FORM OF MASTER AGREEMENT
MASTER AGREEMENT
This AGREEMENT is made as of the day of June, 1995, by and among
OFFITBANK, (the "Bank"), a trust company chartered under the laws of the State
of New York CONNECTICUT MUTUAL LIFE INSURANCE COMPANY, ("Connecticut Mutual
Life") stock life insurance company domiciled in the state of Connecticut.
RECITALS
A. Connecticut Mutual Life is the issuer of flexible payment individual
deferred annuity contracts.
B. The Bank acts as investment adviser to Offitbank Variable Insurance Fund,
Inc. (the "Offitbank Fund" or the "Fund"), a management investment company
registered as such with the Securities and Exchange Commission ("SEC") under
the Investment Company Act of 1940, as amended (the "1940 Act").
C. The Bank and Connecticut Mutual Life desire to create a variable deferred
annuity contract (the "Annuity Contract"). In connection with the development
of such Annuity Contract, the parties to this Agreement desire to create a
segregated separate account, to be registered with the SEC as a unit investment
trust (the "Separate Account"). Subject to the execution of a distribution
agreement, Connecticut Mutual Financial Services, LLC ("CMFS") an affiliate of
Connecticut Mutual Life and a registered broker-dealer, will be designated as
the principal underwriter for the Annuity Contracts. The Annuity Contracts
will be marketed as the Offitbank Variable Annuity.
AGREEMENT
In consideration of the mutual promises set forth herein and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Offitbank Funds.
A. The Bank, through OFFIT Funds Distributor, Inc. (the "Distributor"), shall
make the Fund available to Annuity Contract owners through the Separate
Account. The parties shall agree that initially the following portfolios
(collectively the "Portfolios") of the Offitbank Fund will be available to the
Separate Account:
(1) Offitbank VIF - High Yield Fund;
(2) Offitbank VIF - Investment Grade Global Deposit Fund;
(3) Offitbank VIF - Emerging Market Fund.
Connecticut Mutual Life, on behalf of itself and on behalf of the Separate
Account, shall, enter into a Fund Participation Agreement among the Fund,
OFFIT Funds Distributor, Inc., the Separate Account and Connecticut Mutual
Life, in a form mutually agreeable to the Bank and Connecticut Mutual Life,
pursuant to which purchase payments received under the Annuity Contracts may
be allocated to Portfolios of the Fund. Connecticut Mutual Life shall take
such other steps as are necessary and appropriate to make the shares of the
Fund available to holders of the Contracts.
In connection with such sales, the Distributor and the Bank shall be
responsible for the continued compliance with applicable regulatory
authorities to maintain the registration of the Fund.
B. The Bank may request the Fund at any time to amend its registration
statement for the Fund so as to add additional portfolio(s) to the Fund. Such
additional portfolio(s) may be added to the Annuity Contract upon the prior
written consent of Connecticut Mutual Life, which consent will not be
unreasonably withheld, and subject to obtaining approval from any necessary
regulatory authority.
2. The Offitbank Variable Annuity Contract Design and Features.
A. Subject to approval by applicable state regulatory authorities, the
structure of the Offitbank Variable Annuity Contract shall be in accordance
with the following terms:
(I) Death Benefit.
A death benefit shall be paid during the deferral period upon the death of
the: (a) Owner, (b) first of the two joint owners; or (c) upon the death of
the annuitant if the owner is not a natural person. The Death Benefit shall
equal the Contract Value as of the date notice and proof of death are
received.
(II) Charges imposed under the Contract.
(I) No Sales Charge or Contingent Deferred Surrender Changes shall be imposed
under the Annuity Contracts;
(ii) Subject to the approval of the SEC (and any applicable state insurance
regulatory authority), a Mortality and Expense Risk Charge of 1.25% of the
current net asset value of the Separate Account may be imposed. The parties
understand that this charge shall be set at 0.38% of the net asset value of
the Separate Account on a current basis. Any increase in this charge shall be
consented to in writing by the Bank, and such consent shall not be
unreasonably withheld;
(iii) Subject to the approval of the SEC, an Administrative Charge of 0.01% on
a current basis, and 0.25% on a guaranteed basis shall be charged against the
net asset value of the assets of the Separate Account. Any change in the
current administrative charge shall be consented to in writing by Offitbank,
and such consent shall not be unreasonably withheld.
