREAS, to the extent permitted by applicable insurance laws and regulations, FirstGWL&A intends to purchase shares in the Portfolio(s) listed in Schedule B attached hereto and incorporated herein by reference, as it may be amended from time to time by mutual written agreement (the "Designated Portfolio(s)"), on behalf of the Account to fund the Contracts, and the Fund is authorized to sell such shares to unit investment trusts such as the Account at net asset value; and WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Account also intends to purchase shares in other open-end investment companies or series thereof not affiliated with the Fund (the "Unaffiliated Funds") on behalf of the Account to fund the Contracts; and WHEREAS, Schwab will perform certain services for the Fund in connection with the Contracts; NOW, THEREFORE, in consideration of their mutual promises, FirstGWL&A, Schwab, the Fund and the Adviser agree as follows: ARTICLE I. Sale of Fund Shares 1.1. The Fund agrees to sell to FirstGWL&A those shares of the Designated Portfolio(s) which the Account orders, executing such orders on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the order for the shares of the Portfolios. For purposes of this Section 1.1, FirstGWL&A shall be the designee of the Fund for receipt of such orders and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such order by 10:00 a.m. Eastern time on the next following Business Day. "Business Day" shall mean any day on which the New York Stock Exchange is open for trading and on which the Fund calculates its net asset value pursuant to the rules of the SEC. 1.2. The Fund agrees to make shares of the Designated Portfolio(s) available for purchase at the applicable net asset value per share by FirstGWL&A and the Account on those days on which the Fund calculates its Designated Portfolio(s)' net asset value pursuant to rules of the SEC, and the Fund shall calculate such net asset value on each day which the New York Stock Exchange is open for trading. Notwithstanding the foregoing, the Board of Trustees of the Fund (hereinafter the "Board") may refuse to sell shares of any Portfolio to any person, or suspend or terminate the offering of shares of any Portfolio if such action is required by law or by regulatory authorities having jurisdiction or is, in the sole discretion of the Board acting in good faith and in light of its fiduciary duties under federal and any applicable state laws, necessary in the best interests of the shareholders of such Portfolio. 1.3. The Fund will not sell shares of the Designated Portfolio(s) to any other Participating Insurance Company separate account or any Qualified Plan unless an agreement containing provisions substantially the same as Sections 2.1, 3.5, 3.6, 3.7, and Article VII of this Agreement is in effect to govern such sales; provided, however, that this condition shall apply to Qualified Plans only to the extent required by the Mixed and Shared Funding Exemptive Order. 1.4. The Fund agrees to redeem for cash, on FirstGWL&A's request, any full or fractional shares of the Fund held by FirstGWL&A, executing such requests on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the request for redemption. Requests for redemption identified by FirstGWL&A, or its agent, as being in connection with surrenders, annuitizations, or death benefits under the Contracts, upon prior written notice, may be executed within seven (7) calendar days after receipt by the Fund or its designee of the requests for redemption. This Section 1.4 may be amended, in writing, by the parties consistent with the requirements of the 1940 Act and interpretations thereof. For purposes of this Section 1.4, FirstGWL&A shall be the designee of the Fund for receipt of requests for redemption and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such request for redemption by 10:00 A.M. Eastern time on the next following Business Day. 1.5. The Parties hereto acknowledge that the arrangement contemplated by this Agreement is not exclusive; the Fund's shares may be sold to other Participating Insurance Companies (subject to Section 1.3 and Article VI hereof) and the cash value of the Con- tracts may be invested in other investment companies. 1.6. FirstGWL&A shall pay for Fund shares by 3:00 p.m. Eastern time on the next Business Day after an order to purchase Fund shares is made in accordance with the provisions of Section 1.1 hereof. Payment shall be in federal funds transmitted by wire and/or by a credit for any shares redeemed the same day as the purchase. 1.7. The Fund shall pay and transmit the proceeds of redemptions of Fund shares by 11:00 a.m. Eastern Time on the next Business Day after a redemption order is received in accordance with Section 1.4 hereof. Payment shall be in federal funds transmitted by wire and/or a credit for any shares purchased the same day as the redemption. 1.8. Issuance and transfer of the Fund's shares will be by book entry only. Stock certificates will not be issued to FirstGWL&A or the Account. Shares ordered from the Fund will be recorded in an appropriate title for the Account or the appropriate sub-account of the Account. 1.9. The Fund shall furnish same day notice (by wire or telephone, followed by written confirmation) to FirstGWL&A of any income, dividends or capital gain distributions payable on the Designated Portfolio(s)' shares. FirstGWL&A hereby elects to receive all such income dividends and capital gain distributions as are payable on the Portfolio shares in additional shares of that Portfolio. FirstGWL&A reserves the right to revoke this election and to receive all such income dividends and capital gain distributions in cash. The Fund shall notify FirstGWL&A by the end of the next following Business Day of the number of shares so issued as payment of such dividends and distributions. 1.10.The Fund shall make the net asset value per share for each Designated Portfolio available to FirstGWL&A on each Business Day as soon as reasonably practical after the net asset value per share is calculated and shall use its best efforts to make such net asset value per share available by 6:00 p.m. Eastern time. In the event of an error in the computation of a Designated Portfolio's net asset value per share ("NAV") or any dividend or capital gain distribution (each, a "pricing error"), the Adviser or the Fund shall immediately notify FirstGWL&A as soon as possible after discovery of the error. Such notification may be verbal, but shall be confirmed promptly in writing in accordance with Article XI of this Agreement. A pricing error shall be corrected as follows: (a) if the pricing error results in a difference between the erroneous NAV and the correct NAV of less than $0.01 per share, then no corrective action need be taken; (b) if the pricing error results in a difference between the erroneous NAV and the correct NAV equal to or greater than $0.01 per share, but less than 1/2 of 1% of the Designated Portfolio's NAV at the time of the error, then the Adviser shall reimburse the Designated Portfolio for any loss, after taking into consideration any positive effect of such error; however, no adjustments to Contractowner accounts need be made; and (c) if the pricing error results in a difference between the erroneous NAV and the correct NAV equal to or greater than 1/2 of 1% of the Designated Portfolio's NAV at the time of the error, then the Adviser shall reimburse the Designated Portfolio for any loss (without taking into consideration any positive effect of such error) and shall reimburse FirstGWL&A for the costs of adjustments made to correct Contractowner accounts in accordance with the provisions of Schedule E. If an adjustment is necessary to correct a material error which has caused Contractowners to receive less than the amount to which they are entitled, the number of shares of the applicable sub-account of such Contractowners will be adjusted and the amount of any underpayments shall be credited by the Adviser to FirstGWL&A for crediting of such amounts to the applicable Contractowners accounts. Upon notification by the Adviser of any overpayment due to a material error, FirstGWL&A or Schwab, as the case may be, shall promptly remit to Adviser any overpayment that has not been paid to Contractowners; however, Adviser acknowledges that Schwab and FirstGWL&A do not intend to seek additional payments from any Contractowner who, because of a pricing error, may have underpaid for units of interest credited to his/her account. In no event shall Schwab or FirstGWL&A be liable to Contractowners for any such adjustments or underpayment amounts. A pricing error within categories (b) or (c) above shall be deemed to be "materially incorrect" or constitute a "material error" for purposes of this Agreement. The standards set forth in this Section 1.10 are based on the Parties' understanding of the views expressed by the staff of the Securities and Exchange Commission ("SEC") as of the date of this Agreement. In the event the views of the SEC staff are later modified or superseded by SEC or judicial interpretation, the parties shall amend the foregoing provisions of this Agreement to comport with the appropriate applicable standards, on terms mutually satisfactory to all Parties. ARTICLE II. Representations and Warranties 2.1. FirstGWL&A represents and warrants that the securities deemed to be issued by the Account under the Contracts are or will be registered under the 1933 Act; that the Contracts will be issued and sold in compliance in all material respects with all applicable federal and state laws and that the sale of the Contracts shall comply in all material respects with state insurance suitability requirements. FirstGWL&A further represents and warrants that it is an insurance company duly organized and in good standing under applicable law and that it has legally and validly established the Account prior to any issuance or sale of units thereof as a segregated asset account under Section 4240 of the New York Insurance Law and has registered the Account as a unit investment trust in accordance with the provisions of the 1940 Act to serve as a segregated investment account for the Contracts. 2.2. The Fund represents and warrants that Designated Portfolio(s) shares sold pursuant to this Agreement shall be registered under the 1933 Act, duly authorized for issuance and sold in compliance with all applicable federal securities laws including without limitation the 1933 Act, the 1934 Act, and the 1940 Act and that the Fund is and shall remain registered under the 1940 Act. The Fund shall amend the registration statement for its shares under the 1933 Act and the 1940 Act from time to time as required in order to effect the continuous offering of its shares. 2.3. The Fund reserves the right to adopt a plan pursuant to Rule 12b-1 under the 1940 Act and to impose an asset-based or other charge to finance distribution expenses as permitted by applicable law and regulation. In any event, the Fund and Adviser agree to comply with applicable provisions and SEC staff interpretations of the 1940 Act to assure that the investment advisory or management fees paid to the Adviser by the Fund are in accordance with the requirements of the 1940 Act. To the extent that the Fund decides to finance distribution expenses pursuant to Rule 12b-1, the Fund undertakes to have its Board, a majority of whom are not interested persons of the Fund, formulate and approve any plan pursuant to Rule 12b-1 under the 1940 Act to finance distribution expenses. 2.4. The Fund represents and warrants that it will make every effort to ensure that the investment policies, fees and expenses of the Designated Portfolio(s) are and shall at all times remain in compliance with the insurance and other applicable laws of the State of New York and any other applicable state to the extent required to perform this Agreement. The Fund further represents and warrants that it will make every effort to ensure that Designated Portfolio(s) shares will be sold in compliance with the insurance laws of the State of New York and all applicable state insurance and securities laws. The Fund shall register and qualify the shares for sale in accordance with the laws of the various states if and to the extent required by applicable law. FirstGWL&A and the Fund will endeavor to mutually cooperate with respect to the implementation of any modifications necessitated by any change in state insurance laws, regulations or interpretations of the foregoing that affect the Designated Portfolio(s) (a "Law Change"), and to keep each other informed of any Law Change that becomes known to either party. In the event of a Law Change, the Fund agrees that, except in those circumstances where the Fund has advised FirstGWL&A that its Board of Directors has determined that implementation of a particular Law Change is not in the best interest of all of the Fund's shareholders with an explanation regarding why such action is lawful, any action required by a Law Change will be taken. 2.5. The Fund represents and warrants that it is lawfully organized and validly existing under the laws of the State of Massachusetts and that it does and will comply in all material respects with the 1940 Act. 2.6. The Adviser represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of the State of Delaware and any applicable state and federal securities laws. 2.7. The Distributor represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of the State of California and any applicable state and federal securities laws. 2.8. The Fund and the Adviser represent and warrant that all of their respective officers, employees, investment advisers, and other individuals or entities dealing with the money and/or securities of the Fund are, and shall continue to be at all times, covered by a blanket fidelity bond or similar coverage for the benefit of the Fund in an amount not less than the minimal coverage required by Rule 17g-1 under the 1940 Act or related provisions as may be promulgated from time to time. The aforesaid bond shall include coverage for larceny and embezzlement and shall be issued by a reputable bonding company. 2.9. Schwab represents and warrants that it has completed, obtained and performed, in all material respects, all registrations, filings, approvals, and authorizations, consents and examinations required by any government or governmental authority as may be necessary to perform this Agreement. Schwab does and will comply, in all material respects, with all applicable laws, rules and regulations in the performance of its obligations under this Agreement. 2.10.The Fund will provide FirstGWL&A with as much advance notice as is reasonably practicable of any material change affecting the Designated Portfolio(s) (including, but not limited to, any material change in the registration statement or prospectus affecting the Designated Portfolio(s)) and any proxy solicitation affecting the Designated Portfolio(s) and consult with FirstGWL&A in order to implement any such change in an orderly manner, recognizing the expenses of changes and attempting to minimize such expenses by implementing them in conjunction with regular annual updates of the prospectus for the Contracts. The Fund agrees to share equitably in expenses incurred by FirstGWL&A as a result of actions taken by the Fund, consistent with the allocation of expenses contained in Schedule E attached hereto and incorporated herein by reference. 2.11.FirstGWL&A represents and warrants, for purposes other than diversification under Section 817 of the Internal Revenue Code of 1986 as amended ("the Code"), that the Contracts are currently treated as annuity contracts under applicable provisions of the Code, and that it will make every effort to maintain such treatment and that it will notify Schwab, the Fund and the Adviser immediately upon having a reasonable basis for believing that the Contracts have ceased to be so treated or that they might not be so treated in the future. In addition, FirstGWL&A represents and warrants that the Account is a "segregated asset account" and that interests in the Account are offered exclusively through the purchase of or transfer into a "variable contract" within the meaning of such terms under Section 817 of the Code and the regulations thereunder. FirstGWL&A will use every effort to continue to meet such definitional requirements, and it will notify Schwab, the Fund, and the Adviser immediately upon having a reasonable basis for believing that such requirements have ceased to be met or that they might not be met in the future. ARTICLE III. Prospectuses and Proxy Statements; Voting 3.1. At least annually, the Distributor shall provide FirstGWL&A with as many copies of the Fund's current prospectus for the Designated Portfolio(s) as FirstGWL&A and Schwab may reasonably request for marketing purposes (including distribution to Contractowners with respect to new sales of a Contract). If requested by FirstGWL&A in lieu thereof, the Distributor or Fund shall provide such documentation (including a camera- ready copy and computer diskette of the current prospectus for the Designated Portfolio(s)) and other assistance as is reasonably necessary in order for FirstGWL&A once each year (or more frequently if the prospectuses for the Designated Portfolio(s) are amended) to have the prospectus for the Contracts and the Fund's prospectus for the Designated Portfolio(s) printed together in one document. The Fund and Adviser agree that the prospectuses (and semi-annual and annual reports) for the Designated Portfolio(s) will describe only the Designated Portfolio(s) and will not name or describe any other portfolios or series that may be in the Fund unless required by law. 3.2. If applicable state or federal laws or regulations require that the Statement of Additional Information ("SAI") for the Fund be distributed to all Contractowners, then the Fund and/or the Distributor shall provide FirstGWL&A with copies of the Fund's SAI or documentation thereof for the Designated Portfolio(s) in such quantities, with expenses to be borne in accordance with Schedule E hereof, as FirstGWL&A may reasonably require to permit timely distribution thereof to Contractowners. The Distributor and/or the Fund shall also provide SAIs to any Contractowner or prospective owner who requests such SAI from the Fund (although it is anticipated that such requests will be made to FirstGWL&A). 3.3. The Fund and/or the Distributor shall provide FirstGWL&A with copies of the Fund's proxy material, reports to stockholders and other communications to stockholders for the Designated Portfolio(s) in such quantity, with expenses to be borne in accordance with Schedule E hereof, as FirstGWL&A may reasonably require to permit timely distribution thereof to Contractowners. 3.4. It is understood and agreed that, except with respect to information regarding FirstGWL&A or Schwab provided in writing by that party and except as provided in the Distribution Agreement dated March 29, 1994 between Schwab and the Fund, neither FirstGWL&A nor Schwab are responsible for the content of the prospectus or SAI for the Designated Portfolio(s). It is also understood and agreed that, except with respect to information regarding the Fund, the Distributor, Adviser or the Designated Portfolio(s) provided in writing by the Fund, the Distributor or Adviser, neither the Fund, the Distributor nor Adviser are responsible for the content of the prospectus or SAI for the Contracts. 3.5. If and to the extent required by law FirstGWL&A shall: (i) solicit voting instructions from Contractowners; (ii) vote the Designated Portfolio(s) shares in accordance with instructions received from Contractowners: and (iii)vote Designated Portfolio shares for which no instructions have been received in the same proportion as Designated Portfolio(s) shares for which instructions have been received from Contractowners, so long as and to the extent that the SEC continues to interpret the 1940 Act to require pass-through voting privileges for variable contract owners. FirstGWL&A reserves the right to vote Fund shares held in any segregated asset account in its own right, to the extent permitted by law. 3.6. FirstGWL&A shall be responsible for assuring that each of its separate accounts holding shares of a Designated Portfolio calculates voting privileges as directed by the Fund and agreed to by FirstGWL&A and the Fund. The Fund agrees to promptly notify FirstGWL&A of any changes of interpretations or amendments of the Mixed and Shared Funding Exemptive Order. 3.7. The Fund will comply with all provisions of the 1940 Act requiring voting by shareholders, and in particular the Fund will either provide for annual meetings (except insofar as the SEC may interpret Section 16 of the 1940 Act not to require such meetings) or, as the Fund currently intends, comply with Section 16(c) of the 1940 Act (although the Fund is not one of the trusts described in Section 16(c) of that Act) as well as with Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in accordance with the SEC's interpretation of the requirements of Section 16(a) with respect to periodic elections of directors or trustees and with whatever rules the Commission may promulgate with respect thereto. ARTICLE IV. Sales Material and Information 4.1. FirstGWL&A and Schwab shall furnish, or shall cause to be furnished, to the Fund or its designee, a copy of each piece of sales literature or other promotional material that FirstGWL&A or Schwab, respectively, develops or proposes to use and in which the Fund (or a Portfolio thereof), its Adviser or one of its sub-advisers is named in connection with the Contracts, at least ten (10) Business Days prior to its use. No such material shall be used if the Fund objects to such use within five (5) Business Days after receipt of such material. 4.2. FirstGWL&A and Schwab shall not give any information or make any representations or statements on behalf of the Fund in connection with the sale of the Con- tracts other than the information or representations contained in the registration statement or prospectus for the Fund shares, as such registration statement and prospectus may be amended or supplemented from time to time, or in reports or proxy statements for the Fund, or in sales literature or other promotional material approved by the Fund or by the Distributor, except with the permission of the Fund or the Distributor. 4.3. The Fund shall furnish, or shall cause to be furnished, to FirstGWL&A and Schwab, a copy of each piece of sales literature or other promotional material in which FirstGWL&A and/or its separate account(s), or Schwab is named at least ten (10) Business Days prior to its use. No such material shall be used if FirstGWL&A or Schwab objects to such use within five (5) Business Days after receipt of such material. 4.4. The Fund, the Distributor, and the Adviser shall not give any information or make any representations on behalf of FirstGWL&A or concerning FirstGWL&A, the Account, or the Contracts other than the information or representations contained in a registration statement or prospectus for the Contracts, as such registration statement and prospectus may be amended or supplemented from time to time, or in reports for the Account, or in sales literature or other promotional material approved by FirstGWL&A or its designee, except with the permission of FirstGWL&A. 4.5. FirstGWL&A, the Fund, and the Adviser shall not give any information or make any representations on behalf of or concerning Schwab, or use Schwab's name except with the permission of Schwab. 4.6. The Fund will provide to FirstGWL&A and Schwab at least one complete copy of all registration statements, prospectuses, SAIs, reports, proxy statements, sales literature and other promotional materials, applications for exemptions, requests for no- action letters, and all amendments to any of the above, that relate to the Designated Port- folio(s), contemporaneously with the filing of such document(s) with the SEC or NASD or other regulatory authorities. 4.7. FirstGWL&A or Schwab will provide to the Fund at least one complete copy of all registration statements, prospectuses, SAIs, reports, solicitations for voting instructions, sales literature and other promotional materials, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Contracts or the Account, contemporaneously with the filing of such document(s) with the SEC, NASD, or other regulatory authority. 4.8. For purposes of Articles IV and VIII, the phrase "sales literature and other promotional material" includes, but is not limited to, advertisements (such as material published, or designed for use in, a newspaper, magazine, or other periodical, radio, television, telephone or tape recording, videotape display, signs or billboards, motion pictures, or other public media; e.g., on-line networks such as the Internet or other electronic messages), sales literature (i.e., any written communication distributed or made generally available to customers or the public, including brochures, circulars, research reports, market letters, form letters, seminar texts, reprints or excerpts of any other advertisement, sales literature, or published article), educational or training materials or other communications distributed or made generally available to some or all agents or employees, and registration statements, prospectuses, SAIs, shareholder reports, proxy materials, and any other material constituting sales literature or advertising under the NASD rules, the 1933 Act or the 1940 Act. 4.9. At the request of any party to this Agreement, each other party will make available to the other party's independent auditors and/or representative of the appropriate regulatory agencies, all records, data and access to operating procedures that may be reasonably requested in connection with compliance and regulatory requirements related to this Agreement or any party's obligations under this Agreement. ARTICLE V. Fees and Expenses 5.1. The Fund and the Adviser shall pay no fee or other compensation to FirstGWL&A under this Agreement, and FirstGWL&A shall pay no fee or other compensation to the Fund or Adviser under this Agreement, although the parties hereto will bear certain expenses in accordance with Schedule E, Articles III, V, and other provisions of this Agreement. 5.2. All expenses incident to performance by the Fund, the Adviser and the Distributor under this Agreement shall be paid by the appropriate party, as further provided in Schedule E. The Fund shall see to it that all shares of the Designated Portfolio(s) are registered and authorized for issuance in accordance with applicable federal law and, if and to the extent required, in accordance with applicable state laws prior to their sale. 5.3. The parties shall bear the expenses of routine annual distribution (mailing costs) of the Fund's prospectus and distribution (mailing costs) of the Fund's proxy materials and reports to owners of Contracts offered by FirstGWL&A, in accordance with Schedule E. 5.4. The Fund, the Distributor and the Adviser acknowledge that a principal fea- ture of the Contracts is the Contractowner's ability to choose from a number of unaffiliated mutual funds (and portfolios or series thereof), including the Designated Portfolio(s) and the Unaffiliated Funds, and to transfer the Contract's cash value between funds and portfolios. The Fund and the Adviser agree to cooperate with FirstGWL&A and Schwab in facilitating the operation of the Account and the Contracts as described in the prospectus for the Contracts, including but not limited to cooperation in facilitating transfers between Unaffiliated Funds. 5.5. Schwab agrees to provide certain administrative services, specified in Schedule C attached hereto and incorporated herein by reference, in connection with the arrangements contemplated by this Agreement. The parties acknowledge and agree that the services referred to in this Section 5.5 are recordkeeping, shareholder communication, other transaction facilitation and processing, and related administrative services only and are not the services of an underwriter or a principal underwriter of the Fund. 5.6. As compensation for the services specified in Schedule C hereto, the Adviser agrees to pay Schwab a monthly Administrative Service Fee based on the percentage per annum on Schedule C hereto applied to the average daily value of the shares of the Designated Portfolio(s) held in the Account with respect to Contracts sold by Schwab. This monthly Administrative Service Fee is due and payable before the 15th (fifteenth) day following the last day of the month to which it relates. ARTICLE VI. Diversification and Qualification 6.1. The Fund, the Adviser and the Distributor represent and warrant that the Fund will at all times sell its shares and invest its assets in such a manner as to ensure that the Contracts will be treated as annuity contracts under the Code, and the regulations issued thereunder. Without limiting the scope of the foregoing, the Fund, the Distributor and the Adviser represent and warrant that the Fund and each Designated Portfolio thereof will at all times comply with Section 817(h) of the Code and Treasury Regulation 1.817-5, as amended from time to time, and any Treasury interpretations thereof, relating to the diversi- fication requirements for variable annuity, endowment, or life insurance contracts and any amendments or other modifications or successor provisions to such Section or Regulations. The Fund and the Distributor agree that shares of the Designated Portfolio(s) will be sold only to Participating Insurance Companies and their separate accounts and certain Qualified Plans. 6.2. No shares of any Designated Portfolio of the Fund will be sold to the general public. 6.3. The Fund and the Adviser represent and warrant that the Fund and each Designated Portfolio is currently qualified as a Regulated Investment Company under Subchapter M of the Code, and that each Designated Portfolio will maintain such qualification (under Subchapter M or any successor or similar provisions) as long as this Agreement is in effect. 6.4. The Fund and the Adviser will notify FirstGWL&A immediately upon having a reasonable basis for believing that the Fund or any Designated Portfolio has ceased to comply with the aforesaid Section 817(h) diversification or Subchapter M qualification requirements or might not so comply in the future. 6.5. Without in any way limiting the effect of Sections 8.3 and 8.4 hereof and with- out in any way limiting or restricting any other remedies available to FirstGWL&A or Schwab, the Adviser will pay all costs associated with or arising out of any failure, or any anticipated or reasonably foreseeable failure, of the Fund or any Designated Portfolio to comply with Sections 6.1, 6.2, or 6.3 hereof, including all costs associated with reasonable and appropriate corrections or responses to any such failure; such costs may include, but are not limited to, the costs involved in creating, organizing, and registering a new investment company as a funding medium for the Contracts and/or the costs of obtaining whatever regulatory authorizations are required to substitute shares of another investment company for those of the failed Portfolio (including but not limited to an order pursuant to Section 26(b) of the 1940 Act); such costs are to include, but are not limited to, fees and expenses of legal counsel and other advisors to FirstGWL&A and any federal income taxes or tax penalties and interest thereon (or "toll charges" or exactments or amounts paid in settlement) incurred by FirstGWL&A with respect to itself or owners of its Contracts in connection with any such failure or anticipated or reasonably foreseeable failure. 6.6. The Fund at the Fund's expense shall provide FirstGWL&A or its designee with reports certifying compliance with the aforesaid Section 817(h) diversification and Subchapter M qualification requirements, at the times provided for and substantially in the form attached hereto as Schedule D and incorporated herein by reference; provided, however, that providing such reports does not relieve the Fund of its responsibility for such compliance or of its liability for any non-compliance. 6.7. FirstGWL&A agrees that if the Internal Revenue Service ("IRS") asserts in writing in connection with any governmental audit or review of FirstGWL&A or, to FirstGWL&A's knowledge, or any Contractowner that any Designated Portfolio has failed to comply with the diversification requirements of Section 817(h) of the Code or FirstGWL&A otherwise becomes aware of any facts that could give rise to any claim against the Fund, the Adviser or the Distributor as a result of such a failure or alleged failure: (a) FirstGWL&A shall promptly notify the Fund, the Adviser and the Distributor of such assertion or potential claim; (b) FirstGWL&A shall consult with the Fund, the Adviser and the Distributor as to how to minimize any liability that may arise as a result of such failure or alleged failure; (c) FirstGWL&A shall use its best efforts to minimize any liability of the Fund, the Adviser and the Distributor resulting from such failure, including, without limitation, demonstrating, pursuant to Treasury Regulations, Section 1.817-5(a)(2), to the commissioner of the IRS that such failure was inadvertent; (d) any written materials to be submitted by FirstGWL&A to the IRS, any Contractowner or any other claimant in connection with any of the foregoing proceedings or contests (including, without limitation, any such materials to be submitted to the IRS pursuant to Treasury Regulations, Section 1.817-5(a)(2)) shall be provided by FirstGWL&A to the Fund, the Distributor and the Adviser (together with any supporting information or analysis) within at least two (2) business days prior to submission; (e) FirstGWL&A shall provide the Fund, the Distributor and the Adviser with such cooperation as the Fund, the Distributor and the Adviser shall reasonably request (including, without limitation, permitting the Fund, the Distributor and the Adviser to review the relevant books and records of FirstGWL&A) in order to facilitate review by the Fund, the Distributor and the Adviser of any written submissions provided to it or its assessment of the validity or amount of any claim against it arising from such failure or alleged failure; (f) FirstGWL&A shall not with respect to any claim of the IRS or any Contractowner that would give rise to a claim against the Fund, the Distributor and the Adviser (i) compromise or settle any claim, (ii) accept any adjustment on audit, or (iii) forego any allowable administrative or judicial appeals, without the express written consent of the Fund, the Distributor and the Adviser, which shall not be unreasonably withheld; provided that, FirstGWL&A shall not be required to appeal any adverse judicial decision unless the Fund, the Distributor and the Adviser shall have provided an opinion of independent counsel to the effect that a reasonable basis exists for taking such appeal; and further provided that the Fund, the Distributor and the Adviser shall bear the costs and expenses, including reasonable attorney's fees, incurred by FirstGWL&A in complying with this clause (f). ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order 7.1. The Board will monitor the Fund for the existence of any material irreconcilable conflict between the interests of the contract owners of all separate accounts investing in the Fund. An irreconcilable material conflict may arise for a variety of reasons, including: (a) an action by any state insurance regulatory authority; (b) a change in applicable federal or state insurance, tax, or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretative letter, or any similar action by insurance, tax, or securities regulatory authorities; (c) an administrative or judicial decision in any relevant proceeding; (d) the manner in which the investments of any Portfolio are being managed; (e) a difference in voting instructions given by variable annuity contract and variable life insurance contract owners or by contract owners of different Participating Insurance Companies; or (f) a decision by a Participating Insurance Company to disregard the voting instructions of contract owners. The Board shall promptly inform FirstGWL&A if it determines that an irreconcilable material conflict exists and the implications thereof. 7.2. FirstGWL&A will report any potential or existing conflicts of which it is aware to the Board. FirstGWL&A will assist the Board in carrying out its responsibilities under the Mixed and Shared Funding Exemptive Order, by providing the Board with all information reasonably necessary for the Board to consider any issues raised. This includes, but is not limited to, an obligation by FirstGWL&A to inform the Board whenever contract owner voting instructions are to be disregarded. Such responsibilities shall be carried out by FirstGWL&A with a view only to the interests of its Contractowners. 7.3. If it is determined by a majority of the Board, or a majority of its directors who are not interested persons of the Fund, the Distributor, the Adviser or any sub-adviser to any of the Designated Portfolios (the "Independent Directors"), that a material irreconcilable conflict exists, FirstGWL&A and other Participating Insurance Companies shall, at their expense and to the extent reasonably practicable (as determined by a majority of the Independent Directors), take whatever steps are necessary to remedy or eliminate the irreconcilable material conflict, up to and including: (1) withdrawing the assets allocable to some or all of the separate accounts from the Fund or any Designated Portfolio and reinvesting such assets in a different investment medium, including (but not limited to) another portfolio of the Fund, or submitting the question whether such segregation should be implemented to a vote of all affected contract owners and, as appropriate, segregating the assets of any appropriate group (i.e., annuity contract owners, life insurance contract owners, or variable contract owners of one or more Participating Insurance Companies) that votes in favor of such segregation, or offering to the affected contract owners the option of making such a change; and (2) establishing a new registered management investment company or managed separate account. 7.4. If a material irreconcilable conflict arises because of a decision by FirstGWL&A to disregard contract owner voting instructions and that decision represents a minority position or would preclude a majority vote, FirstGWL&A may be required, at the Fund's election, to withdraw the Account's investment in the Fund and terminate this Agreement; provided, however that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the Independent Directors. Any such withdrawal and termination must take place within six (6) months after the Fund gives written notice that this provision is being implemented, and until the end of that six month period the Distributor and the Fund shall continue to accept and implement orders by FirstGWL&A for the purchase (and redemption) of shares of the Fund. 7.5. If a material irreconcilable conflict arises because a particular state insurance regulator's decision applicable to FirstGWL&A conflicts with the majority of other state regulators, then FirstGWL&A will withdraw the Account's investment in the Fund and terminate this Agreement within six months after the Board informs FirstGWL&A in writing that it has determined that such decision has created an irreconcilable material conflict; provided, however, that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the disinterested members of the Board. Until the end of the foregoing six month period, the Fund shall continue to accept and implement orders by FirstGWL&A for the purchase (and redemption) of shares of the Fund. 7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority of the Independent Directors shall determine whether any proposed action adequately remedies any irreconcilable material conflict, but in no event will the Fund be required to establish a new funding medium for the Contracts. FirstGWL&A shall not be required by Section 7.3 to establish a new funding medium for the Contracts if an offer to do so has been declined by vote of a majority of Contractowners affected by the irreconcilable material conflict. In the event that the Board determines that any proposed action does not adequately remedy any irreconcilable material conflict, then FirstGWL&A will withdraw the Account's investment in the Fund and terminate this Agreement within six (6) months after the Board informs FirstGWL&A in writing of the foregoing determination; provided, however, that such withdrawal and termination shall be limited to the extent required by any such material irreconcilable conflict as determined by a majority of the Independent Directors. 