SERVICE AGREEMENT
This Service Agreement (the “Agreement”), dated as of the ___day of , 2004, is made by and among Pacific Life Insurance Company (“Pac Life”) and Xxx Xxx Securities Corporation (the “Distributor”);
WHEREAS, Distributor is the distributor of the shares of each of the investment companies (each a “Fund”) set forth on Exhibit A, which may be amended from time to time; and
WHEREAS, Pac Life provides administrative services to the owners of certain variable annuity and variable life insurance contracts (the “Contracts”) issued by Pac Life through certain of Pac Life’s accounts (the “Variable Accounts”) set forth on Exhibit B; and
WHEREAS, the Funds will be included as underlying mutual fund options for the Contracts issued by Pac Life through the Variable Accounts pursuant to a Fund Participation Agreement previously entered into by the Distributor, on behalf of the Funds, and Pac Life; and
WHEREAS, the Distributor recognizes substantial savings of administrative expenses as a result of Pac Life performing certain administrative services (the “Services”) on behalf of the Funds; and
NOW, THEREFORE, the Funds will be available for purchase and sale by Variable Accounts, subject to the following conditions:
1. Pac Life agrees to provide services for the contract owners of the Variable Accounts who choose the Funds as underlying investment options in the contracts. Such services will include those described on Exhibit C.
2. Pac Life shall not bear any of the expenses for the cost of registration of the Funds’ shares, preparation of the Funds’ prospectuses, proxy materials, and reports, and the preparation of other related statements and notices required by law, except as otherwise agreed upon by the parties to this Agreement.
3. In consideration for the services to be provided by Pac Life to the Contract owners pursuant to this Agreement, the Distributor will calculate and pay, or cause one of its affiliates to pay, and Pac Life will be entitled to receive from the Distributor a fee (“Service Fee”) at an annualized rate equal to 0.35% of the average daily net assets of each Fund held by the Variable Accounts during the period in which they were earned.
4. If in the good faith opinion of the Distributor or the Funds, based upon an opinion of counsel reasonably acceptable to Pac Life, it is determined that payments under this Agreement are, will be in contravention or violation of any law, rule, regulation, court decision or order, out-of-court settlement of actual or threatened litigation or enforcement position of any regulatory body having jurisdiction over the Distributor or the Funds or their affiliates (taken together, “Change in Law”), the Service Fee shall be adjusted accordingly to conform to such Change in Law on terms and conditions deemed fair and equitable by the Distributor or the Funds, as the case may be.
5. The Service Fees will be paid to Pac Life by electronic funds transfer as soon as practicable, but no later than 30 days after the end of the period in which they were earned. If the assets held in the Variable Accounts are less than $1 billion as of December 31 of the prior calendar year, the Service Fees for the following year will be paid on a quarterly basis; if the assets held in the Variable Accounts are greater than $1 billion as of December 31 of the prior calendar year, the Service Fees for the following year will be paid on a monthly basis. The Service Fee payment will be accompanied or preceded by a statement showing the calculation of the amounts being paid by the Distributor for the relevant period and such other supporting data as may be reasonably requested by Pac Life.
6. The Service Fee shall be paid either by (a) the Distributor or one of its affiliates from general operating funds, or (b) directly by the Funds pursuant to a shareholder service plan adopted by the Board of Directors/Trustees of the Funds (“Boards”).
7. The Service Fee shall be calculated as an annualized percentage (0.35%) of the average aggregate amount invested in the Funds under the Contracts issued by the Variable Accounts for the applicable period. The average aggregate amount shall be computed by totaling the aggregate investment (net asset value multiplied by total number of Fund shares held in the Variable Accounts) on each calendar day during the period and dividing by the total number of calendar days during the period.
8. The effective date of this Agreement with regard to a Contract will be the later of , or the launch date of each Contract.
