EXHIBIT 3
Copy of Distribution Agreement
SERVICING AGREEMENT
This SERVICING AGREEMENT is made this 2nd day of January, 1988, by and between
MML Investors Services, Inc. ("MMLISI") and Massachusetts Mutual Life Insurance
Company ("MMLIC"), on its own behalf and on behalf of Mass Mutual variable
Annuity Separate Account 1 and Mass Mutual Variable Annuity Separate Account 2
(the "Separate Accounts"), separate accounts of MMLIC, as follows:
WHEREAS, the Separate Accounts were each established under authority of
resolutions of MMLIC's Board of Directors in order to set aside and invest
assets attributable to certain variable annuity contracts (hereinafter
collectively the "Contracts") issued by MMLIC and sold by its agents;
WHEREAS, MMLIC has registered each Separate Account as a unit investment trust
under the Investment Company Act of 1940 (the "1940 Act") and has registered the
Contracts under the Securities Act of 1933;
WHEREAS, MMLIC is registered as a broker-dealer with the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended (the "1934
Act") and is a member of the National Association of Securities Dealers,
Inc.(the "NASD");
WHEREAS, MMLIC has served as principal underwriter of the Contracts and has
provided supervision to its agents who sell the Contracts and has been
responsible for compliance with broker-dealer requirements under Federal and
state securities laws and NASD regulations;
WHEREAS, MMLIC desires to reregister as a broker-dealer and to engage MMLISI, a
registered broker-dealer, to assume the above responsibilities with respect to
the distribution of the Contracts and serve as principal underwriter of the
Contracts, as required by applicable law, and MMLISI desires to assume such
responsibilities and to serve as principal underwriter of the Contracts;
NOW, THEREFORE, the parties hereto agree as follows:
1. MMLIC grants to MMLISI the right to be, and MMLISI agrees to serve as,
principal underwriter of the Contracts during the term of this Agreement for
the purposes of Federal and state securities laws. MMLISI agrees, on behalf
of MMLIC, to undertake, at its own expense except as otherwise provided
herein, to provide sales services relative to the Contracts and otherwise to
perform all duties and functions that are necessary and proper for the
distribution of the Contracts as required under Federal and state securities
laws and NASD regulations.
2. MMLISI represents that it is a duly registered 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 securities laws of every state
or other jurisdiction in which the Contracts are available for sale. MMLISI
shall be fully responsible for carrying out all compliance, supervisory and
other obligations hereunder required by the NASD Rules of Fair Practice and
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 person shall offer or sell the Contracts on behalf of
MMLIC until such person is duly registered as a representative of
MMLISI, and 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 sold, in which MMLIC is licensed to sell the
Contracts, and in which such person shall offer or sell the Contracts;
(b) Training and supervising MMLIC's agents for purposes of complying on a
continuous basis with the NASD Rules of Fair Practice and with Federal
and State securities laws applicable in connection with the offering and
sale of the Contracts. In this connection, MMLISI shall:
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A. Jointly conduct with MMLIC such training (including the preparation and
utilization of training materials) as in the opinion of MMLISI is necessary
to accomplish the purposes of this Agreement;
B. Establish and implement reasonable written procedures for supervision of
sales practices of representatives of MMLISI who sell the Contracts;
C. Ensure that MMLIC's agents who are also representatives of MMLISI shall
recommend the purchase of Contracts only upon reasonable grounds to believe
that the purchase of the Contract is suitable for such applicant;
D. Provide a sufficient number of registered principals and an adequately
staffed compliance department to carry out the responsibilities as set
forth herein; and
E. Impose disciplinary measures on agents of MMLIC who are also registered
representatives of MMLISI as required.
(c) MMLISI shall assume full responsibility for the securities activities
of all persons engaged directly or indirectly in operations of MMLISI
and MMLIC in connection with the offer or sale of the Contracts; each
such person shall be considered a "person associated" of MMLISI is
defined in Section 3(a)(18) of the 1934 Act. MMLISI shall have full
responsibility for each such person in connection with his or her
training, supervision, and control, as contemplated by Section 15 of
the 1934 Act.