7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act or the rules promulgated thereunder with respect to mixed or shared funding (as defined in the Mixed and Shared Funding Exemptive Order) on terms and conditions materially different from those contained in the Mixed and Shared Funding Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies, as appropriate, shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable: and (b) Sections 3.5, 3.6, 3.7, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall continue in effect only to the extent that terms and con- ditions substantially identical to such Sections are contained in such Rule(s) as so amended or adopted. ARTICLE VIII. Indemnification 8.1. Indemnification By FirstGWL&A 8.1(a). FirstGWL&A agrees to indemnify and hold harmless the Fund, the Distributor and the Adviser and each of their officers, directors and trustees and each person, if any, who controls the Fund, Distributor or Adviser within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.1) against any and all losses, claims, damages, liabilities (including amounts paid in settlement with the written consent of FirstGWL&A) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in the registration statement or pro- spectus or SAI covering the Contracts or contained in the Contracts or sales literature for the Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or nec- essary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser or the Fund for use in the registration statement or prospectus for the Contracts or in the Contracts or sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, pro- spectus or sales literature of the Fund not supplied by FirstGWL&A or persons under its control) or wrongful conduct of FirstGWL&A or persons under its control, with respect to the sale or distribution of the Contracts or Fund Shares; or (iii)arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, or sales literature of the Fund, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such a statement or omission was made in reliance upon information furnished in writing to the Fund by or on behalf of FirstGWL&A; or (iv) arise as a result of any failure by FirstGWL&A to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by FirstGWL&A in this Agreement or arise out of or result from any other material breach of this Agreement by FirstGWL&A, including without limitation Section 2.11 and Section 6.7 hereof, as limited by and in accordance with the provisions of Sections 8.1(b) and 8.1(c) hereof. 8.1(b). FirstGWL&A shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.1(c). FirstGWL&A shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified FirstGWL&A in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify FirstGWL&A of any such claim shall not relieve FirstGWL&A from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that FirstGWL&A has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, FirstGWL&A shall be entitled to participate, at its own expense, in the defense of such action. FirstGWL&A also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from FirstGWL&A to such party of FirstGWL&A's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and FirstGWL&A will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.1(d). The Indemnified Parties will promptly notify FirstGWL&A of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund. 8.2. Indemnification by Schwab 8.2(a). Schwab agrees to indemnify and hold harmless the Fund and the Adviser and each of their officers, directors and trustees and each person, if any, who controls the Fund or the Adviser within the meaning of Section 15 of the 1933 Act (collec- tively, the "Indemnified Parties" for purposes of this Section 8.2) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of Schwab) or litigation (including reasonable legal and other expenses), to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of Schwab's dissemination of information regarding the Fund that is both (A) materially incorrect and (B) that was neither contained in the Fund's registration statement or sales literature nor other promotional material of the Fund prepared by the Fund or provided in writing to Schwab, or approved in writing, by or on behalf of the Fund or the Adviser; or (ii) arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in sales literature or other promotional material prepared by Schwab for the Contracts or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser or the Fund or to Schwab by FirstGWL&A for use in the registration statement or prospectus for the Contracts or in the Contracts or sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts; or (iii)arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus or sales literature of the Fund not supplied by Schwab or persons under its control) or wrongful conduct of Schwab or persons under its control, with respect to the sale or distribution of the Contracts; or (iv) arise as a result of any failure by Schwab to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by Schwab in this Agreement or arise out of or result from any other material breach of this Agreement by Schwab; as limited by and in accordance with the provisions of Sections 8.2(b) and 8.2(c) hereof. 8.2(b). Schwab shall not be liable under this indemnification provision with respect to any losses, claims, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.2(c). Schwab shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified Schwab in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify Schwab of any such claim shall not relieve Schwab from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that Schwab has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, Schwab shall be entitled to participate, at its own expense, in the defense of such action. Schwab also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from Schwab to such party of Schwab's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and Schwab will not be liable to such party under this Agreement for any legal or other ex- penses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.2(d). The Indemnified Parties will promptly notify Schwab of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund. 8.3. Indemnification by the Adviser 8.3(a). The Adviser agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their directors and officers and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.3) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Adviser) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Fund, Adviser or the Distributor (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information fur- nished in writing to the Adviser, the Distributor or the Fund by or on behalf of FirstGWL&A or Schwab for use in the registration statement or prospectus for the Fund or in sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or the Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI or sales literature or other promotional material for the Contracts not supplied by the Adviser or persons under its control) or wrongful conduct of the Fund, the Distributor or Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or (iii)arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, or sales literature covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser, the Distributor or the Fund; or (iv) arise as a result of any failure by the Fund, the Adviser or the Distributor to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or (v) arise out of or result from any material breach of any representation and/or warranty made by the Fund, the Adviser or the Distributor in this Agreement or arise out of or result from any other material breach of this Agreement by the Adviser, the Fund or the Distributor; or (vi) arise out of or result from the incorrect or untimely calculation or reporting of the daily net asset value per share or dividend or capital gain distribution rate; as limited by and in accordance with the provisions of Sections 8.3(b) and 8.3(c) hereof. This indemnification is in addition to and apart from the responsibilities and obligations of the Adviser specified in Article VI hereof. 8.3(b). The Adviser shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.3(c). The Adviser shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Adviser in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Adviser of any such claim shall not relieve the Adviser from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Adviser has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Adviser will be entitled to participate, at its own expense, in the defense thereof. The Adviser also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Adviser to such party of the Adviser's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Adviser will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.3(d). Notwithstanding any other provision contained herein, in no event shall the Adviser be liable to any individual or entity, including without limitation, FirstGWL&A, Schwab, or any Contractowner, with respect to any losses, claims, damages, liabilities or expenses that arise out of or result from (i) a breach of any representation, warranty, and/or covenant made by FirstGWL&A hereunder; (ii) the failure by FirstGWL&A to maintain its segregated asset account (which invests in any Designated Portfolio) as a legally and validly established segregated asset account under applicable state law and as a duly registered unit investment trust under the provisions of the 1940 Act (unless exempt therefrom); or (iii) the failure by FirstGWL&A or any Participating Insurance Company to maintain its variable annuity and/or variable life insurance contracts (with respect to which any Designated Portfolio serves as an underlying funding vehicle) as life insurance, endowment or annuity contracts under applicable provisions of the Code. 8.3(e). FirstGWL&A and Schwab agree promptly to notify the Adviser of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Account. 8.4. Indemnification By the Fund 8.4(a). The Fund agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their directors and officers and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.4) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Fund) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may be required to pay or become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements, are related to the operations of the Fund and: (i)arise as a result of any failure by the Fund to provide the services and furnish the materials under the terms of this Agreement; or (ii) arise out of or result from any material breach of any representation and/or warranty made by the Fund in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund; or (iii)arise out of or result from the incorrect or untimely calculation or reporting of the daily net asset value per share or dividend or capital gain distribution rate; as limited by and in accordance with the provisions of Sections 8.4(b) and 8.4(c) hereof. 8.4(b). The Fund shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.4(c). The Fund shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Fund in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Fund of any such claim shall not relieve it from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Fund has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Fund will be entitled to participate, at its own expense, in the defense thereof. The Fund shall also be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Fund to such party of the Fund's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Fund will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.4(d). Notwithstanding any other provision contained herein, in no event shall the Fund be liable to any individual or entity, including without limitation, FirstGWL&A, Schwab, or any Contractowner, with respect to any losses, claims, damages, liabilities or expenses that arise out of or result from (i) the failure of the Fund or any Designated Portfolio to qualify or maintain its qualification as a regulated investment company Subchapter M of the Code, or (ii) the failure by the Fund or any Designated Portfolio to comply with the diversification requirements 817(h) of the Code. 8.4(e). FirstGWL&A and Schwab each agree promptly to notify the Fund of the commencement of any litigation or proceeding against itself or any of its respective officers or directors in connection with the Agreement, the issuance or sale of the Contracts, the operation of the Account, or the sale or acquisition of shares of the Fund. 8.5 Indemnification by the Distributor 8.5(a).The Distributor agrees to indemnify and hold harmless FirstGWL&A and each of their directors and officers and each person, if any, who controls FirstGWL&A within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.5) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Distributor) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the contracts and: (i) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Fund, Adviser or Distributor (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information fur- nished in writing to the Adviser, the Distributor or Fund by or on behalf of FirstGWL&A for use in the registration statement or SAI or prospectus for the Fund or in sales literature or other promotional material (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI, sales literature or other promotional material for the Contracts not supplied by the Distributor or persons under its control) or wrongful conduct of the Fund, the Distributor or Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or (iii)arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, sales literature or other promotional material covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished in writing to FirstGWL&A by or on behalf of the Adviser, the Distributor or Fund; or (iv) arise as a result of any failure by the Fund, Adviser or Distributor to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by the Fund, Adviser or Distributor in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund, Adviser or Distributor; or (vi) arise out of or result from the incorrect or untimely calculation or reporting of the daily net asset value per share or dividend or capital gain distribution rate; as limited by and in accordance with the provisions of Sections 8.5(b) and 8.5(c) hereof. This indemnification is in addition to and apart from the responsibilities and obligations of the Distributor specified in Article VI hereof. 8.5(b). The Distributor shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance or such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.5(c)The Distributor shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Distributor in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Distributor of any such claim shall not relieve the Distributor from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Distributor has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Distributor will be entitled to participate, at its own expense, in the defense thereof. The Distributor also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Distributor to such party of the Distributor's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Distributor will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.5(d). Notwithstanding any other provision contained herein, in no event shall the Distributor be liable to any individual or entity, including without limitation, FirstGWL&A, Schwab, or any Contractowner, with respect to any losses, claims, damages, liabilities or expenses that arise out of or result from (i) the failure of the Fund or any Designated Portfolio to qualify or maintain its qualification as a regulated investment company Subchapter M of the Code, or (ii) the failure by the Fund or any Designated Portfolio to comply with the diversification requirements 817(h) of the Code. 8.5(e). FirstGWL&A agrees to promptly notify the Distributor of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Account. ARTICLE IX. Applicable Law 9.1. This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the State of New York, without regard to the New York Conflict of Laws provisions. 9.2. This Agreement shall be subject to the provisions of the 1933, 1934 and 1940 Acts, and the rules and regulations and rulings thereunder, including such exemptions from those statutes, rules and regulations as the Securities and Exchange Commission may grant (including, but not limited to, the Mixed and Shared Funding Exemptive Order) and the terms hereof shall be interpreted and construed in accordance therewith. ARTICLE X. Termination 10.1.This Agreement shall terminate: (a) at the option of any party, with or without cause, with respect to some or all Portfolios, upon six (6) months advance written notice delivered to the other parties; provided, however, that such notice shall not be given earlier than six (6) months following the date of this Agreement; or (b) at the option of FirstGWL&A or Schwab by written notice to the other parties with respect to any Portfolio based upon FirstGWL&A's or Schwab's determination that shares of such Portfolio are not reasonably available to meet the requirements of the Contracts; or (c) at the option of FirstGWL&A or Schwab by written notice to the other parties with respect to any Portfolio in the event any of the Portfolio's shares 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 FirstGWL&A; or (d) at the option of the Fund in the event that formal administrative proceedings are instituted against FirstGWL&A or Schwab by the NASD, the SEC, the Insurance Commissioner or like official of any state or any other regulatory body regarding FirstGWL&A's or Schwab's duties under this Agreement or related to the sale of the Contracts, the operation of any Account, or the purchase of the Fund shares, if, in each case, the Fund reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of FirstGWL&A or Schwab to perform its obligations under this Agreement; or (e) at the option of FirstGWL&A or Schwab in the event that formal administrative proceedings are instituted against the Fund, the Distributor or Adviser by the NASD, the SEC, or any state securities or insurance department or any other regulatory body, if Schwab or FirstGWL&A reasonably 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 Fund, the Distributor or Adviser to perform their obligations under this Agreement; or (f) at the option of FirstGWL&A by written notice to the Fund with respect to any Portfolio if FirstGWL&A reasonably believes that the Portfolio will fail to meet the Section 817(h) diversification requirements or Subchapter M qualifications specified in Article VI hereof; or (g) at the option of either the Fund or the Adviser, if (i) the Fund or Adviser, respectively, shall determine, in their sole judgment reasonably exercised in good faith, that either FirstGWL&A or Schwab has suffered a material adverse change in their business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on FirstGWL&A's or Schwab's ability to perform its obligations under this Agreement, (ii) the Fund or the Adviser notifies FirstGWL&A or Schwab, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by FirstGWL&A or Schwab and any other changes in circumstances since the giving of such a notice, the determination of the Fund or the Adviser shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or (h) at the option of either FirstGWL&A or Schwab, if (i) FirstGWL&A or Schwab, respectively, shall determine, in its sole judgment reasonably exercised in good faith, that either the Fund or the Adviser has suffered a material adverse change in its business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on the Fund's or the Adviser's ability to perform its obligations under this Agreement, (ii) FirstGWL&A or Schwab notifies the Fund, or the Adviser, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by the Fund, the Distributor or Adviser and any other changes in circumstances since the giving of such a notice, the determination of FirstGWL&A or Schwab shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or (i) at the option of FirstGWL&A in the event that formal administrative proceedings are instituted against Schwab by the NASD, the Securities and Exchange Commission, or any state securities or insurance department or any other regulatory body regarding Schwab's duties under this Agreement or related to the sale of the Fund's shares or the Contracts, the operation of any Account, or the purchase of the Fund shares, provided, however, that FirstGWL&A determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of Schwab to perform its obligations related to the Contracts; or (j) at the option of Schwab in the event that formal administrative proceedings are instituted against FirstGWL&A by the NASD, the Securities and Exchange Commission, or any state securities or insurance department or any other regulatory body regarding FirstGWL&A's duties under this Agreement or related to the sale of the Fund's shares or the Contracts, the operation of any Account, or the purchase of the Fund shares, provided, however, that Schwab determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of FirstGWL&A to perform its obligations related to the Contracts; or (k) at the option of any non-defaulting party hereto in the event of a material breach of this Agreement by any party hereto (the "defaulting party") other than as described in 10.1(a)-(j); provided, that the non-defaulting party gives written notice thereof to the defaulting party, with copies of such notice to all other non-defaulting parties, and if such breach shall not have been remedied within thirty (30) days after such written notice is given, then the non- defaulting party giving such written notice may terminate this Agreement by giving thirty (30) days written notice of termination to the defaulting party. 10.2.Notice Requirement. No termination of this Agreement shall be effective unless and until the party terminating this Agreement gives prior written notice to all other parties of its intent to terminate, which notice shall set forth the basis for the termination. Furthermore, (a) in the event any termination is based upon the provisions of Article VII, or the provisions of Section 10.1(a), 10.1(g) or 10.1(h) of this Agreement, the prior written notice shall be given in advance of the effective date of termination as required by those provisions unless such notice period is shortened by mutual written agreement of the parties; (b) in the event any termination is based upon the provisions of Section 10.1(d), 10.1(e), 10.(i) or 10.1(j) of this Agreement, the prior written notice shall be given at least sixty (60) days before the effective date of termination; and (c) in the event any termination is based upon the provisions of Section 10.1(b), 10.1(c) or 10.1(f), the prior written notice shall be given in advance of the effective date of termination, which date shall be determined by the party sending the notice. 10.3.Effect of Termination. Notwithstanding any termination of this Agreement, other than as a result of a failure by either the Fund or FirstGWL&A to meet Section 817(h) of the Code diversification requirements, the Fund, the Adviser and the Distributor shall, at the option of FirstGWL&A or Schwab, continue to make available additional shares of the Designated Portfolios pursuant to the terms and conditions of this Agreement, for all Contracts in effect on the effective date of termination of this Agreement (hereinafter referred to as "Existing Contracts"). Specifically, without limitation, the owners of the Existing Contracts shall be permitted to reallocate investments in the Designated Portfolios, redeem investments in the Designated Portfolios and/or invest in the Designated Portfolios upon the making of additional purchase payments under the Existing Contracts. The parties agree that this Section 10.3 shall not apply to any terminations under Article VII and the effect of such Article VII terminations shall be governed by Article VII of this Agreement. 10.4.Surviving Provisions. Notwithstanding any termination of this Agreement, each party's obligations under Article VIII to indemnify other parties shall survive and not be affected by any termination of this Agreement. In addition, with respect to Existing Contracts, all provisions of this Agreement shall also survive and not be affected by any termination of this Agreement. 10.5.Survival of Agreement. A termination by Schwab shall terminate this Agreement only as to Schwab, and this Agreement shall remain in effect as to the other par- ties; provided, however, that in the event of a termination by Schwab the other parties shall have the option to terminate this Agreement upon 60 (sixty) days notice, rather than the six (6) months specified in Section 10.1(a). ARTICLE XI. Notices Any notice shall be sufficiently given when sent by registered or certified mail to the other party at the address of such party set forth below or at such other address as such party may from time to time specify in writing to the other party. If to the Fund: Schwab Annuity Portfolios 101 Montgomery Street San Francisco, CA 94104 Attention:Secretary If to FirstGWL&A: First Great-West Life & Annuity Insurance Company 8515 East Orchard Road Englewood, CO 80111 Attention:Assistant Vice President, Savings Products If to the Adviser: Charles Schwab Investment Management, Inc. 101 Montgomery Street San Francisco, CA 94104 Attention:Secretary If to Schwab or the Distributor: Charles Schwab & Co., Inc. 101 Montgomery Street San Francisco, CA 94104 Attention:General Counsel ARTICLE XII. Miscellaneous 12.1.Subject to the requirements of legal process and regulatory authority, each party hereto shall treat as confidential the names and addresses of the owners of the Contracts and all information reasonably identified as confidential in writing by any other party hereto and, except as permitted by this Agreement, shall not disclose, disseminate or utilize such names and addresses and other confidential information without the express written consent of the affected party until such time as such information may come into the public domain. Without limiting the foregoing, no party hereto shall disclose any information that another party has designated as proprietary. 12.2.The captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provisions hereof or otherwise affect their construction or effect. 12.3.This Agreement may be executed simultaneously in two or more counterparts, each of which taken together shall constitute one and the same instrument. 12.4.If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby. 12.5.Each party hereto shall cooperate with each other party and all appropriate governmental authorities (including without limitation the SEC, the NASD and state insurance regulators) and shall permit such authorities reasonable access to its books and records in connection with any investigation or inquiry relating to this Agreement or the transactions contemplated hereby. Notwithstanding the generality of the foregoing, each party hereto further agrees to furnish the New York Insurance Commissioner with any information or reports in connection with services provided under this Agreement which such Commissioner may request in order to ascertain whether the variable annuity operations of FirstGWL&A are being conducted in a manner consistent with the New York Variable Annuity Regulations and any other applicable law or regulations. 12.6.Any controversy or claim arising out of or relating to this Agreement, or breach thereof, shall be settled by arbitration in a forum jointly selected by the relevant parties (but if applicable law requires some other forum, then such other forum) in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. 12.7.The rights, remedies and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies and obligations, at law or in equity, which the parties hereto are entitled to under state and federal laws. 12.8.This Agreement or any of the rights and obligations hereunder may not be assigned by any party without the prior written consent of all parties hereto. 12.9.Schwab and FirstGWL&A are hereby expressly put on notice of the limitation of liability as set forth in the Declaration of Trust of the Fund and the Articles of Incorporation of the Adviser and agree that the obligations assumed by the Fund and the Adviser pursuant to this Agreement shall be limited in any case to the Fund and Adviser and their respective assets and neither Schwab nor FirstGWL&A shall seek satisfaction of any such obligation from the shareholders of the Fund or the Adviser, the Trustees, officers, employees or agents of the Fund or Adviser, or any of them, except to the extent permitted under this Agreement. 12.10.The names "Schwab Annuity Portfolios" and "Trustees of Schwab" refer respectively to the Trust created and the Trustees, as trustees but not individually or personally, acting from time to time under the Declaration of Trust, to which reference is hereby made and a copy of which is on file at the office of the Secretary of the Commonwealth of Massachusetts and elsewhere as required by law, and to any and all amendments thereto so filed or hereafter filed. The obligations of "Schwab Annuity Portfolios" entered into in the name or on behalf thereof by any of the Trustees, representatives or agents are made not individually, but in such capacities, and are not binding upon any of the Trustees, interest holders or representatives of the Trust personally, but bind only on the assets of the Trust, and all persons dealing with any series of units of interest of the Trust must look solely to the assets of the Trust belonging to such series for the enforcement of any claims against the Trust. 12.11.The Fund, Adviser and Distributor agree that the obligations assumed by FirstGWL&A and Schwab pursuant to this Agreement shall be limited in any case to FirstGWL&A and Schwab and their respective assets and neither the Fund nor Adviser shall seek satisfaction of any such obligation from the shareholders of the FirstGWL&A or Schwab, the directors, officers, employees or agents of the FirstGWL&A or Schwab, or any of them, except to the extent permitted under this Agreement. 12.12.No provision of this Agreement may be deemed or construed to modify or supersede any contractual rights, duties, or indemnifications, as between the Distributor and the Fund, and as between the Adviser and the Fund. IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in its name and on its behalf by its duly authorized representative and its seal to be hereunder affixed hereto as of the date specified below. FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY By its authorized officer, By:/s/ Robert K. Shaw Title: Vice President, Marketing & Product Development Date: April 1, 1997 SCHWAB ANNUITY PORTFOLIOS By its authorized officer, By:/s/ Stephen B. Ward Title: Sr. Vice President and Chief Investment Officer Date: March 31, 1997 CHARLES SCHWAB INVESTMENT MANAGEMENT, INC. By its authorized officer, By:/s/ William J. Klipp Title: President and Chief Operating Officer Date: March 31, 1997 CHARLES SCHWAB & CO., INC. By its authorized officer, By:/s/ Jeff Benton Title:Vice President, Annuities & Life Insurance Date:March 31, 1997 Schwab Variable Annuity SCHEDULE A Contracts Form Numbers First Great-West Life & Annuity Insurance Company Group Variable/Fixed Annuity Contract J434NY SCHEDULE B Designated Portfolios Schwab Money Market Portfolio Schwab S&P 500 Portfolio Schwab Asset Director-High Growth Portfolio SCHEDULE C Administrative Services To be performed by Charles Schwab & Co., Inc. A. Schwab will provide the properly registered and licensed personnel and systems needed for all customer servicing and support - for both fund and annuity information and questions - including: respond to Contractowner inquiries delivery of prospectus - both fund and annuity; entry of initial and subsequent orders; transfer of cash to insurance company and/or funds; explanations of fund objectives and characteristics; entry of transfers between funds; fund balance and allocation inquiries; mail fund prospectus. B. For the services, Schwab shall receive a fee of 0.00% per annum applied to the average daily value of the shares of the fund held by Schwab's customers, payable by the Adviser directly to Schwab, such payments being due and payable within 15 (fifteen) days after the last day of the month to which such payment relates. C. The Fund will calculate and Schwab will verify with FirstGWL&A the asset balance for each day on which the fee is to be paid pursuant to this Agreement with respect to each Designated Portfolio. D. Schwab will communicate all purchase, withdrawal, and exchange orders it receives from its customers to FirstGWL&A who will retransmit them to each fund. SCHEDULE D Reports per Section 6.6 With regard to the reports relating to the quarterly testing of compliance with the requirements of Section 817(h) and Subchapter M under the Internal Revenue Code (the "Code") and the regulations thereunder, the Fund shall provide within twenty (20) Business Days of the close of the calendar quarter a report to FirstGWL&A in the Form D1 attached hereto and incorporated herein by reference, regarding the status under such sections of the Code of the Designated Portfolio(s), and if necessary, identification of any remedial action to be taken to remedy non-compliance. With regard to the reports relating to the year-end testing of compliance with the requirements of Subchapter M of the Code, referred to hereinafter as "RIC status," the Fund will provide the reports on the following basis: (i) the last quarter's quarterly reports can be supplied within the 20-day period, and (ii) a year-end report will be provided 45 days after the end of the calendar year. However, if a problem with regard to RIC status, as defined below, is identified in the third quarter report, on a weekly basis, starting the first week of December, additional interim reports will be provided specially addressing the problems identified in the third quarter report. If any interim report memorializes the cure of the problem, subsequent interim reports will not be required. A problem with regard to RIC status is defined as any violation of the following standards, as referenced to the applicable sections of the Code: (a) Less than ninety percent of gross income is derived from sources of income specified in Section 851(b)(2); (b) Thirty percent or greater gross income is derived from the sale or disposition of assets specified in Section 851(b)(3); (c) Less than fifty percent of the value of total assets consists of assets specified in Section 851(b)(4)(A); and (d) No more than twenty-five percent of the value of total assets is invested in the securities of one issuer, as that requirement is set forth in Section 851(b)(4)(B). FORM D1 CERTIFICATE OF COMPLIANCE I, , a duly authorized officer, director or agent of Fund hereby certify that Fund is in compliance with all requirements of Section 817(h) and Subchapter M of the Internal Revenue Code (the "Code") and the regulations thereunder as required in the Fund Participation Agreement among First Great-West Life & Annuity Insurance Company, Charles Schwab & Co., Inc. and other than the exceptions discussed below: Exceptions Remedial Action If no exception to report, please indicate "None." Signed this day of , . (Signature) By: (Type or Print Name and Title/Position) SCHEDULE E EXPENSES The Fund and/or Distributor and/or Adviser, and FirstGWL&A will coordinate the functions and pay the costs of the completing these functions based upon an allocation of costs in the tables below. Costs shall be allocated to reflect the Fund's share of the total costs determined according to the number of pages of the Fund's respective portions of the documents. Item Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Prospectus Printing of combined prospectuses FirstGWL&A Fund or Distributor, as applicable Distributor shall supply FirstGWL&A with such numbers of the Designated Portfolio(s) prospectus(es) as FirstGWL&A shall reasonably request FirstGWL&A Fund or Distributor, as applicable Distribution to New and Inforce Clients FirstGWL&A FirstGWL&A Distribution to Prospective Clients Schwab Schwab Product Prospectus Printing for Inforce Clients FirstGWL&A FirstGWL&A Printing for Prospective Clients FirstGWL&A Schwab Distribution to New and Inforce Clients FirstGWL&A FirstGWL&A Distribution to Prospective Clients Schwab SchwabMutual Fund Prospectus Update & Distribution If Required by Fund or Distributor Fund or Distributor Fund or Distributor If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab Schwab Schwab Product Prospectus Update & Distribution If Required by Fund or Distributor FirstGWL&A Fund or Distributor Item Function Party Responsible for Coordination Party Responsible for Expense If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab Schwab Schwab Mutual Fund SAI Printing Fund or Distributor Fund or Distributor Distribution FirstGWL&A FirstGWL&A Product SAI Printing FirstGWL&A FirstGWL&A Distribution FirstGWL&A FirstGWL&A Item Function Party Responsible for Coordination Party Responsible for Expense Proxy Material for Mutual Fund: Printing if proxy required by Law Fund or Distributor Fund or Distributor Distribution (including labor) if proxy required by Law FirstGWL&A Fund or Distributor Printing & distribution if required by FirstGWL&A FirstGWL&A FirstGWL&A Printing & distribution if required by Schwab FirstGWL&A Schwab Item Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Annual & Semi-Annual Report Printing of combined reports FirstGWL&A Fund or Distributor Distribution FirstGWL&A FirstGWL&A and Schwab Other communication to New and Prospective clients If Required by the Fund or Distributor Schwab Fund or Distributor If Required by FirstGWL&A Schwab FirstGWL&A Item Function Party Responsible for Coordination Party Responsible for Expense If Required by Schwab Schwab Schwab Other communication to inforce Distribution (including labor) if required by the Fund or Distributor FirstGWL&A Fund or Distributor If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab FirstGWL&A Schwab Item Function Party Responsible for Coordination Party Responsible for Expense Errors in Share Price calculation pursuant to Section 1.10 Cost of error to participants FirstGWL&A Fund or Adviser Cost of administrative work to correct error FirstGWL&A Fund or Adviser Operations of the Fund All operations and related expenses, including the cost of registration and qualification of shares, taxes on the issuance or transfer of shares, cost of management of the business affairs of the Fund, and expenses paid or assumed by the fund pursuant to any Rule 12b-1 plan Fund or Distributor Fund or Adviser Operations of the Account Federal registration of units of separate account (24f-2 fees) FirstGWL&A FirstGWL&A EX-8.11 18 EXHIBIT 8.11 FUND PARTICIPATION AGREEMENT SteinRoe Variable Investment Trust TABLE OF CONTENTS ARTICLE I. Sale of Fund Shares . . . . . . . . . . . . . . . .3 ARTICLE II. Representations and Warranties. . . . . . . . . . .7 ARTICLE III. Prospectuses and Proxy Statements; Voting . . . . 10 ARTICLE IV. Sales Material and Information. . . . . . . . . . 13 ARTICLE V. Fees and Expenses . . . . . . . . . . . . . . . . 15 ARTICLE VI. Diversification and Qualification . . . . . . . . 17 ARTICLE VII. Potential Conflicts and Compliance With Shared Funding Exemptive Order . . . . . . . . . 20 ARTICLE VIII.Indemnification . . . . . . . . . . . . . . . . . 23 ARTICLE IX. Applicable Law. . . . . . . . . . . . . . . . . . 32 ARTICLE X. Termination . . . . . . . . . . . . . . . . . . . 32 ARTICLE XI. Notices . . . . . . . . . . . . . . . . . . . . . 36 ARTICLE XII. Miscellaneous . . . . . . . . . . . . . . . . . . 37 SCHEDULE A Contracts . . . . . . . . . . . . . . . . . . . . 41 SCHEDULE B Designated Portfolios . . . . . . . . . . . . . . 42 SCHEDULE C Administrative Services . . . . . . . . . . . . . 43 SCHEDULE D Reports per Section 6.6 . . . . . . . . . . . . . 44 SCHEDULE E Expenses. . . . . . . . . . . . . . . . . . . . . 