EXHIBIT (8)(q)
PARTICIPATION AGREEMENT
AMONG
ML LIFE INSURANCE COMPANY OF NEW YORK,
ALLIANZ DRESDNER ASSET MANAGEMENT OF AMERICA L.P., AND
PIMCO FUNDS DISTRIBUTORS LLC
THIS AGREEMENT, dated as of the 11th day of October, 2002, by and among
Xxxxxxx Xxxxx Life Insurance Company of New York (the "Company"), a New York
life insurance company, on its own behalf and on behalf of each segregated asset
account of the Company set forth on Schedule A hereto as may be amended from
time to time (hereinafter referred to individually and collectively as the
"Account"), Allianz Dresdner Asset Management of America L.P. (the "-Adviser"),
a Delaware limited partnership, and PIMCO Funds Distributors LLC (the
"Underwriter"), a Delaware company.
WHEREAS, the Advisor performs and produces the performance of various
services for PIMCO Funds: Multi-Manager Series ("MMS"), a Massachusetts business
trust, and PIMCO funds: Pacific Investment Management Series ("PIMS"), a
Massachusetts business trust, (MMS and PIMS are each sometimes hereinafter
referred to as a "Fund" and, collectively, as the "Funds"); and
WHEREAS, MMS is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"), and
offers Class A shares of beneficial interest ("MMS shares") in separate series
of funds ("MMS Funds"), each with its own investment objective or objectives and
investment policies; and
WHEREAS, PIMS is registered as an open-end management investment
company under the 1940 Act, and offers Class A shares of beneficial interest
("PIMS shares") in separate series of funds ("PIMS Funds"), each with its own
investment objective or objectives and investment policies. (The MMS shares and
PIMS shares are sometimes hereinafter collectively referred to as the "shares"
and the MMS Funds and the PIMS Funds are sometimes hereinafter collectively
referred to as the "Portfolios" or, individually, as a "Portfolio");
WHEREAS, the shares of beneficial interests of the Funds are divided
into several series of shares, each designated a "Portfolio" and representing
the interest in a particular managed portfolio of securities and other assets;
WHEREAS, shares of the Portfolios are registered under the Securities
Act of 1933, as amended (the "1933 Act");
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WHEREAS, the Adviser is duly registered as an investment adviser under
the Investment Advisers Act of 1940, as amended;
WHEREAS, the Underwriter, which serves as distributor to the Funds, is
registered as a broker-dealer with the Securities and Exchange Commission (the
"SEC") under the Securities Exchange Act of 1934, as amended (the "1934 Act"),
and is a member in good standing of the National Association of Securities
Dealers, Inc. (the "NASD");
WHEREAS, the Account is duly established and maintained as a segregated
asset account, duly established by the Company, on the date shown for such
Account on Schedule A hereto, to set aside and invest assets attributable to
variable annuity contracts set forth in Schedule A hereto, as it may be amended
from time to time by mutual written agreement (the "Contracts");
WHEREAS, each Portfolio issues shares to the general public and to the
separate accounts of insurance companies ("Participating Insurance Companies")
to fund variable annuity contracts sold to certain qualified pension and
retirement plans;
WHEREAS, the Company intends to purchase shares of other open-end
management investment companies that offer shares to the general public to fund
the Contracts;
WHEREAS, the Adviser and the Underwriter know of no reason why shares
in any Portfolio may not be sold to Participating Insurance Companies to fund
variable annuity contracts sold to certain qualified pension and retirement
plans; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios (and
classes thereof) listed in Schedule B hereto, as it may be amended from time to
time by mutual written agreement (the "Designated Portfolios") on behalf of the
Account to fund the aforesaid Contracts, and the Underwriter is authorized to
sell such shares in the Designated Portfolios, and classes thereof, to the
Account at net asset value.
NOW, THEREFORE, in consideration of their mutual promises, the Company,
theAdviser, and the Underwriter agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. The Funds have granted to the Underwriter exclusive authority
to distribute the shares of the FundsThe Underwriter agrees to make available to
the Company for purchase on behalf of the Account Fund shares of the Designated
Portfolios and classes thereof listed on Schedule B to this Agreement (the
"Shares"). Pursuant to such authority and instructions, and subject to Article
IX hereof, such purchases to be effected at net asset value in accordance with
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Section 1.3 of this Agreement. Notwithstanding the foregoing, the Boards of
Trustees of the Funds (the "Boards") may suspend or terminate the offering of
Shares of any Designated Portfolio or class thereof, if a Fund or Portfolio is
merged or liquidated, if such action is required by law or by regulatory
authorities having jurisdiction or if, in the sole discretion of the Boards
acting in good faith and in light of their fiduciary duties it is determined
that under federal and any applicable state laws, suspension or termination is
necessary in the best interests of the shareholders of such Designated
Portfolio.
