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EXHIBIT 3(b)
FORM OF
SELLING AGREEMENT
FOR VARIABLE CONTRACTS
THIS AGREEMENT, effective _________________________, is made among TOWER SQUARE
SECURITIES, INC. ("Tower Square") a corporation organized and existing under
the laws of the state of Connecticut and
__________________________________________. (hereafter referred to as
"Broker/Dealer") a corporation organized and existing under the laws of the
state of ___________, and [__, and a corporation organized and existing under
the laws of the state of _______________________, operating as an insurance
agency.]
WHEREAS, Tower Square and the Broker/Dealer enter into this agreement for the
purpose of authorizing the Broker/Dealer, through its insurance licensed
individual agents as described in Section ________________, to solicit
applications for such variable life insurance, variable annuity and modified
guaranteed annuity contracts identified by policy form in the Compensation
Schedules relating to this agreement as such schedules may be amended from time
to time (the "Contract(s)") as may be issued by The Travelers Insurance
Company, the Travelers Life and Annuity Company and any affiliated companies
(hereafter referred to as the Insurance Companies),
WHEREAS the Contracts, if required to be, are registered with the Securities
and Exchange Commission ("SEC") as securities under the Securities Act of 1933,
as amended (the "1933 Act"); and
WHEREAS, to facilitate the distribution of the Contracts the Insurance
Companies have each respectively appointed Tower Square to serve as the
distributor and principal underwriter of the Contract, and
WHEREAS Tower Square is registered with the SEC, the National Association of
Securities Dealers, Inc. ("NASD") and all appropriate state securities
regulatory authorities as a broker-dealer; and
WHEREAS Broker/Dealer is registered with the SEC, and NASD and all appropriate
state securities regulatory authorities as a broker-dealer; and
WHEREAS Tower Square and Broker/Dealer desire that Broker/Dealer through its
registered representatives ("Registered Representatives") be authorized to sell
the Contracts.
NOW, THEREFORE in consideration of the promises and the mutual covenants
hereinafter contained, the parties agree as follows:
1. Appointment of Broker/Dealer. Tower Square hereby appoints
Broker/Dealer to sell the Contracts through its validly
appointed and licensed registered
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representatives (the "Registered Representatives").
Broker/Dealer is also appointed to perform certain
administrative services necessary to facilitate the
solicitation and sales of the Contracts.
2. Securities Licensing. Broker/Dealer shall, at all times when
performing its functions under this agreement, be registered
as a securites 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 Contracts.
Additionally, Broker-Dealer shall monitor the activities or
the supervision of its Registered Representative who are
engaged in sales or solicitation of the Contracts to ensure
compliance with applicable NASD rules concerning solicitation
and sales of variable products.
3. Insurance Licensing. Broker/Dealer (or its insurance agency
affiliate) agrees that at all times when performing its
functions under this agreement, such Broker/Dealer will be
validly licensed as an insurance agency in the states and
other jurisdictions that require such licensing or
registration in connection with Broker/Dealer sales and
solicition of the Contracts. 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 Contracts.
If the Broker/Dealer is not insurance licensed but has an
insurance agency (whether such agency is affiliated or not),
the Broker/Dealer must comply with the following requirements:
(1) All securities services provided in connection with
the sale of insurance securities will be through
registered representatives of the broker-dealer
("Dual Representatives");
(2) Dual Representatives also will be licensed under the
insurance laws of the states in which they do
business and will be appointed agents by each
insurance company for which Dual Representatives may
solicit applications in connection with the offer and
sale of insurance securities;
(3) 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;
(4) A designated principal of the broker-dealer will
approve all advertisements;
(5) The broker-dealer sill maintain books and records
relating to transactions in insurance securities at
its home office;
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(6) Customers purchasing variable insurance products will
make their checks payable to the insurance company
issuing the products, and/or only Dual
Representatives will handle checks routed through the
broker-dealer and the insurance agencies;
(7) Commission will be reported on FOCUS and NASD Fee
Assessment reports by the broker-dealer.