3. MMLIC represents and warrants that the Contracts are registered under the
Securities Act of 1933, and that the Contracts are qualified to be sold
under the insurance and securities laws of all states in which Contracts
are authorized for sale. MMLIC further represents and warrants that it is
an insurance company duly organized under the laws of the Commonwealth of
Massachusetts and in good standing and authorized to conduct business under
the laws of each state in which the Contracts are sold, and that it has
legally and validly established the Separate Accounts as segregated asset
accounts under the Insurance Code of Massachusetts and has registered the
Separate Accounts as unit investment trusts in accordance with the
provisions of the 1940 Act to serve as segregated investment accounts for
the Contracts.
4. MMLISI agrees to ensure that its registered representatives use only the
prospectus or other applicable and authorized sales literature then in
effect in soliciting and 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 prospectus therefore
filed with the Securities and Exchange Commission or in such sales
literature as may be authorized by MMLIC.
5. All applications for Contracts shall be made on application forms supplied
by MMLIC, and all payments collected by MMLISI shall be remitted by MMLISI
promptly in full, together with such application forms and any other
required documentation, directly to MMLIC at the address indicated on such
application or to such other address as MMLIC may, from time to time,
designate in writing. MMLISI shall review all such applications for
suitability. Checks or money orders in payment on any contract shall be
drawn to the order of "Massachusetts Mutual Life Insurance Company." All
applications are subject to acceptance or rejection by MMLIC at its sole
discretion.
6. 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 MMLIC and shall be
transmitted immediately in accordance with the administrative procedures of
MMLIC without any deduction or offset for any reason,. including by example
but not limitation, any deduction or offset for compensation claimed by
MMLISI. No cash payments shall be accepted by MMLISI in connection with the
Contracts.
7. MMLIC agrees to pay the costs of printing the prospectuses and sales
material used in connection with the solicitation of applications for the
Contracts. MMLIC shall provide to MMLISI copies of such prospectuses and
sales material in such number as MMLISI shall reasonably request. MMLIC
shall make available to MMLISI copies of all financial statements and other
documents that MMLISI reasonably requests for use in connection with the
distribution of the Contracts.
8. Notwithstanding anything in this Agreement to the contrary, MMLISI may
enter into sales agreements with independent broker-dealers for the sale of
the Contracts, subject to the prior written approval of MMLIC of each such
sales agreement and the terms thereof. All such sales agreements entered
into by MMLISI shall provide that each independent broker-dealer will
assume full responsibility for continued compliance by itself and its
associated persons with the NASD Rules of Fair Practice and applicable
Federal and state securities and insurance laws, and shall contain
substantially identical provisions to those set forth herein. All
associated persons of such, independent broker-dealer soliciting
applications for the Contracts shall be duly and appropriately licensed or
appointed for the sale of the Contracts under the NASD Rules of Fair
Practice and Federal and
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state securities and insurance laws in which such person shall offer or
sell the Contracts.
9. MMLIC shall apply for and maintain the proper insurance licenses 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 agent or
broker. MMLIC reserves the right to refuse to appoint any proposed agent or
broker, or independent broker-dealer, and to terminate an agent, broker or
independent broker-dealer once appointed. MMLIC agrees to be responsible
for all licensing or other fees required under pertinent state insurance
laws to properly authorize brokers or agents for the sale of the Contracts;
however, the foregoing shall not limit MMLIC's right to collect such amount
from any person or entity other than MMLISI.
10. Commissions or other fees due all brokers and agents in connection with the
sale of Contracts shall be paid by MMLIC to the persons entitled thereto in
accordance with both the applicable agreement between each such broker or
agent and MMLIC. MMLISI shall assist MMLIC in the payment of such amounts
as MMLIC 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 state and
Federal securities laws. Unless applicable state or Federal securities law
shall require, MMLIC retains the ultimate right to determine the commission
rate paid to its agents. Unless otherwise agreed to by MMLIC in writing,
neither MMLISI nor any of MMLIC's agents nor any independent broker-dealer
shall have an interest in any surrender charges, deductions, or other fees
payable to MMLIC as set forth herein.
