Exhibit 3(ii)
UNDERWRITING AND
SERVICING AGREEMENT
This UNDERWRITING AND SERVICING AGREEMENT is made this __ day of
July, 1998, by and between MML Investors Services, Inc. ("MMLISI") and
Massachusetts Mutual Life Insurance Company ("MassMutual"), on its own behalf
and on behalf of Massachusetts Mutual Variable Annuity Separate Account 4 (the
"Separate Account"), a separate account of MassMutual, as follows:
WHEREAS, the Separate Account was established on ____________, 1998
pursuant to authority of MassMutual's Board of Directors in order to set aside
and invest assets attributable to certain variable annuity contracts (the
"Contracts") issued by MassMutual; and
WHEREAS, MassMutual has registered the Separate Account under the
Investment Company Act of 1940, as amended, (the "1940 Act") and has registered
the Contracts under the Securities Act of 1933, as amended, (the "1933 Act");
and
WHEREAS, MassMutual will continue the effectiveness of the
registrations of the Separate Account under the 1940 Act and the Contracts under
the 1933 Act; and
WHEREAS, MassMutual intends for the Contracts to be sold by its
agents and brokers who are required to be registered representatives of a
broker-dealer that is registered with the Securities and Exchange Commission
(the "SEC") under the Securities Exchange Act of 1934 ("1934 Act") and a member
of the National Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, MassMutual desires to engage MMLISI, a broker-dealer
registered with the SEC under the 1934 Act and a member of the NASD, to act as a
co-underwriter ("Co-underwriter") in connection with the distribution of the
Contracts by the full-time career contracted agents of MassMutual ("Agents") and
certain other brokers, and in connection therewith, to provide certain services
and supervision to such Agents and brokers who are also registered
representatives of MMLISI and who sell the Contracts, and to otherwise perform
certain duties and functions that are necessary and proper for the distribution
of the Contracts as required under applicable federal and state securities laws
and NASD regulations, and MMLISI desires to act as Co-underwriter for the sale
of the Contracts and to assume such responsibilities;
NOW, THEREFORE, the parties hereto agree as follows:
1. Underwriter. MassMutual hereby appoints MMLISI as, and MMLISI agrees to serve
as, Co-underwriter of the Contracts during the term of this Agreement for
purposes of federal and state securities laws. MassMutual reserves the right,
however, to refuse at any time or times to sell any Contracts hereunder for any
reason, and MassMutual maintains ultimate responsibility for the sales of the
Contracts.
2. Services. MMLISI agrees, on behalf of MassMutual and in its capacity as
Co-underwriter, to undertake at its own expense except as otherwise provided
herein, to provide certain sales, administrative and supervisory services
relative to the Contracts as described below, and otherwise to perform all
duties that are necessary and proper for the distribution of the Contracts as
required under applicable federal and state securities laws and NASD
regulations.
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3. Best Efforts. MMLISI shall use reasonable efforts to sell the Contracts but
does not agree hereby to sell any specific number of Contracts and shall be free
to act as underwriter of other securities. MMLISI agrees to offer the Contracts
for sale in accordance with the prospectus then in effect for the Contracts.
4. Compliance and Supervision. All persons who are engaged directly or
indirectly in the operations of MMLISI and MassMutual in connection with the
offer or sale of the Contracts shall be considered a "person associated" with
MMLISI as defined in Section 3(a)(18) of the 1934 Act. MMLISI shall have full
responsibility for the securities activities of each such person as contemplated
by Section 15 of the 1934 Act.
MMLISI shall be fully responsible for carrying out all compliance,
supervisory and other obligations hereunder with respect to the activities of
its registered representatives as required by the NASD Rules (the "Rules") and
applicable federal and state securities laws. Without limiting the generality of
the foregoing, MMLISI agrees that it shall be fully responsible for:
(a) ensuring that no representative of MMLISI shall offer or sell
the Contracts until such person is appropriately licensed, registered, or
otherwise qualified to offer and sell such Contracts under the federal
securities laws and any applicable securities laws of each state or other
jurisdiction in which such Contracts may be lawfully sold, in which MassMutual
is licensed to sell the Contracts, and in which such person shall offer or sell
the Contracts; and
(b) training and supervising MassMutual's Agents and brokers who are
also registered representatives of MMLISI for purposes of complying on a
continuous basis with the Rules and with federal and state securities laws
applicable in connection with the offering and sale of the Contracts. In this
connection, MMLISI shall:
(i) jointly conduct with MassMutual such training (including the
preparation and utilization of training materials) as in the opinion of MMLISI
and MassMutual is necessary to accomplish the purposes of this Agreement;
(ii) establish and implement reasonable written procedures for
supervision of sales practices of registered representatives of MMLISI who sell
the Contracts;
(iii) provide a sufficient number of registered principals and an
adequately staffed compliance department to carry out the responsibilities as
set forth herein;
(iv) take reasonable steps to ensure that MassMutual Agents and
brokers who are also registered representatives of MMLISI recommend the purchase
of the Contracts only upon reasonable grounds to believe that the purchase of
the Contracts is suitable for such applicant; and
(v) impose disciplinary measures on agents of MassMutual who are
also registered representatives of MMLISI as required.
