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Exhibit 3(b)
SELLING AGREEMENT
THIS AGREEMENT is made among Travelers Insurance Company ("TIC"), Travelers Life
and Annuity Companies ("TLAC"), (collectively the "Insurance Companies") and
Tower Square Securities (Underwriter) and Exhibit 3b, ("Broker/Dealer") together
with such affiliated insurance agencies (collectively the "Selling Entities") as
are specified on the Selling Agreement Schedule Page.
In consideration of the mutual promises contained in this agreement, the parties
agree as follows:
1. Purpose and Background. The Underwriter, the Insurance Companies,
Broker/Dealer and Selling Entities enter into this agreement for the purpose of
authorizing Broker/Dealer, through its insurance licensed agents as described in
Section 5 below, to solicit applications for such life insurance (including
variable life), annuity contracts (including fixed, variable, and modified
guaranteed annuity products) and, long term care insurance contracts
(collectively the "Insurance Policies") as are listed on the Selling Agreement
Schedule Pages (the "Schedule Pages"). These Schedules Page may be amended from
time to time to add other Insurance Policies.
2. Licensing and Appointment. The Insurance Companies have each respectively
appointed Underwriter to serve as the distributor and principal underwriter of
the variable life or variable annuity Insurance Policies. The Underwriter is
registered with the SEC, the National Association of Securities Dealers, Inc.
("NASD") and all appropriate state securities regulatory authorities as a
Broker/Dealer.
The Underwriter and Broker/Dealer desire that Broker/Dealer through its
registered representatives ("Registered Representatives") be authorized to sell
the Insurance Policies.
3. Securities Licensing/NASD Compliance. Broker/Dealer shall, at all times
when performing its functions under this agreement, be registered as a
securities broker with the SEC and NASD and licensed or registered as a
securities broker-dealer in the states and other local jurisdictions that
require such licensing or registration in connection with sales of the variable
products.
Broker/Dealer agrees to abide by all rules and regulations of the NASD and to
comply with all applicable state and insurance and securities laws and
regulations. For the purpose of compliance with any applicable federal or state
securities laws or regulations promulgated under them, Broker/Dealer
acknowledges and agrees that in performing Broker/Dealer services covered by
this Agreement, it is acting in the capacity of an independent broker and dealer
as defined by the By-Laws of the NASD and not as an agent or employee of either
Underwriter or any registered investment company.
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4. Insurance Licensing. Broker/Dealer (and if appropriate Insurance Selling
Entities) agree that at all times when performing its functions under this
agreement, the entity soliciting sales of the Insurance Policies will be validly
licensed as an insurance agency in the states and other jurisdictions that
require such licensing or registration in connection sales or solicitation of
the Insurance Policies. If applicable, Broker/Dealer represents that it or its
insurance agency affiliate is properly authorized under applicable state law to
receive insurance commissions generated from sales of the Insurance Policies.
Broker/Dealer and Selling Entities each represent that they are engaged in the
issuance of the Insurance Policies in accordance with federal securities laws
and the applicable insurance laws of those states in which the Insurance
Policies have been qualified for sale.
Broker/Dealer represents and warrants that it is authorized and licensed as an
agent under applicable state insurance laws to solicit, negotiate and effect the
contracts of insurance contemplated hereunder. In the event Broker/Dealer is not
licensed as such, an insurance agency affiliated with Broker/Dealer shall be
licensed as an agent under applicable state insurance laws to solicit, negotiate
and effect the contracts of insurance contemplated hereunder.
5. Appointment of Broker/Dealer. The Insurance Companies (and with respect to
any variable life insurance or annuity product, Underwriter) hereby authorize
the Broker/Dealer to sell those Insurance Policies listed on the Schedule Page,
as such page may be amended from time to time, the variable Insurance Policies
through its validly appointed and licensed registered representatives (the
"Registered Representatives"). Broker/Dealer is also appointed to perform
certain administrative services necessary to facilitate the solicitation and
sales of the Insurance Policies.