1.2. The Underwriter shall cause the Funds to redeem, at the
Company's request, any full or fractional Shares held by the Company on behalf
of the Account, such redemptions to be effected at net asset value in accordance
with Section 1.3 of this Agreement. Notwithstanding the foregoing, (i) the
Company shall not redeem Shares attributable to Contract owners except in the
circumstances permitted in Section 9.3 of this Agreement, and (ii) the Funds may
delay redemption of Shares of any Designated Portfolio to the extent permitted
by the 1940 Act, and any rules, regulations, or orders thereunder and
redemptions of Fund shares may be suspended when trading on the New York Stock
Exchange is restricted or during an emergency that makes it impracticable for
the Funds to dispose of their portfolio securities or to determine fairly the
value of their net assets, or during any other period as permitted by the
Securities and Exchange Commission.
1.3. Purchase and Redemption Procedures
The Adviser hereby appoints the Company as an agent of the Funds for the limited
purpose of receiving purchase and redemption requests on behalf of the Account
(but not with respect to any Fund shares that may be held in the general account
of the Company) for the Shares made available hereunder, based on allocations of
amounts to the Account or subaccounts thereof under the Contracts and other
transactions relating to the Contracts or the Account. All transactions in
Account shares shall be executed through the Omnibus Accounts of Company's
affiliate Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx, Inc. ("Omnibus Accounts").
Receipt of any such request (or relevant transactional information therefor) on
any day the New York Stock Exchange is open for trading and on which the Funds
calculate their net asset value pursuant to the rules of the SEC (a "Business
Day") by the Company as such limited agent of the Funds prior to the time that
the Funds ordinarily calculates their net asset value as described from time to
time in the Fund Prospectuses (which as of the date of execution of this
Agreement is 4:00 p.m. Eastern Time) shall constitute receipt by the Funds on
that same Business Day, provided that the Funds receive notice of such request
by 9:30 a.m. Eastern Time on the next following Business Day. Such request will
be submitted to the Funds or its designee by initiating one or more order files
through the NSCC Fund SERV DCC&S platform by 6:00 a.m. ET (which utilizes the
"as of" record layout within Fund/SERV) which will detail the instructions
received with respect to the Designated Portfolios prior to 4:00 p.m. ET on the
prior Business Day for each of the Funds. If for any reason Xxxxxxx Xxxxx is
unable to transmit the file(s) with respect to any Business Day, Xxxxxxx Xxxxx
will notify the Funds or their designee as such by 9:30 a.m. ET on the next
following Business Day and submit the order by 11:00 a.m. ET that day.
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(b) The Company shall pay for Shares on the same day that
it notifies the Funds of a purchase request for such Shares. Payment for Shares
shall be made in federal funds transmitted to the Fund via the NSCC Fund/SERV
DCC&S platform to be received by the Funds by 4:00 p.m. Eastern Time on the day
the Funds are notified of the purchase request for Shares (unless the Funds
determine and so advise the Company that sufficient proceeds are available from
redemption of Shares of other Designated Portfolios affected pursuant to
redemption requests tendered by the Company on behalf of the Account). Upon
receipt of federal funds transmitted via the NSCC Fund/SERV DCC&S platform, such
funds shall cease to be the responsibility of the Company and shall become the
responsibility of the Funds. Notwithstanding any provision of this Agreement to
the contrary, for purchase and redemption instructions with respect to any
Shares, Company and the Funds will settle the purchase and redemption
transactions referred to herein, via the NSCC Fund/SERV platform settlement
process on the next Business Day following the effective trade date. The Funds
will provide to Company a daily transmission of positions and trading activity
taking place in the Omnibus Accounts using Company's affiliate's proprietary
Inventory Control System ("ICS").
(c) Payment for Shares redeemed by the Account or the
Company shall be made in federal funds transmitted via the NSCC Fund/SERV DCC&S
platform to the Company or any other designated person on the next Business Day
after the Funds are properly notified of the redemption order of such Shares
(unless redemption proceeds are to be applied to the purchase of Shares of other
Designated Portfolios in accordance with Section 1.3(b) of this Agreement),
except that the Funds reserve the right to redeem Shares in assets other than
cash and to delay payment of redemption proceeds to the extent permitted under
Section 22(e) of the 1940 Act and any Rules thereunder, and in accordance with
the procedures and policies of the Funds as described in the then current
prospectuses. The Funds shall not bear any responsibility whatsoever for the
proper disbursement or crediting of redemption proceeds by the Company; the
Company alone shall be responsible for such action.
(d) Any purchase or redemption request for Shares held or
to be held in the Company's general account shall be effected at the closing net
asset value per share next determined after each Fund's receipt of such request
as set forth in Section 1.3(a) herein.