4. Compliance with Applicable Laws/Insurance Companies.
Insurance Companies each represent that they are engaged in
the issuance of the Contracts in accordance with federal
securities laws and the applicable insurance laws of those
states in which the Contracts have been qualified for sale.
5. Compliance with Applicable Laws/Broker/Dealer. The
Broker/Dealer certified that it is a registered Broker/Dealer
under the Securities Exchange Act of 1934, as amended, and
that it is a member of the NASD. The Broker/Dealer agrees to
abide by all rules and regulations of the NASD and to comply
with all applicable state and federal laws and the rules and
regulations of the authorized regulatory agencies affecting
the sale of the Contracts.
6. Responsibility for Registered Representatives Activities. The
Broker/Dealer will select persons whom it will employ and
supervise and who will be trained and qualified to solicit
applications for the Contracts in conformance with applicable
state and federal laws and regulations. Persons so trained
and qualified will be registered representatives of the
Broker/Dealer in accordance with the rules of the NASD and
they will be properly licensed in accordance with the state
insurance laws of those jurisdictions in which the Contracts
may lawfully be distributed and in which they solicit
applications for such Contracts. The Insurance Companies
shall have ultimate authority to determine whether they shall
appoint or terminate a particular registered representative as
an agent of the Insurance Companies with the various state
insurance departments. Broker/Dealer agrees to cooperate in
supplying information or making recommendations necessary to
complete such insurance agent appointments.
Broker/Dealer will establish such rules and procedures as may
be necessary to cause diligent supervision of the securities
activities of its Registered Representatives engaged in the
solicitation of sales of the Contracts. Upon request by Tower
Square, Broker/Dealer shall furnish such appropriate records
as may be necessary to establish such diligent supervision.
In the event a Registered Representative fails or refuses to
sumit to supervision of Broker/Dealer or otherwise fails to
meet the fules and standards imposed by Broker/Dealer on its
representatives, Broker-Dealer shall certify such fact to
Tower Square and shall immediately notify such Registered
Representative that he or she is no longer authorized to sell
the Contracts. Broker/Dealer shall take
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whatever additional action may be necessary to terminate the
sales activities of such Registered Representative relating to
the Contracts. Broker/Dealer shall notify Tower Square 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 Contracts.
7. Suitability of Sales of Contract. The Broker/Dealer will
review all contract proposals and applications for suitability
and for completeness and correctness as to form. The
Broker/Dealer shall also be responsible for ensuring
compliance with NASD suitability rules and standards
applicable to purchases of the Contracts. A registered
principal of the Broker/Dealer will make and record such
determination with respect to the sale of the Contracts. The
Broker/Dealer will promptly, but in no case later than the end
of the business day that the Broker/Dealer receives
applications and payment, forward to the applicable Insurance
Company, at addresses provided, all such applications found
sutitable and in good form, together with any payments
received with such applications without deduction or
reduction. The Broker/Dealers will immediately return to the
applicant all applications together with any payments received
therewith deemed by the Broker/Dealer to be unsuitable or not
complete and correct as to form. The Insurance Companies
reserve the right to reject any Contract application and
return any payment made in connection with an application
which is rejected. Contracts issued on applications accepted
by the Insurance Companies will be forwarded to the
Broker/Dealer or at the direction of the Broker/Dealer to the
registered representative for delivery to the Contract Owner.
The Boker/Dealer shall obtain and retain a written receipt for
each Contract which the 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 Tower
Square harmless for any failure to follow such rules or
regulations.
8. Solicitation/Representatives Concerning the Contracts. The
Broker/Dealer will perform the selling functions required by
this Agreement only in accordance with ther terms and
conditions of the then current prospectus(es) applicable to
the Contract and will make no representations not 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
accompanies or preceded by appropriate and then-current
prospectus(es).
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Any material prepared or used by the 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'
Contracts or underlying funds or uses the name of the
Insurance Companies, Tower Square, or The 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 Tower
Square in writing prior to any such use.