The parties hereto recognize that any registered representative of
MMLISI selling the Contracts as contemplated by this Agreement shall also be
acting as an insurance agent of MassMutual or as an insurance broker, and that
the rights of MMLISI to supervise such persons shall be limited to the extent
specifically described herein or required under applicable federal or state
securities laws or NASD regulations. Such persons shall not be considered
employees of MMLISI and shall be considered agents of MMLISI only as and to the
extent required by such laws and regulations. Further, it is intended by the
parties hereto that such
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persons are and shall continue to be considered to have common law independent
contractor relationship with MassMutual and not to be common law employees of
MassMutual.
5. Registration and Qualification of Contracts. MassMutual has prepared or
caused to be prepared a registration statement describing the Contracts,
together with exhibits thereto (hereinafter referred to as the "Registration
Statement"). The Registration Statement includes a prospectus (the "Prospectus")
for the Contracts.
MassMutual agrees to execute such papers and to do such acts and things as shall
from time-to-time be reasonably requested by MMLISI for the purpose of
qualifying and maintaining qualification of the Contracts for sale under
applicable state law and for maintaining the registration of the Separate
Account and interests therein under the 1933 Act and the 1940 Act, to the end
that there will be available for sale from time-to-time such amounts of the
Contracts as MMLISI may reasonably be expected to sell. MassMutual shall advise
MMLISI promptly of any action of the SEC or any authorities of any state or
territory, of which it is aware, affecting registration or qualification of the
Separate Account, or rights to offer the Contracts for sale.
If any event shall occur as a result of which it is necessary to
amend or supplement the Registration Statement in order to make the statements
therein, in light of the circumstances under which they were or are made, true,
complete or not misleading, MassMutual will forthwith prepare and furnish to
MMLISI, without charge, amendments or supplements to the Registration Statement
sufficient to make the statements made in the Registration Statement as so
amended or supplemented true, complete and not misleading in light of the
circumstances under which they were made.
6. Representations of MassMutual. MassMutual represents and warrants to MMLISI
as follows:
(a) MassMutual is an insurance company duly organized under the laws
of the Commonwealth of Massachusetts and is in good standing and is authorized
to conduct business under the laws of each state in which the Contracts are
sold, that the Separate Account was legally and validly established as a
segregated asset account under the Insurance Code of Massachusetts, and that the
Separate Account has been properly registered as a unit investment trust in
accordance with the provisions of the 1940 Act to serve as a segregated
investment account for the Contracts.
(b) All persons that will be engaging in the offer or sale of the Contracts will
be authorized insurance agents of MassMutual.
(c) The Registration Statement does not and will not contain any misstatements
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were or are made, not materially misleading.
(d) MassMutual shall make available to MMLISI copies of all financial statements
that MMLISI reasonably requests for use in connection with the offer and sale of
the Contracts.
(e) No federal or state agency or bureau has issued an order preventing or
suspending the offer of the Contracts or the use of the Registration Statement,
or of any part thereof, with respect to the sale of the Contracts.
(f) The offer and sale of the Contracts is not subject to registration, or if
necessary, is registered, under the Blue Sky laws of the states in which the
Contracts will be offered and sold.
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(g) The Contracts are qualified for offer and sale under the applicable state
insurance laws in those states in which the Contracts shall be offered for sale.
In each state where such qualification is effected, MassMutual shall file and
make such statements or reports as are or may be required by the laws of such
state.
(h) This Agreement has been duly authorized, executed and delivered by
MassMutual and constitutes the valid and legally binding obligation of
MassMutual. Neither the execution and delivery of this Agreement by MassMutual
nor the consummation of the transactions contemplated herein will result in a
breach or violation of any provision of the state insurance laws applicable to
MassMutual, any judicial or administrative orders in which it is named or any
material agreement or instrument to which it is a party or by which it is
bound.