1.4. The Funds shall use their best efforts to make the closing net
asset value per Share for each Designated Portfolio available to the Company by
6:30 p.m. Eastern Time each Business Day via the NSCC Profile 1 platform, and in
any event, as soon as reasonably practicable after the closing net asset value
per Share for such Designated Portfolio is calculated, and shall calculate such
closing net asset value, including any applicable daily dividend factor, in
accordance with each Funds Prospectus. In the event a Fund is unable to make the
6:30 p.m. deadline stated herein, it shall provide additional time for the
Company to place orders for the
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purchase and redemption of Shares. Such additional time shall be equal to the
additional time that the Fund takes to make the closing net asset value
available to the Company. Neither the Fund, any Designated Portfolio, the
Underwriter, the Adviser nor any of their affiliates shall be liable for any
information provided to the Company pursuant to this Agreement which information
is based on incorrect information supplied by the Company to the Funds, the
Adviser or the Underwriter. Any material error in the calculation or reporting
of the closing net asset value, including any applicable daily dividend factor
per Share shall be reported immediately upon discovery to the Company. In such
event, the Company shall be entitled to an adjustment to the number of Shares
purchased or redeemed to reflect the correct closing net asset value, including
any applicable daily dividend factor per Share and the Funds shall bear the cost
of correcting such errors. Any error of a lesser amount shall be corrected in
the next Business Day's net asset value per Share.
1.5 Notwithstanding anything to the contrary contained in this
Agreement, the Underwriter will make available for purchase by the Company, on
its behalf and on behalf of the Account a class of shares available at net asset
value which are not subject to a contingent deferred sales charge or redemption
fee (known as "class A" shares as of the date of this agreement). In addition,
no exchange fees will be applicable to shares of the Funds purchased by the
Company, on its behalf and on behalf of the Account. The Funds shall furnish
notice via the NSCC Profile II platform to the Company as soon as reasonably
practicable of any income dividends or capital gain distributions payable on any
Shares. The form of payment of dividends and capital gains distributions will be
determined in accordance with the Company's operational procedures in effect at
the time of the payment of such dividend or distribution. At this time, the
Company, on its behalf and on behalf of the Account, hereby elects to receive
all such dividends and distributions as are payable on any Shares in the form of
additional Shares of that Designated Portfolio through a trade processed via the
NSCC platform. The Company reserves the right, on its behalf and on behalf of
the Account, to revoke this election and to receive all such dividends and
capital gain distributions in the form of cash. The parties understand and agree
that all transactions of Account shares contemplated herein shall be executed
through the Omnibus Accounts and that Company's affiliate, Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx, Inc. will receive all such dividends and distributions
in the form of cash which Company, in turn, will immediately reinvest in the
form of additional Shares of that Designated Portfolio. The Underwriter, on
behalf of the Funds, shall notify the Company promptly of the number of Shares
so issued as payment of such dividends and distributions.
1.6. Issuance and transfer of Shares shall be by book entry only
and executed through the Omnibus Accounts. Stock certificates will not be issued
to the Company or the Account. Purchase and redemption orders for Fund shares
shall be recorded in an appropriate ledger for the Account or the appropriate
subaccount of the Account.
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1.7 Fund Information.
(a) The Underwriter will provide (or cause to be provided) to Company
the information set forth in Schedule C hereto. In addition, notwithstanding
anything contained in this Agreement to the contrary, the Underwriter hereby
agrees that Company may use such information in communications prepared for the
Contracts, including, but not limited to, application and other marketing or
sales communications materials. The Underwriter will provide timely notification
to Company of any change to the information described in Part I of Schedule C
including without limitation any change to the CUSIP number or symbol
designation of a Fund. Such notification shall be given to Company at least ten
(10) Business Days prior to the effective date of the change or the effect of
the change with respect to transactions by the Account in any affected Fund
shall be delayed for a reasonable time following notification hereunder.
(b) Notwithstanding anything to the contrary in this Agreement, upon
request, the Underwriter will provide Company with prospectuses, proxy
materials, financial statements, reports and other materials relating to each
Fund including holding, portfolio composition, largest sectors and geographical
allocation in sufficient quantity for each Contract owner invested in the Fund.
(c) With the exception of (i) listings of product offerings; (ii)
materials in the public domain (e.g., magazine articles and trade publications);
and (iii) materials used by on an internal basis only, Company agrees not to
furnish or cause to be furnished to any third parties or to display publicly or
publish any information or materials relating to the Funds, except such
materials and information as may be distributed to Company by Fund or approved
for distribution by Fund upon Company's request.
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ARTICLE II. Representations and Warranties
2.1. The Company represents and warrants that the Contracts (a)
are, or prior to issuance will be, registered under the 1933 Act, or (b) are not
registered because they are properly exempt from registration under the 1933 Act
or will be offered exclusively in transactions that are properly exempt from
registration under the 1933 Act. The Company further represents and warrants
that the Contracts will be issued and sold in compliance in all material
respects with all applicable federal securities and state securities and
insurance laws and that the sale of the Contracts shall comply in all material
respects with state insurance suitability requirements. The Company further
represents and warrants that it is an insurance company duly organized and in
good standing under applicable law, that it has legally and validly established
the Account prior to any issuance or sale thereof as a segregated asset account
under New York insurance laws, and that it (a) has registered or, prior to any
issuance or sale of the Contracts, will register the Account as a unit
investment trust in accordance with the provisions of the 1940 Act to serve as a
segregated investment account for the Contracts, or alternatively (b) has not
registered the Account in proper reliance upon an exclusion from registration
under the 1940 Act. The Company shall register and qualify the Contracts or
interests therein as securities in accordance with the laws of the various
states only if and to the extent deemed advisable by the Company.
