Exhibit C(1)
DISTRIBUTION AGREEMENT BETWEEN
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
AND
WESTPORT FINANCIAL SERVICES, L.L.C
AGREEMENT made as of the 15th day of February, 2005 by and between
Connecticut General Life Insurance Company, a Connecticut corporation ("CG"),
on its own behalf and on behalf of certain of its separate accounts
("Accounts") named in Attachment A to this Agreement, as said Attachment may be
amended from time to time, and Westport Financial Services, L.L.C.
("Distributor").
WHEREAS, the Accounts are or will be established under the authority of the
Board of Directors of CG in order to set aside and invest assets attributable
to certain variable annuity contracts and variable life insurance policies
(together, "Policies") issued by CG;
WHEREAS, the Accounts are or will be registered under the Investment Company
Act of 1940, as amended ("the '40 Act") and the Policies are or will be
registered under the Securities Act of 1933, as amended ("the '33 Act"), unless
exemptions from registration under the '40 Act and '33 Act are available;
WHEREAS, Distributor is registered as a broker-dealer with the Securities
and Exchange Commission ("SEC") under the Securities Exchange Act of 1934, as
amended ("the '34 Act") and is a member of the National Association of
Securities Dealers, Inc. ("NASD");
WHEREAS, CG and the Accounts desire to have the Policies sold and
distributed by and through Distributor, and Distributor is willing to sell and
distribute such Policies; and
WHEREAS, Distributor desires to appoint CG, the issuer of the Policies, as
its agent to receive money and perform other services.
NOW, THEREFORE, in consideration of the covenants hereinafter contained, CG and
Distributor agree as follows:
1. Underwriter.
CG hereby appoints Distributor as principal distributor of the Policies during
the term of this Agreement. CG reserves the right, however, to refuse at any
time or times to sell any Policies hereunder for any reason, and CG maintains
ultimate responsibility for Policy underwriting.
2. Undertakings Regarding Sales by Distributor.
Distributor may sell the Policies but does not agree hereby to sell any
specific number of Policies and shall be free to act as underwriter of other
securities. Distributor hereby appoints CG as
-1-
agent of Distributor to receive premiums on Distributor's behalf. Checks or
money orders in payment of premiums shall be drawn to the order of "Connecticut
General Life Insurance Company." Distributor agrees to offer each Policy for
sale in accordance with any prospectus then in effect for such Policy.
Distributor is not authorized to give any information or to make any
representations concerning any Policy other than those contained in the current
prospectus for such Policy as filed with the SEC or in such sales literature as
may be authorized by CG. CG shall review and approve or disapprove all proposed
advertising concerning the Policies prior to its use.
3. Compliance.
Distributor shall conform to the Conduct Rules of the NASD, and the securities
laws of any jurisdiction in which it sells, directly or indirectly, any
Policies. Distributor shall take reasonable steps to ensure that its associated
persons sell Policies to persons for whom a Policy is suitable. Distributor
agrees to make timely filings with the SEC, the NASD, and such other regulatory
authorities as may be required of any sales literature relating to the Policies
and intended for distribution to prospective investors. Distributor also agrees
to furnish to CG sufficient copies of any agreements or plans it intends to use
in connection with any sales of Policies. Distributor further agrees to provide
information or reports with respect to its services hereunder pursuant to
request by any regulatory authority having jurisdiction with respect thereto,
in order that such regulatory authority may ascertain whether CG's variable
product operations are being conducted in a manner consistent with applicable
laws and regulations.
4. Registration and Qualification of Policies.
CG agrees to execute such papers and to do such acts and things as shall from
time to time be reasonably requested by Distributor for the purpose of
qualifying and maintaining qualification of the Policies for sale under
applicable state law and for maintaining the registration of the Accounts and
interests therein, respectively, under the '40 Act and the '33 Act, to the end
that there will be available for sale from time to time such amount of the
Policies as Distributor and other broker-dealers may reasonably be expected to
sell. CG shall advise Distributor promptly of (a) any action of the SEC or any
authority of any state or territory of which it may be advised, affecting
registration or qualification of any Account, or the right to offer the
Policies for sale, and (b) the happening of any event which makes untrue any
statement or which requires the making of any change in the registration
statement or prospectus in order to make the statements therein not misleading.
