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EXHIBIT 3(a)
DISTRIBUTION AND PRINCIPAL UNDERWRITING AGREEMENT
THIS AGREEMENT is made this 8th day of October, 1998, 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 CFBDS, Inc. (the "Distributor")
a Massachusetts general business corporation.
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 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," "assignment,"
"interested person," and "majority of the outstanding voting securities," 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
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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:
(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
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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) 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.
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 shall continue in effect for two years from
the date of its execution, and thereafter from year to year, but only so long as
such continuance is specifically approved at least annually by (i) each Separate
Account's Board of Managers (the "Board"), or by a vote of the majority of the
outstanding voting securities of each Separate Account, and (ii) a vote of a
majority of those members of the Board who are not parties to this Agreement nor
interested persons of such parties, cast in person at a meeting called for the
purpose of voting on such approval.
(c) 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.
(d) 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).
(e) 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.
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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 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
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(c) If to the Distributor -
CFBDS, Inc.
00 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention:
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.
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
Attest: By:
----------------- ------------------------------------
Name:
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Title:
---------------------------------
EACH OF THE SEPARATE ACCOUNTS
LISTED ON SCHEDULE A, ATTACHED HERETO.
Attest: By:
----------------- ------------------------------------
Name:
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Title:
---------------------------------
CFBDS, INC.
Attest: By:
----------------- ------------------------------------
Name:
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Title:
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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 Fund UL II for Variable Life Insurance
10. The Travelers Variable Life Insurance Separate Account One
11. The Travelers Variable Life Insurance Separate Account Two
12. The Travelers Separate Account MGA II
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