2.2. The Adviser represents and warrants that Shares sold pursuant
to this Agreement shall be registered under the 1933 Act, duly authorized for
issuance and sold in compliance with applicable state and federal securities
laws and that each Fund is and shall remain registered under the 1940 Act. The
Adviser represents and warrants that each Fund shall amend its registration
statement for its shares under the 1933 Act and the 1940 Act from time to time
as required in order to effect the continuous offering of its shares. The
Adviser represents and warrants that each Fund shall register and qualify the
shares for sale in accordance with the laws of the various states only if and to
the extent deemed advisable by the Funds, the Adviser, or the Underwriter.
2.3. The Underwriter agrees to provide the Company with information
necessary to comply with any applicable state insurance laws or regulations
(including the furnishing of information not otherwise available to the Company
which is required by state insurance law to enable the Company to obtain the
authority needed to issue the Contracts in any applicable state, and including
cooperating with the Company in any filings of sales literature for the
Contracts), to the extent notified thereof in writing by the Company. The
Adviser makes no representations as to whether any aspect of either Funds'
operations including but not limited to investment policies, fees and expenses,
complies with the insurance laws of the various states.
2.4. The Adviser represents that each Fund is lawfully organized
and validly existing under the laws of the State of Massachusetts and that each
will comply in all material respects with the 1940 Act.
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2.6. The Underwriter represents and warrants that it is a member in
good standing of the NASD and is registered as a broker-dealer with the SEC. The
Underwriter further represents that it will sell and distribute the Fund shares
in accordance with any applicable state and federal securities laws.
2.7. The Adviser and the Underwriter represent and warrant that all
of their and each Fund's trustees/directors, officers, employees, investment
advisers, and other individuals or entities dealing with the money and/or
securities of the Fund are and shall continue to be at all times covered by a
blanket fidelity bond or similar coverage for the benefit of the Fund in an
amount not less than the minimum coverage as required currently by Rule 17g-1 of
the 1940 Act or related provisions as may be promulgated from time to time. The
aforesaid bond shall include coverage for larceny and embezzlement and shall be
issued by a reputable bonding company.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1. The Underwriter shall provide the Company with as many copies
of the Fund's current prospectus as the Company may reasonably request. The Fund
or the Underwriter shall bear the expense of printing copies of the current
prospectus for the Fund that will be distributed to existing Contract owners,
and the Company shall bear the expense of printing copies of the Fund's
prospectus and profiles that are used in connection with offering the Contracts
issued by the Company. If requested by the Company in lieu thereof, the Fund
shall provide such documentation (including a final copy of the new prospectus
on diskette at the Fund's or Underwriter's expense) and other assistance as is
reasonably necessary in order for the Company once each year (or more frequently
if the prospectus for the Fund is amended and the complete prospectus is
re-filed with the SEC) to have the prospectus for the Contracts and the Fund's
prospectus printed together in one document (such printing of the Fund's
prospectus for existing Contract owners to be at the Fund's or Underwriter's
expense).
3.2. The Fund's prospectus shall state that the current Statement
of Additional Information ("SAI") for the Fund is available, and the Underwriter
(or the Fund), at its expense, shall provide a reasonable number of copies of
such SAI free of charge to the Company for itself and for any owner of a
Contract who requests such SAI.
3.3. The Fund shall provide the Company with information regarding
the Fund's expenses, which information may include a table of fees and related
narrative disclosure for use in any prospectus or other descriptive document
relating to a Contract.
3.4. The Fund, at its or the Underwriter's expense, shall provide
the Company with copies of its proxy material, reports to shareholders, and
other communications to shareholders in such quantity as the Company shall
reasonably require for distributing to Contract owners.
3.5. The Company shall:
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(i) solicit voting instructions from Contract owners;
(ii) vote the Shares in accordance with instructions
received from Contract owners; and
(iii) vote Shares for which no instructions have been
received in the same proportion as Shares of such
portfolio for which instructions have been received,
so long as and to the extent that the SEC continues to interpret the 1940 Act to
require pass-through voting privileges for variable contract owners or to the
extent otherwise required by law. The Company will vote Shares held in any
segregated asset account in the same proportion as Shares of such portfolio for
which voting instructions have been received from Contract owners, to the extent
permitted by law.
ARTICLE IV. Sales Material and Information
4.1. The Company shall furnish, or shall cause to be furnished, to
the Fund or its designee, each piece of sales literature or other promotional
material that the Company develops and in which the Fund (or a Designated
Portfolio thereof) or the Adviser or the Underwriter is named. No such material
shall be used until approved by the Fund or its designee. The Fund or its
designee will be deemed to have approved such sales literature or promotional
material unless the Fund or its designee objects or provides comments to the
Company within ten (10) Business Days after receipt of such material. The Fund
or its designee reserves the right to reasonably object to the continued use of
any such sales literature or other promotional material in which the Fund (or a
Designated Portfolio thereof) or the Adviser or the Underwriter is named, and no
such material shall be used if the Fund or its designee so object.