47 PARTICIPATION AGREEMENT Among FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY STEINROE VARIABLE INVESTMENT TRUST, STEIN ROE & FARNHAM INCORPORATED and CHARLES SCHWAB & CO., INC. THIS AGREEMENT, made and entered into as of this ____ day of _______________, 1997 by and among FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (hereinafter "FirstGWL&A"), a New York life insurance company, on its own behalf and on behalf of its Separate Account Variable Annuity-1 Series Account (the "Account"); STEINROE VARIABLE INVESTMENT TRUST, a business trust organized under the laws of Massachusetts (hereinafter the "Fund"); STEIN ROE & FARNHAM INCORPORATED (hereinafter the "Adviser"), a Delaware corporation; and CHARLES SCHWAB & CO., INC., a California corporation (hereinafter "Schwab"). WHEREAS, the Fund engages in business as an open-end management investment company and is available to act as the investment vehicle for separate accounts established for variable life insurance policies and/or variable annuity contracts (collectively, the "Variable Insurance Products") to be offered by insurance companies, including FirstGWL&A, which have entered into participation agreements similar to this Agreement (hereinafter "Participating Insurance Companies"); and WHEREAS, the beneficial interest in the Fund is divided into several series of shares, each designated a "Portfolio" and representing the interest in a particular managed portfolio of securities and other assets; and WHEREAS, the Fund has obtained an order from the Securities and Exchange Commission (hereinafter the "SEC"), dated July 1, 1988 (File No. 812-7044), granting Participating Insurance Companies and variable annuity and variable life insurance separate accounts exemptions from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended, (hereinafter the "1940 Act") and Rules 6e- 2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Fund to be sold to and held by variable annuity and variable life insurance separate accounts of life insurance companies that may or may not be affiliated with one another (hereinafter the "Shared Funding Exemptive Order"); and WHEREAS, the Fund is registered as an open-end management investment company under the 1940 Act and shares of the Portfolio(s) are registered under the Securities Act of 1933, as amended (hereinafter the "1933 Act"); and WHEREAS, the Adviser is duly registered as an investment adviser under the Investment Advisers Act of 1940, as amended, and any applicable state securities laws; and WHEREAS, FirstGWL&A has registered or will register certain variable annuity contracts supported wholly or partially by the Account (the "Contracts") under the 1933 Act and said Contracts are listed in Schedule A attached hereto and incorporated herein by reference, as it may be amended from time to time by mutual written agreement; and WHEREAS, the Account is a duly organized, validly existing segregated asset account, established by resolution of the Board of Directors of FirstGWL&A on January 15, 1997, to set aside and invest assets attributable to the Contracts; and WHEREAS, FirstGWL&A has registered or will register the Account as a unit investment trust under the 1940 Act and has registered or will register the securities deemed to be issued by the Account under the 1933 Act; and WHEREAS, to the extent permitted by applicable insurance laws and regulations, FirstGWL&A intends to purchase shares in the Portfolio(s) listed in Schedule B attached hereto and incorporated herein by reference, as it may be amended from time to time by mutual written agreement (the "Designated Portfolio(s)"), on behalf of the Account to fund the Contracts, and the Fund is authorized to sell such shares to unit investment trusts such as the Account at net asset value; and WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Account also intends to purchase shares in other open-end investment companies or series thereof not affiliated with the Fund (the "Unaffiliated Funds") on behalf of the Account to fund the Contracts; and WHEREAS, Schwab will perform certain services for the Fund and Adviser in connection with the Contracts; NOW, THEREFORE, in consideration of their mutual promises, FirstGWL&A, Schwab, the Fund and the Adviser agree as follows: ARTICLE I. Sale of Fund Shares 1.1. The Fund agrees to sell to FirstGWL&A those shares of the Designated Portfolio(s) which the Account orders, executing such orders on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the order for the shares of the Portfolios. For purposes of this Section 1.1, FirstGWL&A shall be the designee of the Fund for receipt of such orders and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such order by 9:00 a.m. Eastern time on the next following Business Day. "Business Day" shall mean any day on which the New York Stock Exchange is open for trading and on which the Fund calculates its net asset value pursuant to the rules of the SEC. 1.2. The Fund agrees to make shares of the Designated Portfolio(s) available for purchase at the applicable net asset value per share by FirstGWL&A and the Account on those days on which the Fund calculates its Designated Portfolio(s)' net asset value pursuant to rules of the SEC, and the Fund shall calculate such net asset value on each day which the New York Stock Exchange is open for trading. Notwithstanding the foregoing, the Board of Trustees of the Fund (hereinafter the "Board") may refuse to sell shares of any Portfolio to any person, or suspend or terminate the offering of shares of any Portfolio if such action is required by law or by regulatory authorities having jurisdiction or is, in the sole discretion of the Board acting in good faith and in light of their fiduciary duties under federal and any applicable state laws, necessary in the best interests of the shareholders of such Portfolio. 1.3. The Fund will not sell shares of the Designated Portfolio(s) to any other Participating Insurance Company, separate account or any Qualified Plan unless an agreement containing provisions substantially the same as Sections 2.1, 3.5, 3.6, 3.7, and Article VII of this Agreement is in effect to govern such sales. 1.4. The Fund agrees to redeem for cash, on FirstGWL&A's request, any full or fractional shares of the Fund held by FirstGWL&A, executing such requests on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the request for redemption. Requests for redemption identified by FirstGWL&A, or its agent, as being in connection with surrenders, annuitizations, or death benefits under the Contracts, upon prior written notice, may be executed within seven (7) calendar days after receipt by the Fund or its designee of the requests for redemption. If permitted by an order of the SEC under Section 22(e) of the 1940 Act, the Fund shall be permitted to delay sending redemption proceeds to FirstGWL&A beyond the foregoing deadlines; provided, however, that the Account receives similar relief to defer paying proceeds to Contractowners, and further, that the Account is treated no less favorably than the other shareholders of the Designated Portfolio(s). This Section 1.4 may be amended, in writing, by the parties consistent with the requirements of the 1940 Act and interpretations thereof. For purposes of this Section 1.4, FirstGWL&A shall be the designee of the Fund for receipt of requests for redemption and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such request for redemption by 9:00 A.M. Eastern time on the next following Business Day. 1.5. The Parties hereto acknowledge that the arrangement contemplated by this Agreement is not exclusive; the Fund's shares may be sold to other Participating Insurance Companies (subject to Section 1.3 and Article VI hereof) and the cash value of the Con- tracts may be invested in other investment companies. 1.6. FirstGWL&A shall pay for Fund shares by 11:00 a.m. Eastern time on the next Business Day after an order to purchase Fund shares is made in accordance with the provisions of Section 1.1 hereof. Payment shall be in federal funds transmitted by wire and/or by a credit for any shares redeemed the same day as the purchase. 1.7. The Fund shall pay and transmit the proceeds of redemptions of Fund shares by 11:00 a.m. Eastern Time on the next Business Day after a redemption order is received in accordance with Section 1.4 hereof. Payment shall be in federal funds transmitted by wire and/or a credit for any shares purchased the same day as the redemption. 1.8. Issuance and transfer of the Fund's shares will be by book entry only. Stock certificates will not be issued to FirstGWL&A or the Account. Shares ordered from the Fund will be recorded in an appropriate title for the Account or the appropriate sub-account of the Account. 1.9. The Fund or its designee shall furnish same day notice (by wire or telephone, followed by written confirmation) to FirstGWL&A of any income, dividends or capital gain distributions payable on the Designated Portfolio(s)' shares. FirstGWL&A hereby elects to receive all such income dividends and capital gain distributions as are payable on the Portfolio shares in additional shares of that Portfolio. FirstGWL&A reserves the right to revoke this election and to receive all such income dividends and capital gain distributions in cash. The Fund or its designee shall notify FirstGWL&A by the end of the next following Business Day of the number of shares so issued as payment of such dividends and distributions. 1.10.The Fund shall make the net asset value per share for each Designated Portfolio available to FirstGWL&A on each Business Day as soon as reasonably practical after the net asset value per share is calculated and shall use its best efforts to make such net asset value per share available by 6:00 p.m. Eastern time. In the event of an error in the computation of a Designated Portfolio's net asset value per share ("NAV") or any dividend or capital gain distribution (each, a "pricing error"), the Adviser or the Fund shall immediately notify FirstGWL&A as soon as possible after discovery of the error. Such notification may be verbal, but shall be confirmed promptly in writing in accordance with Article XI of this Agreement. A pricing error shall be corrected as follows: (a) if the pricing error is less than $0.01 per share, then no corrective action need be taken; (b) if the pricing error is greater than $0.01 per share, but less than 1/2 of 1% of the Designated Portfolio's NAV at the time of the error, then the Adviser shall reimburse the Designated Portfolio for any loss, after taking into consideration any positive effect of such error; however, no adjustments to Contractowner accounts need be made; and (c) if the pricing error is equal to or greater than 1/2 of 1% of the Designated Portfolio's NAV at the time of the error, then the Adviser shall reimburse the Designated Portfolio for any loss (without taking into consideration any positive effect of such error) and shall reimburse FirstGWL&A for the costs of adjustments made to correct Contractowner accounts in accordance with the provisions of Schedule E. If an adjustment is necessary to correct a material error which has caused Contractowners to receive less than the amount to which they are entitled, the number of shares of the applicable sub-account of such Contractowners will be adjusted and the amount of any underpayments shall be credited by the Adviser to FirstGWL&A for crediting of such amounts to the applicable Contractowners accounts. Upon notification by the Adviser of any overpayment due to a material error, FirstGWL&A or Schwab, as the case may be, shall promptly remit to Fund any overpayment that has not been paid to Contractowners; however, Adviser acknowledges that Schwab and FirstGWL&A do not intend to seek additional payments from any Contractowner who, because of a pricing error, may have underpaid for units of interest credited to his/her account. In no event shall Schwab or FirstGWL&A be liable to Contractowners for any such adjustments or underpayment amounts. A pricing error within categories (b) or (c) above shall be deemed to be "materially incorrect" or constitute a "material error" for purposes of this Agreement. The standards set forth in this Section 1.10 are based on the Parties' understanding of the views expressed by the staff of the Securities and Exchange Commission ("SEC") as of the date of this Agreement. In the event the views of the SEC staff are later modified or superseded by SEC or judicial interpretation, the parties shall amend the foregoing provisions of this Agreement to comport with the appropriate applicable standards, on terms mutually satisfactory to all Parties. ARTICLE II. Representations and Warranties 2.1. FirstGWL&A represents and warrants that the securities deemed to be issued by the Account under the Contracts are or will be registered under the 1933 Act; that the Contracts will be issued and sold in compliance in all material respects with all applicable federal and state laws and that the sale of the Contracts shall comply in all material respects with state insurance suitability requirements. FirstGWL&A further represents and warrants that it is an insurance company duly organized and in good standing under applicable law and that it has legally and validly established the Account prior to any issuance or sale of units thereof as a segregated asset account under Section 4240 of the New York Insurance Law and has registered the Account as a unit investment trust in accordance with the provisions of the 1940 Act to serve as a segregated investment account for the Contracts. 2.2. The Fund represents and warrants that Designated Portfolio(s) shares sold pursuant to this Agreement shall be registered under the 1933 Act, duly authorized for issuance and sold in compliance with all applicable federal securities laws including without limitation the 1933 Act, the 1934 Act, and the 1940 Act and that the Fund is and shall remain registered under the 1940 Act. The Fund shall amend the registration statement for its shares under the 1933 Act and the 1940 Act from time to time as required in order to effect the continuous offering of its shares. 2.3. The Fund reserves the right to adopt a plan pursuant to Rule 12b-1 under the 1940 Act and to impose an asset-based or other charge to finance distribution expenses as permitted by applicable law and regulation. In any event, the Fund and Adviser agree to comply with applicable provisions and SEC staff interpretations of the 1940 Act to assure that the investment advisory or management fees paid to the Adviser by the Fund are in accordance with the requirements of the 1940 Act. To the extent that the Fund decides to finance distribution expenses pursuant to Rule 12b-1, the Fund undertakes to have its Board, a majority of whom are not interested persons of the Fund, formulate and approve any plan pursuant to Rule 12b-1 under the 1940 Act to finance distribution expenses. 2.4. The Fund represents and warrants that it will make every effort to ensure that the investment policies, fees and expenses of the Designated Portfolio(s) are and shall at all times remain in compliance with the insurance and other applicable laws of the State of New York and any other applicable state to the extent required to perform this Agreement. The Fund further represents and warrants that it will make every effort to ensure that Designated Portfolio(s) shares will be sold in compliance with the insurance laws of the State of New York and all applicable state insurance and securities laws. The Fund shall register and qualify the shares for sale in accordance with the laws of the various states if and to the extent required by applicable law. FirstGWL&A and the Fund will endeavor to mutually cooperate with respect to the implementation of any modifications necessitated by any change in state insurance laws, regulations or interpretations of the foregoing that affect the Designated Portfolio(s) (a "Law Change"), and to keep each other informed of any Law Change that becomes known to either party. In the event of a Law Change, the Fund agrees that, except in those circumstances where the Fund has advised FirstGWL&A that its Board of Directors has determined that implementation of a particular Law Change is not in the best interest of all of the Fund's shareholders with an explanation regarding why such action is lawful, any action required by a Law Change will be taken. 2.5. The Fund represents and warrants that it is lawfully organized and validly existing under the laws of the Commonwealth of Massachusetts and that it does and will comply in all material respects with the 1940 Act. 2.6. The Adviser represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of the State of Delaware and any applicable state and federal securities laws. 2.7. The Fund and the Adviser represent and warrant that all of their respective officers, employees, investment advisers, and other individuals or entities dealing with the money and/or securities of the Fund are, and shall continue to be at all times, covered by a blanket fidelity bond or similar coverage for the benefit of the Fund in an amount not less than the minimal coverage required by Rule 17g-1 under the 1940 Act or related provisions as may be promulgated from time to time. The aforesaid bond shall include coverage for larceny and embezzlement and shall be issued by a reputable bonding company. 2.8. Schwab represents and warrants that it has completed, obtained and performed, in all material respects, all registrations, filings, approvals, and authorizations, consents and examinations required by any government or governmental authority as may be necessary to perform this Agreement. Schwab does and will comply, in all material respects, with all applicable laws, rules and regulations in the performance of its obligations under this Agreement. 2.9. The Fund will provide FirstGWL&A with as much advance notice as is reasonably practicable of any material change affecting the Designated Portfolio(s) (including, but not limited to, any material change in the registration statement or prospectus affecting the Designated Portfolio(s)) and any proxy solicitation affecting the Designated Portfolio(s) and consult with FirstGWL&A in order to implement any such change in an orderly manner, recognizing the expenses of changes and attempting to minimize such expenses by implementing them in conjunction with regular annual updates of the prospectus for the Contracts. The Fund or Adviser agree to share equitably in expenses incurred by FirstGWL&A as a result of actions taken by the Fund, consistent with the allocation of expenses contained in Schedule E attached hereto and incorporated herein by reference. 2.10.FirstGWL&A represents and warrants, for purposes other than diversification under Section 817 of the Internal Revenue Code of 1986 as amended ("the Code"), that the Contracts are currently treated as annuity contracts under applicable provisions of the Code, and that it will make every effort to maintain such treatment and that it will notify Schwab, the Fund and the Adviser immediately upon having a reasonable basis for believing that the Contracts have ceased to be so treated or that they might not be so treated in the future. In addition, FirstGWL&A represents and warrants that the Account is a "segregated asset account" and that interests in the Account are offered exclusively through the purchase of or transfer into a "variable contract" within the meaning of such terms under Section 817 of the Code and the regulations thereunder. FirstGWL&A will use every effort to continue to meet such definitional requirements, and it will notify Schwab, the Fund, and the Adviser immediately upon having a reasonable basis for believing that such requirements have ceased to be met or that they might not be met in the future. ARTICLE III. Prospectuses and Proxy Statements; Voting 3.1. At least annually, the Fund or the Adviser shall provide FirstGWL&A and Schwab with as many copies of the Fund's current prospectus for the Designated Portfolio(s) as FirstGWL&A and Schwab may reasonably request for marketing purposes (including distribution to Contractowners with respect to new sales of a Contract). If requested by FirstGWL&A in lieu thereof, the Adviser or Fund shall provide such documentation (including a camera-ready copy and/or computer diskette of the current prospectus for the Designated Portfolio(s)) and other assistance as is reasonably necessary in order for FirstGWL&A once each year (or more frequently if the prospectuses for the Designated Portfolio(s) are amended) to have the prospectus for the Contracts and the Fund's prospectus for the Designated Portfolio(s) printed together in one document. The Fund and Adviser agree that the prospectuses (and semi-annual and annual reports) for the Designated Portfolio(s) will describe only the Designated Portfolio(s) and will not name or describe any other portfolios or series that may be in the Fund unless required by law. 3.2. If applicable state or federal laws or regulations require that the Statement of Additional Information ("SAI") for the Fund be distributed to all Contractowners, then the Fund and/or the Adviser shall provide FirstGWL&A with copies of the Fund's SAI or docu- mentation thereof for the Designated Portfolio(s) in such quantities, with expenses to be borne in accordance with Schedule E hereof, as FirstGWL&A may reasonably require to permit timely distribution thereof to Contractowners. The Adviser and/or the Fund shall also provide SAIs to any Contractowner or prospective owner who requests such SAI from the Fund (although it is anticipated that such requests will be made to FirstGWL&A or Schwab). 3.3. The Fund and/or the Adviser shall provide FirstGWL&A and Schwab with copies of the Fund's proxy material, reports to stockholders and other communications to stockholders for the Designated Portfolio(s) in such quantity, with expenses to be borne in accordance with Schedule E hereof, as FirstGWL&A may reasonably require to permit timely distribution thereof to Contractowners. 3.4. It is understood and agreed that, except with respect to information regarding FirstGWL&A or Schwab provided in writing by that party, neither FirstGWL&A nor Schwab are responsible for the content of the prospectus or SAI for the Designated Portfolio(s). It is also understood and agreed that, except with respect to information regarding the Fund, the Adviser or the Designated Portfolio(s) provided in writing by the Fund or the Adviser, neither the Fund nor Adviser are responsible for the content of the prospectus or SAI for the Contracts. 3.5. If and to the extent required by law FirstGWL&A shall: (i) solicit voting instructions from Contractowners; (ii) vote the Designated Portfolio(s) shares in accordance with instructions received from Contractowners: and (iii)vote Designated Portfolio shares for which no instructions have been received in the same proportion as Designated Portfolio(s) shares for which instructions have been received from Contractowners, so long as and to the extent that the SEC continues to interpret the 1940 Act to require pass-through voting privileges for variable contract owners. FirstGWL&A reserves the right to vote Fund shares held in any segregated asset account in its own right, to the extent permitted by law. 3.6. FirstGWL&A shall be responsible for assuring that each of its separate accounts holding shares of a Designated Portfolio calculates voting privileges as directed by the Fund and agreed to by FirstGWL&A and the Fund. The Fund agrees to promptly notify FirstGWL&A of any changes of interpretations or amendments of the Shared Funding Exemptive Order. 3.7. The Fund will comply with all provisions of the 1940 Act requiring voting by shareholders, and in particular the Fund will either provide for annual meetings (except insofar as the SEC may interpret Section 16 of the 1940 Act not to require such meetings) or, as the Fund currently intends, comply with Section 16(c) of the 1940 Act (although the Fund is not one of the trusts described in Section 16(c) of that Act) as well as with Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in accordance with the SEC's interpretation of the requirements of Section 16(a) with respect to periodic elections of directors or trustees and with whatever rules the Commission may promulgate with respect thereto. The Fund reserves the right, upon 45 days prior written notice to FirstGWL&A and Schwab, to take all actions including but not limited to the dissolution, merger, and sale of all assets of the Fund or any Designated Portfolio upon the sole authorization of the Board, acting in good faith and in light of their fiduciary duties under the 1940 Act and to the extent permitted by the laws of the Commonwealth of Massachusetts and the 1940 Act. ARTICLE IV. Sales Material and Information 4.1. FirstGWL&A and Schwab shall furnish, or shall cause to be furnished, to the Fund or its designee, a copy of each piece of sales literature or other promotional material that FirstGWL&A or Schwab, respectively, develops or proposes to use and in which the Fund (or a Portfolio thereof), its Adviser or one of its sub-advisers or the underwriter for the Fund shares is named in connection with the Contracts, at least ten (10) Business Days prior to its use. No such material shall be used if the Fund or its designee objects to such use within five (5) Business Days after receipt of such material. 4.2. FirstGWL&A and Schwab shall not give any information or make any representations or statements on behalf of or concerning the Fund in connection with the sale of the Contracts other than the information or representations contained in the registration statement or prospectus for the Fund shares, as such registration statement and prospectus may be amended or supplemented from time to time, or in reports or proxy statements for the Fund, or in sales literature or other promotional material approved by the Fund or its designee or by the Adviser, except with the permission of the Fund or its designee or the Adviser. 4.3. The Fund or Adviser shall furnish, or shall cause to be furnished, to FirstGWL&A and Schwab, a copy of each piece of sales literature or other promotional material in which FirstGWL&A and/or its separate account(s), or Schwab is named at least ten (10) Business Days prior to its use. No such material shall be used if FirstGWL&A or Schwab objects to such use within five (5) Business Days after receipt of such material. 4.4. The Fund and the Adviser shall not give any information or make any representations on behalf of FirstGWL&A or concerning FirstGWL&A, the Account, or the Contracts other than the information or representations contained in a registration statement or prospectus for the Contracts, as such registration statement and prospectus may be amended or supplemented from time to time, or in reports for the Account, or in sales literature or other promotional material approved by FirstGWL&A or its designee, except with the permission of FirstGWL&A. 4.5. FirstGWL&A, the Fund and the Adviser shall not give any information or make any representations on behalf of or concerning Schwab, or use Schwab's name except with the permission of Schwab. 4.6. The Fund will provide to FirstGWL&A and Schwab at least one complete copy of all registration statements, prospectuses, SAIs, reports, proxy statements, sales literature and other promotional materials, applications for exemptions, requests for no- action letters, and all amendments to any of the above, that relate to the Designated Port- folio(s), contemporaneously with the filing of such document(s) with the SEC or NASD or other regulatory authorities. 4.7. FirstGWL&A or Schwab will provide to the Fund at least one complete copy of all registration statements, prospectuses, SAIs, reports, solicitations for voting instructions, sales literature and other promotional materials, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Contracts or the Account, contemporaneously with the filing of such document(s) with the SEC, NASD, or other regulatory authority. 4.8. For purposes of Articles IV and VIII, the phrase "sales literature and other promotional material" includes, but is not limited to, advertisements (such as material published, or designed for use in, a newspaper, magazine, or other periodical, radio, television, telephone or tape recording, videotape display, signs or billboards, motion pictures, or other public media; e.g., on-line networks such as the Internet or other electronic media), sales literature (i.e., any written communication distributed or made generally available to customers or the public, including brochures, circulars, research reports, market letters, form letters, seminar texts, reprints or excerpts of any other advertisement, sales literature, or published article), educational or training materials or other communications distributed or made generally available to some or all agents or employees, and registration statements, prospectuses, SAIs, shareholder reports, and proxy materials and any other material constituting sales literature or advertising under the NASD rules, the 1933 Act or the 1940 Act. 4.9. At the request of any party to this Agreement, each other party will make available to the other party's independent auditors and/or representative of the appropriate regulatory agencies, all records, data and access to operating procedures that may be reasonably requested in connection with compliance and regulatory requirements related to this Agreement or any party's obligations under this Agreement. ARTICLE V. Fees and Expenses 5.1. The Fund and the Adviser shall pay no fee or other compensation to FirstGWL&A under this Agreement, and FirstGWL&A shall pay no fee or other compensation to the Fund or Adviser under this Agreement, although the parties hereto will bear certain expenses in accordance with Schedule E, Articles III, V, and other provisions of this Agreement. 5.2. All expenses incident to performance by the Fund and the Adviser under this Agreement shall be paid by the appropriate party, as further provided in Schedule E. The Fund shall see to it that all shares of the Designated Portfolio(s) are registered and authorized for issuance in accordance with applicable federal law and, if and to the extent required, in accordance with applicable state laws prior to their sale. 5.3. The parties shall bear the expenses of routine annual distribution (mailing costs) of the Fund's prospectus and distribution (mailing costs) of the Fund's proxy materials and reports to owners of Contracts offered by FirstGWL&A, in accordance with Schedule E. 5.4. The Fund and the Adviser acknowledge that a principal feature of the Contracts is the Contractowner's ability to choose from a number of unaffiliated mutual funds (and portfolios or series thereof), including the Designated Portfolio(s) and the Unaffiliated Funds, and to transfer the Contract's cash value between funds and portfolios. The Fund and the Adviser agree to cooperate with FirstGWL&A and Schwab in facilitating the operation of the Account and the Contracts as described in the prospectus for the Contracts, including but not limited to cooperation in facilitating transfers between Unaffiliated Funds. 5.5. Schwab agrees to provide certain administrative services, specified in Schedule C attached hereto and incorporated herein by reference, in connection with the arrangements contemplated by this Agreement. The parties acknowledge and agree that the services referred to in this Section 5.5 are recordkeeping, shareholder communication, and other transaction facilitation and processing, and related administrative services only and are not the services of an underwriter or a principal underwriter of the Fund and that Schwab is not an underwriter for the shares of the Designated Portfolio(s), within the meaning of the 1933 Act or the 1940 Act. 5.6. As compensation for the services specified in Schedule C hereto, the Adviser agrees to pay Schwab a monthly Administrative Service Fee based on the percentage per annum on Schedule C hereto applied to the average daily value of the shares of the Designated Portfolio(s) held in the Account with respect to Contracts sold by Schwab. This monthly Administrative Service Fee is due and payable before the 15th (fifteenth) day following the last day of the month to which it relates. ARTICLE VI. Diversification and Qualification 6.1. The Fund and the Adviser represent and warrant that the Fund will at all times sell its shares and invest its assets in such a manner as to ensure that the Contracts will be treated as annuity contracts under the Code, and the regulations issued thereunder. Without limiting the scope of the foregoing, the Fund and Adviser represent and warrant that the Fund and each Designated Portfolio thereof will at all times comply with Section 817(h) of the Code and Treasury Regulation 1.817-5, as amended from time to time, and any Treasury interpretations thereof, relating to the diversification requirements for variable annuity, endowment, or life insurance contracts and any amendments or other modifications or successor provisions to such Section or Regulations. The Fund and the Adviser agree that shares of the Designated Portfolio(s) will be sold only to Participating Insurance Companies and their separate accounts. 6.2. No shares of any Designated Portfolio of the Fund will be sold to the general public. 6.3. The Fund and the Adviser represent and warrant that the Fund and each Designated Portfolio is currently qualified as a Regulated Investment Company under Subchapter M of the Code, and that each Designated Portfolio will maintain such qualification (under Subchapter M or any successor or similar provisions) as long as this Agreement is in effect. 6.4. The Fund or the Adviser will notify FirstGWL&A immediately upon having a reasonable basis for believing that the Fund or any Designated Portfolio has ceased to comply with the aforesaid Section 817(h) diversification or Subchapter M qualification requirements or might not so comply in the future. 6.5. Without in any way limiting the effect of Sections 8.3 and 8.4 hereof and with- out in any way limiting or restricting any other remedies available to FirstGWL&A or Schwab, the Adviser will pay all costs associated with or arising out of any failure, or any anticipated or reasonably foreseeable failure, of the Fund or any Designated Portfolio to comply with Sections 6.1, 6.2, or 6.3 hereof, including all costs associated with reasonable and appropriate corrections or responses to any such failure; such costs may include, but are not limited to, the costs involved in creating, organizing, and registering a new investment company as a funding medium for the Contracts and/or the costs of obtaining whatever regulatory authorizations are required to substitute shares of another investment company for those of the failed Portfolio (including but not limited to an order pursuant to Section 26(b) of the 1940 Act); such costs are to include, but are not limited to, fees and expenses of legal counsel and other advisors to FirstGWL&A and any federal income taxes or tax penalties and interest thereon (or "toll charges" or exactments or amounts paid in settlement) incurred by FirstGWL&A with respect to itself or owners of its Contracts in connection with any such failure or anticipated or reasonably foreseeable failure. 6.6. The Fund at the Fund's expense shall provide FirstGWL&A or its designee with reports certifying compliance with the aforesaid Section 817(h) diversification and Subchapter M qualification requirements, at the times provided for and substantially in the form attached hereto as Schedule D and incorporated herein by reference; provided, however, that providing such reports does not relieve the Fund of its responsibility for such compliance or of its liability for any non-compliance. 6.7. FirstGWL&A agrees that if the Internal Revenue Service ("IRS") asserts in writing in connection with any governmental audit or review of FirstGWL&A or, to FirstGWL&A's knowledge, or any Contractowner that any Designated Portfolio has failed to comply with the diversification requirements of Section 817(h) of the Code or FirstGWL&A otherwise becomes aware of any facts that could give rise to any claim against the Fund or the Adviser as a result of such a failure or alleged failure: (a) FirstGWL&A shall promptly notify the Fund and the Adviser of such assertion or potential claim; (b) FirstGWL&A shall consult with the Fund and the Adviser as to how to minimize any liability that may arise as a result of such failure or alleged failure; (c) FirstGWL&A shall use its best efforts to minimize any liability of the Fund and the Adviser resulting from such failure, including, without limitation, demonstrating, pursuant to Treasury Regulations, Section 1.817-5(a)(2), to the commissioner of the IRS that such failure was inadvertent; (d) any written materials to be submitted by FirstGWL&A to the IRS, any Contractowner or any other claimant in connection with any of the foregoing proceedings or contests (including, without limitation, any such materials to be submitted to the IRS pursuant to Treasury Regulations, Section 1.817-5(a)(2)) shall be provided by FirstGWL&A to the Fund and the Adviser (together with any supporting information or analysis) within at least two (2) business days prior to submission; (e) FirstGWL&A shall provide the Fund and the Adviser with such cooperation as the Fund and the Adviser shall reasonably request (including, without limitation, by permitting the Fund and the Adviser to review the relevant books and records of FirstGWL&A) in order to facilitate review by the Fund and the Adviser of any written submissions provided to it or its assessment of the validity or amount of any claim against it arising from such failure or alleged failure; (f) FirstGWL&A shall not with respect to any claim of the IRS or any Contractowner that would give rise to a claim against the Fund and the Adviser (i) compromise or settle any claim, (ii) accept any adjustment on audit, or (iii) forego any allowable administrative or judicial appeals, without the express written consent of the Fund and the Adviser, which shall not be unreasonably withheld; provided that, FirstGWL&A shall not be required to appeal any adverse judicial decision unless the Fund and the Adviser shall have provided an opinion of independent counsel to the effect that a reasonable basis exists for taking such appeal; and further provided that the Fund and the Adviser shall bear the costs and expenses, including reasonable attorney's fees, incurred by FirstGWL&A in complying with this clause (f). ARTICLE VII. Potential Conflicts and Compliance With Shared Funding Exemptive Order 7.1. The Board will monitor the Fund for the existence of any material irreconcilable conflict between the interests of the contract owners of all separate accounts investing in the Fund. An irreconcilable material conflict may arise for a variety of reasons, including: (a) an action by any state insurance regulatory authority; (b) a change in applicable federal or state insurance, tax, or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretative letter, or any similar action by insurance, tax, or securities regulatory authorities; (c) an administrative or judicial decision in any relevant proceeding; (d) the manner in which the investments of any Designated Portfolio are being managed; (e) a difference in voting instructions given by variable annuity contract and variable life insurance contract owners or by contract owners of different Participating Insurance Companies; or (f) a decision by a Participating Insurance Company to disregard the voting instructions of contract owners. The Board shall promptly inform FirstGWL&A if it determines that an irreconcilable material conflict exists and the implications thereof. 7.2. FirstGWL&A will report any potential or existing conflicts of which it is aware to the Board. FirstGWL&A will assist the Board in carrying out its responsibilities under the Shared Funding Exemptive Order, by providing the Board with all information reasonably necessary for the Board to consider any issues raised. This includes, but is not limited to, an obligation by FirstGWL&A to inform the Board whenever contract owner voting instructions are to be disregarded. Such responsibilities (other than the duty to report, which is unqualified) shall be carried out by FirstGWL&A with a view only to the interests of its Contractowners. 7.3. If it is determined by a majority of the Board, or a majority of its directors who are not interested persons of the Fund, the Adviser or any sub-adviser to any of the Designated Portfolios (the "Independent Directors"), that a material irreconcilable conflict exists, FirstGWL&A and other Participating Insurance Companies shall, at their expense and to the extent reasonably practicable (as determined by a majority of the Independent Directors), take whatever steps are necessary to remedy or eliminate the irreconcilable material conflict, up to and including: (1) withdrawing the assets allocable to some or all of the separate accounts from the Fund or any Designated Portfolio and reinvesting such assets in a different investment medium, including (but not limited to) another Designated Portfolio of the Fund, or submitting the question whether such segregation should be imple- mented to a vote of all affected contract owners and, as appropriate, segregating the assets of any appropriate group (i.e., annuity contract owners, life insurance contract owners, or variable contract owners of one or more Participating Insurance Companies) that votes in favor of such segregation, or offering to the affected contract owners the option of making such a change; and (2) establishing a new registered management investment company or managed separate account. 7.4. If a material irreconcilable conflict arises because of a decision by FirstGWL&A to disregard contract owner voting instructions and that decision represents a minority position or would preclude a majority vote, FirstGWL&A may be required, at the Fund's election, to withdraw the Account's investment in the Fund and terminate this Agreement; provided, however that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the Independent Directors. Any such withdrawal and termination must take place within six (6) months after the Fund gives written notice that this provision is being implemented, and until the end of that six month period the Adviser and the Fund shall continue to accept and implement orders by FirstGWL&A for the purchase (and redemption) of shares of the Fund. 7.5. If a material irreconcilable conflict arises because a particular state insurance regulator's decision applicable to FirstGWL&A conflicts with the majority of other state regulators, then FirstGWL&A will withdraw the Account's investment in the Fund and terminate this Agreement within six months after the Board informs FirstGWL&A in writing that it has determined that such decision has created an irreconcilable material conflict; provided, however, that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the disinterested members of the Board. Until the end of the foregoing six month period, the Fund shall continue to accept and implement orders by FirstGWL&A for the purchase (and redemption) of shares of the Fund. 7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority of the Independent Trustees shall determine whether any proposed action adequately remedies any irreconcilable material conflict, but in no event will the Fund be required to establish a new funding medium for the Contracts. FirstGWL&A shall not be required by Section 7.3 to establish a new funding medium for the Contracts if an offer to do so has been declined by vote of a majority of Contractowners materially adversely affected by the irreconcilable material conflict. In the event that the Board determines that any proposed action does not adequately remedy any irreconcilable material conflict, then FirstGWL&A will withdraw the Account's investment in the Fund and terminate this Agreement within six (6) months after the Board informs FirstGWL&A in writing of the foregoing determination; provided, however, that such withdrawal and termination shall be limited to the extent required by any such material irreconcilable conflict as determined by a majority of the Independent Trustees. 