EXHIBIT 1(8)(A)
Form of Participation Agreement with ▇▇▇▇▇▇▇▇▇▇▇ Variable Account Funds.
SECOND AMENDED AND RESTATED
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PARTICIPATION AGREEMENT
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Among
▇▇▇▇▇▇▇▇▇▇▇ VARIABLE ACCOUNT FUNDS,
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▇▇▇▇▇▇▇▇▇▇▇ MANAGEMENT CORPORATION,
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MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
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and
MML BAY STATE LIFE INSURANCE COMPANY
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THIS AMENDED AND RESTATED AGREEMENT (the "Agreement"), made and
entered into as of the 1st day of July, 1995 by and among Massachusetts Mutual
Life Insurance Company and MML Bay State Life Insurance Company (hereinafter
collectively the "Companies"), on their own behalf and on behalf of
Massachusetts Mutual Variable Life Separate Account I, Massachusetts Mutual
Variable Annuity Separate Account 1, Massachusetts Mutual Variable Annuity
Separate Account 2, Massachusetts Mutual Variable Annuity Separate Account 3,
MML Bay State Variable Annuity Separate Account I and MML Bay State Variable
Life Separate Account 1 (hereinafter collectively the "Accounts"), ▇▇▇▇▇▇▇▇▇▇▇
Variable Account Funds (hereinafter the "Fund") and ▇▇▇▇▇▇▇▇▇▇▇ Management
Corporation (hereinafter the "Adviser").
WHEREAS, the Fund is an open-end management investment company
and is available to act as the investment vehicle for separate accounts now in
existence or to be established at any date hereafter for variable life insurance
policies and variable annuity contracts (collectively, the "Variable Insurance
Products") offered by insurance companies (hereinafter "Participating Insurance
Companies");
WHEREAS, the beneficial interest in the Fund is divided into
several series of shares, each designated a "Portfolio", and each representing
the interests in a particular managed pool of securities and other assets;
WHEREAS, the Fund has obtained an order from the Securities and
Exchange Commission, dated July 16, 1986 (File No. 812-6324) granting
Participating Insurance Companies and variable annuity and variable life
insurance separate accounts exemptions from the provisions of sections 9(a),
13(a), 15(a), and 15(b) of the Investment Company Act of 1940, as amended,
(hereinafter the "1940 Act") and Rules 6e-2(b)(15) and 6e-3(T)(b)(15)
thereunder, to the extent necessary to permit shares of the Fund to be sold to
and held by variable annuity and variable life insurance separate accounts of
both affiliated and unaffiliated life insurance companies (hereinafter the
"Shared Funding Exemptive Order")
WHEREAS, the Fund is registered as an open-end management
investment company under the 1940 Act and its shares are registered under the
Securities Act of 1933, as amended (hereinafter the "1933 Act");
WHEREAS, the Adviser is duly registered as an investment adviser
under the federal Investment Advisers Act of 1940;
WHEREAS, the Companies have registered or will register certain
variable annuity and/or life insurance contracts under the 1933 Act (hereinafter
"Contracts");
WHEREAS, the Accounts are duly organized, validly existing
segregated asset accounts, established by resolution of the Board of Directors
of the Companies, to set aside and invest assets attributable to the aforesaid
variable contracts (the Contract(s) and the Account(s) covered by the Agreement
are specified in Schedule B attached hereto, as may be modified from time to
time);
WHEREAS, the Companies have registered or will register the
Accounts as unit investment trusts under the 1940 Act;
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Companies intend to purchase shares in the Portfolios (the
Portfolios covered by this Agreement are specified in Schedule A attached hereto
as may be modified from time to time), on behalf of the Accounts (which are also
described on Schedule A, as may be modified from time to time) to fund the
Contracts and the Fund is authorized to sell such shares to unit investment
trusts such as the Accounts at net asset value; and
WHEREAS, the Companies, the Fund and the Adviser are parties to
an agreement (the "Prior Agreement") dated December 15, 1993, amended on
September 15, 1994, pursuant to which shares of certain Portfolios of the Fund
are made available as the underlying investment for one of the Accounts, and the
parties wish to have this Agreement replace the Prior Agreement;
NOW, THEREFORE, in consideration of their mutual promises, the
Fund, the Adviser and the Companies agree as follows:
ARTICLE I. Sale of Fund Shares
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1.1 The Fund agrees that shares of the Fund will be sold
only to Variable Insurance Products.