11. With respect to the first calendar year of this Agreement, MMLISI shall be
compensated for its services under this Agreement in the amount of three
hundred two thousand dollars ($302,000) The amount of compensation to be
paid to MMLISI in subsequent years shall be negotiated by the parties prior
thereto.
12. The services of MMLISI and MMLIC to the Separate Accounts hereunder are not
to be deemed exclusive and MMLISI and MMLIC shall be free to render similar
services to others so long as their services hereunder are not impaired or
interfered with hereby.
13. The parties hereto recognize that any person selling the Contracts as
contemplated by this Agreement shall be acting as an insurance agent of
MMLIC 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 persons are and shall continue to be considered to have a common
law independent contractor relationship with MMLIC and not to be common law
employees of MMLIC.
14. Subject to termination, as hereinafter provided, the Agreement shall remain
in full force and effect for the initial term of this Agreement, which
shall be for a two-year period commencing 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, each such additional year
being an additional term of this Agreement.
(a) (a)This Agreement may be terminated by either party hereto upon 60
days written notice to the other party, or at any time upon the mutual
written consent of the parties hereto.
(b) This Agreement shall automatically be terminated in the event of its
assignment.
(c) 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
Contracts in effect at the time of termination issued pursuant to
applications received by MMLIC prior to termination.
15. This Agreement shall be subject to the provisions of the 1934 Act and the
1940 Act and the rules, regulations, and rulings thereunder and of the
NASD), from time to time in effect, including such exemptions from the 1940
Act as the SEC may grant, and the terms hereof shall be interpreted and
construed in accordance therewith. Without limiting the generality of the
foregoing, the term "assigned" shall not include any transactions exempted
from section 15(b)(2) of the 1940 Act. MMLISI and MMLIC 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 law or regulations. In particular,
without limiting the foregoing, MMLIC agrees that any books and records it
maintains pursuant to paragraph 16 of this Servicing Agreement which are
required to be maintained under Rule l7a-3 or 17a-4 of the 1934 Act shall
be subject to inspection by the Securities and Exchange Commission in
accordance
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with Section 17(a) of the 1934 Act.
16. MMLISI and MMLIC shall each cause to be maintained and preserved for the
periods prescribed, such accounts, books, and other documents as are
required of it by the 1934 Act and 1940 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 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 MMLIC 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
shall be reflected on the books and records of MMLISI as required under
applicable NASD regulations and Federal and State securities laws
requirements. MMLISI and MMLIC, 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 MMLIC shall
each cause the other to be furnished with such reports as may reasonably
request for the purpose of meeting its reporting and record keeping
requirements under such regulations and laws, and under the insurance laws
of the Commonwealth of Massachusetts and any other applicable states or
jurisdictions.
17. MMLISI and MMLIC each agree and understand that all documents, reports,
records, books, files, and other materials required under applicable NASD
regulation and Federal and state securities laws relative to the sale of
Contracts 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 maintained also by MMLIC, in which case such
material shall be the joint property of MMLISI and MMLIC. All other
documents, reports, records, books, files and other materials maintained
relative to this Agreement shall be the property of MMLIC. Upon termination
of this Agreement, all said material shall be returned to the applicable
party.
18. MMLISI and MMLIC shall establish and maintain facilities and procedures for
the safekeeping of all books, accounts, records, files, and other materials
relative 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.
19. MMLIC 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, including Rule lOb-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
capacity of Agent for MMLIC.
20. 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.
21. 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.
22. This Agreement shall be interpreted in accordance with the laws of the
Commonwealth of Massachusetts.
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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.
MASSACHUSETTS MUTUAL LIFE
ATTEST: INSURANCE COMPANY, on its behalf
And on behalf of MASS MUTUAL
VARIABLE ANNUITY SEPARATE
ACCOUNT and MassMutual
VARIABLE ANNUITY SEPARATE
ACCOUNT 2
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------
Xxxxxx X. Xxxxxxx
Secretary President
ATTEST MML INVESTORS SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxx
---------------------------
Secretary Xxxxx X. Xxxxxx
President
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