7. Representations of MMLISI. MMLISI represents and warrants to MassMutual as
follows:
(a) MMLISI is duly registered as a broker-dealer under the 1934 Act and is a
member in good standing of the NASD and, to the extent necessary to perform the
activities contemplated hereunder, is duly registered, or otherwise qualified,
under the applicable securities laws of every state or other jurisdiction in
which the Contracts are available for sale.
(b) This Agreement has been duly authorized, executed and delivered by MMLISI
and constitutes the valid and legally binding obligation of MMLISI. Neither the
execution and delivery of this Agreement by MMLISI nor the consummation of the
transactions contemplated herein will result in a breach or violation of any
provision of the federal or state securities laws or the Rules, applicable to
MMLISI, or any judicial or administrative orders in which it is named or any
material agreement or instrument to which it is a party or by which it is
bound.
(c) MMLISI shall comply with the Rules and the securities laws of any
jurisdiction in which it sells, directly or indirectly, any Contracts.
8. Expenses. MMLISI shall be responsible for all expenses incurred in connection
with its provision of services and the performance of its obligations hereunder,
except as otherwise provided herein.
MassMutual shall be responsible for all expenses of printing and distributing
the Prospectuses, and all other expenses of preparing, printing and distributing
all other sales literature or material for use in connection with offering the
Contracts for sale.
9. Sales Literature and Advertising. MMLISI agrees to ensure that its registered
representatives use only the Prospectus, statements of additional information,
or other applicable and authorized sales literature then in effect in selling
the Contracts. MMLISI is not authorized to give any information or to make any
representations concerning the Contracts other than those contained in the
current Registration Statement filed with the SEC or in such sales literature as
may be authorized by MassMutual.
MMLISI agrees to make timely filings with the SEC, the NASD, and such other
regulatory authorities as may be required of any sales literature or advertising
materials relating to the Contracts and intended for distribution to prospective
investors. MassMutual shall review and approve all advertising and sales
literature concerning the Contracts utilized by MMLISI. MMLISI also agrees to
furnish to MassMutual copies of all agreements and plans it intends to use in
connection with any sales of the Contracts.
10. Applications. All applications for Contracts shall be made on application
forms supplied by MassMutual, and shall be remitted by MMLISI promptly, together
with such forms and any other required
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documentation, directly to MassMutual at the address indicated on such
application or to such other address as MassMutual may, from time to time,
designate in writing. All applications are subject to acceptance or rejection by
MassMutual at its sole discretion.
11. Payments. All money payable in connection with any of the Contracts, whether
as premiums, purchase payments or otherwise, and whether paid by, or on behalf
of any applicant or Contract owner, is the property of MassMutual and shall be
transmitted immediately in accordance with the administrative procedures of
MassMutual without any deduction or offset for any reason, including by example
but not limitation, any deduction or offset for compensation claimed by MMLISI.
Checks or money orders as payment on any Contract shall be drawn to the order of
"Massachusetts Mutual Insurance Company." No cash payments shall be accepted by
MMLISI in connection with the Contracts. Unless otherwise agreed to by
MassMutual in writing, neither MMLISI nor any of MassMutual's Agents nor any
broker shall have an interest in any surrender charges, deductions or other fees
payable to MassMutual as set forth herein.
12. Insurance Licenses. MassMutual shall apply for and maintain the proper
insurance licenses and appointments for each of the Agents and brokers selling
the Contracts in all states or jurisdictions in which the Contracts are offered
for sale by such person. MassMutual reserves the right to refuse to appoint any
proposed Agent or broker, and to terminate an Agent or broker once appointed.
MassMutual agrees to be responsible for all licensing or other fees required
under pertinent state insurance laws to properly authorize Agents or brokers for
the sale of the Contracts; however, the foregoing shall not limit MassMutual's
right to collect such amount from any person or entity other than MMLISI.
13. Agent/Broker Compensation. Commissions or other fees due all brokers and
Agents in connection with the sale of Contracts shall be paid by MassMutual, on
behalf of MMLISI, to the persons entitled thereto in accordance with the
applicable agreement between each such broker or Agent and MassMutual or a
general agent thereof. MMLISI shall assist MassMutual in the payment of such
amounts as MassMutual shall reasonably request, provided that MMLISI shall not
be required to perform any acts that would subject it to registration under the
insurance laws of any state. The responsibility of MMLISI shall include the
performance of all activities by MMLISI necessary in order that the payment of
such amounts fully complies with all applicable federal and state securities
laws. Unless applicable federal or state securities law shall require,
MassMutual retains the ultimate right to determine the commission rate paid to
its Agents.