1.2. The Companies shall not permit any person other than a
Contract Holder or such Contract Holder's duly authorized representative to give
instructions to the Companies which would require the Companies to redeem or
exchange shares of the Fund.
ARTICLE II. Sales Material, Prospectuses and Other Reports
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2.1. The Companies shall furnish, or shall cause to be
furnished, to the Fund or its designee, each piece of sales literature or other
promotional material in which the Fund or the Adviser is named, at least ten
Business Days prior to its use. No such material shall be used if the Fund or
its designee reasonably object to such use within ten Business Days after
receipt of such material. "Business Day" shall mean any day in which the New
York Stock Exchange is open for trading and in which the Fund calculates its net
asset value pursuant to the rules of the Securities and Exchange Commission.
2.2. The Companies shall not give any information or make
any representations or statements on behalf of the Fund or concerning the Fund
in connection with the sale of the Contracts other than the information or
representations contained in the registration statement or prospectus for the
Fund shares, as such registration statement and prospectus may be amended or
supplemented from time to time, or in reports or proxy statements for the Fund,
or in sale literature or other promotional material approved by the Fund or its
designee, except with the permission of the Fund.
2.3. For purposes of this Article II, the phrase "sales
literature or other promotional material" means advertisements (such as material
published, or designed for use in, a newspaper, magazine, or other periodical,
radio, television, telephone or tape recording, videotape display, signs or
billboard), and sales literature (such as brochures, circulars, market letters
and form letters), distributed or made generally available to customers or the
public.
2.4. The Fund shall provide one or more diskettes containing
its current prospectus in WordPerfect and ▇▇▇▇▇ format, within a reasonable
period of its filing date, and provide other assistance as is reasonably
necessary in order for the Companies once each year (or more frequently if the
prospectus for the Fund is supplemented or amended) to have the prospectus for
the Contracts and the Fund's prospectus printed together in one document (such
printing to be at the Companies' expense). The Adviser shall be permitted to
review and approve the typeset form of the Fund's Prospectus prior to such
printing.
2.5. The Fund or the Adviser shall provide the Companies
with either: (i) a diskette or modem transmission (or other automated
transmission) containing the Fund's proxy material, reports to shareholders,
other information relating to the Fund necessary to prepare financial reports,
and other communications to shareholders for printing and distribution to
Contract owners at the Companies' expense, or (ii) camera ready and/or printed
copies, if appropriate, of such material for distribution to Contract owners at
the Companies' expense, within a reasonable period of the filing date for
definitive copies of such material. The Adviser shall be permitted to review and
approve the typeset form of such proxy material and shareholder reports prior to
such printing provided such materials have been provided within a reasonable
period.
ARTICLE III. Fees and Expenses
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3.1. The Fund and Adviser shall pay no fee or other
compensation to the Companies under this agreement, and the Companies shall pay
no fee or other compensation to the Fund or Adviser, except as provided herein.
3.2. All expenses incident to performance by each party of
its respective duties under this Agreement shall be paid by that party. The Fund
shall see to it that all its shares are registered and authorized for issuance
in accordance with applicable federal law and, if and to the extent advisable by
the Fund, in accordance with applicable state laws prior to their sale. The Fund
shall bear the expenses for the cost of registration and qualification of the
Fund's shares, preparation and filing of the Fund's prospectus and registration
statement, proxy materials and reports, and the preparation of all statements
and notices required by any federal or state law.
3.3. Unless mutually agreed upon to the contrary in writing,
the Companies shall bear the expenses of typesetting, printing and distributing
the Fund's prospectus, proxy materials and reports to owners of Contracts issued
by the Companies. OMC agrees to use reasonable efforts to restrict the number of
shareholder meetings of the Fund that require the Company to bear the expenses
of typesetting, printing and distributing the Fund's proxy material to one per
fiscal year of the Fund.
