EXHIBIT (1)(b)
Form of Underwriting Agreement with MML Distributors, LLC
8
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 Massachusetts Mutual
Life Insurance Company ("MassMutual"), on its own behalf and on behalf of
_______________ Separate Account (the "Separate Account"), a separate account of
MassMutual, as follows:
WHEREAS, the Separate Account was established on _____________ pursuant to
authority of the Board of Directors of MassMutual 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 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 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;
9
NOW, THEREFORE, the parties hereto agree as follows:
1. Underwriter. MassMutual 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. 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.
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 MassMutual 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
MassMutual. All such agreements shall be in a form agreed to by
MassMutual. 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 MassMutual 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 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 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:
10
(i) jointly conduct with MassMutual such training
(including the preparation and utilization of
training materials) as in the opinion of MML
DISTRIBUTORS 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 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
MassMutual 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 MassMutual
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 MassMutual 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. 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 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.
MassMutual 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, MassMutual 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 MassMutual. MassMutual represents and warrants to MML
DISTRIBUTORS and to the Independent Brokers 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
11
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 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, 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 MML DISTRIBUTORS. MML DISTRIBUTORS represents and
warrants to MassMutual 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.
12
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.
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. MML DISTRIBUTORS agrees to ensure that
it uses and distributes 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
MassMutual.
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. MassMutual shall review and
approve all advertising and sales literature concerning the Contracts
utilized by MML DISTRIBUTORS. MML DISTRIBUTORS 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 MML DISTRIBUTORS or
Independent Brokers promptly, together with such forms and any other
required 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 MML DISTRIBUTORS. Checks or money
orders as payment on any Contract shall be drawn to the order of
"Massachusetts Mutual Life Insurance Company." No cash payments shall be
accepted by MML DISTRIBUTORS in connection with the Contracts. Unless
otherwise agreed to by MassMutual in writing, neither MML DISTRIBUTORS 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 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
MassMutual, on behalf of MML DISTRIBUTORS, to the persons entitled thereto
in accordance with the applicable agreement between each such broker or
agent and MassMutual or a general agent thereof. MML DISTRIBUTORS shall
assist MassMutual in the payment of such amounts as MassMutual shall
reasonably request, provided that MML DISTRIBUTORS shall not
13
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, MassMutual
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 that has the following
components: (1) a fixed fee in the amount of $_____ per year, and (2) a
variable fee in the amount of ___ basis points (.000x) per year of new
sales of the Contracts. Payments shall commence and be made no later than
December 31 of the year in which a Contract is issued. The variable
component of the fee shall be paid to MML DISTRIBUTORS's affiliate, MML
Insurance Agency, Inc. ("MMLIAI"). The fixed component shall be
renegotiated annually commencing in 1997. The last agreed-to amounts for
each of these fees shall remain in effect until the new fees are mutually
agreed upon and are set forth in schedules attached hereto.
15. Books and Records. MML DISTRIBUTORS 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, 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 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 MML DISTRIBUTORS as required under
applicable NASD regulations and federal and state securities laws
requirements.
MML DISTRIBUTORS 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. MML
DISTRIBUTORS 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.
MML DISTRIBUTORS 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 MML DISTRIBUTORS, 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 MML DISTRIBUTORS 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.
MML DISTRIBUTORS 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
14
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 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 MML DISTRIBUTORS or
Independent Broker acting in the capacity of agent for MassMutual.
18. Indemnification. MassMutual 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 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 information furnished to
MassMutual 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 MassMutual hereunder.
MML DISTRIBUTORS 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) 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
15
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 MassMutual'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 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 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 MassMutual to the
Separate Account hereunder are not to be deemed exclusive and MML
DISTRIBUTORS 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 MML DISTRIBUTORS. 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, 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 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 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.
ATTEST: MASSACHUSETTS MUTUAL LIFE
16
INSURANCE COMPANY, on its behalf
and on behalf of _______________
SEPARATE ACCOUNT
By: ___________________________
ATTEST: MML INVESTORS SERVICES, INC.
By: _________________________
17