Broker/Dealer or, if applicable, Selling Entities, are appointed as a general
agencies of Insurance Companies and is authorized to sell the Insurance Policies
listed on the Schedule Pages.
Broker/Dealer and Selling Entities must comply with the following requirements:
(a) All securities services provided in connection with the sale of
insurance securities will be through registered representatives of
Broker/Dealer;
(b) Unregistered employees will not engage in any securities activities,
nor receive any compensation based on transactions in insurance securities or
the provision of securities advice;
(c) Broker/Dealer will maintain books and records relating to transactions
in insurance securities at its home office;
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(d) Customers purchasing variable Insurance Policies will make their
checks payable to Insurance Companies unless a Netting Agreement has been
entered into;
For the purpose of compliance with any applicable state insurance laws or
regulations promulgated under them, Broker/Dealer acknowledges and agrees that
solely in performing the insurance-selling functions reflected by this
Agreement, it or its Registered Representative is acting as the agent of the
Insurance Companies, and in that capacity is authorized only to solicit
applications from the public for the Insurance Policies.
6. Responsibility for Registered Representatives Activities. Broker/Dealer
will select and supervise persons whom it will train to solicit applications for
the Insurance Policies in conformance with applicable state and federal laws and
regulations. Persons engaged in the sale of variable Insurance Policies will be
registered representatives of Broker/Dealer in accordance with the rules of the
NASD. All individuals soliciting sales of Insurance Policies will be properly
licensed and appointed to the Travelers Insurance Companies in accordance with
the state insurance laws of those jurisdictions in which the Insurance Policies
may lawfully be distributed.
The Insurance Companies shall have authority to determine whether to appoint or
terminate a particular registered representative of the Broker Dealer as an
agent of the Insurance Companies. Broker/Dealer agrees to cooperate in supplying
information or making recommendations necessary to complete such insurance agent
appointments. Additionally, Broker/Dealer shall supply the information required
in the "Recommendation Letter" set forth in Exhibit 1 for each of its agents for
which it seeks appointment.
Upon request by Underwriter, Broker/Dealer and/or Insurance Agency shall furnish
such appropriate records as may be necessary to establish supervision of its
Registered Representatives in connection with sales of the Insurance Policies.
Upon Underwriter's review of such supervisory materials, Broker/Dealer shall
make such changes to its registered representatives' rules of conduct as
Underwriter may reasonably request but only to the extent that such requests
relate to sales of the Insurance Policies.
Broker/Dealer shall notify Underwriter if any Registered Representative ceases
to be a registered representative of Broker/Dealer or ceases to maintain the
proper licensing required for the sale of the Insurance Policies or fails to
meet material rules and standards imposed by either Broker/Dealer or the Selling
Entities.
7. Suitability of Sales of Contract. Broker/Dealer will review all contract
proposals and applications for suitability and for completeness and correctness
as to form concerning sales of variable Insurance Policies. Broker/Dealer shall
also be responsible for ensuring compliance with NASD suitability rules and
standards applicable to purchases of the Insurance Policies.
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Broker/Dealer will promptly, but in no case later than the end of the business
day that Broker/Dealer receives applications and payment, forward to the
applicable Insurance Company, at addresses provided, all such applications found
suitable and in good form, together with any payments received with such
applications without deduction or reduction unless a Netting Agreement has been
entered into. Broker/Dealer will immediately return to the applicant all
applications together with any payments received therewith deemed by
Broker/Dealer to be unsuitable or not complete and correct as to form. The
Insurance Companies reserve the right to reject any Insurance Product
application and return any payment made in connection with an application which
is rejected. Insurance Policies issued on applications accepted by the Insurance
Companies will be forwarded to Broker/Dealer or at the direction of
Broker/Dealer to the registered representative for delivery to the Contract
Owner. Broker/Dealer shall obtain and retain a written receipt for each Contract
which Broker/Dealer delivers.