4.2. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund or
the Adviser or the Underwriter in connection with the sale of the Contracts
other than the information or representations contained in the registration
statement or profiles or prospectus or SAI for the Fund shares, as such
registration statement and profiles and prospectus or SAI may be amended or
supplemented from time to time, or in reports or proxy statements for the Fund,
or in sales literature or other promotional material approved by the Fund or its
designee or by the Underwriter, except with the permission of the Fund or the
Underwriter or the designee of either.
4.3. The Adviser, the Fund and the Underwriter, or their designee,
shall furnish, or cause to be furnished, to the Company, each piece of sales
literature or other promotional material that it develops and in which the
Company, and/or its Account, is named. No such material shall be used until
approved by the Company. The Company will be deemed to have approved such sales
literature or promotional material unless the Company objects or provides
comments to the Fund, the Adviser, the Underwriter, or their designee within ten
Business Days
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after receipt of such material. The Company reserves the right to reasonably
object to the continued use of any such sales literature or other promotional
material in which the Company and/or its Account is named, and no such material
shall be used if the Company so objects.
4.4. The Fund and the Underwriter shall not give any information or
make any representations on behalf of the Company or concerning the Company, the
Account, or the Contracts other than the information or representations
contained in a registration statement and prospectus (which shall include an
offering memorandum, if any, if the Contracts issued by the Company or interests
therein are not registered under the 1933 Act), or SAI for the Contracts, as
such registration statement, prospectus, or SAI may be amended or supplemented
from time to time, or in published reports for the Account which are in the
public domain or approved by the Company for distribution to Contract owners, or
in sales literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.
4.5. The Fund will provide to the Company at least one complete
copy of all registration statements, profiles, prospectuses, SAIs, reports,
proxy statements, sales literature and other promotional materials, applications
for exemptions, requests for no-action letters, and all amendments to any of the
above, that relate to the Fund or its shares, promptly after the filing of such
document(s) with the SEC or other regulatory authorities.
4.6. The Company will provide to the Fund at least one complete
copy of all registration statements, prospectuses (which shall include an
offering memorandum, if any, if the Contracts issued by the Company or interests
therein are not registered under the 1933 Act), SAIs, reports, solicitations for
voting instructions, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all amendments
to any of the above, that relate to the Contracts or the Account, promptly after
the filing of such document(s) with the SEC or other regulatory authorities. The
Company shall provide to the Fund and the Underwriter any complaints received
from the Contract owners pertaining to the Fund or the Designated Portfolio.
4.7. The Fund will provide the Company with as much notice as is
reasonably practicable of any proxy solicitation for any Designated Portfolio,
and of any material change in the Fund's registration statement, particularly
any change resulting in a change to the registration statement or prospectus for
any Account. The Fund will work with the Company so as to enable the Company to
solicit proxies from Contract owners, or to make changes to its prospectus or
registration statement, in an orderly manner. The Fund will make reasonable
efforts to attempt to have changes affecting Contract prospectuses become
effective simultaneously with the annual updates for such prospectuses.
4.8. For purposes of this Article IV, the phrase "sales literature
and other promotional materials" includes, but is not limited to, any of the
following that refer to the Fund or any affiliate of the Fund: advertisements
(such as material published, or designed for use in, a newspaper, magazine, or
other periodical, radio, television, telephone or tape recording,
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videotape display, signs or billboards, motion pictures, or other public media),
sales literature (i.e., any written communication distributed or made generally
available to customers or the public, including brochures, circulars, reports,
market letters, form letters, seminar texts, reprints or excerpts of any other
advertisement, sales literature, or published article), educational or training
materials or other communications distributed or made generally available to
some or all agents or employees, and registration statements, prospectuses,
SAIs, shareholder reports, proxy materials, and any other communications
distributed or made generally available with regard to the Fund.
ARTICLE V. Fees and Expenses
5.1. All expenses incident to performance by the Funds under this
Agreement shall be paid by the Fund. On behalf of the Funds, the Adviser 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 deemed
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, setting the
prospectus in type, setting in type and printing the proxy materials and reports
to shareholders (including the costs of printing a prospectus that constitutes
an annual report), the preparation of all statements and notices required by any
federal or state law, and all taxes on the issuance or transfer of the Fund's
shares.
5.2. The Company shall bear the expenses of distributing the Fund's
prospectus to owners of Contracts issued by the Company and of distributing the
Fund's proxy materials and reports to such Contract owners.
ARTICLE VI. Diversification and Qualification
6.1. On behalf of the Fund, the Adviser and the Underwriter
represent that the Fund is or will be qualified as a Regulated Investment
Company under Subchapter M of the Code, and that it will maintain such
qualification (under Subchapter M or any successor or similar provisions) and
that it will notify the Company immediately upon having a reasonable basis for
believing that it has ceased to so qualify or that it might not so qualify in
the future.
