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Exhibit 3
DISTRIBUTION AND PRINCIPAL UNDERWRITING AGREEMENT
THIS AGREEMENT is made this 8th day of October, 2000, by and among
Citicorp Life Insurance Company (the "Company""), an Arizona insurance company,
with its principal offices in Hartford, Connecticut and Citicorp Life Variable
Annuity Separate Account, acting on its own behalf and being solely responsible
for its obligations, (the "Separate Account"), which is a registered, open-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act") of the Company established pursuant to Arizona
Insurance Law with its principal offices in New York, New York, and Travelers
Distribution LLC (the "Distributor") a Delaware limited liability company.
WHEREAS, the Distributor is engaged principally in the business of
distributing variable insurance products and investment company shares, is
registered as a broker-dealer under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), and is a member of the National Association of
Securities Dealers, Inc.
("NASD");
WHEREAS, the Company and the Separate Account has registered variable
annuity contracts (the "Contracts") under the Securities Act of 1933, as amended
(the "1933 Act"), and desire to retain the Distributor to distribute the
Contracts and the Distributor is willing to distribute the Contracts in the
manner and on the terms set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company, the Separate Account, and the
Distributor hereby agree as follows:
1. Definitions. The terms "affiliated person," and "assignment," when
used in this Agreement, shall have the respective meanings specified under the
1940 Act and rules thereunder. In addition, the term "representative," when used
in this Agreement shall have the meaning specified under the 1934 Act and rules
thereunder.
2. Distribution and Principal Underwriting of the Contracts.
(a) Right to Distribute Contracts. The Company and the
Separate Account hereby grant to the Distributor the exclusive right, subject to
the requirements of the 1933 Act, the 1934 Act, and the 1940 Act, and the terms
set forth herein, to act as agent for distribution of the Contracts and as
principal underwriter during the term of this Agreement. The Distributor shall
at all times function as and be deemed to be an independent contractor and
nothing herein contained shall constitute the Distributor or its agents,
officers, or employees as agents, officers, or employees of the Company solely
by virtue of their activities in connection with the sale of the Contracts
hereunder. The Distributor will use its best efforts to distribute the Contracts
in accordance with applicable laws, including the rules of the NASD.
The Company and the Separate Account hereby authorize the
Distributor to enter into written sales or service agreements, on such terms and
conditions as the Distributor may determine are consistent with this Agreement,
with broker-dealers that are registered under the 1934 Act and are members of
the NASD and who agree to distribute the Contracts. Distributor shall not be
obligated or authorized to make retail sales to the public.
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(b) Limits on Authority. This Agreement notwithstanding, the
Company retains the ultimate right to control the sale of the Contracts,
including the right to suspend sales in any jurisdiction or jurisdictions, to
appoint and discharge agents of the Company, or to refuse to sell a Contract to
any applicant for any reason whatsoever. Furthermore, the Distributor and its
representatives shall not have authority, on behalf of the Company: to make,
alter, or discharge any Contract or other variable contract entered into
pursuant to a Contract; to waive any Contract forfeiture provision; to extend
the time of paying any premium, or to receive any monies or premiums. The
Distributor shall not expend, nor contract for the expenditure of, the funds of
the Company. The Distributor shall not possess or exercise any authority on
behalf of the Company other than that expressly conferred on the Distributor by
this Agreement.
(c). Registration; Compliance with NASD Conduct Rules. To the
extent necessary to distribute the Contracts, the Distributor shall be duly
registered or otherwise qualified under all applicable securities laws of any
state or other jurisdiction in which the Distributor is licensed or otherwise
authorized to distribute the Contracts, if required. The Distributor shall be
responsible for the training, supervision, and control of its representatives
for the purpose of the NASD Conduct Rules and all applicable federal and state
securities law requirements.