7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act or the rules promulgated thereunder with respect to mixed or shared funding (as defined in the Shared Funding Exemptive Order) on terms and conditions materially different from those contained in the Shared Funding Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies, as appropriate, shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable: and (b) Sections 3.5, 3.6, 3.7, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall continue in effect only to the extent that terms and conditions substantially identical to such Sections are contained in such Rule(s) as so amended or adopted. ARTICLE VIII. Indemnification 8.1. Indemnification By FirstGWL&A 8.1(a). FirstGWL&A agrees to indemnify and hold harmless the Fund and the Adviser and each of their officers and directors or trustees and each person, if any, who controls the Fund or the Adviser within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.1) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of FirstGWL&A) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in the registration statement or pro- spectus or SAI covering the Contracts or contained in the Contracts or sales literature for the Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or nec- essary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser or Fund for use in the registration statement or prospectus for the Contracts or in the Contracts or sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or Fund shares; or (ii) arise out of or are based upon of statements or representations (other than statements or representations contained in the registration statement, pro- spectus or sales literature of the Fund not supplied by FirstGWL&A or persons under its control) or wrongful conduct of FirstGWL&A or persons under its control, with respect to the sale or distribution of the Contracts or Fund Shares; or (iii)arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, or sales literature of the Fund, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such a statement or omission was made in reliance upon information furnished in writing to the Fund by or on behalf of FirstGWL&A; or (iv) arise as a result of any failure by FirstGWL&A to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by FirstGWL&A in this Agreement or arise out of or result from any other material breach of this Agreement by FirstGWL&A, including without limitation Section 2.10 and Section 6.7 hereof, as limited by and in accordance with the provisions of Sections 8.1(b) and 8.1(c) hereof. 8.1(b). FirstGWL&A shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.1(c). FirstGWL&A shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified FirstGWL&A in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify FirstGWL&A of any such claim shall not relieve FirstGWL&A from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that FirstGWL&A has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, FirstGWL&A shall be entitled to participate, at its own expense, in the defense of such action. FirstGWL&A also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from FirstGWL&A to such party of FirstGWL&A's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and FirstGWL&A will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.1(d). The Indemnified Parties will promptly notify FirstGWL&A of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund. 8.2. Indemnification by Schwab 8.2(a). Schwab agrees to indemnify and hold harmless the Fund and the Adviser and each of their officers and directors or trustees and each person, if any, who controls the Fund or Adviser within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.2) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of Schwab) or litigation (including reasonable legal and other expenses), to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of or are based upon Schwab's dissemination of information regarding the Fund that is both (A) materially incorrect and (B) that was neither contained in the Fund's registration statement or sales literature nor other promotional material of the Fund prepared by the Fund or provided in writing to Schwab, or approved in writing, by or on behalf of the Fund or the Adviser; or (ii) arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in sales literature or other promotional material prepared by Schwab for the Contracts or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser or the Fund or to Schwab by FirstGWL&A for use in the registration statement or prospectus for the Contracts or in the Contracts or sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts; or (iii)arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus or sales literature of the Fund not supplied by Schwab or persons under its control) or wrongful conduct of Schwab or persons under its control, with respect to the sale or distribution of the Contracts; or (iv) arise as a result of any failure by Schwab to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by Schwab in this Agreement or arise out of or result from any other material breach of this Agreement by Schwab; as limited by and in accordance with the provisions of Sections 8.2(b) and 8.2(c) hereof. 8.2(b). Schwab shall not be liable under this indemnification provision with respect to any losses, claims, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.2(c). Schwab shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified Schwab in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify Schwab of any such claim shall not relieve Schwab from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that Schwab has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, Schwab shall be entitled to participate, at its own expense, in the defense of such action. Schwab also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from Schwab to such party of Schwab's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and Schwab will not be liable to such party under this Agreement for any legal or other ex- penses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.2(d). The Indemnified Parties will promptly notify Schwab of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund. 8.3. Indemnification by the Adviser 8.3(a). The Adviser agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their directors and officers and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.3) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Adviser) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Fund or the Adviser (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reli- ance upon and in conformity with information furnished in writing to the Adviser or the Fund by or on behalf of FirstGWL&A or Schwab for use in the registration statement or prospectus for the Fund or in sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or the Fund shares; or (ii) arise out of or are based upon of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI or sales literature or other promotional material for the Contracts not supplied by the Adviser or persons under its control) or wrongful conduct of the Fund or the Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or (iii)arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, or sales literature covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser or the Fund; or (iv) arise as a result of any failure by the Fund or the Adviser to provide the services and furnish the materials under the terms of this Agreement (in- cluding a failure, whether unintentional or in good faith or otherwise, to com- ply with the diversification and other qualification requirements specified in Article VI of this Agreement); or (v) arise out of or result from any material breach of any representation and/or warranty made by the Fund or the Adviser in this Agreement or arise out of or result from any other material breach of this Agreement by the Adviser or the Fund; or (vi) arise out of or result from the incorrect or untimely calculation or reporting of the daily net asset value per share or dividend or capital gain distribution rate; as limited by and in accordance with the provisions of Sections 8.3(b) and 8.3(c) hereof. This indemnification is in addition to and apart from the responsibilities and obligations of the Adviser specified in Article VI hereof. 8.3(b). The Adviser shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.3(c). The Adviser shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Adviser in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Adviser of any such claim shall not relieve the Adviser from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Adviser has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Adviser will be entitled to participate, at its own expense, in the defense thereof. The Adviser also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Adviser to such party of the Adviser's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Adviser will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.3(d). FirstGWL&A and Schwab agree promptly to notify the Adviser of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Account. 8.4. Indemnification By the Fund 8.4(a). The Fund agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their directors and officers and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.4) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Fund) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may be required to pay or become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements, are related to the operations of the Fund and: (i) arise as a result of any failure by the Fund to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agree- ment); or (ii) arise out of or result from any material breach of any representation and/or warranty made by the Fund in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund; or (iii)arise out of or result from the incorrect or untimely calculation or reporting of the daily net asset value per share or dividend or capital gain distribution rate; as limited by and in accordance with the provisions of Sections 8.4(b) and 8.4(c) hereof. 8.4(b). The Fund shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.4(c). The Fund shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Fund in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Fund of any such claim shall not relieve it from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Fund has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Fund will be entitled to participate, at its own expense, in the defense thereof. The Fund shall also be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Fund to such party of the Fund's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Fund will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.4(d). FirstGWL&A and Schwab each agree promptly to notify the Fund of the commencement of any litigation or proceeding against itself or any of its respective officers or directors in connection with the Agreement, the issuance or sale of the Contracts, the operation of the Account, or the sale or acquisition of shares of the Fund. ARTICLE IX. Applicable Law 9.1. This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the State of New York, without regard to the New York Conflict of Laws provisions. 9.2. This Agreement shall be subject to the provisions of the 1933, 1934 and 1940 Acts, and the rules and regulations and rulings thereunder, including such exemptions from those statutes, rules and regulations as the Securities and Exchange Commission may grant (including, but not limited to, the Shared Funding Exemptive Order) and the terms hereof shall be interpreted and construed in accordance therewith. ARTICLE X. Termination 10.1.This Agreement shall terminate: (a) at the option of any party, with or without cause, with respect to some or all Portfolios, upon six (6) months advance written notice delivered to the other parties; provided, however, that such notice shall not be given earlier than six (6) months following the date of this Agreement; or (b) at the option of FirstGWL&A or Schwab by written notice to the other parties with respect to any Portfolio based upon FirstGWL&A's or Schwab's reasonable and good faith determination that shares of such Portfolio are not reasonably available to meet the requirements of the Contracts; or (c) at the option of FirstGWL&A or Schwab by written notice to the other parties with respect to any Portfolio in the event any of the Portfolio's shares 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 FirstGWL&A; or (d) at the option of the Fund in the event that formal administrative proceedings are instituted against FirstGWL&A or Schwab by the NASD, the SEC, the Insurance Commissioner or like official of any state or any other regulatory body regarding FirstGWL&A's or Schwab's duties under this Agreement or related to the sale of the Contracts, the operation of any Account, or the purchase of the Fund shares, or shares or sponsor of any Unaffiliated Fund, if, in each case, the Fund reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of FirstGWL&A or Schwab to perform its obligations under this Agreement or would have a material adverse impact upon the Fund; or (e) at the option of FirstGWL&A or Schwab in the event that formal administrative proceedings are instituted against the Fund or the Adviser by the NASD, the SEC, or any state securities or insurance department or any other regulatory body, if Schwab or FirstGWL&A reasonably 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 Fund or the Adviser to perform their obligations under this Agreement; or (f) at the option of FirstGWL&A by written notice to the Fund and the Adviser with respect to any Portfolio if FirstGWL&A reasonably and in good faith believes that the Portfolio will fail to meet the Section 817(h) diversification requirements or Subchapter M qualifications specified in Article VI hereof; or (g) at the option of either the Fund or the Adviser, if (i) the Fund or Adviser, respectively, shall determine, in their sole judgment reasonably exercised in good faith, that either FirstGWL&A or Schwab has suffered a material adverse change in their business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on FirstGWL&A's or Schwab's ability to perform its obligations under this Agreement, (ii) the Fund or the Adviser notifies FirstGWL&A or Schwab, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by FirstGWL&A or Schwab and any other changes in circumstances since the giving of such a notice, the determination of the Fund or the Adviser shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or (h) at the option of either FirstGWL&A or Schwab, if (i) FirstGWL&A or Schwab, respectively, shall determine, in its sole judgment reasonably exercised in good faith, that either the Fund or the Adviser has suffered a material adverse change in its business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on the Fund's or the Adviser's ability to perform its obligations under this Agreement, (ii) FirstGWL&A or Schwab notifies the Fund or the Adviser, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by the Fund or the Adviser and any other changes in circumstances since the giving of such a notice, the determination of FirstGWL&A or Schwab shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or (i) at the option of FirstGWL&A in the event that formal administrative proceedings are instituted against Schwab by the NASD, the Securities and Exchange Commission, or any state securities or insurance department or any other regulatory body regarding Schwab's duties under this Agreement or related to the sale of the Fund's shares or the Contracts, the operation of any Account, or the purchase of the Fund shares, provided, however, that FirstGWL&A determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of Schwab to perform its obligations related to the Contracts; or (j) at the option of Schwab in the event that formal administrative proceedings are instituted against FirstGWL&A by the NASD, the Securities and Exchange Commission, or any state securities or insurance department or any other regulatory body regarding FirstGWL&A's duties under this Agreement or related to the sale of the Fund's shares or the Contracts, the operation of any Account, or the purchase of the Fund shares, provided, however, that Schwab determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of FirstGWL&A to perform its obligations related to the Contracts; or (k) at the option of any non-defaulting party hereto in the event of a material breach of this Agreement by any party hereto (the "defaulting party") other than as described in 10.1(a)-(j); provided, that the non-defaulting party gives written notice thereof to the defaulting party, with copies of such notice to all other non-defaulting parties, and if such breach shall not have been remedied within thirty (30) days after such written notice is given, then the non- defaulting party giving such written notice may terminate this Agreement by giving thirty (30) days written notice of termination to the defaulting party. 10.2.Notice Requirement. No termination of this Agreement shall be effective unless and until the party terminating this Agreement gives prior written notice to all other parties of its intent to terminate, which notice shall set forth the basis for the termination. Furthermore, (a) in the event any termination is based upon the provisions of Article VII, or the provisions of Section 10.1(a), 10.1(g) or 10.1(h) of this Agreement, the prior written notice shall be given in advance of the effective date of termination as required by those provisions unless such notice period is shortened by mutual written agreement of the parties; (b) in the event any termination is based upon the provisions of Section 10.1(d), 10.1(e), 10.1(i) or 10.1(j) of this Agreement, the prior written notice shall be given at least sixty (60) days before the effective date of termination; and (c) in the event any termination is based upon the provisions of Section 10.1(b), 10.1(c) or 10.1(f), the prior written notice shall be given in advance of the effective date of termination, which date shall be determined by the party sending the notice. 10.3.Effect of Termination. Notwithstanding any termination of this Agreement, other than as a result of a failure by either the Fund or FirstGWL&A to meet Section 817(h) of the Code diversification requirements, the Fund and the Adviser shall, at the option of FirstGWL&A or Schwab, continue to make available additional shares of the Designated Portfolio(s) pursuant to the terms and conditions of this Agreement, for all Contracts in effect on the effective date of termination of this Agreement (hereinafter referred to as "Existing Contracts"). Specifically, without limitation, the owners of the Existing Contracts shall be permitted to reallocate investments in the Designated Portfolio(s), redeem investments in the Designated Portfolio(s) and/or invest in the Designated Portfolio(s) upon the making of additional purchase payments under the Existing Contracts. The parties agree that this Section 10.3 shall not apply to any terminations under Article VII and the effect of such Article VII terminations shall be governed by Article VII of this Agreement. 10.4.Surviving Provisions. Notwithstanding any termination of this Agreement, each party's obligations under Article VIII to indemnify other parties shall survive and not be affected by any termination of this Agreement. In addition, with respect to Existing Contracts, all provisions of this Agreement shall also survive and not be affected by any termination of this Agreement. 10.5.Survival of Agreement. A termination by Schwab shall terminate this Agreement only as to Schwab, and this Agreement shall remain in effect as to the other par- ties; provided, however, that in the event of a termination by Schwab the other parties shall have the option to terminate this Agreement upon 60 (sixty) days notice, rather than the six (6) months specified in Section 10.1(a). ARTICLE XI. Notices Any notice shall be sufficiently given when sent by registered or certified mail to the other party at the address of such party set forth below or at such other address as such party may from time to time specify in writing to the other party. If to the Fund: SteinRoe Variable Investment Trust c/o Liberty Investment Services, Inc. 600 Atlantic Avenue Boston, MA 02210 Attention: Secretary If to FirstGWL&A: First Great-West Life & Annuity Insurance Company 8515 East Orchard Road Englewood, CO 80111 Attention:Assistant Vice President, Savings Products If to the Adviser: Stein Roe & Farnham Incorporated One South Wacker Drive Chicago, IL 60606 Attention: Secretary If to Schwab: Charles Schwab & Co., Inc. 101 Montgomery Street San Francisco, CA 94104 Attention: General Counsel ARTICLE XII. Miscellaneous 12.1.Subject to the requirements of legal process and regulatory authority, each party hereto shall treat as confidential the names and addresses of the owners of the Contracts and all information reasonably identified as confidential in writing by any other party hereto and, except as permitted by this Agreement, shall not disclose, disseminate or utilize such names and addresses and other confidential information without the express written consent of the affected party until such time as such information may come into the public domain. Without limiting the foregoing, no party hereto shall disclose any information that another party has designated as proprietary. 12.2.The captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provisions hereof or otherwise affect their construction or effect. 12.3.This Agreement may be executed simultaneously in two or more counterparts, each of which taken together shall constitute one and the same instrument. 12.4.If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby. 12.5.Each party hereto shall cooperate with each other party and all appropriate governmental authorities (including without limitation the SEC, the NASD and state insurance regulators) and shall permit such authorities reasonable access to its books and records in connection with any investigation or inquiry relating to this Agreement or the transactions contemplated hereby. Notwithstanding the generality of the foregoing, each party hereto further agrees to furnish the New York Insurance Commissioner with any information or reports in connection with services provided under this Agreement which such Commissioner may request in order to ascertain whether the variable annuity operations of FirstGWL&A are being conducted in a manner consistent with the New York Variable Annuity Regulations and any other applicable law or regulations. 12.6.Any controversy or claim arising out of or relating to this Agreement, or breach thereof, may be settled by arbitration in a forum jointly selected by the relevant parties (but if applicable law requires some other forum, then such other forum) in accordance with the Commercial Arbitration Rules of the American Arbitration Association, or other arbitration rules as mutually agreed upon by the relevant parties, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. 12.7.The rights, remedies and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies and obligations, at law or in equity, which the parties hereto are entitled to under state and federal laws. 12.8.This Agreement or any of the rights and obligations hereunder may not be assigned by any party without the prior written consent of all parties hereto. 12.9.Schwab and FirstGWL&A are hereby expressly put on notice of the limitation of liability as set forth in the Declarations of Trust of the Fund and the Adviser and agree that the obligations assumed by the Fund and the Adviser pursuant to this Agreement shall be limited in any case to the Fund and Adviser and their respective assets and neither Schwab nor FirstGWL&A shall seek satisfaction of any such obligation from the shareholders of the Fund or the Adviser, the Trustees, officers, employees or agents of the Fund or Adviser, or any of them. 12.10.The Fund and the Adviser agree that the obligations assumed by FirstGWL&A and Schwab pursuant to this Agreement shall be limited in any case to FirstGWL&A and Schwab and their respective assets and neither the Fund nor the Adviser shall seek satisfaction of any such obligation from the shareholders of the FirstGWL&A or Schwab, the directors, officers, employees or agents of the FirstGWL&A or Schwab, or any of them. 12.11.No provision of this Agreement may be deemed or construed to modify or supersede any contractual rights, duties, or indemnifications, as between the Adviser and the Fund. IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in its name and on its behalf by its duly authorized representative and its seal to be hereunder affixed hereto as of the date specified below. FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY By its authorized officer, By:/s/ Robert K. Shaw Title: Vice President, Marketing & Product Development Date: April 1, 1997 STEINROE VARIABLE INVESTMENT TRUST By its authorized officer, By:/s/ Jilaine Bauer Title: Vice President Date: March 7, 1997 STEIN ROE & FARNHAM INCORPORATED By its authorized officer, By:/s/ Jilaine Bauer Title: Senior Vice President, Secretary & General Counsel Date: March 7, 1997 CHARLES SCHWAB & CO., INC. By its authorized officer, By:/s/ Jeff Benton Title:Vice President, Annuities & Life Insurance Date:March 31, 1997 Schwab Variable Annuity SCHEDULE A Contracts Form Numbers First Great-West Life & Annuity Insurance Company Group Variable/Fixed Annuity Contract J434NY SCHEDULE B Designated Portfolios SteinRoe Capital Appreciation Fund SCHEDULE C Administrative Services To be performed by Charles Schwab & Co., Inc. A. Schwab will provide the properly registered and licensed personnel and systems needed for all customer servicing and support - for both fund and annuity information and questions - including: respond to Contractowner inquiries delivery of prospectus - both fund and annuity; entry of initial and subsequent orders; transfer of cash to insurance company and/or funds; explanations of fund objectives and characteristics; entry of transfers between funds; fund balance and allocation inquiries; mail fund prospectus. B. For the services, Schwab shall receive a fee of 0.25% per annum applied to the average daily value of the shares of the fund held by Schwab's customers, payable by the Adviser directly to Schwab, such payments being due and payable within 15 (fifteen) days after the last day of the month to which such payment relates. C. The Fund will calculate and Schwab will verify with FirstGWL&A the asset balance for each day on which the fee is to be paid pursuant to this Agreement with respect to each Designated Portfolio. D. Schwab will communicate all purchase, withdrawal, and exchange orders it receives from its customers to FirstGWL&A who will retransmit them to each fund. SCHEDULE D Reports per Section 6.6 With regard to the reports relating to the quarterly testing of compliance with the requirements of Section 817(h) and Subchapter M under the Internal Revenue Code (the "Code") and the regulations thereunder, the Fund shall provide within twenty (20) Business Days of the close of the calendar quarter a report to FirstGWL&A in the Form D1 attached hereto and incorporated herein by reference, regarding the status under such sections of the Code of the Designated Portfolio(s), and if necessary, identification of any remedial action to be taken to remedy non-compliance. With regard to the reports relating to the year-end testing of compliance with the requirements of Subchapter M of the Code, referred to hereinafter as "RIC status," the Fund will provide the reports on the following basis: (i) the last quarter's quarterly reports can be supplied within the 20-day period, and (ii) a year-end report will be provided 45 days after the end of the calendar year. However, if a problem with regard to RIC status, as defined below, is identified in the third quarter report, on a weekly basis, starting the first week of December, additional interim reports will be provided specially addressing the problems identified in the third quarter report. If any interim report memorializes the cure of the problem, subsequent interim reports will not be required. A problem with regard to RIC status is defined as any violation of the following standards, as referenced to the applicable sections of the Code: (a) Less than ninety percent of gross income is derived from sources of income specified in Section 851(b)(2); (b) Thirty percent or greater gross income is derived from the sale or disposition of assets specified in Section 851(b)(3); (c) Less than fifty percent of the value of total assets consists of assets specified in Section 851(b)(4)(A); and (d) No more than twenty-five percent of the value of total assets is invested in the securities of one issuer, as that requirement is set forth in Section 851(b)(4)(B). FORM D1 CERTIFICATE OF COMPLIANCE I, , a duly authorized officer, director or agent of Fund hereby swear and affirm that Fund is in compliance with all requirements of Section 817(h) and Subchapter M of the Internal Revenue Code (the "Code") and the regulations thereunder as required in the Fund Participation Agreement among First Great-West Life & Annuity Insurance Company, Charles Schwab & Co., Inc. and other than the exceptions discussed below: Exceptions Remedial Action If no exception to report, please indicate "None." Signed this day of , . (Signature) By: (Type or Print Name and Title/Position) SCHEDULE E EXPENSES The Fund and/or Adviser, and FirstGWL&A will coordinate the functions and pay the costs of the completing these functions based upon an allocation of costs in the tables below. Costs shall be allocated to reflect the Fund's share of the total costs determined according to the number of pages of the Fund's respective portions of the documents. Item Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Prospectus Printing of combined prospectuses FirstGWL&A Fund or Adviser, as applicable Fund or Adviser shall supply FirstGWL&A with such numbers of the Designated Portfolio(s) prospectus(es) as FirstGWL&A shall reasonably request FirstGWL&A Fund or Adviser, as applicable Distribution to New and Inforce Clients FirstGWL&A FirstGWL&A Distribution to Prospective Clients Schwab Schwab Product Prospectus Printing for Inforce Clients FirstGWL&A FirstGWL&A Printing for Prospective Clients FirstGWL&A Schwab Distribution to New and Inforce Clients FirstGWL&A FirstGWL&A Distribution to Prospective Clients Schwab Schwab Mutual Fund Prospectus Update & Distribution If Required by Fund or Adviser Fund or Adviser Fund or Adviser If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab Schwab Schwab Product Prospectus Update & Distribution If Required by Fund or Adviser FirstGWL&A Fund or Adviser Item Function Party Responsible for Coordination Party Responsible for Expense If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab Schwab Schwab Mutual Fund SAI Printing Fund or Adviser Fund or Adviser Distribution FirstGWL&A FirstGWL&A Product SAI Printing FirstGWL&A FirstGWL&A Distribution FirstGWL&A FirstGWL&A Item Function Party Responsible for Coordination Party Responsible for Expense Proxy Material for Mutual Fund: Printing if proxy required by Law Fund or Adviser Fund or Adviser Distribution (including labor) if proxy required by Law FirstGWL&A Fund or Adviser Printing & distribution if required by FirstGWL&A FirstGWL&A FirstGWL&A Printing & distribution if required by Schwab FirstGWL&A Schwab Item Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Annual & Semi-Annual Report Printing of combined reports FirstGWL&A Fund or Adviser Distribution FirstGWL&A FirstGWL&A and Schwab Other communication to New and Prospective clients If Required by the Fund or Adviser Schwab Fund or Adviser If Required by FirstGWL&A Schwab FirstGWL&A Item Function Party Responsible for Coordination Party Responsible for Expense If Required by Schwab Schwab Schwab Other communication to inforce Distribution (including labor) if required by the Fund or Adviser FirstGWL&A Fund or Adviser If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab FirstGWL&A Schwab Item Function Party Responsible for Coordination Party Responsible for Expense Errors in Share Price calculation pursuant to Section 1.10 Cost of error to participants FirstGWL&A Fund or Adviser Cost of administrative work to correct error FirstGWL&A Fund or Adviser Operations of the Fund All operations and related expenses, including the cost of registration and qualification of shares, taxes on the issuance or transfer of shares, cost of management of the business affairs of the Fund, and expenses paid or assumed by the fund pursuant to any Rule 12b-1 plan Fund or Adviser Fund or Adviser Operations of the Account Federal registration of units of separate account (24f-2 fees) FirstGWL&A FirstGWL&A EX-8.12 19 EXHIBIT 8.12 FUND PARTICIPATION AGREEMENT Strong Variable Insurance Funds, Inc. TABLE OF CONTENTS ARTICLE I. Sale of Fund Shares . . . . . . . . . . . . . . . .4 ARTICLE II. Representations and Warranties. . . . . . . . . . .8 ARTICLE III. Prospectuses and Proxy Statements; Voting . . . . 11 ARTICLE IV. Sales Material and Information. . . . . . . . . . 14 ARTICLE V. Fees and Expenses . . . . . . . . . . . . . . . . 16 ARTICLE VI. Diversification and Qualification . . . . . . . . 18 ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order . . . . 21 ARTICLE VIII.Indemnification . . . . . . . . . . . . . . . . . 24 ARTICLE IX. Applicable Law. . . . . . . . . . . . . . . . . . 35 ARTICLE X. Termination . . . . . . . . . . . . . . . . . . . 36 ARTICLE XI. Notices . . . . . . . . . . . . . . . . . . . . . 40 ARTICLE XII. Miscellaneous . . . . . . . . . . . . . . . . . . 41 SCHEDULE A Contracts . . . . . . . . . . . . . . . . . . . . 44 SCHEDULE B Designated Portfolios . . . . . . . . . . . . . . 45 SCHEDULE C Administrative Services . . . . . . . . . . . . . 46 SCHEDULE D Reports per Section 6.6 . . . . . . . . . . . . . 47 SCHEDULE E Expenses. . . . . . . . . . . . . . . . . . . . . 51 PARTICIPATION AGREEMENT Among FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY STRONG VARIABLE INSURANCE FUNDS, INC., STRONG CAPITAL MANAGEMENT, INC., STRONG FUNDS DISTRIBUTORS and CHARLES SCHWAB & CO., INC. THIS AGREEMENT, made and entered into as of this ____ day of _______________, 1997 by and among FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (hereinafter "FirstGWL&A"), a New York life insurance company, on its own behalf and on behalf of its Separate Account Variable Annuity-1 Series Account (the "Account"); STRONG VARIABLE INSURANCE FUNDS, INC., a corporation organized under the laws of Wisconsin (hereinafter the "Fund"); STRONG CAPITAL MANAGEMENT, INC. (hereinafter the "Adviser"), a Wisconsin corporation; STRONG FUNDS DISTRIBUTORS, INC. (the "Distributor"), a Wisconsin corporation; and CHARLES SCHWAB & CO., INC., a California corporation (hereinafter "Schwab"). WHEREAS, the Fund engages in business as an open-end management investment company and is available to act as the investment vehicle for separate accounts established for variable life insurance policies and/or variable annuity contracts (collectively, the "Variable Insurance Products") to be offered by insurance companies, including FirstGWL&A, which have entered into participation agreements similar to this Agreement (hereinafter "Participating Insurance Companies"); and WHEREAS, the beneficial interest in the Fund is divided into several series of shares, each designated a "Portfolio" and representing the interest in a particular managed portfolio of securities and other assets; and WHEREAS, the Fund has obtained an order from the Securities and Exchange Commission (hereinafter the "SEC"), dated July 1, 1992 (File No. 812-7863), granting Participating Insurance Companies and variable annuity and variable life insurance separate accounts exemptions from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended, (hereinafter the "1940 Act") and Rules 6e- 2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Fund to be sold to and held by variable annuity and variable life insurance separate accounts of life insurance companies that may or may not be affiliated with one another and plans established under Sections 401(a), 403(a) and (b), 408(a), (b) and (k), 414(d) 457(b) or 501(c)(18) of the Internal Revenue Code ("Qualified Plans") (hereinafter the "Mixed and Shared Funding Exemptive Order"); and WHEREAS, the Fund is registered as an open-end management investment company under the 1940 Act and shares of the Portfolio(s) are registered under the Securities Act of 1933, as amended (hereinafter the "1933 Act"); and WHEREAS, the Adviser is duly registered as an investment adviser under the Investment Advisers Act of 1940, as amended, and any applicable state securities laws; and WHEREAS, the Distributor is duly registered as a broker-dealer under the Securities Exchange Act of 1934, as amended, (the "1934 Act") and is a member in good standing of the National Association of Securities Dealers, Inc. (the "NASD"); and WHEREAS, FirstGWL&A has registered or will register certain variable annuity contracts supported wholly or partially by the Account (the "Contracts") under the 1933 Act and said Contracts are listed in Schedule A attached hereto and incorporated herein by reference, as it may be amended from time to time by mutual written agreement; and WHEREAS, the Account is a duly organized, validly existing segregated asset account, established by resolution of the Board of Directors of FirstGWL&A on January 15, 1997, to set aside and invest assets attributable to the Contracts; and WHEREAS, FirstGWL&A has registered or will register the Account as a unit investment trust under the 1940 Act and has registered or will register the securities deemed to be issued by the Account under the 1933 Act; and WHEREAS, to the extent permitted by applicable insurance laws and regulations, FirstGWL&A intends to purchase shares in the Portfolio(s) listed in Schedule B attached hereto and incorporated herein by reference, as it may be amended from time to time by mutual written agreement (the "Designated Portfolio(s)"), on behalf of the Account to fund the Contracts, and the Fund is authorized to sell such shares to unit investment trusts such as the Account at net asset value; and WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Account also intends to purchase shares in other open-end investment companies or series thereof not affiliated with the Fund (the "Unaffiliated Funds") on behalf of the Account to fund the Contracts; and WHEREAS, Schwab will perform certain services for the Fund in connection with the Contracts; NOW, THEREFORE, in consideration of their mutual promises, FirstGWL&A, Schwab, the Fund, the Distributor and the Adviser agree as follows: ARTICLE I. Sale of Fund Shares 1.1. The Fund agrees to sell to FirstGWL&A those shares of the Designated Portfolio(s) which the Account orders, executing such orders on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the order for the shares of the Portfolios. For purposes of this Section 1.1, FirstGWL&A shall be the designee of the Fund for receipt of such orders and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such order by 9:00 a.m. Eastern time on the next following Business Day. "Business Day" shall mean any day on which the New York Stock Exchange is open for trading and on which the Fund calculates its net asset value pursuant to the rules of the SEC. 1.2. The Distributor and the Fund agrees to make shares of the Designated Port- folio(s) available for purchase at the applicable net asset value per share by FirstGWL&A and the Account on those days on which the Fund calculates its Designated Portfolio(s)' net asset value pursuant to rules of the SEC, and the Fund shall calculate such net asset value on each day which the New York Stock Exchange is open for trading. Notwithstanding the foregoing, the Board of Directors of the Fund (hereinafter the "Board") may refuse to sell shares of any Portfolio to any person, or suspend or terminate the offering of shares of any Portfolio if such action is required by law or by regulatory authorities having jurisdiction or is, in the sole discretion of the Board acting in good faith and in light of their fiduciary duties under federal and any applicable state laws, necessary in the best interests of the shareholders of such Portfolio. 1.3. The Fund will not sell shares of the Designated Portfolio(s) to any other Participating Insurance Company, separate account or any Qualified Plan unless an agreement containing provisions substantially the same as Sections 2.1, 3.5, 3.6, 3.7, and Article VII of this Agreement is in effect to govern such sales. 1.4. The Fund agrees to redeem for cash, on FirstGWL&A's request, any full or fractional shares of the Fund held by FirstGWL&A, executing such requests on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the request for redemption. Requests for redemption identified by FirstGWL&A, or its agent, as being in connection with surrenders, annuitizations, or death benefits under the Contracts, upon prior written notice, may be executed within seven (7) calendar days after receipt by the Fund or its designee of the requests for redemption. This Section 1.4 may be amended, in writing, by the parties consistent with the requirements of the 1940 Act and interpretations thereof. For purposes of this Section 1.4, FirstGWL&A shall be the designee of the Fund for receipt of requests for redemption and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such request for redemption by 9:00 A.M. Eastern time on the next following Business Day. 1.5. The Parties hereto acknowledge that the arrangement contemplated by this Agreement is not exclusive; the Fund's shares may be sold to other Participating Insurance Companies (subject to Section 1.3 and Article VI hereof) and the cash value of the Con- tracts may be invested in other investment companies. 1.6. FirstGWL&A shall pay for Fund shares by 3:00 p.m. Eastern time on the next Business Day after an order to purchase Fund shares is made in accordance with the provisions of Section 1.1 hereof. Payment shall be in federal funds transmitted by wire and/or by a credit for any shares redeemed the same day as the purchase. FirstGWL&A agrees that if it fails to wire the purchase price to Distributor before such 3:00 p.m. deadline, or (ii) provide the Distributor with a Federal Funds wire system reference number evidencing the wire transfer of the purchase price to the Distributor prior to such deadline, then, at the option of Distributor, (a) the transaction may be canceled, or (b) the transaction may be processed at the next-determined net asset value for the applicable Designated Portfolio after purchase order funds are received. In such event FirstGWL&A shall indemnify and hold harmless Distributor, Adviser and/or Fund from any liabilities, costs and damages either may suffer as a result of such failure. If, however, a failure by FirstGWL&A to wire the purchase price to Distributor before the 3:00 p.m. deadline is a result, directly or indirectly, of circumstances beyond the control and without the fault or negligence of FirstGWL&A, Distributor and FirstGWL&A will mutually agree upon the appropriate procedure for processing the transaction and FirstGWL&A shall not be subject to the hold harmless or indemnification provisions of this Section 1.6. 1.7. The Fund shall use its best efforts to pay and transmit the proceeds of redemptions of Fund shares by 12:00 p.m. (noon) Eastern Time on the next Business Day after a redemption order is received in accordance with Section 1.4 hereof. Payment shall be in federal funds transmitted by wire and/or a credit for any shares purchased the same day as the redemption. 1.8. Issuance and transfer of the Fund's shares will be by book entry only. Stock certificates will not be issued to FirstGWL&A or the Account. Shares ordered from the Fund will be recorded in an appropriate title for the Account. 1.9. The Distributor and/or the Adviser shall furnish same day notice (by wire, direct or indirect system access or telephone, followed by written confirmation) to FirstGWL&A of any income, dividends or capital gain distributions payable on the Designated Portfolio(s)' shares. FirstGWL&A hereby elects to receive all such income dividends and capital gain distributions as are payable on the Portfolio shares in additional shares of that Portfolio. FirstGWL&A reserves the right to revoke this election and to receive all such income dividends and capital gain distributions in cash. The Distributor and/or the Adviser shall notify FirstGWL&A by the end of the next following Business Day by direct or indirect system access of the number of shares so issued as payment of such dividends and distributions. 1.10.The Adviser shall make the net asset value ("NAV") per share for each Designated Portfolio available to FirstGWL&A on each Business Day as soon as reasonably practical after the NAV per share is calculated and shall use its best efforts to make such net asset value per share available by 6:00 p.m. Eastern time. In the event of an error in the computation of a Designated Portfolio's NAV on any day on which Designated Portfolio shares are purchased or redeemed or any dividend or capital gain distribution (each, a "pricing error"), the Adviser or the Fund shall immediately notify FirstGWL&A as soon as possible after discovery of the error. Such notification may be verbal, but shall be confirmed promptly in writing in accordance with Article XI of this Agreement. A pricing error shall be corrected as follows: the Designated Portfolio shall be reimbursed by the Adviser (or, without limiting the Adviser's responsibility hereunder, the entity responsible for the error, provided such entity is willing to provide timely reimbursement) if the difference between the NAV at which the shares were purchased or redeemed (the "Incorrect Price") and the correct NAV as subsequently determined (the "Correct Price") equals or exceeds one-half of one percent (0.5%) of the Correct Price (a "Reimbursable Error"). In the event of a Reimbursable Error, the Designated Portfolio shall be reimbursed the total difference between the Incorrect Price and the Correct Price (the "Reimbursement Amount"). The Reimbursement Amount shall be calculated separately for each shareholder of record of the Designated Portfolio who suffered a loss. If the Reimbursement Amount is greater than $10.00, said shareholder's account will be adjusted accordingly and if $10.00 or less, it shall be paid directly to the Designated Portfolio, all in accordance with the Designated Portfolio's policies on Reimbursable Errors. In no event shall Schwab or FirstGWL&A be liable to Contractowners for any such adjustments or underpayment amounts. The foregoing represents the policies and procedures of the Fund with respect to NAV pricing errors and are not the policies and procedures of FirstGWL&A or Schwab. The Fund believes that these policies and procedures are fair and reasonable and are consistent with applicable guidelines of the Securities and Exchange Commission ("SEC") and its staff relative to NAV pricing errors. In the event new guidelines for handling NAV pricing errors are disseminated by the SEC or its Staff or pursuant to judicial or other interpretation, the parties shall amend the foregoing provisions of this Agreement to comport with the appropriate applicable guidelines, on terms mutually satisfactory to all parties. ARTICLE II. Representations and Warranties 2.1. FirstGWL&A represents and warrants that the securities deemed to be issued by the Account under the Contracts are or will be registered under the 1933 Act; that the Contracts will be issued and sold in compliance in all material respects with all applicable federal and state laws and that the sale of the Contracts shall comply in all material respects with state insurance suitability requirements. FirstGWL&A further represents and warrants that it is an insurance company duly organized and in good standing under applicable law and that it has legally and validly established the Account prior to any issuance or sale of units thereof as a segregated asset account under Section 4240 of the New York Insurance Law and has registered the Account as a unit investment trust in accordance with the provisions of the 1940 Act to serve as a segregated investment account for the Contracts. 2.2. The Fund represents and warrants that Designated Portfolio(s) shares sold pursuant to this Agreement shall be registered under the 1933 Act, duly authorized for issuance and sold in compliance with all applicable federal securities laws including without limitation the 1933 Act, the 1934 Act, and the 1940 Act and that the Fund is and shall remain registered under the 1940 Act. The Fund shall amend the registration statement for its shares under the 1933 Act and the 1940 Act from time to time as required in order to effect the continuous offering of its shares. 2.3. The Fund reserves the right to adopt a plan pursuant to Rule 12b-1 under the 1940 Act and to impose an asset-based or other charge to finance distribution expenses as permitted by applicable law and regulation. In any event, the Fund and Adviser agree to comply with applicable provisions and SEC staff interpretations of the 1940 Act to assure that the investment advisory or management fees paid to the Adviser by the Fund are in accordance with the requirements of the 1940 Act. To the extent that the Fund decides to finance distribution expenses pursuant to Rule 12b-1, the Fund undertakes to have its Board, a majority of whom are not interested persons of the Fund, formulate and approve any plan pursuant to Rule 12b-1 under the 1940 Act to finance distribution expenses. 2.4. The Fund represents and warrants that it will make every effort to ensure that the investment policies, fees and expenses of the Designated Portfolio(s) are and shall at all times remain in compliance with the insurance and other applicable laws of the State of New York and any other applicable state to the extent required to perform this Agreement and to the extent notified by FirstGWL&A in writing of such laws. The Fund further represents and warrants that it will make every effort to ensure that Designated Portfolio(s) shares will be sold in compliance with the insurance laws of the State of New York and all applicable state insurance and securities laws. With regard to state insurance laws, the Fund and Adviser shall be deemed to be on notice only of those laws and regulations disclosed to the Fund or the Adviser in writing by FirstGWL&A. The Fund shall register and qualify the shares for sale in accordance with the laws of the various states if and to the extent required by applicable law. FirstGWL&A and the Fund will endeavor to mutually cooperate with respect to the implementation of any modifications necessitated by any change in state insurance laws, regulations or interpretations of the foregoing that affect the Designated Portfolio(s) (a "Law Change"), and to keep each other informed of any Law Change that becomes known to either party. In the event of a Law Change, the Fund agrees that, except in those circumstances where the Fund has advised FirstGWL&A that its Board of Directors has determined that implementation of a particular Law Change is not in the best interest of all of the Fund's shareholders with an explanation regarding why such action is lawful, any action required by a Law Change will be taken. 2.5. The Fund represents and warrants that it is lawfully organized and validly existing under the laws of the State of Wisconsin and that it does and will comply in all material respects with the 1940 Act. 2.6. The Adviser represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of the State of Wisconsin and any applicable state and federal securities laws. 2.7. The Distributor represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of the State of Wisconsin and any applicable state and federal securities laws. 2.8. The Fund, the Distributor and the Adviser represent and warrant that all of their respective officers, employees, investment advisers, and other individuals or entities dealing with the money and/or securities of the Fund are, and shall continue to be at all times, covered by a blanket fidelity bond or similar coverage for the benefit of the Fund in an amount not less than the minimal coverage required by Rule 17g-1 under the 1940 Act or related provisions as may be promulgated from time to time. The aforesaid bond shall include coverage for larceny and embezzlement and shall be issued by a reputable bonding company. 2.9. Schwab represents and warrants that it has completed, obtained and performed, in all material respects, all registrations, filings, approvals, and authorizations, consents and examinations required by any government or governmental authority as may be necessary to perform this Agreement. Schwab does and will comply, in all material respects, with all applicable laws, rules and regulations in the performance of its obligations under this Agreement. 2.10.The Designated Portfolio(s) will provide FirstGWL&A with as much advance notice as is reasonably practicable of any material change affecting the Designated Portfolio(s) (including, but not limited to, any material change in the registration statement or prospectus affecting the Designated Portfolio(s)) and any proxy solicitation affecting the Designated Portfolio(s) and consult with FirstGWL&A in order to implement any such change in an orderly manner, recognizing the expenses of changes and attempting to minimize such expenses by implementing them in conjunction with regular annual updates of the prospectus for the Contracts. The Fund agrees to share equitably in expenses incurred by FirstGWL&A as a result of actions taken by the Fund, consistent with the allocation of expenses contained in Schedule E attached hereto and incorporated herein by reference. 2.11.FirstGWL&A represents and warrants, for purposes other than diversification under Section 817 of the Internal Revenue Code of 1986 as amended ("the Code"), that the Contracts are currently treated as annuity contracts under applicable provisions of the Code, and that it will make every effort to maintain such treatment and that it will notify Schwab, the Fund, the Distributor and the Adviser immediately upon having a reasonable basis for believing that the Contracts have ceased to be so treated or that they might not be so treated in the future. In addition, FirstGWL&A represents and warrants that the Account is a "segregated asset account" and that interests in the Account are offered exclusively through the purchase of or transfer into a "variable contract" within the meaning of such terms under Section 817 of the Code and the regulations thereunder. FirstGWL&A will use every effort to continue to meet such definitional requirements, and it will notify Schwab, the Fund, the Distributor, and the Adviser immediately upon having a reasonable basis for believing that such requirements have ceased to be met or that they might not be met in the future. ARTICLE III. Prospectuses and Proxy Statements; Voting 3.1. At least annually, the Distributor shall provide FirstGWL&A and Schwab with as many copies of the Fund's current prospectus for the Designated Portfolio(s) as FirstGWL&A and Schwab may reasonably request for marketing purposes (including distribution to Contractowners with respect to new sales of a Contract). If requested by FirstGWL&A in lieu thereof, the Distributor or Fund shall provide such documentation (including a camera-ready copy and computer diskette of the current prospectus for the Designated Portfolio(s)) and other assistance as is reasonably necessary in order for FirstGWL&A once each year (or more frequently if the prospectuses for the Designated Portfolio(s) are amended) to have the prospectus for the Contracts and the Fund's prospectus for the Designated Portfolio(s) printed together in one document. The Fund and Adviser agree that the prospectuses (and semi-annual and annual reports) for the Designated Portfolio(s) will describe only the Designated Portfolio(s) and will not name or describe any other portfolios or series that may be in the Fund unless required by law. 3.2. If applicable state or federal laws or regulations require that the Statement of Additional Information ("SAI") for the Fund be distributed to all existing and prospective Contractowners, then the Fund and/or the Distributor shall provide FirstGWL&A with copies of the Fund's SAI or documentation thereof for the Designated Portfolio(s) in such quantities, with expenses to be borne in accordance with Schedule E hereof, as FirstGWL&A may reasonably require to permit timely distribution thereof to said Contractowners. The Distributor and/or the Fund shall also provide SAIs to any Contractowner or prospective owner who requests such SAI from the Fund (although it is anticipated that such requests will be made to FirstGWL&A or Schwab). 3.3. The Fund and/or the Distributor shall provide FirstGWL&A and Schwab with copies of the Designated Portfolio's proxy material, reports to stockholders and other communications to stockholders for the Designated Portfolio(s) in such quantity, with expenses to be borne in accordance with Schedule E hereof, as FirstGWL&A may reasonably require to permit timely distribution thereof to Contractowners. 3.4. It is understood and agreed that, except with respect to information regarding FirstGWL&A or Schwab provided in writing by that party, neither FirstGWL&A nor Schwab are responsible for the content of the prospectus or SAI for the Designated Portfolio(s). It is also understood and agreed that, except with respect to information regarding the Fund, the Distributor, Adviser or the Designated Portfolio(s) provided in writing by the Fund, the Distributor or Adviser, neither the Fund, the Distributor nor Adviser are responsible for the content of the prospectus or SAI for the Contracts. 3.5. If and to the extent required by law FirstGWL&A shall: (i) solicit voting instructions from Contractowners; (ii) vote the Designated Portfolio(s) shares in accordance with instructions received from Contractowners: and (iii)vote Designated Portfolio shares for which no instructions have been received in the same proportion as Designated Portfolio(s) shares for which instructions have been received from Contractowners, so long as and to the extent that the SEC continues to interpret the 1940 Act to require pass-through voting privileges for variable contract owners. FirstGWL&A reserves the right to vote Fund shares held in any segregated asset account in its own right, to the extent permitted by law. 3.6. FirstGWL&A shall be responsible for assuring that each of its separate accounts holding shares of a Designated Portfolio calculates voting privileges as directed by the Fund and as agreed to by FirstGWL&A and the Fund. The Fund agrees to promptly notify FirstGWL&A of any changes of interpretations or amendments of the Mixed and Shared Funding Exemptive Order. 3.7. The Fund will comply with all provisions of the 1940 Act requiring voting by shareholders, and in particular the Fund will either provide for annual meetings (except insofar as the SEC may interpret Section 16 of the 1940 Act not to require such meetings) or, as the Fund currently intends, comply with Section 16(c) of the 1940 Act (although the Fund is not one of the trusts described in Section 16(c) of that Act) as well as with Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in accordance with the SEC's interpretation of the requirements of Section 16(a) with respect to periodic elections of directors or trustees and with whatever rules the Commission may promulgate with respect thereto. ARTICLE IV. Sales Material and Information 4.1. FirstGWL&A and Schwab shall furnish, or shall cause to be furnished, to the Distributor or its designee, a copy of each piece of sales literature or other promotional material that FirstGWL&A or Schwab, respectively, develops or proposes to use and in which the Fund (or a Portfolio thereof), its Adviser or one of its sub-advisers or the Distributor is named in connection with the Contracts, at least ten (10) Business Days prior to its use. No such material shall be used if the Fund objects to such use within five (5) Business Days after receipt of such material. 4.2. FirstGWL&A and Schwab shall not give any information or make any representations or statements on behalf of or concerning the Fund, any Designated Portfolio, the Distributor or the Adviser in connection with the sale of the Contracts other than the information or representations contained in the registration statement or prospectus for the Fund shares, as such registration statement and prospectus may be amended or sup- plemented from time to time, or in reports or proxy statements for the Fund, or in sales literature or other promotional material approved by the Fund or by the Distributor, except with the permission of the Fund or the Distributor. 4.3. The Fund or the Distributor shall furnish, or shall cause to be furnished, to FirstGWL&A and Schwab, a copy of each piece of sales literature or other promotional material in which FirstGWL&A and/or its separate account(s), or Schwab is named at least ten (10) Business Days prior to its use. No such material shall be used if FirstGWL&A or Schwab objects to such use within five (5) Business Days after receipt of such material. 4.4. The Fund, the Distributor, and the Adviser shall not give any information or make any representations on behalf of FirstGWL&A or concerning FirstGWL&A, the Account, or the Contracts other than the information or representations contained in a registration statement or prospectus for the Contracts, as such registration statement and prospectus may be amended or supplemented from time to time, or in reports for the Account, or in sales literature or other promotional material approved by FirstGWL&A or its designee, except with the permission of FirstGWL&A. 4.5. FirstGWL&A, the Fund, the Distributor and the Adviser shall not give any information or make any representations on behalf of or concerning Schwab, or use Schwab's name except with the permission of Schwab. 4.6. The Fund will provide to FirstGWL&A and Schwab at least one complete copy of all registration statements, prospectuses, SAIs, reports, proxy statements, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Designated Portfolio(s), contemporaneously with the filing of such document(s) with the SEC or NASD or other regulatory authorities. The Fund will also provide at least one complete copy of all sales literature and other promotional materials which includes discussion of Schwab and/or the Contracts and/or FirstGWL&A. 4.7. FirstGWL&A or Schwab will provide to the Fund at least one complete copy of all registration statements, prospectuses, SAIs, reports, solicitations for voting instructions, sales literature and other promotional materials, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Contracts or the Account, contemporaneously with the filing of such document(s) with the SEC, NASD, or other regulatory authority. 4.8. For purposes of Articles IV and VIII, the phrase "sales literature and other promotional material" includes, but is not limited to, advertisements (such as material published, or designed for use in, a newspaper, magazine, or other periodical, radio, television, telephone or tape recording, videotape display, signs or billboards, motion pictures, or other public media; e.g., on-line networks such as the Internet or other electronic media), sales literature (i.e., any written communication distributed or made generally available to customers or the public, including brochures, circulars, research reports, market letters, form letters, seminar texts, reprints or excerpts of any other advertisement, sales literature, or published article), educational or training materials or other communications distributed or made generally available to some or all agents or employees, and registration statements, prospectuses, SAIs, shareholder reports, and proxy materials and any other material constituting sales literature or advertising under the NASD rules, 1933 Act or the 1940 Act. 4.9. At the request of any party to this Agreement, each other party will make available to the other party's independent auditors and/or representative of the appropriate regulatory agencies, all records, data and access to operating procedures that may be reasonably requested in connection with compliance and regulatory requirements related to this Agreement or any party's obligations under this Agreement. ARTICLE V. Fees and Expenses 5.1. The Fund, Distributor and Adviser shall pay no fee or other compensation to FirstGWL&A under this Agreement, and FirstGWL&A shall pay no fee or other compensation to the Fund, Distributor or Adviser under this Agreement, although the parties hereto will bear certain expenses in accordance with Schedule E, Articles III, V, and other provisions of this Agreement. 5.2. All expenses incident to performance by the Fund, the Adviser and the Distributor under this Agreement shall be paid by the appropriate party, as further provided in Schedule E. The Fund or Distributor shall see to it that all shares of the Designated Portfolio(s) are registered and authorized for issuance in accordance with applicable federal law and, if and to the extent required, in accordance with applicable state laws prior to their sale. 5.3. The parties shall bear the expenses of routine annual distribution (mailing costs) of the Fund's prospectus and distribution (mailing costs) of the Fund's proxy materials and reports to owners of Contracts offered by FirstGWL&A, in accordance with Schedule E. 5.4. The Fund, the Distributor and the Adviser acknowledge that a principal fea- ture of the Contracts is the Contractowner's ability to choose from a number of unaffiliated mutual funds (and portfolios or series thereof), including the Designated Portfolio(s) and the Unaffiliated Funds, and to transfer the Contract's cash value between funds and portfolios. The Fund, the Distributor and the Adviser agree to cooperate with FirstGWL&A and Schwab in facilitating the operation of the Account and the Contracts as intended, including but not limited to cooperation in facilitating transfers between Unaffiliated Funds. 5.5. Schwab agrees to provide certain administrative services, specified in Schedule C attached hereto and incorporated herein by reference, in connection with the arrangements contemplated by this Agreement. The parties acknowledge and agree that the services referred to in this Section 5.5 are recordkeeping, shareholder communication, and other transaction facilitation and processing, and related administrative services only and are not the services of an underwriter or a principal underwriter of the Fund and that Schwab is not an underwriter for the shares of the Designated Portfolio(s), within the meaning of the 1933 Act or the 1940 Act. 5.6. As compensation for the services specified in Schedule C hereto, the Adviser agrees to pay Schwab a monthly Administrative Service Fee based on the percentage per annum on Schedule C hereto applied to the average daily value of the shares of the Designated Portfolio(s) held in the Account with respect to Contracts sold by Schwab. This monthly Administrative Service Fee is due and payable before the 15th (fifteenth) day following the last day of the month to which it relates. ARTICLE VI. Diversification and Qualification 6.1. The Fund, the Adviser and the Distributor represent and warrant that the Fund will at all times sell its shares and invest its assets in such a manner as to ensure that the Contracts will be treated as annuity contracts under the Code, and the regulations issued thereunder. Without limiting the scope of the foregoing, the Fund, Distributor and Adviser represent and warrant that the Fund and each Designated Portfolio thereof will at all times comply with Section 817(h) of the Code and Treasury Regulation 1.817-5, as amended from time to time, and any Treasury interpretations thereof, relating to the diversification requirements for variable annuity, endowment, or life insurance contracts and any amendments or other modifications or successor provisions to such Section or Regulations. The Fund and the Distributor agree that shares of the Designated Portfolio(s) will be sold only to Participating Insurance Companies and their separate accounts. 6.2. No shares of any Designated Portfolio of the Fund will be sold to the general public. 6.3. The Fund, the Distributor and the Adviser represent and warrant that the Fund and each Designated Portfolio is currently qualified as a Regulated Investment Company under Subchapter M of the Code, and that each Designated Portfolio will maintain such qualification (under Subchapter M or any successor or similar provisions) as long as this Agreement is in effect. 6.4. The Fund, the Distributor or the Adviser will notify FirstGWL&A immediately upon having a reasonable basis for believing that the Fund or any Designated Portfolio has ceased to comply with the aforesaid Section 817(h) diversification or Subchapter M qualification requirements or might not so comply in the future. 6.5. Without in any way limiting the effect of Sections 8.3, 8.4 and 8.5 hereof and without in any way limiting or restricting any other remedies available to FirstGWL&A or Schwab, the Adviser or the Distributor will pay all costs associated with or arising out of any failure, or any anticipated or reasonably foreseeable failure, of the Fund or any Designated Portfolio to comply with Sections 6.1, 6.2, or 6.3 hereof, including all costs associated with reasonable and appropriate corrections or responses to any such failure; such costs may include, but are not limited to, the costs involved in creating, organizing, and registering a new investment company as a funding medium for the Contracts and/or the costs of obtaining whatever regulatory authorizations are required to substitute shares of another investment company for those of the failed Portfolio (including but not limited to an order pursuant to Section 26(b) of the 1940 Act); such costs are to include, but are not limited to, fees and expenses of legal counsel and other advisors to FirstGWL&A and any federal income taxes or tax penalties and interest thereon (or "toll charges" or exactments or amounts paid in settlement) incurred by FirstGWL&A with respect to itself or owners of its Contracts in connection with any such failure or anticipated or reasonably foreseeable failure. 6.6. The Fund at the Fund's expense shall provide FirstGWL&A or its designee with reports certifying compliance with the aforesaid Section 817(h) diversification and Subchapter M qualification requirements, at the times provided for and substantially in the form attached hereto as Schedule D and incorporated herein by reference; provided, however, that providing such reports does not relieve the Fund of its responsibility for such compliance or of its liability for any non-compliance. 6.7. FirstGWL&A agrees that if the Internal Revenue Service ("IRS") asserts in writing in connection with any governmental audit or review of FirstGWL&A or, to FirstGWL&A's knowledge, or any Contractowner that any Designated Portfolio has failed to comply with the diversification requirements of Section 817(h) of the Code or FirstGWL&A otherwise becomes aware of any facts that could give rise to any claim against the Fund, the Adviser or the Distributor as a result of such a failure or alleged failure: (a) FirstGWL&A shall promptly notify the Fund, the Adviser and the Distributor of such assertion or potential claim; (b) FirstGWL&A shall consult with the Fund, the Adviser and the Distributor as to how to minimize any liability that may arise as a result of such failure or alleged failure; (c) FirstGWL&A shall use its best efforts to minimize any liability of the Fund, the Adviser and the Distributor resulting from such failure, including, without limitation, demonstrating, pursuant to Treasury Regulations, Section 1.817-5(a)(2), to the commissioner of the IRS that such failure was inadvertent; (d) any written materials to be submitted by FirstGWL&A to the IRS, any Contractowner or any other claimant in connection with any of the foregoing proceedings or contests (including, without limitation, any such materials to be submitted to the IRS pursuant to Treasury Regulations, Section 1.817-5(a)(2)) shall be provided by FirstGWL&A to the Fund, the Distributor and the Adviser (together with any supporting information or analysis) within at least two (2) business days prior to submission; (e) FirstGWL&A shall provide the Fund, the Distributor and the Adviser with such cooperation as the Fund, the Distributor and the Adviser shall reasonably request (including, without limitation, by permitting the Fund, the Distributor and the Adviser to review the relevant books and records of FirstGWL&A) in order to facilitate review by the Fund, the Distributor and the Adviser of any written submissions provided to it or its assessment of the validity or amount of any claim against it arising from such failure or alleged failure; (f) FirstGWL&A shall not with respect to any claim of the IRS or any Contractowner that would give rise to a claim against the Fund, the Distributor and the Adviser (i) compromise or settle any claim, (ii) accept any adjustment on audit, or (iii) forego any allowable administrative or judicial appeals, without the express written consent of the Fund, the Distributor and the Adviser, which shall not be unreasonably withheld; provided that, FirstGWL&A shall not be required to appeal any adverse judicial decision unless the Fund, the Distributor and the Adviser shall have provided an opinion of independent counsel to the effect that a reasonable basis exists for taking such appeal; and further provided that the Fund, the Distributor and the Adviser shall bear the costs and expenses, including reasonable attorney's fees, incurred by FirstGWL&A in complying with this clause (f). ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order 7.1. The Board will monitor the Fund for the existence of any material irreconcilable conflict between the interests of the contract owners of all separate accounts investing in the Fund. An irreconcilable material conflict may arise for a variety of reasons, including: (a) an action by any state insurance regulatory authority; (b) a change in applicable federal or state insurance, tax, or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretative letter, or any similar action by insurance, tax, or securities regulatory authorities; (c) an administrative or judicial decision in any relevant proceeding; (d) the manner in which the investments of any Portfolio are being managed; (e) a difference in voting instructions given by variable annuity contract and variable life insurance contract owners or by contract owners of different Participating Insurance Companies; or (f) a decision by a Participating Insurance Company to disregard the voting instructions of contract owners. The Board shall promptly inform FirstGWL&A if it determines that an irreconcilable material conflict exists and the implications thereof. 7.2. FirstGWL&A will report any potential or existing conflicts of which it is aware to the Board. FirstGWL&A will assist the Board in carrying out its responsibilities under the Mixed and Shared Funding Exemptive Order, by providing the Board with all information reasonably necessary for the Board to consider any issues raised. This includes, but is not limited to, an obligation by FirstGWL&A to inform the Board whenever contract owner voting instructions are to be disregarded. Such responsibilities shall be carried out by FirstGWL&A with a view only to the interests of its Contractowners. 7.3. If it is determined by a majority of the Board, or a majority of its directors who are not interested persons of the Fund, the Distributor, the Adviser or any sub-adviser to any of the Designated Portfolios (the "Independent Directors"), that a material irreconcilable conflict exists, FirstGWL&A and other Participating Insurance Companies shall, at their expense and to the extent reasonably practicable (as determined by a majority of the Independent Directors), take whatever steps are necessary to remedy or eliminate the irreconcilable material conflict, up to and including: (1) withdrawing the assets allocable to some or all of the separate accounts from the Fund or any Designated Portfolio and reinvesting such assets in a different investment medium, including (but not limited to) another portfolio of the Fund, or submitting the question whether such segregation should be implemented to a vote of all affected contract owners and, as appropriate, segregating the assets of any appropriate group (i.e., annuity contract owners, life insurance contract owners, or variable contract owners of one or more Participating Insurance Companies) that votes in favor of such segregation, or offering to the affected contract owners the option of making such a change; and (2) establishing a new registered management investment company or managed separate account. 7.4. If a material irreconcilable conflict arises because of a decision by FirstGWL&A to disregard contract owner voting instructions and that decision represents a minority position or would preclude a majority vote, FirstGWL&A may be required, at the Fund's election, to withdraw the Account's investment in the Fund and terminate this Agreement; provided, however that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the Independent Directors. Any such withdrawal and termination must take place within six (6) months after the Fund gives written notice that this provision is being implemented, and until the end of that six month period the Distributor and the Fund shall continue to accept and implement orders by FirstGWL&A for the purchase (and redemption) of shares of the Fund. 7.5. If a material irreconcilable conflict arises because a particular state insurance regulator's decision applicable to FirstGWL&A conflicts with the majority of other state regulators, then FirstGWL&A will withdraw the Account's investment in the Fund and terminate this Agreement within six months after the Board informs FirstGWL&A in writing that it has determined that such decision has created an irreconcilable material conflict; provided, however, that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the disinterested members of the Board. Until the end of the foregoing six month period, the Fund, Distributor and Adviser shall continue to accept and implement orders by FirstGWL&A for the purchase (and redemption) of shares of the Fund. 7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority of the Independent Directors shall determine whether any proposed action adequately remedies any irreconcilable material conflict, but in no event will the Fund be required to establish a new funding medium for the Contracts. FirstGWL&A shall not be required by Section 7.3 to establish a new funding medium for the Contracts if an offer to do so has been declined by vote of a majority of Contractowners affected by the irreconcilable material conflict. In the event that the Board determines that any proposed action does not adequately remedy any irreconcilable material conflict, then FirstGWL&A will withdraw the Account's investment in the Fund and terminate this Agreement within six (6) months after the Board informs FirstGWL&A in writing of the foregoing determination; provided, however, that such withdrawal and termination shall be limited to the extent required by any such material irreconcilable conflict as determined by a majority of the Independent Directors. 7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act or the rules promulgated thereunder with respect to mixed or shared funding (as defined in the Mixed and Shared Funding Exemptive Order) on terms and conditions materially different from those contained in the Mixed and Shared Funding Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies, as appropriate, shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable: and (b) Sections 3.5, 3.6, 3.7, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall continue in effect only to the extent that terms and con- ditions substantially identical to such Sections are contained in such Rule(s) as so amended or adopted. ARTICLE VIII. Indemnification 8.1. Indemnification By FirstGWL&A 8.1(a). FirstGWL&A agrees to indemnify and hold harmless the Fund, the Distributor and the Adviser and each of their officers and directors or trustees and each person, if any, who controls the Fund, Distributor or Adviser within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.1) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of FirstGWL&A) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in the registration statement or pro- spectus or SAI covering the Contracts or contained in the Contracts or sales literature for the Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or nec- essary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser, Distributor or Fund for use in the registration statement or prospectus for the Contracts or in the Contracts or sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, pro- spectus or sales literature of the Fund not supplied by FirstGWL&A or persons under its control) or wrongful conduct of FirstGWL&A or persons under its control, with respect to the sale or distribution of the Contracts or Fund Shares; or (iii)arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, or sales literature of the Fund, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such a statement or omission was made in reliance upon information furnished in writing to the Fund by or on behalf of FirstGWL&A; or (iv) arise as a result of any failure by FirstGWL&A to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by FirstGWL&A in this Agreement or arise out of or result from any other material breach of this Agreement by FirstGWL&A, including without limitation Section 2.11 and Section 6.7 hereof, as limited by and in accordance with the provisions of Sections 8.1(b) and 8.1(c) hereof. 