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ARTICLE VII. Indemnification
7.1. Indemnification By the Company
7.1(a). The Company agrees to indemnify and hold harmless the
Adviser, Fund and the Underwriter and each of its trustees/directors and
officers, and each person, if any, who controls the Adviser, Fund or the
Underwriter within the meaning of Section 15 of the 1933 Act or who is under
common control with the Underwriter (collectively, the "Indemnified Parties" for
purposes of this Section 7.1) against any and all losses, claims, damages,
liabilities (including amounts paid in settlement with the written consent of
the Company) or litigation (including legal and other expenses), to which the
Indemnified Parties may become subject under any statute or regulation, at
common law or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements:
(i) arise out of or are based upon any untrue statement
or alleged untrue statements of any material fact contained in
the registration statement, prospectus (which shall include a
written description of a Contract that is not registered under
the 1933 Act), or SAI for the Contracts or contained in sales
literature for the Contracts (or any amendment or supplement
to any of the foregoing), or arise out of or are based upon
the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged statement
or omission was made in reliance upon and in conformity with
information furnished to the Company by or on behalf of the
Fund for use in the registration statement, prospectus or SAI
for the Contracts or in the Contracts or sales literature (or
any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the registration statement, prospectus, SAI, or
sales literature of the Fund not supplied by the Company or
persons under its control) or wrongful conduct of the Company
or its agents or persons under the Company's authorization or
control, with respect to the sale or distribution of the
Contracts or Fund Shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, SAI, or sales literature of the Fund or
any amendment thereof or supplement thereto or the omission or
alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein
not misleading if such a statement or omission was made in
reliance upon information furnished to the Fund by or on
behalf of the Company; or
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(iv) arise as a result of any material failure by the
Company to provide the services and furnish the materials
under the terms of this Agreement (including a failure,
whether unintentional or in good faith or otherwise, to comply
with the qualification requirements specified in Section 6.1
of this Agreement); or
(v) arise out of or result from any material breach of
any representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Company;
as limited by and in accordance with the provisions of Sections 7.1(b) and
7.1(c) hereof.
7.1(b). The Company shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of its obligations or
duties under this Agreement.
7.1(c). The Company shall not be liable under this
indemnification provision with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified the Company in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Company of any
such claim shall not relieve the Company from any liability which it may have to
the Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against an Indemnified Party, the Company shall be entitled to participate, at
its own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Company to such party of the
Company's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Company will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.
7.1(d). The Indemnified Parties will promptly notify the
Company of the commencement of any litigation or proceedings against them in
connection with the issuance or sale of the Fund shares or the Contracts or the
operation of the Fund.
13
7.2. Indemnification by the Underwriter
7.2(a). The Underwriter agrees to indemnify and hold harmless
the Company and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 7.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Underwriter) or litigation
(including legal and other expenses) to which the Indemnified Parties may become
subject under any statute or regulation, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements:
(i) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in
the registration statement or profile or prospectus or SAI or
sales literature of the Fund (or any amendment or supplement
to any of the foregoing), or arise out of or are based upon
the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified
Party if such statement or omission or such alleged statement
or omission was made in reliance upon and in conformity with
information furnished to the Underwriter or the Fund by or on
behalf of the Company for use in the registration statement,
profile, prospectus or SAI for the Fund or in sales literature
(or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in the registration statement, prospectus, SAI or
sales literature for the Contracts not supplied by the
Underwriter or persons under their control) or wrongful
conduct of the Fund or the Underwriter or persons under their
control, with respect to the sale or distribution of the
Contracts or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, SAI or sales literature covering the
Contracts, or any amendment thereof or supplement thereto, or
the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statement or statements therein not misleading, if such
statement or omission was made in reliance upon information
furnished to the Company by or on behalf of the Fund or the
Underwriter; or
(iv) arise as a result of any failure by the Fund or the
Underwriter to provide the services and furnish the materials
under the terms of this Agreement (including a failure of the
Fund, whether unintentional or in good faith or
14
otherwise, to comply with the qualification requirements
specified in Section 6.1 of this Agreement); or
(v) arise out of or result from any material breach of
any representation and/or warranty made by the Fund or the
Underwriter in this Agreement or arise out of or result from
any other material breach of this Agreement by the Fund or the
Underwriter; or
(vi) arise out of or result from the materially incorrect
or untimely calculation or reporting of the daily net asset
value per share or dividend or capital gain distribution rate;
as limited by and in accordance with the provisions of Sections 7.2(b) and
7.2(c) hereof.
7.2(b). The Underwriter shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance or such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations and duties
under this Agreement or to the Company or the Account, whichever is applicable.