9. The parties agree that a Service Fee will be paid to Pac Life according to this Agreement with respect to each Fund as long as shares of such Fund are held by the Variable Accounts except in the event Pac Life terminates this Agreement, provided that payments will continue for six months after such termination based on shares of the Fund held by the Variable Accounts during that period, or payment is prohibited by a Change in Law. This provision will survive the termination of this Agreement and the termination of the Distributor’s Fund Participation Agreements with Pac Life.
10. Pac Life and Distributor agree that the Service Fees described in the Agreement are for administrative services only and do not constitute payment in any manner for investment advisory services or for the cost of distribution of the Funds or the Contracts.
11. This Agreement may be terminated by Pac Life at any time upon written notice to the Distributor and by Distributor upon at least 30 days’ written notice to Pac Life. In addition, Distributor may terminate this Agreement immediately upon written notice to Pac Life (1) if required by any applicable law or regulation, (2) if so required by action of the Board, (3) If Pac Life engages in any material breach of this Agreement or (4) if Pac Life or any other Pac Life affiliates engages in conduct which would constitute a material breach of this Agreement were Pac Life or the affiliate a party to this Agreement. This Agreement will terminate immediately and automatically with respect to Funds held in the Variable Accounts upon the termination of the Fund Participation Agreement which governs a Fund’s inclusion as an investment option in the Variable Account and in such event no notice is required under this Agreement.
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12. Each notice required by this Agreement shall be given by wire and confirmed in writing to:
If to Pac Life:
Pacific Life Insurance Company
If to Distributor:
Xxxxx X. Xxxxxxx,
Xxx Xxx Securities Corporation 00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
13. This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of New York. This Agreement shall be subject to the provisions of the federal securities statutes, rules and regulations, 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.
14. Each of the parties to this Agreement acknowledges and agrees that this Agreement and the arrangements described herein are intended to be non-exclusive and that each of the parties is free to enter into similar agreements or arrangements with other entities.
IN WITNESS WHEREOF, this Agreement is executed as of the date first written above:
PACIFIC LIFE INSURANCE COMPANY
By:
Name:
Title:
XXX XXX SECURITIES CORPORATION
By:
Name:
Title:
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EXHIBIT A
TO SERVICE AGREEMENT
Name of Fund
Xxx Xxx Worldwide Insurance Trust - Worldwide Hard Assets Fund
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EXHIBIT C
TO SERVICE AGREEMENT
Services Provided by Pac Life
Pursuant to the Agreement, Pac Life shall perform all administrative and shareholder services with respect to the contracts, including but not limited to, the following:
| 1. | Maintaining separate records for each contract owner, which shall reflect the Fund shares purchased and redeemed and Fund share balances of such contract owners. Pac Life will maintain a single master account with each Fund on behalf of contract owners and such account shall be in the name of Pac Life (or its nominee) as the record owner of shares owned by contract owners. | |||
| 2. | Disbursing or crediting to contract owners all proceeds of redemptions of shares of the Funds and all dividends and other distributions not reinvested in shares of the Funds. | |||
| 3. | Preparing and transmitting to contract owners, as required by law, periodic statements showing the total number of shares owned by contract owners as of the statement closing date, purchases and redemptions of Fund shares by the contract owners during the period covered by the statement and the dividends and other distributions paid during the statement period (whether paid in cash or reinvested in Fund shares), and such other information as may be required, from time to time, by contract owners. | |||
| 4. | Supporting and responding to service inquiries from contract owners. | |||
| 5. | Maintaining and preserving all records required by law to be maintained and preserved in connection with providing the services for contract owners. | |||
| 6. | Generating written confirmations and quarterly statements to contract owners. | |||
| 7. | Printing and distributing to contract owners, to the extent required by applicable law, Funds’ prospectuses, proxy materials, periodic fund reports to shareholders and other materials that the Funds are required by law or otherwise to provide to their shareholders or prospective shareholders. | |||
| 8. | Transmitting purchase and redemption orders to the Funds on behalf of the contract owners. | |||
| 9. | Federal and state income tax withholding and reporting. | |||
| 10. | Providing such other assistance and services as may reasonably be requested by the Funds. | |||
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