(iv) Connecticut Mutual Life, in its sole discretion may, with regard to
premium taxes justly due and owing, :
1. determine when premium taxes are incurred;
2. determine the amount of tax that is owed; and
3. either charge such amounts against premium payments or defer the
assessment to a later date.
(v) A contract Maintenance Charge will be imposed against each Annuity
Contract at a current rate of $35. Connecticut Mutual Life will reserve the
right to raise this rate up to a maximum of $60 subject to cost basis
justification and the mutual consent of the Bank.
(III)Ownership of the Offitbank Variable Annuity.
The Annuity Contract shall permit the owner and the annuitant to be different
persons. Additionally, if permitted under applicable state law, joint
ownership of the Annuity Contract (by spouses only) will be an option.
Further, the Annuity Contract shall permit, subject to Connecticut Mutual
Life's approval, change of ownership.
(IV) Investments by the Separate Account.
In addition to the Offitbank Fund Portfolios, portfolios of Connecticut Mutual
Financial Services Series Fund I, Inc. (the "C.M. Fund") may also be made
available to Annuity Contract Owners. The parties agree initially that only
the C.M. Fund Money Market Portfolio will be initially available under the
Annuity Contract as the only money market portfolio.
(V) Miscellaneous Design Features.
The maximum issue age shall be 85 (both Owner and Annuitant).
The minimum initial purchase payment will be $100,000.
Connecticut Mutual Life will reserve the right to restrict the number of
partial withdrawals that may be made from Annuity Contracts. The minimum
amount of each withdrawal will be $10,000. The minimum balance after a
withdrawal is $50,000.
A Systematic Withdrawal program will be available under the Contract.
The maximum annuity age shall be the lesser of age 90, or the maximum date
permitted under state law.
The minimum balance to annuitize an Annuity Contract is $2,000.
Other contractual provisions shall be agreed upon as necessary. Variations in
product design may be necessitated due to individual State requirements.
B.(i) Connecticut Mutual Life shall, prepare and distribute to current
contractholders all registrations, prospectuses, reports, statements of
additional information, communications and other filings and documents
(collectively, the "Contractholder Communications") with respect to the
Offitbank Variable Annuity Contract, that are required by law, regulation,
legal process or regulatory order ("Required By Law"), including without
limitation those required by the Securities Act of 1933 (the "1933 Act"), the
1940 Act and state insurance and "blue sky" laws and regulations. The Bank
shall approve (which approval shall not be unreasonably withheld) the Form of
any Contractholder communications prior to distribution.
(ii) The Distributor shall at its expense prepare, typeset, print and
distribute to current contractholders all Contractholder Communications
Required By Law with respect to the Fund and the Annuity Contract, including
without limitation, the 1933 Act, 1940 Act and state "blue sky" laws and
regulations. The Distributor shall bear the cost of printing and distributing
the prospectuses for the Annuity Contracts.
C. Connecticut Mutual Life or a designee agreed to in writing by the Bank,
shall service the Offitbank Variable Annuity Contract in a manner consistent
with its servicing of its other annuity contracts, including providing
policyholder support, administering the Offitbank Variable Annuity Contract,
mailing at the expense of the Fund annual and semiannual reports of the Fund
to Offitbank Variable Annuity Contractholders, and preparing and mailing
contract statements, prospectuses, statements of additional information and
such other communications as may be necessary or appropriate or required
by law, regulation or legal process.
D. Connecticut Mutual Life shall appoint CMFS (or such other entity as is
acceptable to the Bank) to serve as the principal underwriter for the
Offitbank Variable Annuity Contract.
E. Except for those portfolios of the C.M. Fund noted above in Section
2.A.(IV) agreed to by the parties, the Annuity Contracts shall not make
available any interests in any other investment companies other than the Fund
without the prior approval of the Bank.