7.2(c). The Underwriter shall not be liable under this
indemnification provision with respect to any claim made against an Indemnified
Party unless such Indemnified Party shall have notified the Underwriter in
writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Underwriter of
any such claim shall not relieve the Underwriter from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Party, the Underwriter will be entitled to participate,
at its own expense, in the defense thereof. The Underwriter also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Underwriter to such party of the
Underwriter's election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it, and
the Underwriter will not be liable to such party under this Agreement for any
legal or other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
7.2(d). The Indemnified Party will promptly notify the
Underwriter of the commencement of any litigation or proceedings against it or
any of its officers or directors in connection with the issuance or sale of the
Contracts or the operation of the Account.
15
ARTICLE VIII. Applicable Law
8.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of New York.
8.2. 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 SEC
may grant and the terms hereof shall be interpreted and construed in accordance
therewith.
ARTICLE IX. Termination
9.1. This Agreement shall continue in full force and effect until
the first to occur of:
(a) termination by any party, for any reason with respect
to some or all Designated Portfolios, by three (3)
months advance written notice delivered to the other
parties; or
(b) termination by the Company by written notice to the
Fund and the Underwriter based upon the Company's
determination that shares of the Fund are not
reasonably available to meet the requirements of the
Contracts; or
(c) termination by the Company by written notice to the
Fund and the Underwriter in the event any of the
Shares are not registered, issued, or sold in
accordance with applicable state and/or federal law
or such law precludes the use of such Shares as the
underlying investment media of the Contracts issued
or to be issued by the Company; or
(d) termination by the Adviser or the Underwriter in the
event that formal administrative proceedings are
instituted against the Company by the NASD, the SEC,
the Insurance Commissioner, or like official of any
state or any other regulatory body regarding the
Company's duties under this Agreement or related to
the sale of the Contracts, the operation of any
Account, or the purchase of the Shares; provided,
however, that the Fund or the Underwriter determines
in its sole judgment exercised in good faith, that
any such administrative proceedings will have a
material adverse effect upon the ability of the
Company to perform its obligations under this
Agreement; or
(e) termination by the Company in the event that formal
administrative proceedings are instituted against the
Adviser, the Fund or the Underwriter by the NASD, the
SEC, or any state securities or insurance department,
or
16
any other regulatory body; provided, however, that
the Company determines in its sole judgment exercised
in good faith, that any such administrative
proceedings will have a material adverse effect upon
the ability of the Fund or the Underwriter to perform
its obligations under this Agreement; or
(f) termination by the Company by written notice to the
Adviser and the Underwriter with respect to any
Designated Portfolio in the event that such Portfolio
ceases to qualify as a Regulated Investment Company
under Subchapter M as specified in Section 6.1
hereof, or if the Company reasonably believes that
such Portfolio may fail to so qualify or comply; or
(g) termination by the Adviser or the Underwriter by
written notice to the Company, if the Adviser or the
Underwriter respectively, shall determine, in their
sole judgment exercised in good faith, that the
Company has suffered a material adverse change in its
business, operations, financial condition, or
prospects since the date of this Agreement or is the
subject of material adverse publicity; or
(h) termination by the Company by written notice to the
Adviser and the Underwriter, if the Company shall
determine, in its sole judgment exercised in good
faith, that the Fund, the Adviser, or the Underwriter
has suffered a material adverse change in its
business, operations, financial condition, or
prospects since the date of this Agreement or is the
subject of material adverse publicity; or
(i) termination by the Company upon any substitution of
the shares of another investment company or series
thereof for Shares in accordance with the terms of
the Contracts, provided that the Company has given at
least 45 days prior written notice to the Fund and
the Underwriter of the date of substitution.
9.2. Notwithstanding any termination of this Agreement, the Fund
and the Underwriter shall, at the option of the Company, continue for a period
of not more than two (2) years from the termination date of such Agreement to
make available additional Shares pursuant to the terms and conditions of this
Agreement, for all Contracts in effect on the effective date of termination of
this Agreement (hereinafter referred to as "Existing Contracts"), unless the
Underwriter requests that the Company seek an order pursuant to Section 26(c) of
the 1940 Act to permit the substitution of other securities for the Shares. The
Underwriter agree to split the cost of seeking such an order, and the Company
agrees that it shall reasonably cooperate with the Underwriter and seek such an
order upon request. Specifically, the owners of the Existing Contracts may be
permitted to reallocate investments in the Fund, redeem investments in the Fund,
and/or invest in the Fund upon the making of additional purchase payments under
the existing Contracts (subject
17
to any such election by the Underwriter). The parties agree that this Section
9.2 shall not apply to any terminations under Section 9.1(i) of this Agreement.
In no way shall the provisions of this Agreement limit the authority of
the Funds and the Adviser to take such lawful action as any of them may deem
appropriate or advisable in connection with all matters relating to the
operation of the Funds and the sale of the shares. The parties acknowledge that
nothing in this Agreement shall in any way preclude or prevent either Fund's
Board of Trustees from taking any actions deemed necessary by either such Board
in furtherance of its fiduciary duties to the applicable Fund and its respective
shareholders, which, among other things, may include approval of a merger or
consolidation of any Portfolio to any person, or to suspend or terminate the
offering of the shares of any Portfolio, if such action is required by law or by
regulatory authorities having jurisdiction or is, in the sole discretion of the
Trustees, acting in good faith and in light of the Trustees' fiduciary duties
under applicable law, necessary and in the best interests of the shareholder of
any Portfolio.
