EXHIBIT 1(3)(A)
Form of Distribution Servicing Agreement between MML Distributors, LLC, and MML
Bay State Life Insurance Company.
UNDERWRITING AND
SERVICING AGREEMENT
This UNDERWRITING AND SERVICING AGREEMENT is made this 1st day of May, 1996, by
and between MML Distributors, LLC ("MML Distributors") and MML Bay State Life
Insurance Company ("Bay State"), on its own behalf and on behalf of MML Bay
State Variable Life Separate Account I (the "Separate Account"), a separate
account of Bay State, as follows:
WHEREAS, the Separate Account was established under authority of resolutions of
the Board of Directors of Bay State in order to set aside and invest assets
attributable to certain variable life insurance contracts (the "Contracts")
issued by Bay State; and
WHEREAS, Bay State 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, Bay State will continue the effectiveness of the registrations of the
Separate Account under the 1940 Act and the Contracts under the 1933 Act; and
WHEREAS, Bay State intends for the Contracts to be sold by 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, Bay State desires to engage MML Distributors, a broker-dealer
registered with the SEC under the 1934 Act and a member of the NASD, to act as
the principal underwriter ("Underwriter") of 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 MML Distributors desires to act as
Underwriter for the sale of the Contracts and to assume such responsibilities;
NOW, THEREFORE, the parties hereto agree as follows:
1. UNDERWRITER. Bay State hereby appoints MML Distributors as, and MML
Distributors agrees to serve as, Underwriter of the Contracts during the term of
this Agreement for purposes of federal and state securities laws. Bay State
reserves the right, however, to refuse
at any time or times to sell any Contracts hereunder for any reason, and Bay
State maintains ultimate responsibility for the sales of the Contracts.
MML Distributors 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. MML Distributors agrees to offer the
Contracts for sale in accordance with the prospectus then in effect for the
Contracts.
2. SERVICES. MML Distributors agrees, on behalf of Bay State and the Separate
Account, and in its capacity as 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.
3. SELLING GROUP. MML Distributors may enter into sales agreements for the
sale of the Contracts with independent broker-dealer firms ("Independent
Brokers") whose registered representatives have been or shall be licensed and
appointed as life insurance agents of Bay State. All such agreements shall be
in a form agreed to by Bay State. All such agreements shall provide that the
Independent Brokers must assume full responsibility for continued compliance by
itself and its associated persons with the NASD Rules of Fair Practice (the
"Rules") and all applicable federal and state securities and insurance laws.
All associated persons of such Independent Brokers soliciting applications for
the Contracts shall be duly and appropriately licensed and appointed for the
sale of the Contracts under the Rules and applicable federal and state
securities and insurance laws.
4. COMPLIANCE AND SUPERVISION. All persons who are engaged directly or
indirectly in the operations of MML Distributors and Bay State in connection
with the offer or sale of the Contracts shall be considered a "person
associated" with MML Distributors as defined in Section 3(a)(18) of the 1934
Act. MML Distributors shall have full responsibility for the securities
activities of each such person as contemplated by Section 15 of the 1934 Act.
MML Distributors 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 Rules and applicable federal
and state securities laws. Without limiting the generality of the foregoing, MML
Distributors agrees that it shall be fully responsible for:
(a) ensuring that no representative of MML Distributors 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 Bay State is licensed to sell the Contracts,
and in which such person shall offer or sell the Contracts; and
(b) training and supervising Bay State's agents and brokers who are
also registered representatives of MML Distributors 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, MML Distributors shall:
(i) jointly conduct with Bay State such training
(including the preparation and utilization of training
materials) as in the opinion of MML Distributors and Bay
State 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 MML Distributors 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 Bay State agents
and brokers who are also registered representatives of MML
Distributors 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 Bay State
who are also registered representatives of MML Distributors
as required.
The parties hereto recognize that any registered representative of MML
Distributors or Independent Broker selling the Contracts as contemplated by this
Agreement shall also be acting as an insurance agent of Bay State or as an
insurance broker, and that the rights of MML Distributors and Independent Broker
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.
5. REGISTRATION AND QUALIFICATION OF CONTRACTS. Bay State 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.
Bay State agrees to execute such papers and to do such acts and things as shall
from time-to-time be reasonably requested by MML Distributors 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 MML Distributors may reasonably request. Bay State shall advise MML
Distributors 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, Bay State will forthwith prepare and furnish to MML
Distributors, 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 BAY STATE. Bay State represents and warrants to MML
Distributors and to the Independent Brokers as follows:
(a) Bay State is an insurance company duly organized under the laws
of the state of Missouri 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
Missouri, 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 segregated investment accounts for the Contracts.
(b) All persons that will be engaging in the offer or sale of the
Contracts will be authorized insurance agents of Bay State.
(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) Bay State shall make available to MML Distributors copies of all
financial statements that MML Distributors 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.