3.4. In the event the Fund adds one or more additional
Portfolios and the Companies desire to make such Portfolios available to their
respective Contract owners as an underlying investment medium, a new Schedule A
or an amendment to this Agreement shall be executed by the parties authorizing
the issuance of shares of the new Portfolios to the particular Account. The
amendment may also provide for the sharing of expenses for the establishment of
new Portfolios among Participating Insurance Companies desiring to invest in
such Portfolios and the provision of funds as the initial investment in the new
Portfolios.
ARTICLE IV. Potential Conflicts
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4.1. The Board of Trustees of the Fund (the "Board") will
monitor the Fund for the existence of any material irreconcilable conflict
between the interests of the Contract owners of all separate accounts investing
in the Fund. An irreconcilable material conflict may arise for a variety of
reasons, including: (a) an action by any state insurance regulatory authority;
(b) a change in applicable federal or state insurance, tax, or securities laws
or regulations, or a public ruling, private letter ruling, no-action or
interpretative letter, or any similar action by insurance, tax, or securities
regulatory authorities; (c) an administrative or judicial decision in any
relevant proceeding; (d) the manner in which the investments of any Portfolio
are being managed; (e) a difference in voting instructions given by variable
annuity contract and variable life insurance contract owners; or (f) a decision
by an insurer to disregard the voting instructions of Contract owners. The Board
shall promptly inform the Companies if it determines that an irreconcilable
material conflict exists and the implications thereof.
4.2. The Companies will each report any potential or
existing conflicts of which it is aware to the Board. The Companies will assist
the Board in carrying out its responsibilities in monitoring such conflicts by
providing the Board in a timely manner with all information reasonably necessary
for the Board to consider any issues raised. This includes, but is not limited
to, an obligation by the Companies to inform the Board whenever Contract owner
voting instructions are disregarded and by confirming in writing, at the Fund's
request, that the Companies are unaware of any such potential or existing
material irreconcilable conflicts.
4.3. If it is determined by a majority of the Board, or a
majority of its disinterested Trustees, that a material irreconcilable conflict
exists, the Companies shall, at their expense and to the extent reasonably
practicable (as determined by a majority of the disinterested trustees), take
whatever steps are necessary to remedy or eliminate the irreconcilable material
conflict, up to an including: (1) withdrawing the assets allocable to some or
all of the separate accounts from the Fund or any Portfolio and reinvesting such
assets in a different investment medium, including (but not limited to) another
Portfolio of the Fund, or submitting the question whether such segregation
should be implemented to a vote of all affected Contract owners and, as
appropriate, segregating the assets of any appropriate group (i.e., annuity
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contract owners, life insurance contract owners, or variable contract owners of
one or more Participating Insurance Companies) that votes in favor of such
segregation, or offering to the affected Contract owners the option of making
such a change; and (2) establishing a new registered management investment
company or managed separate account.
4.4. If a material irreconcilable conflict arises because of
a decision by either Company to disregard Contract owner voting instructions and
that decision represents a minority position or would preclude a majority vote,
such Company may be required, at the Fund's election, to withdraw the affected
Account's investment in the Fund and terminate this Agreement; provided,
however, that such withdrawal and termination shall be limited to the extent
required by the foregoing material irreconcilable conflict as determined by a
majority of the disinterested members of the Board. Any such withdrawal and
termination must take place within six (6) months after the Fund gives written
notice that this provision is being implemented, and until the end of the six
month period the Fund shall continue to accept and implement orders by such
Company for the purchase and redemption of shares of the Fund.
4.5. If a material irreconcilable conflict arises because a
particular state insurance regulator's decision applicable to such Company
conflicts with the majority of other state regulators, then the affected Company
will withdraw such Account's investment in the Fund and terminate this Agreement
within six months after the Board informs such Company in writing that it has
determined that such decision has created an irreconcilable material conflict;
provided, however, that such withdrawal and termination shall be limited to the
extent required by the foregoing material irreconcilable conflict as determined
by a majority of the disinterested members of the Board. Until the end of the
foregoing six month period, the Fund shall continue to accept and implement
orders by such Company for the purchase and redemption of shares of the Fund,
subject to applicable regulatory limitation.