9.3. The Company shall not redeem Shares attributable to the
Contracts (as opposed to Shares attributable to the Company's assets held in the
Account) except (i) as necessary to implement Contract owner initiated or
approved transactions, (ii) as required by state and/or federal laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption"), (iii) upon 45 days
prior written notice to the Fund and Underwriter, as permitted by an order of
the SEC pursuant to Section 26(c) of the 1940 Act, but only if a substitution of
other securities for the Shares is consistent with the terms of the Contracts,
or (iv) as permitted under the terms of the Contract. Upon request, the Company
will promptly furnish to the Fund and the Underwriter reasonable assurance that
any redemption pursuant to clause (ii) above is a Legally Required Redemption.
Furthermore, except in cases where permitted under the terms of the Contacts,
the Company shall not prevent Contract owners from allocating payments to a
Portfolio that was otherwise available under the Contracts without first giving
the Fund or the Underwriter 45 days notice of its intention to do so.
9.4. Notwithstanding any termination of this Agreement, each
party's obligation under Article VII to indemnify the other parties shall
survive.
ARTICLE X. Notices
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 in writing
to the other party.
If to the Adviser: Xxxxxxx Xxxx, Esq.
Allianz Dresdner Asset Management of America
L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
18
If to the Company: Xxxxx X. Xxxxxxxx, Esq.
Senior Vice President and General Counsel
Xxxxxxx Xxxxx Life Insurance Company of New York
0 Xxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
If to the Underwriter: Xxxxxx Xxxxxx, Xx., Esq.
PIMCO Funds Distributors
0000 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, XX 00000
ARTICLE XI. Miscellaneous
11.1. All persons dealing with the Fund must look solely to the
property of the Fund, and in the case of a series company, the respective
Designated Portfolios listed on Schedule B hereto as though each such Designated
Portfolio had separately contracted with the Company and the Underwriter for the
enforcement of any claims against the Fund. The parties agree that neither the
Board, officers, agents, or shareholders of the Fund assume any personal
liability or responsibility for obligations entered into by or on behalf of the
Fund.
11.2. 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 such information has come into the
public domain.
11.3. 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.
11.4. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
11.5. 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.
11.6. Each party hereto shall cooperate with each other party and
all appropriate governmental authorities (including without limitation the SEC,
the NASD, and state insurance
19
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. Notwithstanding the
generality of the foregoing, each party hereto further agrees to furnish the New
York Insurance Commissioner with any information or reports in connection with
services provided under this Agreement which such Commissioner may request in
order to ascertain whether the variable contract operations of the Company are
being conducted in a manner consistent with the New York variable annuity laws
and regulations and any other applicable law or regulations.
11.7. 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.
20
11.8. This Agreement or any of the rights and obligations hereunder
may not be assigned by any party without the prior written consent of all
parties hereto.
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 hereto as of the date
specified below.
XXXXXXX XXXXX LIFE INSURANCE COMPANY of New York:
By its authorized officer
By: _____________________________
Name: Xxxx X. Xxxxx
Title:Vice President & Secretary
ALLIANZ DRESDNER ASSET MANAGEMENT OF AMERICA L.P.
By its authorized officer
By: _____________________________
Name: _____________________________
Title:_____________________________
PIMCO FUNDS DISTRIBUTORS LLC
By its authorized officer
By: _____________________________
Name: _____________________________
Title:_____________________________
21
SCHEDULE A
SEPARATE ACCOUNTS OF THE COMPANY
Dated: October 11, 2002
Xxxxxxx Xxxxx Life Variable Annuity Separate Account D
22
SCHEDULE B
DESIGNATED PORTFOLIOS AND CLASSES
Dated: October 11, 2002
Multi Manager Series Classes
Renaissance Fund A
Portfolios
Small Cap Value Fund A
Portfolios
Pacific Investment Management Series Class
Total Return Fund A
Portfolios
23
SCHEDULE C
FUND MATERIALS
PART I. Fund Description
- The Fund will provide to Company or a common service provider
designated by Company within ten (10) days of the end of each month,
the Fund's average annual return for the 1, 5, and 10 year periods
ending the current month on a Net Asset Value basis.
- The Fund will provide to Company a description of the Fund including
holdings, portfolio composition, largest sectors, geographical
allocation and a statement of objective in a mutually acceptable
format.
Part II. Fund Information and Materials
The Fund will provide to Company the following information and
materials on an as needed basis, as requested by Company:
- A supply of materials relating to the Funds (prospectuses,
quarterly reports and other brochures) to include with
contract application sales, marketing and communication
materials.
- Specific investment performance information that may be
requested that cannot be obtained from the prospectus. This
would include specific calculations on various performance
parameters and will require an aggressive turnaround time
(usually 5 business days).
24