9. Compensation. Compensation payable to the Broker/Dealer on
sales of the Contracts solicited by the Broker/Dealer will be
paid to the Broker/Dealer, or as necessary to meet any and all
legal requirements, to a licensed insurance affiliate, in
accordance with the Compensation Schedule(s) relating to this
agreement as they 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). In the event compensation is paid to the licensed
insurance agency affiliate as described in the preceding
sentence, such payment will be reflected in the
Broker/Dealer's "Focus" reports, and in its fee assessment
reports filed with the NASD. The Insurance Companies and
Tower Square reserve the privilege of revising the
Compensation Schedules at any time. The parties understand
that with regard to sales of modified guaranteed annuity
contract, in certain states, commission schedules may be
adjusted without provision of prior notice.
10. Chargebacks of Commission. If the Insurance Companies return
all or a portion of a premium paid with respect to a Contract,
Broker/Dealer shall be obligated to refund to Tower Square
applicable commissions on the amount of such premium only
where:
(a) consistent with section 11 of this Agreement, the
Contract solicited is returned not taken under the
policy "free look" provisions;
(b) premiums are refunded due to overpayments, errors in
billing or in the timing of automatic premium
collection deductions, or errors resulting in policy
reissue;
(c) the check delivered in payment of any contract does
not clear and the premium collection deductions, or
errors resulting in policy reissue;
(d) the Contract is terminated or there is a refund of
premium and an act, error or omission of the
Broker/Dealer or its Registered Representative
materially contributed to the termination of the
Contract or the need to return premium;
(e) the application is rejected by the Insurance Company;
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(f) the Insurance Company is directed by a judicial or
regulatory authorith to return premium without
assessment of a surrender charge;
(g) the applicant's initial premium on a 1035 exchange is
returned because the expected rollover amount from
another Contract is not transferred due to the
exchange not meeting the legal requirements to
qualify for a tax-free exchange;
(h) the Insurance Company returns unearned premium on a
life insurance contract as required by the provisions
of the contract;
(i) the Insurance Company determines that it has a legal
liability to return premiums on a life insurance
contract within the first year after the Contract is
issued; or
(j) the Insurance Company and Broker/Dealer mutually
agree to return all or a portion of a premium paid
with respect to a Contract.
11. Free Look Provision. If any Contract is repurchased at any
time or if within forty-five (45) days after confirmation by
the Insurance Companies of any premium payments credited to a
Contract, that Contract is tendered for full or partial
surrender, or the life at risk thereunder dies, them, at the
option of the Insurance Companies or Tower Square no
commission will be payable with respect to such premium
payments and any commission previously paid for said premium
payments must be refunded to the applicable Insurance Company
or Tower Square as directed by Tower Square. Tower Square
agrees to notify the Broker/Dealer with ten (10) business days
after the request for repurchase or redemption, or
notification or death of the life at risk is recieved by the
applicable Insurance Company.
12. 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 the Broker/Dealer ceases to be a
registered Broker/Dealer or a member of the NASD, this
Agreement will immediately terminate. Tower Square reserves
the right to edsignate, at its sole discretion, an alternative
Principal Underwriter for the distribution of the Contracts
covered by this Agreement without notice to the Broker/Dealer.
The designation will constitute substitution of parties to
this Agreement with assumption of the rights and obligations
created by this Agreement as applicable.
13. Representations. For the purpose of compliance with any
applicable federal or state securities laws or regulations
promulgated under them, the Broker/Dealer acknowledges and
agrees that in performing the Broker/Dealer services covered
by this Agreement, it is acting in the capacity of an
independent broker and dealer
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as defined by the By-Laws of the NASD and not as an agent or
employee of either Tower Square or any registered investment
company.
The 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 the
Broker/Dealer is not licensed sa such, an insurance agency
affiliated with the Broker/Dealer shall be licensed as an
agent under applicable state insurance laws to solicit,
negotiate and effect the contracts of insurance contemplated
hereunder.