The parties acknowledge that sales and solicitations may, where consistent with
state insurance laws and regulations, be conducted either without an
application, or on a basis where an application is submitted subsequent to a
sale. If such sales procedures are permitted, Broker/Dealer agrees that it will
continue to be responsible for compliance with applicable laws concerning, among
other things, suitability and policy delivery requirements. Broker/Dealer agrees
to hold Underwriter harmless for any failure to follow such rules or
regulations.
8. Solicitation/Representatives Concerning the Contracts. Broker/Dealer will
perform the selling functions required by this Agreement in accordance with the
terms and conditions of any applicable prospectus(es). Broker/Dealer will make
only representations included in the prospectus or in any authorized
supplemental material. No sales solicitations, including the delivery of
supplemental sales literature or other such materials, shall occur, be delivered
to, or used with a prospective purchaser unless accompanied or preceded by
appropriate and then-current prospectus(es).
Any material prepared or used by Broker/Dealer or its Registered
Representative, which describes in whole or in part or refers by name or form to
any of the Insurance Companies' Insurance Policies or underlying funds or uses
the name of the Insurance Companies, Underwriter, or Travelers Group Inc., or
the logos or service marks of any of them, or the name, logos or service marks
of any "Affiliated Company" of any of them, as that term is defined in Section
2(a)(2) of the Investment Company Act of 1940, must be approved by Underwriter
in writing prior to any such use.
Broker/Dealer and Selling Entities acknowledge that information pertaining to
Underwriter and Insurance Companies is proprietary in nature. Selling Entities
agree that they will not disclose any information concerning Insurance Companies
or Underwriter's products, services or programs or any person for consideration
or otherwise unless Broker/Dealer and/or Selling Entities consents to such use
in writing. Broker/Dealer and Selling Entities agree that, following the
termination of this Agreement for any reason, they will not enter into any plan,
program scheme or course of action which would
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systematically attempt to induce any Contract owner (s) away from Travelers,
except that Broker Dealer may always recommend a move to another company's
product if such move would be more suitable than Traveler's product for a
particular client or clients or in the event of a detrimental change in the
financial stability of Travelers which Broker Dealer believe would jeopardize
their clients.
9. Compensation. Compensation payable to Broker/Dealer on sales of the
Contracts solicited by Broker/Dealer will be paid to Broker/Dealer, or as
necessary to meet any and all legal requirements, to a licensed insurance
affiliate, in accordance with the compensation schedule(s) set forth on the
Schedule Pages as such Schedule Pages may be amended from time to time and are
in effect at the time the Contract payments are received by the applicable
Insurance Company (in the case of annuities) or at the time the applications are
received (in the case of life insurance). The Insurance Companies and
Underwriter reserve the privilege of revising the compensation schedules set
forth in the Schedule Pages at any time with thirty (30) days prior written
notice to Broker/Dealer. The parties understand that with regard to rate
specials only, for the modified guaranteed annuity contracts, commission
schedules may be adjusted without provision of prior notice.
10. Assignment of Agreement. This Agreement may not be assigned except by
mutual consent and will continue, subject to the termination by any party on
written notice to the other party, except that in the event Broker/Dealer ceases
to be a registered Broker/Dealer or a member of the NASD, this Agreement will
immediately terminate. Underwriter reserves the right to designate, at its sole
discretion, an alternative Principal Underwriter for the distribution of the
Contracts covered by this Agreement with thirty (30) days prior written notice
to Broker/Dealer except in the event that TIC replaces Underwriter as discussed
below.
The parties understand that if TIC replaces Underwriter any such substituted
party will automatically assume all of Underwriter's rights and duties under
this agreement. TIC may assume such functions itself or assign these to
affiliated, properly licensed broker-dealers. TIC will notify Broker/Dealer if
any such substitution occurs.
