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EXHIBIT 3(a)
DISTRIBUTION AND PRINCIPAL UNDERWRITING AGREEMENT
THIS AGREEMENT is made this 8th day of October, 2000, by and among The
Travelers Life and Annuity Company ("TLAC"), 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 TLAC established pursuant to Connecticut State Insurance Law with its
principal offices in Hartford, Connecticut, and Travelers Distribution LLC, 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, TLAC 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, TLAC, 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. TLAC 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 TLAC 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.
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TLAC 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,
TLAC 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 TLAC, 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 TLAC: 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 TLAC. The
Distributor shall not possess or exercise any authority on behalf of TLAC
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 TLAC 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. TLAC 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.
TLAC shall be responsible for filing all promotional, sales, or advertising
material, as required, with any state insurance regulatory authorities. TLAC
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.
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3. Books and Records.
(a) TLAC, each 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 TLAC on behalf of the Distributor, or by any person on
behalf of TLAC, 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 TLAC or by any
person on behalf of TLAC 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. TLAC shall have access to all records maintained in connection with
the Contracts.
(b) TLAC, 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 TLAC 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 TLAC 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. TLAC 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. TLAC 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 TLAC,
engaged directly or indirectly in the Contract operations, and for the
training, supervision, and control of such persons to the extent of such
activities.
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7. Non-Exclusivity. TLAC 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 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 TLAC. TLAC 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 TLAC 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 TLAC 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 TLAC of any provision of
this Agreement.
This indemnification agreement shall be in addition to any liability that TLAC
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 TLAC on its behalf and on behalf of each Separate Account and
any officer, director, or employee of TLAC 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 TLAC 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:
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(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 TLAC 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.
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 TLAC, 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.
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
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any change, in the registration statement or prospectus for the Contracts in
order to make the statements therein not misleading.
(b) TLAC, 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 TLAC, 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.
11. 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.
12. 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.
13. 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.
14. 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
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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.
15. 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.
16. 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 TLAC -
The Travelers Life and Annuity Company
Xxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
(b) If to each Separate Account
The Travelers Life and Annuity Company, 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 TLAC, each 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.
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IN WITNESS WHEREOF, The Travelers Life and Annuity Company, 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 LIFE AND ANNUITY COMPANY
By: /s/Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Secretary
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EACH OF THE SEPARATE ACCOUNTS
LISTED ON SCHEDULE A, ATTACHED HERETO.
By: /s/Xxxxxxxx X. McGgah
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Name: Xxxxxxxx X. XxXxx
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Title: Assistant Secretary
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TRAVELERS DISTRIBUTION LLC
By: /s/Xxxxxx X. Xxxxxx, Xx.
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Name: Xxxxxx X. Xxxxxx, Xx.
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Title: President, Chief Executive Officer
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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 VA for Variable Annuities
2. The Travelers Fund XX XX for Variable Annuities
3. The Travelers Fund XX XX for Variable Annuities
4. The Travelers Fund ABD II for Variable Annuities
5. The Travelers Separate Account XX XX for Variable Annuities
6. The Travelers Separate Account XX XX for Variable Annuities
7. The Travelers Separate Account Six for Variable Annuities
8. The Travelers Separate Account Eight for Variable Annuities
9. The Travelers Separate Account Ten for Variable Annuities
10. The Travelers Fund UL II for Variable Life Insurance
11. The Travelers Variable Life Insurance Separate Account One
12. The Travelers Variable Life Insurance Separate Account Two
13. The Travelers Separate Account MGA II