(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, Bay State 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 Bay State and constitutes the valid and legally binding obligation
of Bay State. Neither the execution and delivery of this Agreement by
Bay State 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 Bay State, 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 MML DISTRIBUTORS. MML Distributors represents and
warrants to Bay State as follows:
(a) MML Distributors 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 MML Distributors and constitutes the valid and legally binding
obligation of MML Distributors. Neither the execution and delivery of
this Agreement by MML Distributors 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 MML Distributors, 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) MML Distributors shall comply with the Rules and the securities
laws of any jurisdiction in which it sells, directly or indirectly,
any Contracts.
8. EXPENSES. MML Distributors 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.
Bay State 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. MML Distributors will use and
distribute only the Prospectus, statements of additional information, or other
applicable and authorized sales literature then in effect in selling the
Contracts. MML Distributors 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 Bay State.
MML Distributors 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. Bay State shall review and approve all advertising and
sales literature concerning the Contracts utilized by MML Distributors. MML
Distributors also agrees to furnish to Bay State 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 Bay State, and shall be remitted by MML Distributors or
Independent Brokers promptly, together with such forms and any other required
documentation, directly to Bay State at the address indicated on such
application or to such other address as Bay State may, from time to time,
designate in writing. All applications are subject to acceptance or rejection by
Bay State 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 Bay State and
shall be transmitted immediately in accordance with the administrative
procedures of Bay State without any deduction or offset for any reason,
including by example but not limitation, any deduction or offset for
compensation claimed by MML Distributors. Checks or money orders as payment on
any Contract shall be drawn to the order of "MML Bay State Life Insurance
Company." No cash payments shall be accepted by MML Distributors in connection
with the Contracts. Unless otherwise agreed to by Bay State in writing, neither
MML Distributors nor any of Bay State's agents nor any broker shall have an
interest in any surrender charges, deductions or other fees payable to Bay State
as set forth herein.
12. INSURANCE LICENSES. Bay State 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. Bay State reserves the right to refuse to appoint any
proposed agent or broker, and to terminate an agent or broker once appointed.
Bay State 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 Bay State's
right to collect such amount from any person or entity other than MML
Distributors.
13. AGENT/BROKER COMPENSATION. Commissions or other fees due all brokers and
agents in connection with the sale of Contracts shall be paid by Bay State, on
behalf of MML Distributors, to the persons entitled thereto in accordance with
the applicable agreement between each such broker or agent and Bay State or a
general agent thereof. MML Distributors shall assist Bay State in the payment of
such amounts as Bay State shall reasonably request, provided that MML
Distributors shall not be required to perform any acts that would
subject it to registration under the insurance laws of any state. The
responsibility of MML Distributors shall include the performance of all
activities by MML Distributors 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, Bay State
retains the ultimate right to determine the commission rate paid to its agents.
14. MML DISTRIBUTORS' COMPENSATION. As payment for its services hereunder, MML
Distributors shall receive an annual fee in the amount of $10,000 per year.
Payments shall commence and be made no later than December 31 of each year.
15. BOOKS AND RECORDS. MML Distributors and Bay State 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, MML
Distributors 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 MML Distributors and Bay State 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 MML Distributors as required under applicable NASD regulations
and federal and state securities laws requirements.
MML Distributors and Bay State, 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. MML Distributors and Bay State 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.
MML Distributors and Bay State 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 MML
Distributors, unless such documents, reports, records, books, files and other
materials are required by applicable regulation or law to be also maintained by
Bay State, in which case such material shall be the joint property of MML
Distributors and Bay State. All other documents, reports, records, books, files
and other
materials maintained relative to this Agreement shall be the property of Bay
State. Upon termination of this Agreement, all said material shall be returned
to the applicable party.
MML Distributors and Bay State 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. MML Distributors and Bay State 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, Bay State 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. Bay State 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
MML Distributors or Independent Broker acting in the capacity of agent for Bay
State.
18. INDEMNIFICATION. Bay State shall indemnify MML Distributors, Independent
Brokers, their 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 Bay State
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 information furnished to
Bay State by MML Distributors, Independent Brokers, or their 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 Bay State hereunder.
MML Distributors will indemnify Bay State, 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) MML Distributors 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 MML Distributors 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. MML Distributors shall be an independent
contractor. MML Distributors 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. MML
Distributors 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 Bay State's approval, however, MML Distributors 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 Bay State 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
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 MML Distributors and Bay State to
the Separate Account hereunder are not to be deemed exclusive and MML
Distributors and Bay State 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 MML DISTRIBUTORS. It is understood that any of the
policyholders, directors, officers, employees and agents of Bay State may be a
shareholder, director, officer, employee, or agent of, or be otherwise
interested in, MML Distributors, any affiliated person of MML Distributors, any
organization in which MML Distributors may have an interest, or any organization
which may have an interest in MML Distributors; that MML Distributors, any such
affiliated person or any such organization may have an interest in Bay State;
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 Bay State and MML
Distributors, 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.
MML BAY STATE LIFE
INSURANCE COMPANY, on its behalf
and on behalf of MML BAY STATE
VARIABLE LIFE SEPARATE
ACCOUNT I
ATTEST:
/s/ Xxxxxxx Xxxx By: /s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
MML DISTRIBUTORS, LLC
ATTEST:
/s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxx X' Xxxxxx
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Xxxx X. X'Xxxxxx
President