3. Marketing
A. (i) Connecticut Mutual Financial Services, L.L.C., a broker-dealer
affiliate of Connecticut Mutual Life, registered under the Securities Exchange
Act of 1934, as amended (the "1934 Act"), and a member of the National
Association of Securities Dealers, Inc., ("NASD") shall serve as principal
underwriter of the Offitbank Variable Annuity Contract. Connecticut Mutual
Life together with CMFS shall enter into Selling Group Agreements
substantially in the form attached as Exhibit A with the Bank or broker-
dealers as Connecticut Mutual Life and the Bank shall agree upon. (Banks and
broker-dealers entering into such Selling Group Agreements with the
Distributor are referred to this Agreement as "Sellers"). Pursuant to such
agreements, Connecticut Mutual Life shall appoint as its agent Sellers'
agents, employees, or representatives, as the case may be, and as Sellers may
designate. Appointments and licensing may be paid by Connecticut Mutual Life
in its sole discretion. Any proposed modifications to the form of Selling
Group Agreement as provided in Exhibit A shall be subject to Connecticut
Mutual Life's, CMFS', and the Bank's prior consent which such consent will
not be unreasonably withheld..
(ii) No compensation shall be paid under the Selling Agreements.
B. The Annuity Contract contemplated hereunder shall be marketed under the
name "Offitbank Variable Annuity" (or such other name as the Bank shall
reasonably select with the approval of Connecticut Mutual Life in the event
use of "Offitbank Variable Annuity" is deemed inadvisable by the Bank due to
trade name, trademark or other considerations). The Bank shall license the use
of the name "Offitbank Variable Annuity" to Connecticut Mutual Life and its
affiliates, if necessary, to facilitate the marketing of the Annuity
Contracts. All marketing materials shall clearly indicate that Connecticut
Mutual Life is the issuer of the Annuity Contracts.
C. The Bank may develop such marketing materials and sales literature as it
deems advisable. Such materials will be consistent with applicable state
insurance and state and federal securities laws and regulations, (including
but not limited to applicable NASD rules). Prior to the dissemination of any
such material to the general public, the Bank shall obtain Connecticut Mutual
Life's and CMFS' prior approval (and such approval will not be unreasonably
withheld) of any such materials and the Distributor shall file such materials
with appropriate regulatory authorities. The cost to produce and file any
such materials will be borne by the Bank.
4. Conduct of the Parties
A. Except as expressly provided in this Agreement or as required by law,
regulation, legal process or a regulatory or self-regulatory agency, neither
the Bank, CMFS, nor Connecticut Mutual Life (or the affiliates of any of them)
will take any action, directly or indirectly, which is intended to solicit or
induce owners of the Offitbank Variable Annuity Contract to exchange an
Offitbank Variable Annuity Contract for any other insurance or mutual fund
product, unless such action is deemed appropriate in the joint judgment of
senior management of the Bank and Connecticut Mutual Life to settle a claim or
potential claim against the Bank or Connecticut Mutual Life or to reverse a
purchase that fails to meet suitability criteria established by the NASD and
state regulatory authorities.
B. Connecticut Mutual Life reserves the right to terminate any agent
appointed to sell the Annuity Contract at any time for "cause." "Cause" for
purposes of the foregoing is hereby defined to mean any act or omission of the
agent determined by Connecticut Mutual Life as constituting cause for such
agent's termination including but not limited to: (i) the willful commission
by the agent of an act which causes or probably will cause substantial
economic damage to, or substantial injury to the business reputation of
Connecticut Mutual Life or any of its affiliates; (ii) the commission by the
agent of an act of misrepresentation, dishonesty or fraud in the course of
agent's representation of Connecticut Mutual Life or any of its affiliates;
(iii) the continuing willful failure of the agent to perform his or her duties
as an agent of Connecticut Mutual Life according to policies and procedures
established by Connecticut Mutual Life for such activities after written
notice thereof and a reasonable opportunity to be heard and cure such failure
have been afforded the agent; (iv) the order of a federal or state regulatory
authority or court of competent jurisdiction requiring the termination of the
agent's status as such; (v) or the discontinuance of the agent as a broker-
dealer registered with the SEC and a member in good standing with the NASD or
an associated person of such a broker-dealer; (vi) the failure of the agent
to meet production requirements established by Connecticut Mutual Life.