8.1(b). FirstGWL&A shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.1(c) FirstGWL&A shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified FirstGWL&A in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify FirstGWL&A of any such claim shall not relieve FirstGWL&A from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that FirstGWL&A has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, FirstGWL&A shall be entitled to participate, at its own expense, in the defense of such action. FirstGWL&A also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from FirstGWL&A to such party of FirstGWL&A's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and FirstGWL&A will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.1(d). The Indemnified Parties will promptly notify FirstGWL&A of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund. 8.2. Indemnification by Schwab 8.2(a). Schwab agrees to indemnify and hold harmless the Fund, the Distributor and the Adviser and each of their officers and directors or trustees and each person, if any, who controls the Fund, Distributor or Adviser within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.2) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of Schwab) or litigation (including reasonable legal and other expenses), to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acqu- isition of the Fund's shares or the Contracts and: (i) arise out of Schwab's dissemination of information regarding the Fund, the Adviser or the Distributor that is both (A) materially incorrect and (B) that was neither contained in the Fund's registration statement or sales literature nor other promotional material of the Fund prepared by the Fund or provided in writing to Schwab, or approved in writing, by or on behalf of the Fund, the Distributor or the Adviser; or (ii) arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in sales literature or other promotional material prepared by Schwab for the Contracts or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser, the Distributor or Fund for use in the registra- tion statement or prospectus for the Contracts or in the Contracts or sales literature (or any amendment or supplement) or otherwise for use in connec- tion with the sale of the Contracts; or (iii)arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus or sales literature of the Fund not supplied by Schwab or persons under its control) or wrongful conduct of Schwab or persons under its control, with respect to the sale or distribution of the Contracts; or (iv) arise as a result of any failure by Schwab to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by Schwab in this Agreement or arise out of or result from any other material breach of this Agreement by Schwab; as limited by and in accordance with the provisions of Sections 8.2(b) and 8.2(c) hereof. 8.2(b). Schwab shall not be liable under this indemnification provision with respect to any losses, claims, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.2(c). Schwab shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified Schwab in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify Schwab of any such claim shall not relieve Schwab from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that Schwab has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, Schwab shall be entitled to participate, at its own expense, in the defense of such action. Schwab also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from Schwab to such party of Schwab's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and Schwab will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.2(d). The Indemnified Parties will promptly notify Schwab of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund. 8.3. Indemnification by the Adviser 8.3(a). The Adviser agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their directors and officers and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.3) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Adviser) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Fund, Adviser or the Distributor (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information fur- nished in writing to the Adviser, the Distributor or the Fund by or on behalf of FirstGWL&A or Schwab for use in the registration statement or prospectus for the Fund or in sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or the Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI or sales literature or other promotional material for the Contracts not supplied by the Adviser or persons under its control) or wrongful conduct of the Fund, the Distributor or Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or (iii)arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, or sales literature covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser, the Distributor or the Fund; or (iv) arise as a result of any failure by the Fund or the Adviser to provide the services and furnish the materials under the terms of this Agreement (in- cluding a failure, whether unintentional or in good faith or otherwise, to com- ply with the diversification and other qualification requirements specified in Article VI of this Agreement); or (v) arise out of or result from any material breach of any representation and/or warranty made by the Fund, the Adviser or the Distributor in this Agreement or arise out of or result from any other material breach of this Agreement by the Adviser, the Fund or the Distributor; or (vi) arise out of or result from the incorrect or untimely calculation or reporting of the daily net asset value per share or dividend or capital gain distribution rate; as limited by and in accordance with the provisions of Sections 8.3(b) and 8.3(c) hereof. This indemnification is in addition to and apart from the responsibilities and obligations of the Adviser specified in Article VI hereof. 8.3(b). The Adviser shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.3(c). The Adviser shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Adviser in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Adviser of any such claim shall not relieve the Adviser from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Adviser has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Adviser will be entitled to participate, at its own expense, in the defense thereof. The Adviser also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Adviser to such party of the Adviser's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Adviser will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.3(d).FirstGWL&A and Schwab agree promptly to notify the Adviser of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the Agreement, the issuance or sale of the Contracts or the operation of the Account or the sale or acquisition of shares of the Designated Portfolios. 8.4. Indemnification By the Fund 8.4(a).The Fund agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their directors and officers and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.4) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Fund) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may be required to pay or become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements, are related to the operations of the Fund and: (i) arise as a result of any failure by the Fund to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agree- ment); or (ii) arise out of or result from any material breach of any representation and/or warranty made by the Fund in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund; as limited by and in accordance with the provisions of Sections 8.4(b) and 8.4(c) hereof. 8.4(b). The Fund shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.4(c). The Fund shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Fund in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Fund of any such claim shall not relieve it from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Fund has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Fund will be entitled to participate, at its own expense, in the defense thereof. The Fund shall also be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Fund to such party of the Fund's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Fund will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.4(d). FirstGWL&A and Schwab each agree promptly to notify the Fund of the commencement of any litigation or proceeding against itself or any of its respective officers or directors in connection with the Agreement, the issuance or sale of the Contracts, the operation of the Account, or the sale or acquisition of shares of the Fund. 8.5. Indemnification by the Distributor 8.5(a).The Distributor agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their directors and officers and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.5) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Distributor) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the contracts and: (i) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Fund, Adviser or Distributor (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information fur- nished in writing to the Adviser, the Distributor or Fund by or on behalf of FirstGWL&A or Schwab for use in the registration statement or SAI or prospectus for the Fund or in sales literature or other promotional material (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI, sales literature or other promotional material for the Contracts not supplied by the Distributor or persons under its control) or wrongful conduct of the Fund, the Distributor or Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or (iii)arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, sales literature or other promotional material covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Distributor or Fund; or (iv) arise as a result of any failure by the Fund or Distributor to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or (v) arise out of or result from any material breach of any representation and/or warranty made by the Fund or Distributor in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund or Distributor; as limited by and in accordance with the provisions of Sections 8.5(b) and 8.5(c) hereof. This indemnification is in addition to and apart from the responsibilities and obligations of the Distributor specified in Article VI hereof. 8.5(b).The Distributor shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance or such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.5(c)The Distributor shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Distributor in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Distributor of any such claim shall not relieve the Distributor from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Distributor has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Distributor will be entitled to participate, at its own expense, in the defense thereof. The Distributor also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Distributor to such party of the Distributor's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Distributor will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.5(d)FirstGWL&A and Schwab agree to promptly notify the Distributor of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Account. ARTICLE IX. Applicable Law 9.1. This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the State of New York, without regard to the New York Conflict of Laws provisions. 9.2. This Agreement shall be subject to the provisions of the 1933, 1934 and 1940 Acts, and the rules and regulations and rulings thereunder, including such exemptions from those statutes, rules and regulations as the Securities and Exchange Commission may grant (including, but not limited to, the Mixed and Shared Funding Exemptive Order) and the terms hereof shall be interpreted and construed in accordance therewith. ARTICLE X. Termination 10.1.This Agreement shall terminate: (a) at the option of any party, with or without cause, with respect to some or all Portfolios, upon six (6) months advance written notice delivered to the other parties; provided, however, that such notice shall not be given earlier than six (6) months following the date of this Agreement; or (b) at the option of FirstGWL&A or Schwab by written notice to the other parties with respect to any Portfolio based upon FirstGWL&A's or Schwab's determination that shares of such Portfolio are not reasonably available to meet the requirements of the Contracts; or (c) at the option of FirstGWL&A or Schwab by written notice to the other parties with respect to any Portfolio in the event any of the Portfolio's shares 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 FirstGWL&A; or (d) at the option of the Fund, Adviser or Distributor in the event that formal administrative proceedings are instituted against FirstGWL&A or Schwab by the NASD, the SEC, the Insurance Commissioner or like official of any state or any other regulatory body regarding FirstGWL&A's or Schwab's duties under this Agreement or related to the sale of the Contracts, the operation of any Account, or the purchase of the Fund shares, if, in each case, the Fund reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of FirstGWL&A or Schwab to perform its obligations under this Agreement; or (e) at the option of FirstGWL&A or Schwab in the event that formal administrative proceedings are instituted against the Fund, the Distributor or Adviser by the NASD, the SEC, or any state securities or insurance department or any other regulatory body, if Schwab or FirstGWL&A reasonably 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 Fund, the Distributor or Adviser to perform their obligations under this Agreement; or (f) at the option of FirstGWL&A by written notice to the Fund with respect to any Portfolio if FirstGWL&A reasonably believes that the Portfolio will fail to meet the Section 817(h) diversification requirements or Subchapter M qualifications specified in Article VI hereof; or (g) at the option of either the Fund, the Distributor or the Adviser, if (i) the Fund or Adviser, respectively, shall determine, in their sole judgment reasonably exercised in good faith, that either FirstGWL&A or Schwab has suffered a material adverse change in their business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on FirstGWL&A's or Schwab's ability to perform its obligations under this Agreement, (ii) the Fund, the Distributor or Adviser notifies FirstGWL&A or Schwab, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by FirstGWL&A or Schwab and any other changes in circumstances since the giving of such a notice, the determination of the Fund, the Distributor or Adviser shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or (h) at the option of either FirstGWL&A or Schwab, if (i) FirstGWL&A or Schwab, respectively, shall determine, in its sole judgment reasonably exercised in good faith, that either the Fund, the Distributor or the Adviser has suffered a material adverse change in its business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on the Fund's, the Distributor's or Adviser's ability to perform its obligations under this Agreement, (ii) FirstGWL&A or Schwab notifies the Fund, the Distributor or Adviser, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by the Fund, the Distributor or Adviser and any other changes in circumstances since the giving of such a notice, the determination of FirstGWL&A or Schwab shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or (i) at the option of FirstGWL&A in the event that formal administrative proceedings are instituted against Schwab by the NASD, the Securities and Exchange Commission, or any state securities or insurance department or any other regulatory body regarding Schwab's duties under this Agreement or related to the sale of the Fund's shares or the Contracts, the operation of any Account, or the purchase of the Fund shares, provided, however, that FirstGWL&A determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of Schwab to perform its obligations related to the Contracts; or (j) at the option of Schwab in the event that formal administrative proceedings are instituted against FirstGWL&A by the NASD, the Securities and Exchange Commission, or any state securities or insurance department or any other regulatory body regarding FirstGWL&A's duties under this Agreement or related to the sale of the Fund's shares or the Contracts, the operation of any Account, or the purchase of the Fund shares, provided, however, that Schwab determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of FirstGWL&A to perform its obligations related to the Contracts; or (k) at the option of any non-defaulting party hereto in the event of a material breach of this Agreement by any party hereto (the "defaulting party") other than as described in 10.1(a)-(j); provided, that the non-defaulting party gives written notice thereof to the defaulting party, with copies of such notice to all other non-defaulting parties, and if such breach shall not have been remedied within thirty (30) days after such written notice is given, then the non- defaulting party giving such written notice may terminate this Agreement by giving thirty (30) days written notice of termination to the defaulting party. 10.2.Notice Requirement. No termination of this Agreement shall be effective unless and until the party terminating this Agreement gives prior written notice to all other parties of its intent to terminate, which notice shall set forth the basis for the termination. Furthermore, (a) in the event any termination is based upon the provisions of Article VII, or the provisions of Section 10.1(a), 10.1(g) or 10.1(h) of this Agreement, the prior written notice shall be given in advance of the effective date of termination as required by those provisions unless such notice period is shortened by mutual written agreement of the parties; (b) in the event any termination is based upon the provisions of Section 10.1(d), 10.1(e), 10.1 (i) or 10.1(j) of this Agreement, the prior written notice shall be given at least sixty (60) days before the effective date of termination; and (c) in the event any termination is based upon the provisions of Section 10.1(b), 10.1(c) or 10.1(f), the prior written notice shall be given in advance of the effective date of termination, which date shall be determined by the party sending the notice. 10.3.Effect of Termination. Notwithstanding any termination of this Agreement, other than as a result of a failure by either the Fund or FirstGWL&A to meet Section 817(h) of the Code diversification requirements, the Fund, the Adviser and the Distributor shall, at the option of FirstGWL&A or Schwab, continue to make available additional shares of the Designated Portfolio(s) pursuant to the terms and conditions of this Agreement, for all Contracts in effect on the effective date of termination of this Agreement (hereinafter referred to as "Existing Contracts") unless such further sale of the Fund's shares is proscribed by the SEC, the NASD or other regulatory body. Specifically, without limitation, the owners of the Existing Contracts shall be permitted to reallocate investments in the Designated Portfolio(s), redeem investments in the Designated Portfolio(s) and/or invest in the Designated Portfolio(s) upon the making of additional purchase payments under the Existing Contracts. The parties agree that this Section 10.3 shall not apply to any terminations under Article VII and the effect of such Article VII terminations shall be governed by Article VII of this Agreement. 10.4.Surviving Provisions. Notwithstanding any termination of this Agreement, each party's obligations under Article VIII to indemnify other parties shall survive and not be affected by any termination of this Agreement. In addition, with respect to Existing Contracts, all provisions of this Agreement shall also survive and not be affected by any termination of this Agreement, with the exception of Section 3.1; provided, however, that the Distributor will continue to provide the requisite number of prospectuses, SAIs, annual and semi-annual reports for purposes of Existing Contracts. 10.5.Survival of Agreement. A termination by Schwab shall terminate this Agreement only as to Schwab, and this Agreement shall remain in effect as to the other par- ties; provided, however, that in the event of a termination by Schwab the other parties shall have the option to terminate this Agreement upon 60 (sixty) days notice, rather than the six (6) months specified in Section 10.1(a). ARTICLE XI. Notices Any notice shall be sufficiently given when sent by registered or certified mail to the other party at the address of such party set forth below or at such other address as such party may from time to time specify in writing to the other party. If to the Fund: Strong Variable Insurance Funds, Inc. 100 Heritage Reserve Menomonee Falls, WI 53151 Attention: General Counsel If to FirstGWL&A: First Great-West Life & Annuity Insurance Company 8515 East Orchard Road Englewood, CO 80111 Attention: Assistant Vice President, Savings Products If to the Adviser: Strong Capital Management, Inc. 100 Heritage Reserve Menomonee Falls, WI 53151 Attention: General Counsel If to the Distributor: Strong Funds Distributors, Inc. 100 Heritage Reserve Menomonee Falls, WI 53151 Attention: General Counsel If to Schwab: Charles Schwab & Co., Inc. 101 Montgomery Street San Francisco, CA 94104 Attention: General Counsel ARTICLE XII. Miscellaneous 12.1.Subject to the requirements of legal process and regulatory authority, each party hereto shall treat as confidential the names and addresses of the owners of the Contracts and all information reasonably identified as confidential in writing by any other party hereto and, except as permitted by this Agreement, shall not disclose, disseminate or utilize such names and addresses and other confidential information without the express written consent of the affected party until such time as such information may come into the public domain. Without limiting the foregoing, no party hereto shall disclose any information that the parties mutually agree is proprietary. 12.2.The captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provisions hereof or otherwise affect their construction or effect. 12.3.This Agreement may be executed simultaneously in two or more counterparts, each of which taken together shall constitute one and the same instrument. 12.4.If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby. 12.5.Each party hereto shall cooperate with each other party and all appropriate governmental authorities (including without limitation the SEC, the NASD and state insurance regulators) and shall permit such authorities reasonable access to its books and records in connection with any investigation or inquiry relating to this Agreement or the transactions contemplated hereby. Notwithstanding the generality of the foregoing, each party hereto further agrees to furnish the New York Insurance Commissioner with any information or reports in connection with services provided under this Agreement which such Commissioner may request in order to ascertain whether the variable annuity operations of FirstGWL&A are being conducted in a manner consistent with the New York Variable Annuity Regulations and any other applicable law or regulations. 12.6.Any controversy or claim arising out of or relating to this Agreement, or breach thereof, shall be settled by arbitration in a forum jointly selected by the relevant parties (but if applicable law requires some other forum, then such other forum) in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. 12.7.The rights, remedies and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies and obligations, at law or in equity, which the parties hereto are entitled to under state and federal laws. 12.8.This Agreement or any of the rights and obligations hereunder may not be assigned by any party without the prior written consent of all parties hereto. 12.9.Schwab and FirstGWL&A agree that the obligations assumed by the Fund and the Adviser pursuant to this Agreement shall be limited in any case to the Fund and Adviser and their respective assets and neither Schwab nor FirstGWL&A shall seek satisfaction of any such obligation from the shareholders of the Fund or the Adviser, the Directors, officers, employees or agents of the Fund or Adviser, or any of them, except to the extent permitted under this Agreement. 12.10.The Fund, Adviser and Distributor agree that the obligations assumed by FirstGWL&A and Schwab pursuant to this Agreement shall be limited in any case to FirstGWL&A and Schwab and their respective assets and neither the Fund, Distributor nor Adviser shall seek satisfaction of any such obligation from the shareholders of the FirstGWL&A or Schwab, the directors, officers, employees or agents of the FirstGWL&A or Schwab, or any of them, except to the extent permitted under this Agreement. 12.11.No provision of this Agreement may be deemed or construed to modify or supersede any contractual rights, duties, or indemnifications, as between the Distributor and the Fund, and as between the Adviser and the Fund. IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in its name and on its behalf by its duly authorized representative and its seal to be hereunder affixed hereto as of the date specified below. FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY By its authorized officer, By:/s/ Robert K. Shaw Title:Vice President, Marketing & Product Development Date:April 1, 1997 STRONG VARIABLE INSURANCE FUNDS, INC. By its authorized officer, By:/s/ Stephen Shenkenberg Title:Vice President Date:March 17, 1997 STRONG CAPITAL MANAGEMENT, INC. By its authorized officer, By:/s/ Rochelle Lamm Wallach Title:President, Strong Advisory Services (a division of Strong Capital Management, Inc. Date:March 17, 1997 STRONG FUNDS DISTRIBUTORS, INC. By its authorized officer, By:/s/ Stephen Shenkenberg Title:Vice President Date:March 17, 1997 CHARLES SCHWAB & CO., INC. By its authorized officer, By:/s/ Jeff Benton Title: Vice President, Annuities & Life Insurance Date:March 31, 1997 Schwab Variable Annuity SCHEDULE A Contracts Form Numbers First Great-West Life & Annuity Insurance Company Group Variable/Fixed Annuity Contract J434NY SCHEDULE B Designated Portfolios Strong Discovery Fund II SCHEDULE C Administrative Services To be performed by Charles Schwab & Co., Inc. A. Schwab will provide the properly registered and licensed personnel and systems needed for all customer servicing and support - for both fund and annuity information and questions - including: respond to Contractowner inquiries delivery of prospectus - both fund and annuity; entry of initial and subsequent orders; transfer of cash to insurance company and/or funds; explanations of fund objectives and characteristics; entry of transfers between funds; fund balance and allocation inquiries; mail fund prospectus. B. For the services, Schwab shall receive a fee of 0.25% per annum applied to the average daily value of the shares of the fund held by Schwab's customers, payable by the Adviser directly to Schwab, such payments being due and payable within 15 (fifteen) days after the last day of the month to which such payment relates. Adviser shall calculate and pay said fee. C. The Fund will calculate and Schwab will verify with FirstGWL&A the asset balance for each day on which the fee is to be paid pursuant to this Agreement with respect to each Designated Portfolio. D. Schwab will communicate all purchase, withdrawal, and exchange orders it receives from its customers to FirstGWL&A who will retransmit them to each fund. E. Schwab agrees to provide Adviser, by the 15th day of each month, with a report which indicates the number of Contractowners that hold through the Account beneficial interest in each Designated Portfolio, as of the last day of the prior month. SCHEDULE D Reports per Section 6.6 With regard to the reports relating to the quarterly testing of compliance with the requirements of Section 817(h) and Subchapter M under the Internal Revenue Code (the "Code") and the regulations thereunder, the Fund shall provide within twenty (20) Business Days of the close of the calendar quarter a report to FirstGWL&A in the Form D1 attached hereto and incorporated herein by reference, regarding the status under such sections of the Code of the Designated Portfolio(s), and if necessary, identification of any remedial action to be taken to remedy non-compliance. With regard to the reports relating to the year-end testing of compliance with the requirements of Subchapter M of the Code, referred to hereinafter as "RIC status," the Fund will provide the reports on the following basis: (i) the last quarter's quarterly reports can be supplied within the 20-day period, and (ii) a year-end report will be provided 45 days after the end of the calendar year. However, if a problem with regard to RIC status, as defined below, is identified in the third quarter report, on a weekly basis, starting the first week of December, additional interim reports will be provided specially addressing the problems identified in the third quarter report. If any interim report memorializes the cure of the problem, subsequent interim reports will not be required. A problem with regard to RIC status is defined as any violation of the following standards, as referenced to the applicable sections of the Code: (a) Less than ninety percent of gross income is derived from sources of income specified in Section 851(b)(2); (b) Thirty percent or greater gross income is derived from the sale or disposition of assets specified in Section 851(b)(3); (c) Less than fifty percent of the value of total assets consists of assets specified in Section 851(b)(4)(A); and (d) No more than twenty-five percent of the value of total assets is invested in the securities of one issuer, as that requirement is set forth in Section 851(b)(4)(B). FORM D1 CERTIFICATE OF COMPLIANCE I, , a duly authorized officer, director or agent of Fund hereby swear and affirm that Fund is in compliance with all requirements of Section 817(h) and Subchapter M of the Internal Revenue Code (the "Code") and the regulations thereunder as required in the Fund Participation Agreement among First Great-West Life & Annuity Insurance Company, Charles Schwab & Co., Inc. and other than the exceptions discussed below: Exceptions Remedial Action If no exception to report, please indicate "None." Signed this day of , . (Signature) By: (Type or Print Name and Title/Position) SCHEDULE E EXPENSES The Fund and/or Distributor and/or Adviser, and FirstGWL&A will coordinate the functions and pay the costs of the completing these functions based upon an allocation of costs in the tables below. Costs shall be allocated to reflect the Fund's share of the total costs determined according to the number of pages of the Fund's respective portions of the documents. Item Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Prospectus Printing of combined prospectuses FirstGWL&A Fund or Distributor, as applicable Distributor shall supply FirstGWL&A with such numbers of the Designated Portfolio(s) prospectus(es) as FirstGWL&A shall reasonably request FirstGWL&A Fund or Distributor, as applicable Distribution to New and Inforce Clients FirstGWL&A FirstGWL&A Distribution to Prospective Clients Schwab Schwab Product Prospectus Printing for Inforce Clients FirstGWL&A FirstGWL&A Printing for Prospective Clients FirstGWL&A Schwab Distribution to New and Inforce Clients FirstGWL&A FirstGWL&A Distribution to Prospective Clients Schwab SchwabMutual Fund Prospectus Update & Distribution If Required by Fund or Distributor Fund or Distributor Fund or Distributor If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab Schwab Schwab Product Prospectus Update & Distribution If Required by Fund or Distributor FirstGWL&A Fund or Distributor Item Function Party Responsible for Coordination Party Responsible for Expense If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab Schwab Schwab Mutual Fund SAI Printing (one copy to be provided by Distributor) Fund or Distributor Fund or Distributor Distribution/Copying FirstGWL&A FirstGWL&A Product SAI Printing FirstGWL&A FirstGWL&A Distribution FirstGWL&A FirstGWL&A Item Function Party Responsible for Coordination Party Responsible for Expense Proxy Material for Mutual Fund: Printing if proxy required by Law Fund or Distributor Fund orDistributor Distribution (including labor) if proxy required by Law FirstGWL&A Fund or Distributor Printing & distribution if required by FirstGWL&A FirstGWL&A FirstGWL&A Printing & distribution if required by Schwab FirstGWL&A Schwab Item Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Annual & Semi-Annual Report Printing of combined reports (for in-force clients) FirstGWL&A Fund or Distributor Distribution FirstGWL&A FirstGWL&A and Schwab Other communication to New and Prospective clients If Required by the Fund or Distributor Schwab Fund or Distributor If Required by FirstGWL&A Schwab FirstGWL&A Item Function Party Responsible for Coordination Party Responsible for Expense If Required by Schwab Schwab Schwab Other communication to inforce Distribution (including labor) if required by the Fund or Distributor FirstGWL&A Fund or Distributor If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab FirstGWL&A Schwab Item Function Party Responsible for Coordination Party Responsible for Expense Errors in Share Price calculation pursuant to Section 1.10 Cost of error to participants FirstGWL&A Fund or Adviser Cost of administrative work to correct error FirstGWL&A Fund or Adviser Operations of the Fund All operations and related expenses, including the cost of registration and qualification of shares, taxes on the issuance or transfer of shares, cost of management of the business affairs of the Fund, and expenses paid or assumed by the fund pursuant to any Rule 12b-1 plan Fund or Distributor Fund or Adviser Operations of the Account Federal registration of units of separate account (24f-2 fees) FirstGWL&A FirstGWL&A EX-8.13 20 EXHIBIT 8.13 FUND PARTICIPATION AGREEMENT Van Eck Worldwide Insurance Trust TABLE OF CONTENTS ARTICLE I. Sale of Fund Shares . . . . . . . . . . . . . . . .3 ARTICLE II. Representations and Warranties. . . . . . . . . . .7 ARTICLE III. Prospectuses and Proxy Statements; Voting . . . . 11 ARTICLE IV. Sales Material and Information. . . . . . . . . . 13 ARTICLE V. Fees and Expenses . . . . . . . . . . . . . . . . 16 ARTICLE VI. Diversification and Qualification . . . . . . . . 17 ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order . . . . 21 ARTICLE VIII.Indemnification . . . . . . . . . . . . . . . . . 24 ARTICLE IX. Applicable Law. . . . . . . . . . . . . . . . . . 35 ARTICLE X. Termination . . . . . . . . . . . . . . . . . . . 36 ARTICLE XI. Notices . . . . . . . . . . . . . . . . . . . . . 39 ARTICLE XII. Miscellaneous . . . . . . . . . . . . . . . . . . 40 SCHEDULE A Contracts . . . . . . . . . . . . . . . . . . . . 44 SCHEDULE B Designated Portfolios . . . . . . . . . . . . . . 45 SCHEDULE C Administrative Services . . . . . . . . . . . . . 46 SCHEDULE D Reports per Section 6.6 . . . . . . . . . . . . . 47 SCHEDULE E Expenses. . . . . . . . . . . . . . . . . . . . . 50 PARTICIPATION AGREEMENT Among FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY VAN ECK WORLDWIDE INSURANCE TRUST VAN ECK SECURITIES CORPORATION, VAN ECK ASSOCIATES CORPORATION and CHARLES SCHWAB & CO., INC. THIS AGREEMENT, made and entered into as of this ____ day of _______________, 1997 by and among FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY (hereinafter "FirstGWL&A"), a New York life insurance company, on its own behalf and on behalf of its Separate Account Variable Annuity-1 Series Account (the "Account"); VAN ECK WORLDWIDE INSURANCE, a business trust organized under the laws of Massachusetts (hereinafter the "Fund"); VAN ECK ASSOCIATES CORPORATION (hereinafter the "Adviser"), a corporation organized under the laws of Delaware; VAN ECK SECURITIES CORPORATION (the "Distributor"), a corporation organized under the laws of Delaware; and CHARLES SCHWAB & CO., INC., a California corporation (hereinafter "Schwab"). WHEREAS, the Fund engages in business as an open-end management investment company and is available to act as the investment vehicle for separate accounts established for variable life insurance policies and/or variable annuity contracts (collectively, the "Variable Insurance Products") to be offered by insurance companies, including FirstGWL&A, which have entered into participation agreements similar to this Agreement (hereinafter "Participating Insurance Companies"); and WHEREAS, the beneficial interest in the Fund is divided into several series of shares, each designated a "Portfolio" and representing the interest in a particular managed portfolio of securities and other assets; and WHEREAS, the Fund has obtained an order from the Securities and Exchange Commission (hereinafter the "SEC"), dated September 19, 1990 (File No. 811-5083), granting Participating Insurance Companies and variable annuity and variable life insurance separate accounts exemptions from the provisions of sections 9(a), 13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended, (hereinafter the "1940 Act") and Rules 6e- 2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Fund to be sold to and held by variable annuity and variable life insurance separate accounts of life insurance companies that may or may not be affiliated with one another (hereinafter the "Mixed and Shared Funding Exemptive Order"); and WHEREAS, the Fund is registered as an open-end management investment company under the 1940 Act and shares of the Portfolio(s) are registered under the Securities Act of 1933, as amended (hereinafter the "1933 Act"); and WHEREAS, the Adviser is duly registered as an investment adviser under the Investment Advisers Act of 1940, as amended, and any applicable state securities laws; and WHEREAS, the Distributor is duly registered as a broker-dealer under the Securities Exchange Act of 1934, as amended, (the "1934 Act") and is a member in good standing of the National Association of Securities Dealers, Inc. (the "NASD"); and WHEREAS, FirstGWL&A has registered or will register certain variable annuity contracts supported wholly or partially by the Account (the "Contracts") under the 1933 Act and said Contracts are listed in Schedule A attached hereto and incorporated herein by reference, as it may be amended from time to time by mutual written agreement; and WHEREAS, the Account is a duly organized, validly existing segregated asset account, established by resolution of the Board of Directors of FirstGWL&A on January 15, 1997, to set aside and invest assets attributable to the Contracts; and WHEREAS, FirstGWL&A has registered or will register the Account as a unit investment trust under the 1940 Act and has registered or will register the securities deemed to be issued by the Account under the 1933 Act; and WHEREAS, to the extent permitted by applicable insurance laws and regulations, FirstGWL&A intends to purchase shares in the Portfolio(s) listed in Schedule B attached hereto and incorporated herein by reference, as it may be amended from time to time by mutual written agreement (the "Designated Portfolio(s)"), on behalf of the Account to fund the Contracts, and the Fund is authorized to sell such shares to unit investment trusts such as the Account at net asset value; and WHEREAS, to the extent permitted by applicable insurance laws and regulations, the Account also intends to purchase shares in other open-end investment companies or series thereof not affiliated with the Fund (the "Unaffiliated Funds") on behalf of the Account to fund the Contracts; and WHEREAS, Schwab will perform certain services for the Fund in connection with the Contracts; NOW, THEREFORE, in consideration of their mutual promises, FirstGWL&A, Schwab, the Fund, the Distributor and the Adviser agree as follows: ARTICLE I. Sale of Fund Shares 1.1. The Fund agrees to sell to FirstGWL&A those shares of the Designated Portfolio(s) which the Account orders, executing such orders on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the order for the shares of the Portfolios. For purposes of this Section 1.1, FirstGWL&A shall be the designee of the Fund for receipt of such orders and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such order by 10:00 a.m. Eastern time on the next following Business Day. "Business Day" shall mean any day on which the New York Stock Exchange is open for trading and on which the Fund calculates its net asset value pursuant to the rules of the SEC. 1.2. The Fund agrees to make shares of the Designated Portfolio(s) available for purchase at the applicable net asset value per share by FirstGWL&A and the Account on those days on which the Fund calculates its Designated Portfolio(s)' net asset value pursuant to rules of the SEC, and the Fund shall calculate such net asset value on each day which the New York Stock Exchange is open for trading. Notwithstanding the foregoing, the Board of Trustees of the Fund (hereinafter the "Board") may refuse to sell shares of any Portfolio to any person, or suspend or terminate the offering of shares of any Portfolio if such action is required by law or by regulatory authorities having jurisdiction or is, in the sole discretion of the Board acting in good faith and in light of their fiduciary duties under federal and any applicable state laws, necessary in the best interests of the shareholders of such Portfolio. 1.3. The Fund will not sell shares of the Designated Portfolio(s) to any other Participating Insurance Company, separate account or any Qualified Plan unless an agreement containing provisions substantially the same as Sections 2.1, 3.5, 3.6, 3.7, and Article VII of this Agreement is in effect to govern such sales. 