5. Independent Contractor Status.
Distributor shall be an independent contractor. Distributor is responsible for
its own conduct and for the employment, control and conduct of its agents and
employees and for injury to such agents or employees or to others through its
agents or employees. Distributor assumes full responsibility for its agents and
employees under applicable statutes and agrees to pay all employer taxes
thereunder. All persons selling Policies shall be duly licensed as insurance
agents, with variable contract authority if necessary, pursuant to applicable
state laws, and CG shall have responsibility for arranging for such licensing.
6. Expenses Paid by CG.
While Distributor continues to act as agent of CG to obtain applications for
and to sell Policies, and provided Distributor (as distinguished from its
associated persons) receives no commission for the sale of the Policies, CG
shall pay the following:
(a) all expenses of printing and distributing any prospectus for use in
offering the Policies for sale and all other copies of any such prospectus used
by Distributor, and
-2-
(b) all other expenses of advertising and of preparing, printing and
distributing all other literature or material for use in connection with
offering the Policies for sale.
7. Interests in and of Distributor.
It is understood that any of the policyholders, directors, officers, employees
and agents of CG may be a shareholder, director, officer, employee or agent of,
or be otherwise interested in, Distributor, any affiliated person of
Distributor, any organization in which Distributor may have an interest or any
organization which may have an interest in Distributor; that Distributor, any
such affiliated person or any such organization may have an interest in CG; and
that the existence of any such dual interest shall not affect the validity
hereof or of any transaction hereunder except as otherwise provided in the
Charter, Articles of Incorporation or By-Laws of CG and Distributor, or by
specific provision of applicable law.
8. Compensation for Sales of Policies and Appointments of CG as Agent of
Distributor.
(a) For sales of the Policies by associated persons of Distributor and the
continuing obligations of Distributor set forth herein, CG shall compensate
Distributor as provided in the Distribution Services Agreement by and between
the parties hereto of even date herewith (the "Distribution Services
Agreement").
(b) CG agrees to maintain all required books of account and related
financial records on behalf of Distributor. All such books and records shall be
maintained and preserved pursuant to Rules 17a-3 and 17a-4 under the '34 Act
(or the corresponding provisions of any future federal securities laws or
regulations). In addition, CG agrees to maintain records of all sales
commissions paid to the associated persons of Distributor and any other
broker-dealers pursuant to paragraph (a) above for the sale of Policies. All
such books and records shall be owned by and under the control of CG. CG also
agrees to send to Distributor's customers all required confirmations of
customer transactions, and on behalf of Distributor to pay all sales
commissions due and payable in connection with the sale of the Policies.
9. Indemnification.
(a) CG agrees to indemnify and hold harmless Distributor and each director
or officer thereof and each person, if any, who is associated with Distributor
within the meaning of the '34 Act against any and all loss, liability, claims
damage, and expenses whatsoever (including any and all expenses reasonably
incurred in investigating or defending against any litigation commenced or
threatened or any claim whatsoever) arising out of any untrue or alleged untrue
registration statement, or sales material relating to the Policies prepared by
CG or supplied to Distributor by CG, or in any application filed in any state
in order to qualify the same for sale, or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(b) Distributor agrees to indemnify and hold harmless CG and each director
or officer thereof, and each person, if any, who controls CG within the meaning
of the '33 Act, its agents, subsidiaries and employees, against any and all
loss liability, claims, damages, and expense whatsoever (including but not
limited to any and all expenses reasonably incurred in investigating or
defending against any litigation commenced or threatened or any claim
-3-
whatsoever) arising out of any untrue or alleged untrue statement or
representation made (except as such statements may be made in reliance on the
prospectus, registration statement and sales material supplied by CG), the
failure to deliver a currently effective prospectus (provided that Distributor
shall be entitled to rely on representations by CG as to which prospectus is
currently effective at any point in time and Distributor shall not be liable
for delivering a prospectus that is not currently effective at the time of
delivery thereof due to a misrepresentation of the currency thereof by CG or
other failure by CG to notify Distributor that such prospectus was no longer
effective) or the use of any unauthorized sales literature by Distributor (or
its employees) in connection with the sale of the Policies.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any such litigation or claim, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section, notify the indemnifying party of the
commencement thereof, but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section. In case any such litigation or claim is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, assume the defense
thereof, with counsel satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its election to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than the reasonable cost of investigation.
10. Liability.
Each party shall be liable for its own misconduct and negligence hereunder.
11. Effective Date and Termination.
This Agreement shall act to amend any previous agreement between the parties
styled in whole or in part as a principal underwriting agreement shall be
effective as of the date first above written, and:
(a) shall continue in force from year to year thereafter, subject to prior
termination as provided herein;
(b) may at any time be terminated by CG upon sixty days' written notice to
Distributor;
(c) may at any time be terminated by CG if CG reasonably determines that
Distributor has failed to perform in a satisfactory manner;
(d) shall terminate automatically in the event of its attempted assignment
by Distributor and shall not be assignable by CG except with the written
consent of Distributor;
(e) may at any time be terminated by Distributor upon 180 days' written
notice to CG.
Termination of this agreement pursuant to this Section shall be without payment
of any penalty. In the event of termination for any reason, CG shall retain all
records relating hereto, free from any claim or retention of rights by
Distributor, provided, however, that copies of all records will be made
available to regulatory authorities having jurisdiction over Distributor.
-4-
Notwithstanding the foregoing, Distributor shall not terminate this Agreement
prior to December 31, 2005, except as required by law or due to a default by CG
which, if capable of cure, is not cured within any applicable grace or notice
period. This Agreement shall immediately terminate in event of its assignment
(as that term is defined in the 1940 Act).
For purposes hereof, the term "default" shall include, without limitation:
(a) an Account's failure to maintain a required effective registration under
the 1940 Act or the Securities Act of 1933; (b) inclusion in a relevant
registration statement, prospectus, statement of additional information or
other marketing material prepared by CG of an untrue statement of a material
fact or omission to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; or (c) a material
breach by CG of any representation, warranty or covenant in this Agreement or
in the Distribution Services Agreement.
12. Confidentiality.
Distributor agrees not to disclose or use any records or information obtained
hereunder in any manner whatsoever except as expressly authorized herein, will
keep confidential any information obtained pursuant hereto, and disclose such
information only if CG has authorized such disclosure, or if such disclosure is
expressly required by state or federal regulatory authorities having
appropriate jurisdiction or otherwise by force of law. Distributor agrees that
any disclosure it makes of records or information obtained hereunder shall be
in accordance with procedures adopted by Distributor in good faith to protect
confidential information of third parties delivered to it, including without
limitation policyholder and insured names. Except as previously provided,
Distributor will not disclose records or information obtained hereunder to any
person other than to Distributor's directors, officers, employees, affiliates,
and advisors, including, without limitation, attorneys and auditors
(collectively, "Representatives") who are informed of, and who Distributor
shall direct to respect, the confidential nature of such information, and then,
in Distributor's reasonable judgment, only on a "need to know" basis in
connection with the fulfilling its role under this Distribution Agreement.
Distributor agrees to be responsible for any breach of this Agreement by any of
its Representatives.
13. Amendment.
This Agreement may be amended only by an instrument in writing signed by both
parties.
14. Applicable Law and Liabilities; Conflicting Provisions.
This Agreement is executed and delivered in the State of Connecticut and shall
be governed by and construed in accordance with the laws of Connecticut (other
than its rules with respect to conflicts of law). To the extent any provisions
herein contained conflict with any applicable provisions of law, the latter
shall control and this Agreement shall, to that extent, be deemed modified. In
the event of any conflict between the provisions of this Agreement and the
Distribution Services Agreement, the provisions of the Distribution Services
Agreement shall prevail.
-5-
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY
By: /s/ Xxx Xxxx
------------------------------
Name: Xxx Xxxx
Title: Vice President
WESTPORT FINANCIAL SERVICES, L.L.C.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
-6-
Attachment A
Separate Accounts
1. CG Variable Life Insurance Separate Account A
Established May 22, 1995
File Number 811-7317 (Group Registered Product)
2. CG Corporate Insurance Variable Life Separate Account 02
Established February 22, 1996
File Number 811-7563 (COLI Registered Product)
3. Separate Accounts of Connecticut General Life Insurance Company exempt
from registration under the Investment Company Act of 1940 issuing
privately placed corporate and bank owned life insurance products, now
existing or created after the date of this Agreement