5. Representations and Warranties
Each party hereto represents and warrants to the other parties, as follows:
(i) It is duly organized, validly existing and in good standing under the
laws of the state of its organization and has all requisite corporate power
to carry on its business as now being conducted and to perform its
obligations as contemplated by this Agreement.
(ii) It (and each affiliate which will enter into an agreement contemplated
by the parties hereunder )has or will have at such time as it is performing
its obligations all licenses, approvals, permits and authorizations of, and
registrations with, all authorities and agencies, including non-governmental
self-regulatory agencies, required under all federal, state, and local laws
and regulations to enable it to perform its obligations as contemplated by
this Agreement.
(iii) It has all requisite corporate power and authority to enter into this
Agreement. The execution, delivery and performance of this Agreement has
been duly and validly authorized by all necessary corporate action and
this Agreement constitutes the legal, valid and binding agreement of such
party, enforceable against it in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to creditors'
rights generally and general principles of equity. Neither the execution
and delivery of this Agreement nor the performance of its obligations
under this Agreement will (subject to obtaining the approvals and making
the filings referred to in this Agreement) violate any judgment, order,
writ, injunction, decree, statute, rule or regulation applicable to it, or
to any of its affiliates which will enter into an agreement provided for
in this Agreement.
(iv) Except as provided in this Agreement, no approval, authorization,
consent, license, clearance or order of, declaration or notification to, or
filing or registration with, any governmental or regulatory authority
(including, without limitation, any non-governmental regulatory agencies or
authorities) is required by it for the consummation of the transactions
contemplated by this Agreement.
6. Indemnification
The Bank agrees to indemnify and hold harmless Connecticut Mutual Life and its
affiliates and each of their respective directors and officers and each
person, if any, who controls Connecticut Mutual Life and its affiliates
(collectively, the "Connecticut Mutual Life Indemnified Persons") against any
and all losses, claims, damages, liabilities or litigation (including legal
and other expenses), arising out of activities undertaken pursuant to this
Agreement, to which a Connecticut Mutual Life Indemnified Person may become
subject, under any statute, at common law, or otherwise, which: (i) may be
based upon any wrongful act or breach of this Agreement by the Bank, any of
its employees or representatives, or any affiliate of or any person acting on
behalf of the Bank; or (ii) may be based upon a breach of the warranties made
by the Bank set forth in Section 5 of this Agreement; provided, however, that
(x) in no case is the Bank's indemnity in favor of the Connecticut Mutual Life
Indemnified Persons deemed to protect such persons against any liability to
which any such person would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of such
person's duties or by reason of such person's reckless disregard of
obligations and duties under this Agreement, and (y) the Bank's obligations to
indemnify and hold harmless shall not apply to circumstances which could give
rise to Connecticut Mutual Life's obligations to indemnify and hold harmless
as set forth below.
Connecticut Mutual Life agrees to indemnify and hold harmless the Bank and its
affiliates and each of their respective directors and officers and each
person, if any, who controls the Bank and its affiliates (collectively, the
"Bank Indemnified Persons") against any and all losses, claims, damages,
liabilities or litigation (including legal and other expenses) to which a Bank
Indemnified Person may become subject, under any statute, at common law, or
otherwise, arising out of activities undertaken pursuant to this Agreement
which (i) may be based upon any wrongful act or breach of this Agreement by
Connecticut Mutual Life, any of its employees or representatives (other than
insurance agents appointed pursuant to Section 3.A unless acting in accordance
with the directions of Connecticut Mutual Life or its affiliates) or any
affiliate of or any person acting on behalf of Connecticut Mutual Life, or
(ii) may be based upon a breach of the warranties made by Connecticut Mutual
Life set forth in Section 5 of this Agreement; provided, however, that (y) in
no case is Connecticut Mutual Life's indemnity in favor of the Bank
Indemnified Persons deemed to protect such persons against any liability to
which any such person would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of such
person's duties or by reason of such person's reckless disregard of
obligations and duties under this Agreement, and (z) Connecticut Mutual Life's
obligation to indemnify and hold harmless shall not apply to circumstances
which could give rise to the Bank's obligations to indemnify and hold harmless
as set forth above.