(d) Representations and Warranties of the Distributor. The
Distributor represents and warrants to the Company that the Distributor is, and
during the term of this Agreement shall remain, registered as a broker-dealer
under the 1934 Act, admitted as a member with the NASD, and duly registered
under applicable state securities laws, and that the Distributor is and shall
remain during the term of this Agreement in compliance with Section 9(a) of the
1940 Act.
(e) Marketing Materials; Preparation and Filing. The Company shall design and
develop all promotional, sales, and advertising material relating to the
Contracts and any other marketing-related documents for use in the sale of the
Contracts, subject to review and approval by Distributor of such material and
documents in accordance with Section 2210 of the NASD Conduct Rules. The
Distributor shall be responsible for filing such material with the NASD and any
state securities regulatory authorities requiring such filings. The Company
shall be responsible for filing all promotional, sales, or advertising material,
as required, with any state insurance regulatory authorities. The Company shall
be responsible for preparing the Contract forms and filing them with applicable
state insurance regulatory authorities, and for preparing the prospectuses and
registration statements for the Contracts and filing them with the Securities
and Exchange Commission (the "SEC") and state regulatory authorities, to the
extent required. The parties shall notify each other expeditiously of any
comments provided by the SEC, NASD, or any securities or insurance regulatory
authority on such material, and will cooperate expeditiously in resolving and
implementing any comments, as applicable.
3. Books and Records.
(a) The Company, the Separate Account, and the Distributor
shall cause to be maintained and preserved all books of account and related
financial records as are required by the 1934 Act, the NASD, and any other
applicable laws and regulations. These books and records as to all transactions
hereunder shall be maintained so as to disclose clearly and accurately the
nature and details of the transactions. All the books and records maintained by
the Company on behalf of the Distributor, or by any person on behalf of the
Company, or by the Distributor directly, in connection with the offer and sale
of the Contracts, shall be maintained and preserved in conformity with the
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requirements of Rules 17a-3 and 17a-4 under the 1934 Act or the corresponding
provisions of any future federal securities laws or regulations. All such books
and records shall be maintained and held by the Company or by any person on
behalf of the Company on behalf of and as agent for the Distributor, whose
property they are and shall remain. Such books and records shall be at all times
subject to inspection by the SEC in accordance with Section 17(a) of the 1934
Act. The Company shall have access to all records maintained in connection with
the Contracts.
(b) The Company, as agent for the Distributor, shall confirm
to each purchaser of a Contract, in accordance with Rule 10b-10 under the 1934
Act, acceptance of premiums and such other transactions as are required by and
in accordance with Rule 10b-10 and administrative interpretations thereunder.
4. Reports.
(a) The Distributor shall cause the Company and the Separate
Account to be furnished with such reports as either or both may reasonably
request for the purpose of meeting reporting and record keeping requirements
under the 1933 Act, the 1934 Act, and the 1940 Act and rules thereunder, as well
as the insurance laws of the State of Connecticut and any other applicable
states or jurisdictions.
(b) The Distributor and the Company shall submit to all
regulatory and administrative bodies having jurisdiction over the present and
future operations of the Separate Account, any information, reports, or other
material which any such body by reason of this Agreement may request or require
pursuant to applicable laws or regulations.
5. Maintaining Registration and Approvals. The Company shall be
responsible for maintaining the registration of the Contracts with the SEC and
any state securities regulatory authority with which such registration is
required, and for gaining and maintaining approval of the Contract forms where
required under the insurance laws and regulations of each state or other
jurisdiction in which the Contracts are to be offered.
6. Issuance and Administration of Contracts. The Company shall be
responsible for issuing the Contracts and administering the Contracts and the
Separate Account and an affiliated broker-dealer shall have full responsibility
for the securities activities of all persons employed by the Company, engaged
directly or indirectly in the Contract operations, and for the training,
supervision, and control of such persons to the extent of such activities.
7. Non-Exclusivity. The Company and the Separate Account agree that the
services to be provided by the Distributor hereunder are not to be deemed
exclusive and the Distributor is free to act as distributor of other variable
insurance products or investment company shares.
8. Affiliated Persons. It is understood that any Contract owner or
agent of the Separate Account may be a Contract owner, shareholder, director,
officer, employee, or agent of, or be otherwise interested in, the Distributor,
any affiliated person of the Distributor, any organization in which the
Distributor may have an interest or any organization which may have an interest
in the Distributor; that the Distributor, any such affiliated person, or any
such organization may have an interest in the Separate Account and that the
existence of any such dual interest shall not affect the validity hereof or
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any transaction thereunder except as may otherwise be provided in the articles
of organization or by-laws of the Distributor or by specific provisions of
applicable law.