For the purpose of compliance with any applicable state
insurance laws or regulations promulgated under them, the
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 Contracts. Such Contracts will not become effective until
such applications are accepted after underwriting review by
the Insurance Companies at their Home Office.
In furtherance of its responsibilities as a Broker/Dealer, the
Broker/Dealer acknowledges that it is responsible for
compliance on any business it produces concerning the
Contracts. No Broker/Dealer will be entitled to compensation
with respect to any application for or payment credited to,
any Contract(s) that is rejected by the Insurance Companies in
the event the Insurance Companies or Tower Square determine
the solicitation or obtaining of purchasers, applications or
payments by the Broker/Dealer or any of its Associated persons
was done in violation of the securities or insurance laws of
the United States or any state or other jurisdiction.
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) Tower Square, and (4) the
Broker/Dealer, as appropriate, for any loss or expense
suffered as a result of the violation or noncompliance by that
party or the Associated persons of that party of any
applicable law or regulation or any provision of the
Agreement; provided, however, that no party or 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.
14. Notices. All notices to the Insurance Companies or Tower
Square relating to this Agreement should be sent to the
attention of The Travelers Insurance Companies, FS Law
Department, Xxx Xxxxx Xxxxxx, Xxxxxxxx, Xx 00000. All notices
to the Broker/Dealer will be duly given if mailed or faxed to
the address shown below.
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15. Definitions. The terms "Associated Person", "member" and
"rules of the Corporation" as used herein shall be defined
consistently with the definition of similar terms as contained
in Artile I of the NASD By-Laws.
16. Independent Contractors. Tower Square and Insurance Companies
are independent contractors with respect to Broker/Dealer,
Insurance Agency, and to Registered Representatives.
17. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the state of
Connecticut.
18. Amendment of Agreement. Tower Square 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.
19. Terminations. 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
registered Broker/Dealer under the Securities Exchange Act of
1934, as amended, and a member of the NASD.
20. Waiver Upon Termination. Failure of any party to terminate
this Agreement for 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.
21. Rebating. If Broker/Dealer or any Registered Representative
of Broker/Dealer shall rebate or offer to rebate all or any
part of a premium on a Contract issued by the Insurance
Companies in violation of applicable state insurance laws or
regulations, or if Broker/Dealer or any Registered
Representative of Broker/Dealer shall withhold any premium on
any Contract issued by the Insurance Companies, the same may
be grounds for termination of this Agreement by Tower Square.
If Broker/Dealer or any representative of Broker/Dealer shall
at any time induce or endeavor to induce any owner of a
Contract to relinquish the Contract except under circumstances
where there is reasonable grounds for believing the policy,
contract or certificate is not suitable for such person, any
and all compensation due Broker/Dealer hereunder shall cease
and terminate.
22. 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 Contracts. The
books, accounts and records of the Broker/Dealer relating to
the sale of the Contracts shall be maintained so as to clearly
and accurate.y disclose the nature and details of all
transactions.
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23. Cooperation with Regulatory Investigations. Broker/Dealer and
Tower Square 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 Contracts. Broker/Dealer and
Tower Square 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.
24. 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, coverning 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 NASD Rules of Fair Practice.
25. Counterparts. This Agreement may be executed in one or more
counterpart, each of which shall be deemed in all respects an
original.
In reliance on the representations set forth and in consideration of the
undertakings described herein, the parties represented below do hereby contract
and agree.
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XXXXX XXXXXX SECURITIES, INC.
By:
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Title:
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Date:
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[ ]
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(Broker/Dealer)
By:
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Title:
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Taxpayer I.D.:
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Date:
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FAX:
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[ ]
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(Insurance Agency)
By:
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Title:
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Taxpayer I.D.
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Date:
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FAX:
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EXHIBIT A
SCHEDULE OF SALES CONCESSIONS
CONTRACTS FORM CONTRACT %
PAYMENT NUMBER PER PURCHASE
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