Each party shall have, in addition to its indemnification rights under this
Section 6, any and all rights otherwise available to it under any other
agreement or applicable law.
7. Additional Agreements of the Parties
A. Except as expressly provided herein, each party shall be responsible for
all expenses incurred by it in connection with the matters contemplated by
this Agreement.
B. The parties shall act reasonably and in good faith in complying with their
obligations under this Agreement. The parties each shall use all reasonable
efforts to cooperate with one another to carry out to the fullest extent
possible the purposes of this Agreement.
C. All notices and other communications required or permitted to be given
hereunder shall be in writing and shall be deemed to have been given if
delivered personally, given by facsimile or mailed by registered or certified
mail (return receipt requested) or by Federal Express or other overnight
delivery, as follows:
if to Connecticut Mutual Life:
Connecticut Mutual Life Insurance Company
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: General Counsel
if to the Bank:
Offitbank
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxx
if to CMFS:
Connecticut Mutual Financial Services, LLC
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: President
Any party to this Agreement may change the address to which such
communications are to be directed to such party by giving notice of such
change to the other party in the manner provided above.
D. None of the provisions of this Agreement shall inure to the benefit of any
person other than the parties hereto or their respective successors or be
deemed to create any rights, benefits or privileges in favor of any person
except the parties hereto.
E. None of the provisions of this Agreement, shall be deemed to designate or
appoint any party hereto as the agent of any other party or to authorize or
empower any party hereto to act for or to create or incur any obligations on
behalf of any other party.
F. This Agreement may be executed and delivered in any one or more
counterparts, each such counterpart so delivered and bearing the original
signature of a part hereto shall be binding as to such party, and all
counterparts shall together constitute one original and the same instrument.
G. This Agreement may be amended or terminated only by the mutual written
consent of the parties to this Agreement. Notwithstanding the foregoing,
sections 4.A., 6 and 7.J. shall survive any termination of this Agreement.
H. This Agreement shall be governed by construed and enforced in accordance
with the laws of the State of Connecticut and shall be interpreted in such a
manner as to be effective and valid under the laws of the State of
Connecticut, except with respect to (i) matters relating to banking and
banking law in which case this Agreement shall be governed by, construed and
enforced in accordance with and interpreted in a manner as to be effective and
valid under both the federal laws of the United States and the laws of the
State of New York and regulations promulgated thereunder; and (ii) the
representations and warranties of the Bank contained at Section 5 which shall
be governed by, construed and enforced in accordance with and interpreted in a
manner as to be effective and valid under both federal laws of the United
States and the laws of the State of New York. If any provisions of this
Agreement shall be deemed to be prohibited by law or invalid, such provisions
shall be ineffective only to the extent of the prohibition or invalidity,
without invalidating the remainder of such provision or the remaining
provisions of the Agreement.
I. The waiver by a party of performance in observance of any covenant or
condition to be performed or observed by the other hereunder shall not
invalidate this Agreement, nor constitute a waiver by such party of any other
covenant, or condition to be performed or observed by any other party
hereunder. The exercise by a party hereto of any right, privilege or remedy
provided by this Agreement shall not constitute a waiver by such party of any
other covenant or condition to be performed or observed by any other party
under this agreement. The exercise by a party hereto of any right, privilege
or remedy provided by this Agreement or otherwise by law shall not exclude the
exercise of any other right, privilege or remedy.
J. Subject to the requirements of legal process and regulatory authority,
each party shall treat, and shall cause its affiliates to treat, as
confidential all information reasonably identified as confidential in writing
by any other party hereto and, except as permitted by this Agreement, shall
not disclose, disseminate or utilize confidential information without express
written consent of the affected party.
K. This Agreement constitutes the exclusive agreement of the parties on the
subject matter addressed in this Agreement. There are no understandings, oral
or written, outside this Agreement on the matters addressed herein.
IN WITNESS WHEREOF, the parties to this Agreement have caused this Agreement
to be executed by their duly authorized representatives as to the date first
set forth above.
OFFITBANK
By:
Title:
Date:
C. M. LIFE INSURANCE COMPANY
By:
Title:
Date:
CONNECTICUT MUTUAL FINANCIAL SERVICES, LLC
By:
Title:
Date:
