Participation Agreement (Allianz/PIMCO)
PARTICIPATION AGREEMENT
among
ML LIFE INSURANCE COMPANY of New York,
Allianz Dresdner Asset Management of America L.P., and
PIMCO Funds Distributors LLC
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, the Adviser,
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 Funds The 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 Section 1.3 of this
Agreement. Notwithstanding the foregoing, the Boards of Trustees of the
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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 purchase and redemption of
Shares. Such additional time shall be equal to the additional time that the Fund
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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.
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
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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-l 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:
(i) | solicit voting instructions from Contract owners; |
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(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 after receipt
of
such material. The Company reserves the right to reasonably object to the continued use of any
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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, videotape
display,
signs or billboards, motion pictures, or other public media), sales literature (i.e., any
written
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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.
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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 otherwise, to
14
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 to any
17
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: | /s/ Xxxx X. Xxxxx | |||
Name: | Xxxx X. Xxxxx | |||
Title: | Vice President & Secretary | |||
ALLIANZ DRESDNER ASSET MANAGEMENT OF AMERICA L.P.
By its authorized officer |
||||
By: | /s/ Xxxxxxx X. Xxxx | |||
Name: | Xxxxxxx X. Xxxx | |||
Title: | EVP | |||
PIMCO FUNDS DISTRIBUTORS LLC
By its authorized officer |
||||
By: | /s/ Xxxxxx X. Xxxxxx, Xx | |||
Name: | Xxxxxx X. Xxxxxx, Xx | |||
Title: | Managing Director |
21
Schedule A
Dated: October 11, 2002
SEPARATE ACCOUNTS OF THE COMPANY
Xxxxxxx Xxxxx Life Variable Annuity Separate Account D
XXXXXXXXX
Xxxxxxxx # XXXX-XX-000
00
Schedule B
DESIGNATED PORTFOLIOS AND CLASSES
Dated: October 11, 2002
Multi Manager Series
|
Classes | |
Renaissance Fund Portfolios
|
A | |
Small Cap Value Fund Portfolios
|
A | |
Pacific Investment Management Series
|
Class | |
Total Return Fund Portfolios
|
A |
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). |
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