11. Indemnification. No party to this Agreement will be liable for any
obligation, act or omission of the other. Each party to this Agreement will hold
harmless and indemnify the (1) Registered Investment Companies which are used to
fund the Contracts, (2) Insurance Companies, (3) Underwriter, (4) Broker/Dealer,
and (5) Selling Entities, as appropriate, for any loss or expense suffered as a
result of the violation or noncompliance by any party to this agreement of any
of the terms of this agreement or of any applicable law or regulation. No party
nor any of its employees or agents will be liable to the other party for any
direct, special or consequential damages arising out of or in connection with
the performance of any services pursuant to the Agreement. Each party to this
agreement agrees to indemnify and hold harmless any other affected party for any
losses, claims, damages or liabilities (or actions in respect thereof) which
arise out of or are based on any untrue statement or alleged untrue statement of
a material fact required to be stated or
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necessary to make the statements made not misleading in the connection with the
solicitation, sale, or administration of the of the Insurance Policies.
12. Notices. All notices to the Insurance Companies or Underwriter relating to
this Agreement should be sent to the attention of:
The Travelers Insurance Companies
Xxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
All notices to Broker/Dealer will be duly given if mailed or
faxed to the address provided to Insurance Companies by Broker/Dealer from time
to time.
13. Independent Contractors. Underwriter and Insurance Companies are
independent contractors with respect to Broker/Dealer, Insurance Agency, and to
Registered Representatives.
14. Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the state of Connecticut.
15. Amendment of Agreement. Underwriter reserves the right to amend this
Agreement at any time, and the submission of an application by Broker/Dealer
after notice of any such amendment has been sent to the other parties shall
constitute the other parties' agreement to any such amendment. The compensation
schedules attached to the Schedule Pages may, however, be revised at any time
without the provision of prior notice with regard to rate specials only for the
modified guaranteed annuities.
16. Termination. This Agreement may be terminated, without cause, by any party
upon thirty (30) days' prior written notice, and may be terminated, for failure
to perform satisfactorily or other cause, by any party immediately; and shall be
terminated if Broker/Dealer shall cease to be a registered Broker/Dealer under
the Securities Exchange Act of 1934, as amended, and a member of the NASD.
Notwithstanding, the following sections shall survive any such termination:
Sections 6, 8, 10, 11 and 14.
17. Waiver Upon Termination. Failure of any party to terminate this Agreement
0for any of the causes set forth in this agreement will not constitute a waiver
of the right to terminate this Agreement at a later time for any of these
causes.
18. Books and Records. Broker/Dealer shall maintain all books and records
required by applicable laws and regulations in connection with the offer and
sale of the Insurance Policies. The books, accounts and records of Broker/Dealer
relating to the sale of the Insurance Policies shall be maintained so as to
clearly and accurately disclose the nature and details of all transactions.
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19. Cooperation with Regulatory Investigations. Broker/Dealer and Underwriter
agree to cooperate fully in any insurance, securities or other regulatory
investigation, inquiry, inspection, or proceeding or in any judicial proceeding
arising in connection with the Insurance Policies. Broker/Dealer and Underwriter
shall cooperate with each other to resolve any customer complaint, and each
agrees to promptly notify the other upon receipt of notice of any investigation,
claim, or proceeding involving the Contracts or any situation which would
materially affect the respective party's ability to perform its obligations
hereunder.
20. Fidelity Bond. Broker/Dealer represents that all of its directors,
officers, employees and Registered Representatives are and shall be continuously
covered by a blanket fidelity bond, covering for larceny and embezzlement,
issued by a reputable bonding company. This bond shall be maintained at
Broker/Dealer's expense and shall be, at least, of the form, type and amount
required under the NASD Rules of Fair Practice.
21. Counterparts. This Agreement may be executed in one or more counterpart,
each of which shall be deemed in all respects an original.
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In reliance on the representations set forth and in consideration of the
undertakings described herein, the parties represented below do hereby contract
and agree. This agreement is effective _______________, 1997
Travelers Insurance Company Travelers Life and Annuity Company
By: By:
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Title: Title:
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Date: Date:
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Tower Square Securities, Inc. ----------------------------------
Broker Dealer
By: By:
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Title: Title:
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Date:
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Insurance Agency Insurance Agency
By: By:
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Title: Title:
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Date: Date:
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