14. MMLISI Compensation. As payment for its services hereunder, MMLISI shall
receive an annual fee in the amount of $ per year. The fee shall be renegotiated
annually commencing in 1999. The last agreed-to fee shall remain in effect until
the new fee is mutually agreed upon and is set forth in a schedule attached
hereto.
15. Books and Records. MMLISI and MassMutual shall each cause to be maintained
and preserved for the period prescribed such accounts, books, and other
documents as are required of it by the 1934 Act and any other applicable laws
and regulations. In particular, without limiting the foregoing, MMLISI shall
cause all the books and records in connection with the offer and sale of the
Contracts by its registered representatives to be maintained and preserved in
conformity with the requirements of Rules 17a-3 and 17a-4 under the 1934 Act, to
the extent that such requirements are applicable to the Contracts. The books,
accounts, and records of MMLISI and MassMutual as to all transactions hereunder
shall be maintained so as to disclose clearly and accurately the nature and
details of the transactions. The payment of premiums, purchase payments,
commissions and other fees and payments in connection with the Contracts by its
registered representatives shall be reflected on the books and records of MMLISI
as required under applicable NASD regulations and federal and state securities
laws requirements.
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MMLISI and MassMutual, from time to time during the term of this
Agreement, shall divide the administrative responsibility for maintaining and
preserving the books, records and accounts kept in connection with the
Contracts; provided, however, in the case of books, records and accounts kept
pursuant to a requirement of applicable law or regulation, the ultimate and
legal responsibility for maintaining and preserving such books, records and
accounts shall be that of the party which is required to maintain or preserve
such books, records and accounts under the applicable law or regulation, and
such books, records and accounts shall be maintained and preserved under the
supervision of that party. MMLISI and MassMutual shall each cause the other to
be furnished with such reports as it may reasonably request for the purpose of
meeting its reporting and recordkeeping requirements under such regulations and
laws, and under the insurance laws of the Commonwealth of Massachusetts and any
other applicable states or jurisdictions.
MMLISI and MassMutual each agree and understand that all documents,
reports, records, books, files and other materials required under applicable
Rules and federal and state securities laws shall be the property of MMLISI,
unless such documents, reports, records, books, files and other materials are
required by applicable regulation or law to be also maintained by MassMutual, in
which case such material shall be the joint property of MMLISI and MassMutual.
All other documents, reports, records, books, files and other materials
maintained relative to this Agreement shall be the property of MassMutual. Upon
termination of this Agreement, all said material shall be returned to the
applicable party.
MMLISI and MassMutual shall establish and maintain facilities and
procedures for the safekeeping of all books, accounts, records, files, and other
materials related to this Agreement. Such books, accounts, records, files, and
other materials shall remain confidential and shall not be voluntarily disclosed
to any other person or entity except as described below in section 16..
16. Availability of Records. MMLISI and MassMutual shall each submit to all
regulatory and administrative bodies having jurisdiction over the sales of the
Contracts, present or future, any information, reports, or other material that
any such body by reason of this Agreement may request or require pursuant to
applicable laws or regulations. In particular, without limiting the foregoing,
MassMutual agrees that any books and records it maintains pursuant to paragraph
15 of this Agreement which are required to be maintained under Rule 17a-3 or
17a-4 of the 1934 Act shall be subject to inspection by the SEC in accordance
with Section 17(a) of the 1934 Act and Sections 30 and 31 of the 1940 Act.
17. Confirmations. MassMutual agrees to prepare and mail a confirmation for each
transaction in connection with the Contracts at or before the completion thereof
as required by the 1934 Act and applicable interpretations thereof, including
Rule 10b-10 thereunder. Each such confirmation shall reflect the facts of the
transaction, and the form thereof will show that it is being sent on behalf of
MMLISI acting in the capacity of agent for MassMutual.
18. Indemnification. MassMutual shall indemnify MMLISI, its registered
representatives, officers, directors, employees, agents and controlling persons
and hold such persons harmless, from and against any and all losses, damages,
liabilities, claims, demands, judgments, settlements, costs and expenses of any
nature whatsoever (including reasonable attorneys' fees and disbursements)
resulting or arising out of or based upon an allegation or finding that: (i) the
Registration Statement or any application or other document or written
information provided by or on behalf of MassMutual includes any untrue statement
of a material fact or omits to state a material fact necessary to make the
statements therein, in light of the circumstances under which they are made, not
misleading, unless such statement or omission was made in reliance upon, and in
conformity with, written
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information furnished to MassMutual by MMLISI or its registered representatives
specifically for use in the preparation thereof, or (ii) there is a
misrepresentation, breach of warranty or failure to fulfill any covenant or
warranty made or undertaken by MassMutual hereunder.