4.6. For purposes of Sections 4.3 through 4.6 of this
Agreement, a majority of the disinterested members of the Board shall determine
whether any proposed action adequately remedies any irreconcilable material
conflict, but in no event will the Fund be required to establish a new funding
medium for the Contracts. In such case a Company shall not be required by
Section 4.3 to establish a new funding medium for Contracts if an offer to do so
has been declined by vote of a majority of Contract owners materially adversely
affected by the irreconcilable material conflict. In the event that the Board
determines that any proposed action does not adequately remedy any
irreconcilable material conflict, then such Company will withdraw the particular
Account's investment in the Fund and terminate this Agreement within six (6)
months after the Board informs the Company in writing of the foregoing
determination, provided, however, that such withdrawal and termination shall be
limited to the extent required by any such material irreconcilable conflict as
determined by a majority of the disinterested members of the Board.
ARTICLE V. Applicable Law
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5.1. This Agreement shall be construed and the provisions
hereof interpreted under and in accordance with the laws of New York.
5.2. This Agreement shall be subject to the provisions of
the 1933, 1934 and 1940 Acts, and the rules and regulations and rulings
thereunder, including such exemptions from those statutes, rules and regulations
as the Securities and Exchange Commission may grant (including, but not limited
to, the Shared Funding Exemptive Order) and the terms hereof shall be
interpreted and construed in accordance therewith.
ARTICLE VI. Termination
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6.1 This Agreement shall terminate with respect to some or
all Portfolios:
(a) at the option of any party upon six month's
advance written notice to the other parties;
(b) at the option of either Company to the extent that
shares of Portfolios are not reasonably available to meet the requirements of
its Contracts or are not appropriate funding vehicles for such Contracts, as
determined by that Company reasonably and in good faith. Prompt notice of the
election to terminate for such cause and an explanation of such cause shall be
furnished by that Company; or
(c) as provided in Article IV
6.2. It is understood and agreed that the right of any party
hereto to terminate this Agreement pursuant to Section 6.1(a) may be exercised
for cause or for no cause.
ARTICLE VII. Notices
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Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify to the
other party.
If to the Fund:
▇▇▇▇▇▇▇▇▇▇▇ Variable Account Funds
c/▇ ▇▇▇▇▇▇▇▇▇▇▇ Management Corporation
▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Legal Department
If to the Adviser:
▇▇▇▇▇▇▇▇▇▇▇ Management Corporation
▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: General Counsel
If to the Companies:
Massachusetts Mutual Life Insurance Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇.
Vice President & Managing Director
ARTICLE VIII. Miscellaneous
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8.1. Subject to the requirements of legal process and
regulatory authority, each party hereto shall treat as confidential the names
and addresses of the owners of the Contracts and all information reasonably
identified as confidential in writing by any other party hereto and, except as
permitted by this Agreement, shall not disclose, disseminate or utilize such
names and addresses and other confidential information without the express
written consent of the affected party until such time as it may come into the
public domain.
8.2. The captions in this Agreement are included for
convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
8.3. This Agreement may be executed simultaneously in two or
more counterparts, each of which taken together shall constitute one and the
same instrument.
8.4. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
the Agreement shall not be affected thereby.
8.5. Each party hereto shall cooperate with, and promptly
notify each other party and all appropriate governmental authorities (including
without limitation the Securities and Exchange Commission, the NASD and state
insurance regulators) and shall permit such authorities reasonable access to its
books and records in connection with any investigation or inquiry relating to
this Agreement or the transactions contemplated hereby.
8.6. The rights, remedies and obligations contained in this
Agreement are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to under
state and federal laws.
8.7. It is understood by the parties that this Agreement is
not an exclusive arrangement in any respect.