9. Indemnification.
(a) By the Company. The Company on its behalf and on behalf of
the Separate Account shall indemnify and hold harmless the Distributor and any
officer, director, or employee of the Distributor against any and all losses,
claims, damages, or liabilities, joint or several (including any investigative,
legal, and other expenses reasonably incurred in connection with, and any
amounts paid in settlement of, any action, suit, or proceeding or any claim
asserted), to which the Distributor and/or any such person may become subject,
under any statute or regulation, any NASD rule or interpretation, at common law
or otherwise, insofar as such losses, claims, damages, or liabilities:
(i) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, in light of the circumstances in
which they were made, contained in any registration statement or in any
prospectus for the Contracts; provided that the Company shall not be liable in
any such case to the extent that such loss, claim, damage, or liability arises
out of, or is based upon, an untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon information furnished in
writing to the Company by the Distributor specifically for use in the
preparation of any such registration statement or any amendment thereof or
supplement thereto; or
(ii) result from any breach by the Company of any
provision of this Agreement.
This indemnification agreement shall be in addition to any liability that the
Company may otherwise have; provided, however, that no person shall be entitled
to indemnification pursuant to this provision if such loss, claim, damage, or
liability is due to the willful misfeasance, bad faith, gross negligence, or
reckless disregard of duty by the person seeking indemnification.
(b) By The Distributor. The Distributor shall indemnify and
hold harmless the Company on its behalf and on behalf of the Separate Account
and any officer, director, or employee of the Company or the Separate Account
against any and all losses, claims, damages, or liabilities, joint or several
(including any investigative, legal, and other expenses reasonably incurred in
connection with, and any amounts paid in settlement of, any action, suit, or
proceeding or any claim asserted), to which the Company and/or any such person
may become subject under any statute or regulation, any NASD rule or
interpretation, at common law or otherwise, insofar as such losses, claims,
damages, or liabilities:
(i) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, in light of the
circumstances in which they were made, contained in any registration statement
or in any prospectus for the Contracts; in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon information furnished in writing
by the Distributor to the Company specifically for use in the preparation of any
such registration statement or any amendment thereof or supplement thereto; or
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(ii) result from any breach by the Distributor of any
provision of this Agreement; or
(iii) result from the Distributor's own misconduct or
negligence.
This indemnification agreement shall be in addition to any liability that the
Distributor may otherwise have; provided, however, that no person shall be
entitled to indemnification pursuant to this provision if such loss, claim,
damage, or liability is due to the willful misfeasance, bad faith, gross
negligence, or reckless disregard of duty by the person seeking indemnification.
(c) General. Promptly after receipt by a party entitled to
indemnification ("indemnified person") under this Paragraph 9 of notice of the
commencement of any action as to which a claim will be made against any person
obligated to provide indemnification under this Paragraph 9 ("indemnifying
party"), such indemnified person shall notify the indemnifying party in writing
of the commencement thereof as soon as practicable thereafter, but failure to so
notify the indemnifying party shall not relieve the indemnifying party from any
liability which it may have to the indemnified person otherwise than on account
of this Paragraph 9. The indemnifying party will be entitled to participate in
the defense of the indemnified person but such participation will not relieve
such indemnifying party of the obligation to reimburse the indemnified person
for reasonable legal and other expenses incurred by such indemnified person in
defending himself or itself.
The indemnification provisions contained in this Paragraph 9 shall
remain operative in full force and effect, regardless of any termination of this
Agreement. A successor by law of the Distributor or the Company, as the case may
be, shall be entitled to the benefits of the indemnification provisions
contained in this Paragraph 9.
10. Regulation. This Agreement shall be subject to the provisions of
the 1933 Act, the 1934 Act, and the 1940 Act and the rules, regulation, and
rulings thereunder, and of the NASD, as in effect from time to time, including
such exemptions and other relief as the SEC, its staff, or the NASD may grant,
and the terms hereof shall be interpreted and construed in accordance therewith.
11. Investigation and Proceedings.
(a) Each party hereto shall advise the other promptly of (i)
any action of the SEC or any authorities of any state or territory, of which it
has knowledge, affecting registration or qualification of the Separate Account
and the Contracts, or the right to offer the Contracts for sale, and (ii) the
happenings of any event that makes untrue any statement or which requires the
making of any change, in the registration statement or prospectus for the
Contracts in order to make the statements therein not misleading.