1.4. The Fund agrees to redeem for cash, on FirstGWL&A's request, any full or fractional shares of the Fund held by FirstGWL&A, executing such requests on each Business Day at the net asset value next computed after receipt by the Fund or its designee of the request for redemption. Requests for redemption identified by FirstGWL&A, or its agent, as being in connection with surrenders, annuitizations, or death benefits under the Contracts, upon prior written notice, may be executed within seven (7) calendar days after receipt by the Fund or its designee of the requests for redemption. This Section 1.4 may be amended, in writing, by the parties consistent with the requirements of the 1940 Act and interpretations thereof. For purposes of this Section 1.4, FirstGWL&A shall be the designee of the Fund for receipt of requests for redemption and receipt by such designee shall constitute receipt by the Fund, provided that the Fund receives notice of any such request for redemption by 10:00 A.M. Eastern time on the next following Business Day. 1.5. The Parties hereto acknowledge that the arrangement contemplated by this Agreement is not exclusive; the Fund's shares may be sold to other Participating Insurance Companies (subject to Section 1.3 and Article VI hereof) and the cash value of the Con- tracts may be invested in other investment companies. 1.6. FirstGWL&A shall pay for Fund shares by 3:00 p.m. Eastern time on the next Business Day after an order to purchase Fund shares is made in accordance with the provisions of Section 1.1 hereof. Payment shall be in federal funds transmitted by wire and/or by a credit for any shares redeemed the same day as the purchase. 1.7. The Fund shall pay and transmit the proceeds of redemptions of Fund shares by 11:00 a.m. Eastern Time on the next Business Day after a redemption order is received in accordance with Section 1.4 hereof. Payment shall be in federal funds transmitted by wire and/or a credit for any shares purchased the same day as the redemption. 1.8. Issuance and transfer of the Fund's shares will be by book entry only. Stock certificates will not be issued to FirstGWL&A or the Account. Shares ordered from the Fund will be recorded in an appropriate title for the Account or the appropriate sub-account of the Account. 1.9. The Fund shall furnish same day notice (by wire or telephone, followed by written confirmation) to FirstGWL&A of any income, dividends or capital gain distributions payable on the Designated Portfolio(s)' shares. FirstGWL&A hereby elects to receive all such income dividends and capital gain distributions as are payable on the Portfolio shares in additional shares of that Portfolio. FirstGWL&A reserves the right to revoke this election and to receive all such income dividends and capital gain distributions in cash. The Fund shall notify FirstGWL&A by the end of the next following Business Day of the number of shares so issued as payment of such dividends and distributions. 1.10.The Fund shall make the net asset value per share for each Designated Portfolio available to FirstGWL&A on each Business Day as soon as reasonably practical after the net asset value per share is calculated and shall use its best efforts to make such net asset value per share available by 6:00 p.m. Eastern time. In the event of an error in the computation of a Designated Portfolio's net asset value per share ("NAV") or any dividend or capital gain distribution (each, a "pricing error"), the Adviser or the Fund shall promptly notify FirstGWL&A as soon as possible after discovery of the error. Such notification may be verbal, but shall be confirmed promptly in writing in accordance with Article XI of this Agreement. A pricing error shall be corrected as follows: (a) if the pricing error results in a difference between the erroneous NAV and the correct NAV of less than $0.01 per share, then no corrective action need be taken; (b) if the pricing error results in a difference between the erroneous NAV and the correct NAV equal to or greater than $0.01 per share, but less than 1/2 of 1% of the Designated Portfolio's NAV at the time of the error, then the Adviser shall reimburse the Designated Portfolio for any loss, after taking into consideration any positive effect of such error; however, no adjustments to Contractowner accounts need be made; and (c) if the pricing error results in a difference between the erroneous NAV and the correct NAV equal to or greater than 1/2 of 1% of the Designated Portfolio's NAV at the time of the error, then the Adviser shall reimburse the Designated Portfolio for any loss (without taking into consideration any positive effect of such error) and shall reimburse FirstGWL&A for the costs of adjustments made to correct Contractowner accounts in accordance with the provisions of Schedule E. If an adjustment is necessary to correct a material error which has caused Contractowners to receive less than the amount to which they are entitled, the number of shares of the applicable sub-account of such Contractowners will be adjusted and the amount of any underpayments shall be credited by the Fund or the Adviser to FirstGWL&A for crediting of such amounts to the applicable Contractowners accounts. Upon notification by the Adviser of any overpayment due to a material error, FirstGWL&A or Schwab, as the case may be, shall promptly remit to Adviser any overpayment that has not been paid by federal funds wire transfer to Contractowners; however, Adviser acknowledges that Schwab and FirstGWL&A do not intend to seek additional payments from any Contractowner who, because of a pricing error, may have underpaid for units of interest credited to his/her account. In no event shall Schwab or FirstGWL&A be liable to Contractowners for any such adjustments or underpayment amounts. A pricing error within categories (b) or (c) above shall be deemed to be "materially incorrect" or constitute a "material error" for purposes of this Agreement. The standards set forth in this Section 1.10 are based on the Parties' understanding of the views expressed by the staff of the Securities and Exchange Commission ("SEC") as of the date of this Agreement. In the event the views of the SEC staff are later modified or superseded by SEC or judicial interpretation, the parties shall amend the foregoing provisions of this Agreement to comport with the appropriate applicable standards, on terms mutually satisfactory to all Parties. ARTICLE II. Representations and Warranties 2.1. FirstGWL&A represents and warrants that the securities deemed to be issued by the Account under the Contracts are or will be registered under the 1933 Act; that the Contracts will be issued and sold in compliance in all material respects with the terms of this Agreement and all applicable federal and state laws and that the sale of the Contracts shall comply in all respects with state insurance suitability requirements. FirstGWL&A further represents and warrants that it is an insurance company duly organized and in good standing under applicable law and that it has legally and validly established the Account prior to any issuance or sale of units thereof as a segregated asset account under Section 4240 of the New York Insurance Law and has registered the Account as a unit investment trust in accordance with the provisions of the 1940 Act to serve as a segregated investment account for the Contracts. 2.2. The Fund represents and warrants that Designated Portfolio(s) shares sold pursuant to this Agreement shall be registered under the 1933 Act, duly authorized for issuance and sold in compliance with all applicable federal securities laws including without limitation the 1933 Act, the 1934 Act, and the 1940 Act and that the Fund is and shall remain registered under the 1940 Act. The Fund shall amend the registration statement for its shares under the 1933 Act and the 1940 Act from time to time as required in order to effect the continuous offering of its shares. 2.3. The Fund reserves the right to adopt a plan pursuant to Rule 12b-1 under the 1940 Act and to impose an asset-based or other charge to finance distribution expenses as permitted by applicable law and regulation. In any event, the Fund and Adviser agree to comply with applicable provisions and SEC staff interpretations of the 1940 Act to assure that the investment advisory or management fees paid to the Adviser by the Fund are in accordance with the requirements of the 1940 Act. To the extent that the Fund decides to finance distribution expenses pursuant to Rule 12b-1, the Fund undertakes to have its Board, a majority of whom are not interested persons of the Fund, formulate and approve any plan pursuant to Rule 12b-1 under the 1940 Act to finance distribution expenses. 2.4. The Fund represents and warrants that it will make every effort to ensure that the investment policies, fees and expenses of the Designated Portfolio(s) are and shall at all times remain in compliance with the insurance and other applicable laws of the State of New York and any other applicable state, as disclosed in writing to the Fund by FirstGWL&A or of which the Fund has actual knowledge, to the extent required to perform this Agree- ment. The Fund further represents and warrants that it will make every effort to ensure that Designated Portfolio(s) shares will be sold in compliance with all state and federal securities laws and all state insurance laws specifically designated by FirstGWL&A in writing. The Fund shall register and qualify the shares for sale in accordance with the laws of the various states if and to the extent required by applicable law. FirstGWL&A and the Fund will endeavor to mutually cooperate with respect to the implementation of any modifications necessitated by any change in state insurance laws, regulations or interpretations of the foregoing that affect the Designated Portfolio(s) (a "Law Change"), and to keep each other informed of any Law Change that becomes known to either party. In the event of a Law Change, the Fund agrees that, except in those circumstances where the Fund has advised FirstGWL&A that its Board of Directors has determined that implementation of a particular Law Change is not in the best interest of all of the Fund's shareholders with an explanation regarding why such action is lawful, any action required by a Law Change will be taken. 2.5. The Fund represents and warrants that it is lawfully organized and validly existing under the laws of the Commonwealth of Massachusetts and that it does and will comply in all material respects with the 1940 Act. 2.6. The Adviser represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of the State of Delaware and any applicable state and federal securities laws. 2.7. The Distributor represents and warrants that it is and shall remain duly registered under all applicable federal and state securities laws and that it shall perform its obligations for the Fund in compliance in all material respects with the laws of the State of Delaware and any applicable state and federal securities laws. 2.8. The Fund, the Distributor and the Adviser represent and warrant that all of their respective officers, employees, investment advisers, and other individuals or entities dealing with the money and/or securities of the Fund are, and shall continue to be at all times, covered by a blanket fidelity bond or similar coverage for the benefit of the Fund in an amount not less than the minimal coverage required by Rule 17g-1 under the 1940 Act or related provisions as may be promulgated from time to time. The aforesaid bond shall include coverage for larceny and embezzlement and shall be issued by a reputable bonding company. 2.9. Schwab represents and warrants that it has completed, obtained and performed, in all material respects, all registrations, filings, approvals, and authorizations, consents and examinations required by any government or governmental authority as may be necessary to perform this Agreement. Schwab does and will comply, in all material respects, with all applicable laws, rules and regulations in the performance of its obligations under this Agreement. 2.10.The Fund will provide FirstGWL&A with as much advance notice as is reasonably practicable of any material change affecting the Designated Portfolio(s) (including, but not limited to, any material change in the registration statement or prospectus affecting the Designated Portfolio(s)) and any proxy solicitation affecting the Designated Portfolio(s) and consult with FirstGWL&A in order to implement any such change in an orderly manner, recognizing the expenses of changes and attempting to minimize such expenses by implementing them in conjunction with regular annual updates of the prospectus for the Contracts. The Fund agrees to share equitably in expenses incurred by FirstGWL&A as a result of actions taken by the Fund, consistent with the allocation of expenses contained in Schedule E attached hereto and incorporated herein by reference. 2.11.FirstGWL&A represents and warrants, for purposes other than diversification under Section 817 of the Internal Revenue Code of 1986 as amended ("the Code"), that the Contracts are currently treated as annuity contracts under applicable provisions of the Code, and that it will maintain such treatment and that it will notify Schwab, the Fund, the Distributor and the Adviser immediately upon having a reasonable basis for believing that the Contracts have ceased to be so treated or that they might not be so treated in the future. In addition, FirstGWL&A represents and warrants that the Account is a "segregated asset account" and that interests in the Account are offered exclusively through the purchase of or transfer into a "variable contract" within the meaning of such terms under Section 817 of the Code and the regulations thereunder. FirstGWL&A will use every effort to continue to meet such definitional requirements, and it will notify Schwab, the Fund, the Distributor, and the Adviser immediately upon having a reasonable basis for believing that such requirements have ceased to be met or that they might not be met in the future. 2.12 FirstGWL&A represents and warrants that it will not purchase Fund shares with assets derived from plans established under Sections 401(a), 403(a) and (b), 408(a), (b) and (k), 414(d), 457(b) or 501(c)(18) of the Internal Revenue Code ("Qualified Plans") except indirectly through Contracts purchased in connection with such plans. ARTICLE III. Prospectuses and Proxy Statements; Voting 3.1. At least annually, the Distributor shall provide FirstGWL&A and Schwab with as many copies of the Fund's current prospectus for the Designated Portfolio(s) as FirstGWL&A and Schwab may reasonably request for marketing purposes (including distribution to Contractowners with respect to new sales of a Contract). If requested by FirstGWL&A in lieu thereof, the Distributor or Fund shall provide such documentation (including a camera-ready copy and computer diskette of the current prospectus for the Designated Portfolio(s)) and other assistance as is reasonably necessary in order for FirstGWL&A once each year (or more frequently if the prospectuses for the Designated Portfolio(s) are amended) to have the prospectus for the Contracts and the Fund's prospectus for the Designated Portfolio(s) printed together in one document. The Fund and Adviser agree that the prospectuses (and semi-annual and annual reports) for the Designated Portfolio(s) will describe only the Designated Portfolio(s) and will not name or describe any other portfolios or series that may be in the Fund unless required by law. 3.2. If applicable state or federal laws or regulations require that the Statement of Additional Information ("SAI") for the Fund be distributed to all Contractowners, then the Fund and/or the Distributor shall provide FirstGWL&A with copies of the Fund's SAI or documentation thereof for the Designated Portfolio(s) in such quantities, with expenses to be borne in accordance with Schedule E hereof, as FirstGWL&A may reasonably require to permit timely distribution thereof to Contractowners. The Distributor and/or the Fund shall also provide SAIs to any Contractowner or prospective owner who requests such SAI from the Fund (although it is anticipated that such requests will be made to FirstGWL&A or Schwab). 3.3. The Fund and/or the Distributor shall provide FirstGWL&A and Schwab with copies of the Fund's proxy material, reports to stockholders and other communications to stockholders for the Designated Portfolio(s) in such quantity, with expenses to be borne in accordance with Schedule E hereof, as FirstGWL&A may reasonably require to permit timely distribution thereof to Contractowners. 3.4. It is understood and agreed that, except with respect to information regarding FirstGWL&A or Schwab provided in writing by that party, neither FirstGWL&A nor Schwab are responsible for the content of the prospectus or SAI for the Designated Portfolio(s). It is also understood and agreed that, except with respect to information regarding the Fund, the Distributor, Adviser or the Designated Portfolio(s) provided in writing by the Fund, the Distributor or Adviser, neither the Fund, the Distributor nor Adviser are responsible for the content of the prospectus or SAI for the Contracts. 3.5. If and to the extent required by law FirstGWL&A shall: (i) solicit voting instructions from Contractowners; (ii) vote the Designated Portfolio(s) shares in accordance with instructions received from Contractowners: and (iii)vote Designated Portfolio shares for which no instructions have been received in the same proportion as Designated Portfolio(s) shares for which instructions have been received from Contractowners, so long as and to the extent that the SEC continues to interpret the 1940 Act to require pass-through voting privileges for variable contract owners. FirstGWL&A reserves the right to vote Fund shares held in any segregated asset account in its own right, to the extent permitted by law. 3.6. FirstGWL&A shall be responsible for assuring that each of its separate accounts holding shares of a Designated Portfolio calculates voting privileges as agreed to by FirstGWL&A and the Fund. The Fund agrees to promptly notify FirstGWL&A of any changes of interpretations or amendments of the Mixed and Shared Funding Exemptive Order. 3.7. The Fund will comply with all provisions of the 1940 Act requiring voting by shareholders, and in particular the Fund will either provide for annual meetings (except insofar as the SEC may interpret Section 16 of the 1940 Act not to require such meetings) or, as the Fund currently intends, comply with Section 16(c) of the 1940 Act (although the Fund is not one of the trusts described in Section 16(c) of that Act) as well as with Sections 16(a) and, if and when applicable, 16(b). Further, the Fund will act in accordance with the SEC's interpretation of the requirements of Section 16(a) with respect to periodic elections of directors or trustees and with whatever rules the Commission may promulgate with respect thereto. ARTICLE IV. Sales Material and Information 4.1. FirstGWL&A and Schwab shall furnish, or shall cause to be furnished, to the Fund or its designee, a copy of each piece of sales literature or other promotional material that FirstGWL&A or Schwab, respectively, develops or proposes to use and in which the Fund (or a Portfolio thereof), its Adviser or one of its sub-advisers or the Distributor is named in connection with the Contracts, at least ten (10) Business Days prior to its use. No such material shall be used if the Fund objects to such use within five (5) Business Days after receipt of such material. If sales literature or promotional material goes beyond naming the Fund, a Designated Portfolio, the Adviser, a sub-adviser, or the Distributor, FirstGWL&A shall obtain from the Fund or its designee affirmative written approval to use such material. 4.2. FirstGWL&A and Schwab shall not give any information or make any representations or statements on behalf of the Fund in connection with the sale of the Con- tracts or Fund shares other than the information or representations contained in the registration statement or prospectus for the Fund shares, as such registration statement and prospectus may be amended or supplemented from time to time, or in reports to shareholders or proxy statements for the Fund, or in sales literature or other promotional material approved by the Fund or by the Distributor, except with the permission of the Fund or the Distributor. 4.3. The Fund shall furnish, or shall cause to be furnished, to FirstGWL&A and Schwab, a copy of each piece of sales literature or other promotional material in which FirstGWL&A and/or its separate account(s), or Schwab is named at least ten (10) Business Days prior to its use. No such material shall be used without the written permission of FirstGWL&A or Schwab. 4.4. The Fund, the Distributor, and the Adviser shall not give any information or make any representations on behalf of FirstGWL&A or concerning FirstGWL&A, the Account, or the Contracts other than the information or representations contained in a registration statement or prospectus for the Contracts, as such registration statement and prospectus may be amended or supplemented from time to time, or in reports for the Account, or in sales literature or other promotional material approved by FirstGWL&A or its designee, except with the permission of FirstGWL&A. 4.5. FirstGWL&A, the Fund, the Distributor and the Adviser shall not give any information or make any representations on behalf of or concerning Schwab, or use Schwab's name except with the permission of Schwab, or except which merely names Schwab as administrator or the Fund's participation in a Schwab sponsored program. 4.6. The Fund will provide to FirstGWL&A and Schwab at least one complete copy of all registration statements, prospectuses, SAIs, reports, proxy statements, sales literature and other promotional materials, applications for exemptions, requests for no- action letters, and all amendments to any of the above, that relate to the Designated Port- folio(s), contemporaneously with the filing of such document(s) with the SEC or NASD or other regulatory authorities. 4.7. FirstGWL&A or Schwab will provide to the Fund at least one complete copy of all registration statements, prospectuses, SAIs, reports, solicitations for voting instructions, sales literature and other promotional materials, applications for exemptions, requests for no-action letters, and all amendments to any of the above, that relate to the Contracts or the Account, contemporaneously with the filing of such document(s) with the SEC, NASD, or other regulatory authority. 4.8. For purposes of Articles IV and VIII, the phrase "sales literature and other promotional material" includes, but is not limited to, advertisements (such as material published, or designed for use in, a newspaper, magazine, or other periodical, radio, television, telephone or tape recording, videotape display, signs or billboards, motion pictures, or other public media; e.g., on-line networks such as the Internet or other electronic media), sales literature (i.e., any written communication distributed or made generally available to customers or the public, including brochures, circulars, research reports, market letters, form letters, seminar texts, reprints or excerpts of any other advertisement, sales literature, or published article), educational or training materials or other communications distributed or made generally available to some or all agents or employees, and registration statements, prospectuses, SAIs, shareholder reports, and proxy materials and any other material constituting sales literature or advertising under the NASD rules, the 1933 Act or the 1940 Act. 4.9. At the request of any party to this Agreement, each other party will make available to the other party's independent auditors and/or representative of the appropriate regulatory agencies, all records, data and access to operating procedures that may be reasonably requested in connection with compliance and regulatory requirements related to this Agreement or any party's obligations under this Agreement. ARTICLE V. Fees and Expenses 5.1. The Fund shall pay no fee or other compensation to FirstGWL&A under this Agreement, and FirstGWL&A shall pay no fee or other compensation to the Fund or Adviser under this Agreement, although the parties hereto will bear certain expenses in accordance with Schedule E, Articles III, V, and other provisions of this Agreement. 5.2. All expenses incident to performance by the Fund, the Adviser and the Distributor under this Agreement shall be paid by the appropriate party, as further provided in Schedule E. The Fund shall see to it that all shares of the Designated Portfolio(s) are registered and authorized for issuance in accordance with applicable federal law and, if and to the extent required, in accordance with applicable state laws prior to their sale. 5.3. The parties shall bear the expenses of routine annual distribution (mailing costs) of the Fund's prospectus and distribution (mailing costs) of the Fund's proxy materials and reports to owners of Contracts offered by FirstGWL&A, in accordance with Schedule E. 5.4. The Fund, the Distributor and the Adviser acknowledge that a principal fea- ture of the Contracts is the Contractowner's ability to choose from a number of unaffiliated mutual funds (and portfolios or series thereof), including the Designated Portfolio(s) and the Unaffiliated Funds, and to transfer the Contract's cash value between funds and portfolios. The Fund, the Distributor and the Adviser agree to cooperate with FirstGWL&A and Schwab in facilitating the operation of the Account and the Contracts as described in the prospectus for the Contracts, including but not limited to cooperation in facilitating transfers between Unaffiliated Funds. 5.5. Schwab agrees to provide certain administrative services, specified in Schedule C attached hereto and incorporated herein by reference, in connection with the arrangements contemplated by this Agreement. The parties acknowledge and agree that the services referred to in this Section 5.5 are recordkeeping, shareholder communication, and other transaction facilitation and processing, and related administrative services only and are not the services of an underwriter or a principal underwriter of the Fund and that Schwab is not an underwriter for the shares of the Designated Portfolio(s), within the meaning of the 1933 Act or the 1940 Act. 5.6. Unless prohibited by law, rule or regulation, as compensation for the services specified in Schedule C hereto, the Adviser agrees to pay Schwab a monthly Administrative Service Fee based on the percentage per annum on Schedule C hereto applied to the average daily value of the shares of the Designated Portfolio(s) held in the Account with respect to Contracts sold by Schwab. This monthly Administrative Service Fee is due and payable before the 15th (fifteenth) day following the last day of the month to which it relates. ARTICLE VI. Diversification and Qualification 6.1. The Fund, the Adviser and the Distributor represent and warrant that the Fund will at all times sell its shares to Participating Insurance Companies and invest its assets in such a manner as to ensure that the Contracts will be treated as annuity contracts under the Code, and the regulations issued thereunder. Without limiting the scope of the foregoing, the Fund, Distributor and Adviser represent and warrant that none of them will take any action or fail to take any action which may cause the Fund and each Designated Portfolio thereof not to, at all times, comply with Section 817(h) of the Code and Treasury Regulation 1.817-5, as amended from time to time, and any Treasury interpretations thereof, relating to the diversification requirements for variable annuity, endowment, or life insurance contracts and any amendments or other modifications or successor provisions to such Section or Regulations. The Fund and the Distributor agree that shares of the Desig- nated Portfolio(s) will be sold only to Participating Insurance Companies and their separate accounts. 6.2. No shares of any Designated Portfolio of the Fund will be sold to the general public. 6.3. The Fund and the Adviser represent and warrant that the Fund and each Designated Portfolio is currently qualified as a Regulated Investment Company under Subchapter M of the Code, and that each Designated Portfolio will maintain such qualification (under Subchapter M or any successor or similar provisions) as long as this Agreement is in effect. 6.4. The Fund or the Adviser will notify FirstGWL&A immediately upon having a reasonable basis for believing that the Fund or any Designated Portfolio has ceased to comply with the aforesaid Section 817(h) diversification or Subchapter M qualification requirements or might not so comply in the future. 6.5. Without in any way limiting the effect of Sections 8.3, 8.4 and 8.5 hereof and without in any way limiting or restricting any other remedies available to FirstGWL&A or Schwab, the Adviser or the Distributor will pay all costs associated with or arising out of any failure, or any anticipated or reasonably foreseeable failure, of the Fund or any Designated Portfolio to comply with Sections 6.1, 6.2, or 6.3 hereof, including all costs associated with reasonable and appropriate corrections or responses to any such failure; such costs may include, but are not limited to, the costs involved in creating, organizing, and registering a new investment company as a funding medium for the Contracts and/or the costs of obtaining whatever regulatory authorizations are required to substitute shares of another investment company for those of the failed Portfolio (including but not limited to an order pursuant to Section 26(b) of the 1940 Act); such costs are to include, but are not limited to, fees and expenses of legal counsel and other advisors to FirstGWL&A and any federal income taxes or tax penalties and interest thereon (or "toll charges" or exactments or amounts paid in settlement) incurred by FirstGWL&A with respect to itself or owners of its Contracts in connection with any such failure or anticipated or reasonably foreseeable failure. 6.6. The Fund at the Fund's expense shall provide FirstGWL&A or its designee with reports certifying compliance with the aforesaid Section 817(h) diversification and Subchapter M qualification requirements, at the times provided for and substantially in the form attached hereto as Schedule D and incorporated herein by reference; provided, however, that providing such reports does not relieve the Fund of its responsibility for such compliance or of its liability for any non-compliance. 6.7. FirstGWL&A agrees that if the Internal Revenue Service ("IRS") asserts in writing in connection with any governmental audit or review of FirstGWL&A or, to FirstGWL&A's knowledge, or any Contractowner that any Designated Portfolio has failed to comply with the diversification requirements of Section 817(h) of the Code or FirstGWL&A otherwise becomes aware of any facts that could give rise to any claim against the Fund, the Adviser or the Distributor as a result of such a failure or alleged failure: (a) FirstGWL&A shall promptly notify the Fund, the Adviser and the Distributor of such assertion or potential claim; (b) FirstGWL&A shall consult with the Fund, the Adviser and the Distributor as to how to minimize any liability that may arise as a result of such failure or alleged failure; (c) FirstGWL&A shall use its best efforts to minimize any liability of the Fund, the Adviser and the Distributor resulting from such failure, including, without limitation, demonstrating, pursuant to Treasury Regulations, Section 1.817-5(a)(2), to the commissioner of the IRS that such failure was inadvertent; (d) any written materials to be submitted by FirstGWL&A to the IRS, any Contractowner or any other claimant in connection with any of the foregoing proceedings or contests (including, without limitation, any such materials to be submitted to the IRS pursuant to Treasury Regulations, Section 1.817-5(a)(2)) shall be provided by FirstGWL&A to the Fund, the Distributor and the Adviser (together with any supporting information or analysis) within at least two (2) business days prior to submission; (e) FirstGWL&A shall provide the Fund, the Distributor and the Adviser with such cooperation as the Fund, the Distributor and the Adviser shall reasonably request (including, without limitation, by permitting the Fund, the Distributor and the Adviser to review the relevant books and records of FirstGWL&A) in order to facilitate review by the Fund, the Distributor and the Adviser of any written submissions provided to it or its assessment of the validity or amount of any claim against it arising from such failure or alleged failure; (f) FirstGWL&A shall not with respect to any claim of the IRS or any Contractowner that would give rise to a claim against the Fund, the Distributor and the Adviser (i) compromise or settle any claim, (ii) accept any adjustment on audit, or (iii) forego any allowable administrative or judicial appeals, without the express written consent of the Fund, the Distributor and the Adviser, which shall not be unreasonably withheld; provided that, FirstGWL&A shall not be required to appeal any adverse judicial decision unless the Fund, the Distributor and the Adviser shall have provided an opinion of independent counsel to the effect that a reasonable basis exists for taking such appeal; and further provided that the Fund, the Distributor and the Adviser shall bear the costs and expenses, including reasonable attorney's fees, incurred by FirstGWL&A in complying with this clause (f). ARTICLE VII. Potential Conflicts and Compliance With Mixed and Shared Funding Exemptive Order 7.1. The Board will monitor the Fund for the existence of any material irreconcilable conflict between the interests of the contract owners of all separate accounts investing in the Fund. An irreconcilable material conflict may arise for a variety of reasons, including: (a) an action by any state insurance regulatory authority; (b) a change in applicable federal or state insurance, tax, or securities laws or regulations, or a public ruling, private letter ruling, no-action or interpretative letter, or any similar action by insurance, tax, or securities regulatory authorities; (c) an administrative or judicial decision in any relevant proceeding; (d) the manner in which the investments of any Portfolio are being managed; (e) a difference in voting instructions given by variable annuity contract and variable life insurance contract owners or by contract owners of different Participating Insurance Companies; or (f) a decision by a Participating Insurance Company to disregard the voting instructions of contract owners. The Board shall promptly inform FirstGWL&A if it determines that an irreconcilable material conflict exists and the implications thereof. 7.2. FirstGWL&A will report any potential or existing conflicts of which it is aware or reasonably should be aware to the Board. FirstGWL&A will assist the Board in carrying out its responsibilities under the Mixed and Shared Funding Exemptive Order, by providing the Board with all information reasonably necessary for the Board to consider any issues raised. This includes, but is not limited to, an obligation by FirstGWL&A to inform the Board whenever any of the events listed in Section 7.1(a)-(f) occur as they pertain to FirstGWL&A (e.g., contract owner voting instructions are to be disregarded). Such responsibilities shall be carried out by FirstGWL&A with a view only to the interests of its Contractowners. 7.3. If it is determined by a majority of the Board, or a majority of its directors who are not interested persons of the Fund, the Distributor, the Adviser or any sub-adviser to any of the Designated Portfolios (the "Independent Directors"), that a material irreconcilable conflict exists, FirstGWL&A and other Participating Insurance Companies shall, at their expense and to the extent reasonably practicable (as determined by a majority of the Independent Directors), take whatever steps are necessary to remedy or eliminate the irreconcilable material conflict, up to and including: (1) withdrawing the assets allocable to some or all of the separate accounts from the Fund or any Designated Portfolio and reinvesting such assets in a different investment medium, including (but not limited to) another portfolio of the Fund, or submitting the question whether such segregation should be implemented to a vote of all affected contract owners and, as appropriate, segregating the assets of any appropriate group (i.e., annuity contract owners, life insurance contract owners, or variable contract owners of one or more Participating Insurance Companies) that votes in favor of such segregation, or offering to the affected contract owners the option of making such a change; and (2) establishing a new registered management investment company or managed separate account. 7.4. If a material irreconcilable conflict arises because of a decision by FirstGWL&A to disregard contract owner voting instructions and that decision represents a minority position or would preclude a majority vote, FirstGWL&A may be required, at the Fund's election, to withdraw the Account's investment in the Fund and terminate this Agreement; provided, however that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the Independent Directors. Any such withdrawal and termination must take place within six (6) months after the Fund gives written notice that this provision is being implemented, and until the end of that six month period the Distributor and the Fund shall continue to accept and implement orders by FirstGWL&A for the purchase (and redemption) of shares of the Fund. 7.5. If a material irreconcilable conflict arises because a particular state insurance regulator's decision applicable to FirstGWL&A conflicts with the majority of other state regulators, then FirstGWL&A will withdraw the Account's investment in the Fund and terminate this Agreement within six months after the Board informs FirstGWL&A in writing that it has determined that such decision has created an irreconcilable material conflict; provided, however, that such withdrawal and termination shall be limited to the extent required by the foregoing material irreconcilable conflict as determined by a majority of the disinterested members of the Board. Until the end of the foregoing six month period, the Fund shall continue to accept and implement orders by FirstGWL&A for the purchase (and redemption) of shares of the Fund. 7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a majority of the Independent Directors shall determine whether any proposed action adequately remedies any irreconcilable material conflict, but in no event will the Fund be required to establish a new funding medium for the Contracts. FirstGWL&A shall not be required by Section 7.3 to establish a new funding medium for the Contracts if an offer to do so has been declined by vote of a majority of Contractowners affected by the irreconcilable material conflict. In the event that the Board determines that any proposed action does not adequately remedy any irreconcilable material conflict, then FirstGWL&A will withdraw the Account's investment in the Fund and terminate this Agreement within six (6) months after the Board informs FirstGWL&A in writing of the foregoing determination; provided, however, that such withdrawal and termination shall be limited to the extent required by any such material irreconcilable conflict as determined by a majority of the Independent Directors. 7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the 1940 Act or the rules promulgated thereunder with respect to mixed or shared funding (as defined in the Mixed and Shared Funding Exemptive Order) on terms and conditions materially different from those contained in the Mixed and Shared Funding Exemptive Order, then (a) the Fund and/or the Participating Insurance Companies, as appropriate, shall take such steps as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent such rules are applicable: and (b) Sections 3.5, 3.6, 3.7, 7.1, 7.2, 7.3, 7.4, and 7.5 of this Agreement shall continue in effect only to the extent that terms and con- ditions substantially identical to such Sections are contained in such Rule(s) as so amended or adopted. ARTICLE VIII. Indemnification 8.1. Indemnification By FirstGWL&A 8.1(a). FirstGWL&A agrees to indemnify and hold harmless the Fund, the Distributor and the Adviser and each of their officers and directors or trustees and each person, if any, who controls the Fund, Distributor or Adviser within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.1) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of FirstGWL&A) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in the registration statement or pro- spectus or SAI covering the Contracts or contained in the Contracts or sales literature for the Contracts (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or nec- essary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser, Distributor or Fund for use in the registration statement or prospectus for the Contracts or in the Contracts or sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, pro- spectus or sales literature of the Fund not supplied by FirstGWL&A or persons under its control) or wrongful conduct of FirstGWL&A or persons under its control, with respect to the sale or distribution of the Contracts or Fund Shares; or (iii)arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, or sales literature of the Fund, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such a statement or omission was made in reliance upon information furnished in writing to the Fund by or on behalf of FirstGWL&A; or (iv) arise as a result of any failure by FirstGWL&A to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by FirstGWL&A in this Agreement or arise out of or result from any other material breach of this Agreement by FirstGWL&A, including without limitation Section 2.11 and Section 6.7 hereof, as limited by and in accordance with the provisions of Sections 8.1(b) and 8.1(c) hereof. 