8.8. The Companies and the Adviser each understand and agree
that the obligations of the Fund under this Agreement are not binding upon any
shareholder of the Fund personally, but bind only the Fund and the Fund's
property; the Companies and the Adviser each represent that it has notice of the
provisions of the Declaration of Trust of the Fund disclaiming shareholder
liability for acts or obligations of the Fund.
8.9. The parties agree that the Companies may, on behalf of
their respective Accounts and Contracts listed in Exhibits A and B, elect to
make additional Portfolios available to Accounts upon the approval of the
Adviser and the provision of reasonable notice to the Adviser. Any Portfolio so
added will be subject to all of the terms and conditions of this Agreement.
8.10. The prior Agreement is superseded in its entirety by
this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed as of the date specified
below.
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By its authorized officer,
By: _________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President & Managing Director
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Date: _______________________________________
MML BAY STATE LIFE INSURANCE COMPANY
By its authorized officer,
By: _________________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President & Chief Executive Officer
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Date: _______________________________________
▇▇▇▇▇▇▇▇▇▇▇ VARIABLE ACCOUNT FUNDS
By its authorized officer,
By: __________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Assistant Secretary
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Date: ________________________________
▇▇▇▇▇▇▇▇▇▇▇ MANAGEMENT CORPORATION
By its authorized officer,
By: __________________________________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
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Date: ________________________________
SCHEDULE A
Portfolios of ▇▇▇▇▇▇▇▇▇▇▇ Variable Account Funds available for
-- MassMutual Strategic Life VI:
▇▇▇▇▇▇▇▇▇▇▇ High Income Fund
▇▇▇▇▇▇▇▇▇▇▇ Capital Appreciation Fund
▇▇▇▇▇▇▇▇▇▇▇ Global Securities Fund
-- MassMutual Variable Life Select:
-- MML Bay State Variable Life Select:
▇▇▇▇▇▇▇▇▇▇▇ Capital Appreciation Fund
▇▇▇▇▇▇▇▇▇▇▇ Strategic Bond Fund
▇▇▇▇▇▇▇▇▇▇▇ Growth Fund
▇▇▇▇▇▇▇▇▇▇▇ Global Securities Fund
-- MassMutual Flex-Annuity V (now known as "Flex Extra"):
▇▇▇▇▇▇▇▇▇▇▇ Capital Appreciation Fund
▇▇▇▇▇▇▇▇▇▇▇ Global Securities Fund
▇▇▇▇▇▇▇▇▇▇▇ Strategic Bond Fund
-- MassMutual/OPM Variable Annuity, MML Bay State/OPM Variable Annuity and
MassMutual Strategic Life IX:
▇▇▇▇▇▇▇▇▇▇▇ Money Fund
▇▇▇▇▇▇▇▇▇▇▇ High Income Fund
▇▇▇▇▇▇▇▇▇▇▇ Bond Fund
▇▇▇▇▇▇▇▇▇▇▇ Capital Appreciation Fund
▇▇▇▇▇▇▇▇▇▇▇ Growth Fund
▇▇▇▇▇▇▇▇▇▇▇ Multiple Strategies Fund
▇▇▇▇▇▇▇▇▇▇▇ Global Securities Fund
▇▇▇▇▇▇▇▇▇▇▇ Strategic Bond Fund
▇▇▇▇▇▇▇▇▇▇▇ Growth & Income Fund
SCHEDULE B
Massachusetts Mutual Variable Life Separate Account I (Strategic Life VI,
Strategic Life IX and Variable Life Select Contracts)
MML Bay State Variable Life Separate Account I (Variable Life Select Contract)
MML Bay State Variable Annuity Separate Account 1 (for OppenheimerFunds
LifeTrust Variable Annuity)
Massachusetts Mutual Variable Annuity Separate Account 1 (Flex Extra Contract)
Massachusetts Mutual Variable Annuity Separate Account 2 (Flex Extra Contract)
Massachusetts Mutual Variable Annuity Separate Account 3 (for OppenheimerFunds
LifeTrust Variable Annuity)
