EXHBIT 3A
DISTRIBUTION AND PRINCIPAL UNDERWRITING AGREEMENT
THIS AGREEMENT is made this 8th day of October, 2000, by and among The
Travelers Insurance Company ("The Travelers"), a Connecticut stock insurance
company, with its principal offices in Hartford, Connecticut and each of the
investment companies as set forth in Schedule A attached hereto, as the same may
be amended from time to time, each acting on its own behalf and not on behalf of
any other investment company and each being solely responsible for its
obligations, (each, a "Separate Account" and collectively, the "Separate
Accounts"), each of which is a registered, open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act") of
The Travelers established pursuant to Connecticut State Insurance Law with its
principal offices in Hartford, Connecticut, 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 Travelers and each Separate Account have registered variable
annuity and life insurance 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 Travelers, each 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 Travelers and each
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 Travelers
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 Travelers and each 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.
(b) Limits on Authority. This Agreement notwithstanding, The
Travelers 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 Travelers, 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 Travelers: 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 Travelers. The Distributor shall not possess or exercise any authority on
behalf of The Travelers 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 Travelers 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 Travelers
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
Travelers shall be responsible for filing all promotional, sales, or advertising
material, as required, with any state insurance regulatory authorities. The
Travelers 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 Travelers, each Separate Account, and the Distributor
shall cause to be
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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 Travelers on
behalf of the Distributor, or by any person on behalf of The Travelers, or by
the Distributor directly, in connection with the offer and sale of the
Contracts, shall be maintained and preserved in conformity with the 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 Travelers or by any person on behalf of The
Travelers 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
Travelers shall have access to all records maintained in connection with the
Contracts.
(b) The Travelers, 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 Travelers and each 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 Travelers shall submit to all
regulatory and administrative bodies having jurisdiction over the present and
future operations of each 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 Travelers 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 Travelers shall be
responsible for issuing the Contracts and administering the Contracts and each
Separate Account and a Travelers affiliated broker-dealer shall have full
responsibility for the securities activities of all persons employed by The
Travelers, 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 Travelers and each 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 each 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 each Separate Account and that the
existence of any such dual interest shall not affect the
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validity hereof or 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 Travelers. The Travelers on its behalf and on behalf
of each 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 Travelers 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
Travelers 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 Travelers of any
provision of this Agreement. This indemnification agreement shall be in addition
to any liability that The Travelers 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 Travelers on its behalf and on behalf of each Separate Account
and any officer, director, or employee of The Travelers or each 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 Travelers 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 Travelers 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 Distributor of any
provision of this Agreement; or
(iii) result from the Distributor's own misconduct or
negligence.
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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 Travelers, 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 each 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 Travelers, each 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 Travelers, each
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.
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.
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(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:
(a) If to The Travelers -
The Travelers Insurance Company
Xxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
(b) If to the Separate Accounts
The Travelers Insurance Company, Separate Accounts
Xxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
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(c) If to the Distributor -
Travelers Distribution LLC
Xxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
or to such other address as The Travelers, the Separate Accounts, 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.
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IN WITNESS WHEREOF, The Travelers, each 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.
THE TRAVELERS INSURANCE COMPANY
By: /s/Xxxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxx
-------------------------------------------
Title: Secretary
------------------------------------------
EACH OF THE SEPARATE ACCOUNTS LISTED ON SCHEDULE A,
ATTACHED HERETO.
By: /s/Xxxxxxxx X. XxXxx
---------------------------------------------
Name: Xxxxxxxx X. XxXxx
-------------------------------------------
Title: Assistant Secretary
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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 ACCOUNTS
1. The Travelers Fund U for Variable Annuities
2. The Travelers Fund BD for Variable Annuities
3. The Travelers Fund BD III for Variable Annuities
4. The Travelers Fund ABD for Variable Annuities
5. The Travelers Separate Account QP for Variable Annuities
6. The Travelers Separate Account PF for Variable Annuities
7. The Travelers Separate Account TM for Variable Annuities
8. The Travelers Separate Account Five for Variable Annuities
9. The Travelers Separate Account Seven for Variable Annuities
10. The Travelers Separate Account Nine for Variable Annuities
11. The Travelers Fund UL for Variable Life Insurance
12. The Travelers Variable Life Insurance Separate Account Three
13. The Travelers Variable Life Insurance Separate Account Four
14. The Travelers Fund UL III for Variable Life Insurance
15. The Travelers Separate Account MGA
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