(b) The Company, the Separate Account, and the Distributor
agree to cooperate fully in any regulatory inspection, inquiry, investigation,
or proceeding or any judicial proceeding with respect to the Company, the
Separate Account, or the Distributor, their affiliates and their representatives
to the extent that such inspection, inquiry, investigation, or proceeding is in
connection with the Contracts distributed under this Agreement.
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12. Duration and Termination of the Agreement.
(a) This Agreement shall become effective with respect to the
Contracts as of the date first written above, and shall continue in full force
and effect until termination or expiration. This Agreement may be amended at any
time by mutual agreement of the parties hereto.
(b) This Agreement may be terminated at any time for any
reason by either party upon 60 days' written notice to the other party, without
payment of any penalty. This Agreement may be terminated immediately at the
option of either party to this Agreement upon the other party's material breach
of any provision of this Agreement, unless such breach has been cured within 10
days after receipt of notice from the non-breaching party of such breach.
(c) This Agreement shall automatically terminate in the event
of its assignment. (The term "assigned" shall not include any transaction
exempted from Section 15(b)(2) of the 1940 Act).
(d) Upon termination of this Agreement, all authorizations,
rights and obligations shall cease except the obligation to settle accounts, and
the provisions contained in Paragraph 9 regarding indemnification agreements.
13. Rights, Remedies, etc. are Cumulative. 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. Failure of either
party to insist upon strict compliance with any of the conditions of this
Agreement shall not be construed as a waiver of any of the conditions, but the
same shall remain in full force and effect. No waiver of any of the provisions
of this Agreement shall be deemed, or shall constitute, a waiver of any other
provisions, whether or not similar, nor shall any waiver constitute a continuing
waiver.
14. Interpretation. This Agreement constitutes the whole agreement
between the parties hereto with respect to the subject matter hereof, and
supersedes all prior oral or written understandings, agreements, or negotiations
between the parties with respect to such matter. No prior writing by or between
the parties with respect to the subject matter hereof shall be used by either
party in connection with the interpretation of any provisions of this Agreement.
15. Severability. This is a severable Agreement. In the event that any
provision of this Agreement would require a party to take action prohibited by
applicable federal or state law or prohibit a party from taking action required
by applicable federal or state law, then it is the intention of the parties
hereto that such provision shall be enforced to the extent permitted under the
law, and, in any event, that all other provisions of this Agreement shall remain
valid and duly enforceable as if the provision at issue had never been a part
hereof.
16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
be deemed one instrument.
17. Notices. All notices and other communications provided for
hereunder shall be in writing and shall be either hand-delivered, transmitted by
registered or certified United States mail with return receipt requested, or by
overnight mail by a nationally recognized courier. All notices shall be
effective upon delivery and shall be addressed as follows:
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(a) If to the Company -
Citicorp Life Insurance Company
Xxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
(b) If to the Separate Accounts
Citicorp Life Insurance Company
Variable Annuity Separate Account
Xxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
(c) If to the Distributor -
Travelers Distribution LLC
Xxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
or to such other address as the Company, the Separate Account, or the
Distributor shall designate by written notice to the other parties.
18. Miscellaneous. Captions in this Agreement are included for
convenience or reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect.
IN WITNESS WHEREOF, the Company, the Separate Account, and the
Distributor have caused this Agreement to be executed in their names and on
their behalf by and through their duly authorized officer on the day and year
first above written.
CITICORP LIFE INSURANCE COMPANY
By: /s/Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Secretary
CITICORP LIFE VARIABLE ANNUITY SEPARATE
ACCOUNT
By: /s/Xxxxxxxx X. McGgah
-----------------------------------
Name: Xxxxxxxx X. XxXxx
Title: Assistant Secretary
TRAVELERS DISTRIBUTION LLC
By: /s/Xxxxxx X. Xxxxxx, Xx.
-----------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: President, Chief Executive Officer
and Chief Operating Officer
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Schedule A
to the
Distribution and Principal Underwriting Agreement
List of Separate Account
1. Citicorp Life Variable Annuity Separate Account