MMLISI will indemnify MassMutual, its officers, directors,
employees, agents and controlling persons and hold such persons harmless, from
and against any and all losses, damages, liabilities, claims, demands,
judgments, settlements, costs and expenses of any nature whatsoever (including
reasonable attorneys' fees and disbursements) resulting or arising out of or
based upon an allegation or finding that: (i) MMLISI or its registered
representatives offered or sold or engaged in any activity relating to the offer
and sale of the Contracts which was in violation of any provision of the federal
securities laws or, (ii) there is a material misrepresentation, material breach
of warranty or material failure to fulfill any covenant or warranty made or
undertaken by MMLISI hereunder.
Promptly after receipt by an indemnified party under this paragraph
18 of notice of the commencement of any action by a third party, such
indemnified party will, if a claim in respect thereof is to be made against the
indemnifying party under this paragraph 18, notify the indemnifying party of the
commencement thereof; but the omission to notify the indemnifying party will not
relieve the indemnifying party from liability which the indemnifying party may
have to any indemnified party otherwise than under this paragraph. In case any
such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, to assume
the defense thereof, with counsel satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this paragraph for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
19. Independent Contractor. MMLISI shall be an independent contractor. MMLISI is
responsible for its own conduct and the employment, control and conduct of its
agents and employees and for injury to such agents or employees or to others
through its agents or employees. MMLISI assumes full responsibility for its
agents and employees under applicable statutes and agrees to pay all employer
taxes thereunder.
20. Termination. Subject to termination as hereinafter provided, this Agreement
shall remain in full force and effect for the initial term of the Agreement,
which shall be for a two year period commencing on the date first above written,
and this Agreement shall continue in full force and effect from year to year
thereafter, until terminated as herein provided.
This Agreement may be terminated by either party hereto upon 30 days
written notice to the other party, or at any time upon the mutual written
consent of the parties hereto. This Agreement shall automatically be terminated
in the event of its assignment. Subject to MassMutual's approval, however,
MMLISI may delegate any duty or function assigned to it in this agreement
provided that such delegation is permissible under applicable law. Upon
termination of this Agreement, all authorizations, rights and obligations shall
cease except the obligations to settle accounts hereunder, including the
settlement of monies due in connection with the Contracts in effect at the time
of termination or issued pursuant to applications received by MassMutual prior
to termination.
21. Interpretation. This Agreement shall be subject to the provisions of the
1934 Act and the rules, regulations, and rulings thereunder and of the NASD,
from time to time in effect, and the terms hereof shall be interpreted and
construed in accordance therewith. If any provision of this Agreement shall be
held or made invalid by a court
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decision, statute, rule, or otherwise, the remainder of this Agreement shall not
be affected thereby. This Agreement shall be interpreted in accordance with the
laws of the Commonwealth of Massachusetts.
22. Non-exclusivity. The services of MMLISI and MassMutual to the Separate
Account hereunder are not to be deemed exclusive and MMLISI and MassMutual shall
be free to render similar services to others so long as their services hereunder
are not impaired or interfered with hereby.
23. Amendment. This Agreement constitutes the entire Agreement between the
parties hereto and may not be modified except in a written instrument executed
by all parties hereto.
24. Interests in and of MMLISI. It is understood that any of the policyholders,
directors, officers, employees and agents of MassMutual may be a shareholder,
director, officer, employee, or agent of, or be otherwise interested in, MMLISI,
any affiliated person of MMLISI, any organization in which MMLISI may have an
interest, or any organization which may have an interest in MMLISI; that MMLISI,
any such affiliated person or any such organization may have an interest in
MassMutual; and that the existence of any such dual interest shall not affect
the validity hereof or of any transaction hereunder except as otherwise provided
in the Charter, Articles of Incorporation, or By-Laws of MassMutual and MMLISI,
respectively, or by specific provision of applicable law.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed by their respective officials thereunto duly authorized and seals to
be affixed, as of the day and year first above written.
ATTEST: MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, on
its behalf and on behalf of MASSACHUSETTS MUTUAL VARIABLE ANNUITY SEPARATE
ACCOUNT 4
By:
Its:
ATTEST: MML INVESTORS SERVICES, INC.
By:
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