8.1(b). FirstGWL&A shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.1(c). FirstGWL&A shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified FirstGWL&A in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify FirstGWL&A of any such claim shall not relieve FirstGWL&A from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that FirstGWL&A has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, FirstGWL&A shall be entitled to participate, at its own expense, in the defense of such action. FirstGWL&A also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from FirstGWL&A to such party of FirstGWL&A's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and FirstGWL&A will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.1(d). The Indemnified Parties will promptly notify FirstGWL&A of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund. 8.2. Indemnification by Schwab 8.2(a). Schwab agrees to indemnify and hold harmless the Fund, the Distributor and the Adviser and each of their officers and directors or trustees and each person, if any, who controls the Fund, Distributor or Adviser within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.2) against any and all losses, claims, expenses, damages and liabilities (including amounts paid in settlement with the written consent of Schwab) or litigation (including reasonable legal and other expenses), to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acqu- isition of the Fund's shares or the Contracts and: (i) arise out of Schwab's dissemination of information regarding the Fund that is both (A) materially incorrect and (B) that was neither contained in the Fund's registration statement or sales literature nor other promotional material of the Fund prepared by the Fund or provided in writing to Schwab, or approved in writing, by or on behalf of the Fund, the Distributor or the Adviser; or (ii) arise out of or are based upon any untrue statements or alleged untrue statements of any material fact contained in sales literature or other promotional material prepared by Schwab for the Contracts or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information furnished in writing to Schwab by or on behalf of the Adviser, the Distributor or Fund or to Schwab for use in the registration statement or prospectus for the Contracts or in the Contracts or sales litera- ture (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts; or (iii)arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus or sales literature of the Fund not supplied by Schwab or persons under its control) or wrongful conduct of Schwab or persons under its control, with respect to the sale or distribution of the Contracts; or (iv) arise as a result of any failure by Schwab to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by Schwab in this Agreement or arise out of or result from any other material breach of this Agreement by Schwab; as limited by and in accordance with the provisions of Sections 8.2(b) and 8.2(c) hereof. 8.2(b). Schwab shall not be liable under this indemnification provision with respect to any losses, claims, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.2(c). Schwab shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified Schwab in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify Schwab of any such claim shall not relieve Schwab from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that Schwab has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, Schwab shall be entitled to participate, at its own expense, in the defense of such action. Schwab also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from Schwab to such party of Schwab's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and Schwab will not be liable to such party under this Agreement for any legal or other ex- penses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.2(d). The Indemnified Parties will promptly notify Schwab of the commencement of any litigation or proceedings against them in connection with the issuance or sale of the Fund Shares or the Contracts or the operation of the Fund. 8.3. Indemnification by the Adviser 8.3(a). The Adviser agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their directors and officers and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.3) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Adviser) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the Contracts and: (i) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Fund, Adviser or the Distributor (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information fur- nished in writing to the Adviser, the Distributor or the Fund by or on behalf of FirstGWL&A or Schwab for use in the registration statement or prospectus for the Fund or in sales literature (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or the Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI or sales literature or other promotional material for the Contracts not supplied by the Adviser or persons under its control) or wrongful conduct of the Fund, the Distributor or Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or (iii)arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, or sales literature covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser; or (iv) arise as a result of any failure by the Adviser to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agreement); or (v) arise out of or result from any material breach of any representation and/or warranty made by the Fund, the Adviser or the Distributor in this Agreement or arise out of or result from any other material breach of this Agreement by the Adviser, the Fund or the Distributor; or (vi) arise out of or result from the incorrect or untimely calculation or reporting of the daily net asset value per share or dividend or capital gain distribution rate; as limited by and in accordance with the provisions of Sections 8.3(b) and 8.3(c) hereof. This indemnification is in addition to and apart from the responsibilities and obligations of the Adviser specified in Article VI hereof. 8.3(b). The Adviser shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.3(c). The Adviser shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Adviser in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Adviser of any such claim shall not relieve the Adviser from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Adviser has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Adviser will be entitled to participate, at its own expense, in the defense thereof. The Adviser also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Adviser to such party of the Adviser's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Adviser will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.3(d). FirstGWL&A and Schwab agree promptly to notify the Adviser of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Account. 8.4. Indemnification By the Fund 8.4(a). The Fund agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their directors and officers and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.4) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Fund) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may be required to pay or become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements, are related to the operations of the Fund and: (i) arise as a result of any failure by the Fund to provide the services and furnish the materials under the terms of this Agreement (including a failure, whether unintentional or in good faith or otherwise, to comply with the diversification and other qualification requirements specified in Article VI of this Agree- ment); or (ii) arise out of or result from any material breach of any representation and/or warranty made by the Fund in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund; or (iii)arise out of or result from the incorrect or untimely calculation or reporting of the daily net asset value per share or dividend or capital gain distribution rate; as limited by and in accordance with the provisions of Sections 8.4(b) and 8.4(c) hereof. 8.4(b). The Fund shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance of such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.4(c). The Fund shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Fund in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Fund of any such claim shall not relieve it from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Fund has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Fund will be entitled to participate, at its own expense, in the defense thereof. The Fund shall also be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Fund to such party of the Fund's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Fund will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.4(d). FirstGWL&A and Schwab each agree promptly to notify the Fund of the commencement of any litigation or proceeding against itself or any of its respective officers or directors in connection with the Agreement, the issuance or sale of the Contracts, the operation of the Account, or the sale or acquisition of shares of the Fund. 8.5. Indemnification by the Distributor 8.5(a).The Distributor agrees to indemnify and hold harmless FirstGWL&A and Schwab and each of their directors and officers and each person, if any, who controls FirstGWL&A or Schwab within the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this Section 8.5) against any and all losses, claims, expenses, damages, liabilities (including amounts paid in settlement with the written consent of the Distributor) or litigation (including reasonable legal and other expenses) to which the Indemnified Parties may become subject under any statute or regulation, at common law or otherwise, insofar as such losses, claims, expenses, damages, liabilities or expenses (or actions in respect thereof) or settlements are related to the sale or acquisition of the Fund's shares or the contracts and: (i) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the registration statement or prospectus or SAI or sales literature or other promotional material of the Fund prepared by the Fund, Adviser or Distributor (or any amendment or supplement to any of the foregoing), or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, provided that this Agreement to indemnify shall not apply as to any Indemnified Party if such statement or omission or such alleged statement or omission was made in reliance upon and in conformity with information fur- nished in writing to the Adviser, the Distributor or Fund by or on behalf of FirstGWL&A or Schwab for use in the registration statement or SAI or prospectus for the Fund or in sales literature or other promotional material (or any amendment or supplement) or otherwise for use in connection with the sale of the Contracts or Fund shares; or (ii) arise out of or as a result of statements or representations (other than statements or representations contained in the registration statement, prospectus, SAI, sales literature or other promotional material for the Contracts not supplied by the Distributor or persons under its control) or wrongful conduct of the Fund, the Distributor or Adviser or persons under their control, with respect to the sale or distribution of the Contracts or Fund shares; or (iii)arise out of any untrue statement or alleged untrue statement of a material fact contained in a registration statement, prospectus, SAI, sales literature or other promotional material covering the Contracts, or any amendment thereof or supplement thereto, or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statement or statements therein not misleading, if such statement or omission was made in reliance upon information furnished in writing to FirstGWL&A or Schwab by or on behalf of the Adviser, the Distributor or Fund; or (iv) arise as a result of any failure by the Fund, Adviser or Distributor to provide the services and furnish the materials under the terms of this Agreement; or (v) arise out of or result from any material breach of any representation and/or warranty made by the Fund, Adviser or Distributor in this Agreement or arise out of or result from any other material breach of this Agreement by the Fund, Adviser or Distributor; or (vi) arise out of or result from the incorrect or untimely calculation or reporting of the daily net asset value per share or dividend or capital gain distribution rate; as limited by and in accordance with the provisions of Sections 8.5(b) and 8.5(c) hereof. This indemnification is in addition to and apart from the responsibilities and obligations of the Distributor specified in Article VI hereof. 8.5(b).The Distributor shall not be liable under this indemnification provision with respect to any losses, claims, expenses, damages, liabilities or litigation to which an Indemnified Party would otherwise be subject by reason of such Indemnified Party's willful misfeasance, bad faith, or negligence in the performance or such Indemnified Party's duties or by reason of such Indemnified Party's reckless disregard of obligations or duties under this Agreement or to any of the Indemnified Parties. 8.5(c)The Distributor shall not be liable under this indemnification provision with respect to any claim made against an Indemnified Party unless such Indemnified Party shall have notified the Distributor in writing within a reasonable time after the summons or other first legal process giving information of the nature of the claim shall have been served upon such Indemnified Party (or after such Indemnified Party shall have received notice of such service on any designated agent), but failure to notify the Distributor of any such claim shall not relieve the Distributor from any liability which it may have to the Indemnified Party against whom such action is brought otherwise than on account of this indemnification provision, except to the extent that the Distributor has been prejudiced by such failure to give notice. In case any such action is brought against the Indemnified Parties, the Distributor will be entitled to participate, at its own expense, in the defense thereof. The Distributor also shall be entitled to assume the defense thereof, with counsel satisfactory to the party named in the action. After notice from the Distributor to such party of the Distributor's election to assume the defense thereof, the Indemnified Party shall bear the fees and expenses of any additional counsel retained by it, and the Distributor will not be liable to such party under this Agreement for any legal or other expenses subsequently incurred by such party independently in connection with the defense thereof other than reasonable costs of investigation. 8.5(d)FirstGWL&A and Schwab agree to promptly notify the Distributor of the commencement of any litigation or proceedings against it or any of its officers or directors in connection with the issuance or sale of the Contracts or the operation of the Account. ARTICLE IX. Applicable Law 9.1. This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the State of New York, without regard to the New York Conflict of Laws provisions. 9.2. This Agreement shall be subject to the provisions of the 1933, 1934 and 1940 Acts, and the rules and regulations and rulings thereunder, including such exemptions from those statutes, rules and regulations as the Securities and Exchange Commission may grant (including, but not limited to, the Mixed and Shared Funding Exemptive Order) and the terms hereof shall be interpreted and construed in accordance therewith. ARTICLE X. Termination 10.1.This Agreement shall terminate: (a) at the option of any party, with or without cause, with respect to some or all Portfolios, upon six (6) months advance written notice delivered to the other parties; provided, however, that such notice shall not be given earlier than six (6) months following the date of this Agreement; or (b) at the option of FirstGWL&A or Schwab by written notice to the other parties with respect to any Portfolio based upon FirstGWL&A's or Schwab's determination that shares of such Portfolio are not reasonably available to meet the requirements of the Contracts; or (c) at the option of FirstGWL&A or Schwab by written notice to the other parties with respect to any Portfolio in the event any of the Portfolio's shares 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 FirstGWL&A; or (d) at the option of the Fund in the event that formal administrative proceedings are instituted against FirstGWL&A or Schwab by the NASD, the SEC, the Insurance Commissioner or like official of any state or any other regulatory body regarding FirstGWL&A's or Schwab's duties under this Agreement or related to the sale of the Contracts, the operation of any Account, or the purchase of the Fund shares, if, in each case, the Fund reasonably determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of FirstGWL&A or Schwab to perform its obligations under this Agreement; or (e) at the option of FirstGWL&A or Schwab in the event that formal administrative proceedings are instituted against the Fund, the Distributor or Adviser by the NASD, the SEC, or any state securities or insurance department or any other regulatory body, if Schwab or FirstGWL&A reasonably 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 Fund, the Distributor or Adviser to perform their obligations under this Agreement; or (f) at the option of FirstGWL&A by written notice to the Fund with respect to any Portfolio if FirstGWL&A reasonably believes that the Portfolio will fail to meet the Section 817(h) diversification requirements or Subchapter M qualifications specified in Article VI hereof; or (g) at the option of either the Fund, the Distributor or the Adviser, if (i) the Fund or Adviser, respectively, shall determine, in their sole judgment reasonably exercised in good faith, that either FirstGWL&A or Schwab has suffered a material adverse change in their business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on FirstGWL&A's or Schwab's ability to perform its obligations under this Agreement, (ii) the Fund, the Distributor or Adviser notifies FirstGWL&A or Schwab, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by FirstGWL&A or Schwab and any other changes in circumstances since the giving of such a notice, the determination of the Fund, the Distributor or Adviser shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or (h) at the option of either FirstGWL&A or Schwab, if (i) FirstGWL&A or Schwab, respectively, shall determine, in its sole judgment reasonably exercised in good faith, that either the Fund, the Distributor or the Adviser has suffered a material adverse change in its business or financial condition or is the subject of material adverse publicity and that material adverse change or publicity will have a material adverse impact on the Fund's, the Distributor's or Adviser's ability to perform its obligations under this Agreement, (ii) FirstGWL&A or Schwab notifies the Fund, the Distributor or Adviser, as appropriate, of that determination and its intent to terminate this Agreement, and (iii) after considering the actions taken by the Fund, the Distributor or Adviser and any other changes in circumstances since the giving of such a notice, the determination of FirstGWL&A or Schwab shall continue to apply on the sixtieth (60th) day following the giving of that notice, which sixtieth day shall be the effective date of termination; or (i) at the option of FirstGWL&A in the event that formal administrative proceedings are instituted against Schwab by the NASD, the Securities and Exchange Commission, or any state securities or insurance department or any other regulatory body regarding Schwab's duties under this Agreement or related to the sale of the Fund's shares or the Contracts, the operation of any Account, or the purchase of the Fund shares, provided, however, that FirstGWL&A determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of Schwab to perform its obligations related to the Contracts; or (j) at the option of Schwab in the event that formal administrative proceedings are instituted against FirstGWL&A by the NASD, the Securities and Exchange Commission, or any state securities or insurance department or any other regulatory body regarding FirstGWL&A's duties under this Agreement or related to the sale of the Fund's shares or the Contracts, the operation of any Account, or the purchase of the Fund shares, provided, however, that Schwab determines in its sole judgment exercised in good faith, that any such administrative proceedings will have a material adverse effect upon the ability of FirstGWL&A to perform its obligations related to the Contracts; or (k) at the option of any non-defaulting party hereto in the event of a material breach of this Agreement by any party hereto (the "defaulting party") other than as described in 10.1(a)-(j); provided, that the non-defaulting party gives written notice thereof to the defaulting party, with copies of such notice to all other non-defaulting parties, and if such breach shall not have been remedied within thirty (30) days after such written notice is given, then the non- defaulting party giving such written notice may terminate this Agreement by giving thirty (30) days written notice of termination to the defaulting party. 10.2.Notice Requirement. No termination of this Agreement shall be effective unless and until the party terminating this Agreement gives prior written notice to all other parties of its intent to terminate, which notice shall set forth the basis for the termination. Furthermore, (a) in the event any termination is based upon the provisions of Article VII, or the provisions of Section 10.1(a), 10.1(g) or 10.1(h) of this Agreement, the prior written notice shall be given in advance of the effective date of termination as required by those provisions unless such notice period is shortened by mutual written agreement of the parties; (b) in the event any termination is based upon the provisions of Section 10.1(d), 10.1(e), 10.1 (i) or 10.1(j) of this Agreement, the prior written notice shall be given at least sixty (60) days before the effective date of termination; and (c) in the event any termination is based upon the provisions of Section 10.1(b), 10.1(c) or 10.1(f), the prior written notice shall be given in advance of the effective date of termination, which date shall be determined by the party sending the notice. 10.3.Effect of Termination. Notwithstanding any termination of this Agreement, other than as a result of a failure by either the Fund or FirstGWL&A to meet Section 817(h) of the Code diversification requirements, the Fund, the Adviser and the Distributor shall, at the option of FirstGWL&A or Schwab, continue to make available additional shares of the Designated Portfolio(s) pursuant to the terms and conditions of this Agreement, for all Contracts in effect on the effective date of termination of this Agreement (hereinafter referred to as "Existing Contracts"). Specifically, without limitation, the owners of the Existing Contracts shall be permitted to reallocate investments in the Designated Portfolio(s), redeem investments in the Designated Portfolio(s) and/or invest in the Designated Portfolio(s) upon the making of additional purchase payments under the Existing Contracts. The parties agree that this Section 10.3 shall not apply to any terminations under Article I, section 1.2, or Article VII and the effect of such Article VII terminations shall be governed by Article VII of this Agreement. 10.4.Surviving Provisions. Notwithstanding any termination of this Agreement, each party's obligations under Article VIII to indemnify other parties shall survive and not be affected by any termination of this Agreement. In addition, with respect to Existing Contracts in effect on the effective date of termination of this Agreement, all provisions of this Agreement shall also survive and not be affected by any termination of this Agreement. 10.5.Survival of Agreement. A termination by Schwab shall terminate this Agreement only as to Schwab, and this Agreement shall remain in effect as to the other par- ties; provided, however, that in the event of a termination by Schwab the other parties shall have the option to terminate this Agreement upon 60 (sixty) days notice, rather than the six (6) months specified in Section 10.1(a). ARTICLE XI. Notices Any notice shall be sufficiently given when sent by registered or certified mail to the other party at the address of such party set forth below or at such other address as such party may from time to time specify in writing to the other party. If to the Fund: Van Eck Worldwide Insurance Trust 99 Park Avenue New York, New York 10016 Attention: President with a copy to the General Counsel If to FirstGWL&A: First Great-West Life & Annuity Insurance Company 8515 East Orchard Road Englewood, CO 80111 Attention:Assistant Vice President, Savings Products If to the Adviser: Van Eck Associates Corporation 99 Park Avenue New York, New York 10016 Attention: President If to the Distributor: Van Eck Securities Corporation 99 Park Avenue New York, New York 10016 Attention: President If to Schwab: Charles Schwab & Co., Inc. 101 Montgomery Street San Francisco, CA 94104 Attention: General Counsel ARTICLE XII. Miscellaneous 12.1.Subject to the requirements of legal process and regulatory authority, each party hereto shall treat as confidential the names and addresses of the owners of the Contracts and all information reasonably identified as confidential in writing by any other party hereto and, except as permitted by this Agreement, shall not disclose, disseminate or utilize such names and addresses and other confidential information without the express written consent of the affected party until such time as such information may come into the public domain. Without limiting the foregoing, no party hereto shall disclose any information that another party has designated as proprietary. 12.2.The captions in this Agreement are included for convenience of reference only and in no way define or delineate any of the provisions hereof or otherwise affect their construction or effect. 12.3.This Agreement may be executed simultaneously in two or more counterparts, each of which taken together shall constitute one and the same instrument. 12.4.If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Agreement shall not be affected thereby. 12.5.Each party hereto shall cooperate with each other party and all appropriate governmental authorities (including without limitation the SEC, the NASD and state insurance regulators) and shall permit such authorities reasonable access to its books and records in connection with any investigation or inquiry relating to this Agreement or the transactions contemplated hereby. Notwithstanding the generality of the foregoing, each party hereto further agrees to furnish the New York Insurance Commissioner with any information or reports in connection with services provided under this Agreement which such Commissioner may request in order to ascertain whether the variable annuity operations of FirstGWL&A are being conducted in a manner consistent with the New York Variable Annuity Regulations and any other applicable law or regulations. 12.6.Any controversy or claim arising out of or relating to this Agreement, or breach thereof, shall be settled by arbitration in a forum jointly selected by the relevant parties (but if applicable law requires some other forum, then such other forum) in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. 12.7.The rights, remedies and obligations contained in this Agreement are cumulative and are in addition to any and all rights, remedies and obligations, at law or in equity, which the parties hereto are entitled to under state and federal laws. 12.8.This Agreement or any of the rights and obligations hereunder may not be assigned by any party without the prior written consent of all parties hereto. 12.9.Schwab and FirstGWL&A are hereby expressly put on notice of the limitation of liability as set forth in the Master Trust Agreement of the Fund and the Articles of Incorporation of the Adviser and the Distributor and agree that the obligations assumed by the Fund and the Adviser pursuant to this Agreement shall be limited in any case to the Fund and Adviser and their respective assets and neither Schwab nor FirstGWL&A shall seek satisfaction of any such obligation from the shareholders of the Fund or the Adviser and Distributor, the Trustees, officers, directors, employees or agents of the Fund or Adviser, or any of them. 12.10.The Fund, Adviser and Distributor agree that the obligations assumed by FirstGWL&A and Schwab pursuant to this Agreement shall be limited in any case to FirstGWL&A and Schwab and their respective assets and neither the Fund, Distributor nor Adviser shall seek satisfaction of any such obligation from the shareholders of the FirstGWL&A or Schwab, the directors, officers, employees or agents of the FirstGWL&A or Schwab, or any of them, except to the extent permitted under this Agreement. 12.11.No provision of this Agreement may be deemed or construed to modify or supersede any contractual rights, duties, or indemnifications, as between the Distributor and the Fund, and as between the Adviser and the Fund. IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed in its name and on its behalf by its duly authorized representative and its seal to be hereunder affixed hereto as of the date specified below. FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY By its authorized officer, By:/s/ Robert K. Shaw Title: Vice President, Marketing & Product Development Date: April 1, 1997 VAN ECK WORLDWIDE INSURANCE TRUST: By its authorized officer, By:/s/ Thaddeus Leszczynski Title: Secretary Date: March 12, 1997 VAN ECK SECURITIES CORPORATION: By its authorized officer, By:/s/ Thaddeus Leszczynski Title: Secretary Date: March 12, 1997 VAN ECK ASSOCIATES CORPORATION: By its authorized officer, By:/s/ Thaddeus Leszczynski Title: Secretary Date: March 12, 1997 CHARLES SCHWAB & CO., INC. By its authorized officer, By:/s/ Jeff Benton Title:Vice President, Annuities & Life Insurance Date:March 31, 1997 Schwab Variable Annuity SCHEDULE A Contracts Form Numbers First Great-West Life & Annuity Insurance Company Group Variable/Fixed Annuity Contract J434NY SCHEDULE B Designated Portfolios Van Eck Gold and Natural Resources Fund SCHEDULE C Administrative Services To be performed by Charles Schwab & Co., Inc. A. Schwab will provide the properly registered and licensed personnel and systems needed for all customer servicing and support - for both fund and annuity information and questions - including: respond to Contractowner inquiries delivery of prospectus - both fund and annuity; entry of initial and subsequent orders; transfer of cash to insurance company and/or funds; explanations of fund objectives and characteristics; entry of transfers between funds; fund balance and allocation inquiries; mail fund prospectus. B. For the services, Schwab shall receive a fee of 0.25% per annum applied to the average daily value of the shares of the fund held by Schwab's customers, payable by the Adviser directly to Schwab, such payments being due and payable within 15 (fifteen) days after the last day of the month to which such payment relates. C. The Fund will calculate and Schwab will verify with FirstGWL&A the asset balance for each day on which the fee is to be paid pursuant to this Agreement with respect to each Designated Portfolio. D. Schwab will communicate all purchase, withdrawal, and exchange orders it receives from its customers to FirstGWL&A who will retransmit them to each fund. SCHEDULE D Reports per Section 6.6 With regard to the reports relating to the quarterly testing of compliance with the requirements of Section 817(h) and Subchapter M under the Internal Revenue Code (the "Code") and the regulations thereunder, the Fund shall provide within twenty (20) Business Days of the close of the calendar quarter a report to FirstGWL&A in the Form D1 attached hereto and incorporated herein by reference, regarding the status under such sections of the Code of the Designated Portfolio(s), and if necessary, identification of any remedial action to be taken to remedy non-compliance. With regard to the reports relating to the year-end testing of compliance with the requirements of Subchapter M of the Code, referred to hereinafter as "RIC status," the Fund will provide the reports on the following basis: (i) the last quarter's quarterly reports can be supplied within the 20-day period, and (ii) a year-end report will be provided 45 days after the end of the calendar year. However, if a problem with regard to RIC status, as defined below, is identified in the third quarter report, on a weekly basis, starting the first week of December, additional interim reports will be provided specially addressing the problems identified in the third quarter report. If any interim report memorializes the cure of the problem, subsequent interim reports will not be required. A problem with regard to RIC status is defined as any violation of the following standards, as referenced to the applicable sections of the Code: (a) Less than ninety percent of gross income is derived from sources of income specified in Section 851(b)(2); (b) Thirty percent or greater gross income is derived from the sale or disposition of assets specified in Section 851(b)(3); (c) Less than fifty percent of the value of total assets consists of assets specified in Section 851(b)(4)(A); and (d) No more than twenty-five percent of the value of total assets is invested in the securities of one issuer, as that requirement is set forth in Section 851(b)(4)(B). FORM D1 CERTIFICATE OF COMPLIANCE I, , a duly authorized officer, director or agent of Fund hereby swear and affirm that Fund is in compliance with all requirements of Section 817(h) and Subchapter M of the Internal Revenue Code (the "Code") and the regulations thereunder as required in the Fund Participation Agreement among First Great-West Life & Annuity Insurance Company, Charles Schwab & Co., Inc. and other than the exceptions discussed below: Exceptions Remedial Action If no exception to report, please indicate "None." Signed this day of , . (Signature) By: (Type or Print Name and Title/Position) SCHEDULE E EXPENSES The Fund and/or Distributor and/or Adviser, and FirstGWL&A will coordinate the functions and pay the costs of the completing these functions based upon an allocation of costs in the tables below. Costs shall be allocated to reflect the Fund's share of the total costs determined according to the number of pages of the Fund's respective portions of the documents. Item Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Prospectus Printing of combined prospectuses FirstGWL&A Fund or Distributor, as applicable Distributor shall supply FirstGWL&A with such numbers of the Designated Portfolio(s) prospectus(es) as FirstGWL&A shall reasonably request FirstGWL&A Fund or Distributor, as applicable Distribution to New and Inforce Clients FirstGWL&A FirstGWL&A Distribution to Prospective Clients Schwab Schwab Product Prospectus Printing for Inforce Clients FirstGWL&A FirstGWL&A Printing for Prospective Clients FirstGWL&A Schwab Distribution to New and Inforce Clients FirstGWL&A FirstGWL&A Distribution to Prospective Clients Schwab SchwabMutual Fund Prospectus Update & Distribution If Required by Fund or Distributor Fund or Distributor Fund or Distributor If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab Schwab Schwab Product Prospectus Update & Distribution If Required by Fund or Distributor FirstGWL&A Fund or Distributor Item Function Party Responsible for Coordination Party Responsible for Expense If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab Schwab Schwab Mutual Fund SAI Printing Fund or Distributor Fund or Distributor Distribution FirstGWL&A FirstGWL&A Product SAI Printing FirstGWL&A FirstGWL&A Distribution FirstGWL&A FirstGWL&A Item Function Party Responsible for Coordination Party Responsible for Expense Proxy Material for Mutual Fund: Printing if proxy required by Law Fund or Distributor Fund or Distributor Distribution (including labor) if proxy required by Law FirstGWL&A Fund or Distributor Printing & distribution if required by FirstGWL&A FirstGWL&A FirstGWL&A Printing & distribution if required by Schwab FirstGWL&A Schwab Item Function Party Responsible for Coordination Party Responsible for Expense Mutual Fund Annual & Semi-Annual Report Printing of combined reports FirstGWL&A Fund or Distributor Distribution FirstGWL&A FirstGWL&A and Schwab Other communication to New and Prospective clients If Required by the Fund or Distributor Schwab Fund or Distributor If Required by FirstGWL&A Schwab FirstGWL&A Item Function Party Responsible for Coordination Party Responsible for Expense If Required by Schwab Schwab Schwab Other communication to inforce Distribution (including labor) if required by the Fund or Distributor FirstGWL&A Fund or Distributor If Required by FirstGWL&A FirstGWL&A FirstGWL&A If Required by Schwab FirstGWL&A Schwab Item Function Party Responsible for Coordination Party Responsible for Expense Errors in Share Price calculation pursuant to Section 1.10 Cost of error to participants FirstGWL&A Fund or Adviser Cost of administrative work to correct error FirstGWL&A Fund or Adviser Operations of the Fund All operations and related expenses, including the cost of registration and qualification of shares, taxes on the issuance or transfer of shares, cost of management of the business affairs of the Fund, and expenses paid or assumed by the fund pursuant to any Rule 12b-1 plan Fund or Distributor Fund or Adviser Operations of the Account Federal registration of units of separate account (24f-2 fees) FirstGWL&A FirstGWL&A EX-10.(I) 21 EXHIBIT 10(a) April 15, 1997 First Great-West Life & Annuity Insurance Company 125 Wolf Road Albany, New York 12205 Re: Registration Statement Dear Ladies and Gentlemen: We have acted as counsel to First Great-West Life & Annuity Insurance Company, a New York corporation, ("Registrant") regarding federal securities laws applicable to the issuance and sale of the Contract described therein. We hereby consent to the reference to us under the heading "Legal Matters" in the prospectus. Very Truly Yours, /s/ Jorden Burt Berenson & Johnson LLP Jorden Burt Berenson & Johnson LLP EX-10.(II) 22 INDEPENDENT AUDITORS' CONSENT We consent to the use in this Registration Statement of First Great-West Life & Annuity Insurance Company on Form N-4 of our report dated April 14, 1997, appearing in the Prospectus, which is a part of this Registration Statement. We also consent to the reference to us under the heading "Experts" in the Prospectus and Statement of Additional Information which are a part of such Registration Statement. /s/ Deloitte & Touche LLP DELOITTE & TOUCHE LLP Denver, Colorado April 14, 1997 EX-13 23 EXHIBIT 13 YIELD AND EFFECTIVE YIELD CALCULATIONS Money Market Investment Division Yield for the Money Market Investment Division is calculated on a seven day period. The current yield formula = base period return x (365/7) The effective yield formula = [(1 + base period return)365/7] - 1 Base period return is calculated as follows: Ending account value -Beginning account value -Expenses accrued for the period Net change in account value Net change in account value/Beginning account value = base period return. Following is an example of these calculations: a= Value of one accumulation unit at beginning of period = 16.23525 b= Value of one accumulation unit at end of period = 16.24946 c= Annual maintenance charges accrued in period = $3.91 d= Average number of units outstanding in period = 1000.00 e= Base period return Yield = (b-a-c/d) a = $16.24946 - 16.23535 - $3.91/ 1000.00 16.23535 e= 0.000635 f= Annualized yield e x (365/7) = 3.31% g= Effective yield {[1 + (e)]365/7} - 1 = 3.36% Other Investment Divisions The yield calculation for all other investment divisions is based on a 30-day period. FORMULA: Yield = 2{[(a-b)/ (cd) + 1]6 -1} Where: a= net investment income earned during the period attributable to the Investment Division b= expenses accrued for the period (net of reimbursements) c= average daily number of accumulation units outstanding during the period d= maximum offering price per accumulation unit on the last day of the period Following is an example of this yield calculation: a= $6,000 b= $2,000 c= 50,000.00 d= $13.00 Yield= 2[($6,000.00 - 2,000.00 + 1)6 - 1] 50,000.00 x $13.00 = 7.50% TOTAL RETURN CALCULATION FORMULA: P(1+T)N = ERV Where: T= Average annual total return N= The number of years including portions of years where applicable for which the performance is being measured ERV= Ending redeemable value of a hypothetical $1,000 payment made at the beginning of the applicable period P= A hypothetical $1,000 initial payment made at the inception of the Investment Division Assumed expenses = 0.85% mortality & expense risk charge and $25 contract maintenance charge The above formula can be restated to solve for T as follows: T = [(ERV/P)1/N] - 1 Following are examples of this calculation on a 1 year, 5 year, 10 year and since inception basis: 1 year total return: ERV = 1,344.50 N= 1.00 P= 1,000.00 Therefore, 1 year total return is 34.55% . 5 year total return: ERV = 1,792.44 N= 5.00 P= 1,000.00 Therefore, 5 year total return is 12.38% . 10 year total return: ERV = 2,857.38 N= 10.00 P= 1,000.00 Therefore, 10 year total return is 11.07% . Since inception total return: ERV = 4,595.67 N= 13.50 P= 1,000.00 Therefore, since inception total return is 11.96% . EX-27 24
7 1,000 OTHER DEC-31-1997 APR-04-1997 0 0 0 0 0 0 0 6,000 0 0 6,000 0 0 0 0 0 0 0 2,000 4,000 6,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
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