INVESTMENT SERVICES AGREEMENT
This Investment Services Agreement (this "Agreement") is made effective
as of 12:01 a.m., Eastern Standard Time, on the ___ day of ________________,
1997 ("Effective Date"), by and between THE MANUFACTURERS LIFE INSURANCE
COMPANY, a corporation organized under the Insurance Company Act (Canada)
("Provider") and THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK, a New
York stock life insurance corporation ("Company").
WHEREAS, Provider has extensive experience in investment operations; and
WHEREAS, the Company is a party to an Investment Services Agreement
effective July 8, 1992 with Xxxxxxx & Page, a subsidiary of Provider (the "Prior
Agreement"); and
WHEREAS, Company desires Provider to perform certain investment advisory
services ("services") for Company in its investment operations; and
WHEREAS, Provider and Company contemplate that such an arrangement will
achieve certain operating economies and improve services to the mutual benefit
of both; and
WHEREAS, Provider and Company wish to assure that all charges for
services and the use of facilities incurred hereunder are reasonable; and
WHEREAS, Provider and Company wish to identify the services to be
rendered to Company by Provider and its subsidiaries and to provide a formula
for determining the charges to be made to Company:
NOW, THEREFORE, in consideration of the premises and of the mutual
promises set forth herein, and intending to be legally bound hereby, Provider
and Company agree as follows:
1. PERFORMANCE OF SERVICES. Subject to the terms, conditions and
limitations of this Agreement, Provider agrees to the extent requested by
Company to perform diligently and in a professional manner such services for
Company as Company determines to be reasonably necessary in the conduct of its
investment operations.
Provider agrees at all times to maintain sufficient facilities and
trained personnel of the kind necessary to perform this Agreement.
2. CAPACITY OF PERSONNEL AND STATUS OF FACILITIES. Whenever
Provider utilizes its personnel to perform services for Company pursuant to this
Agreement, such personnel shall at all times remain employees of Provider
subject solely to its direction and control, and Provider shall alone retain
full liability to such employees for their welfare, salaries, fringe benefits,
legally required employer contributions and tax obligations.
No facility of Provider used in performing services for or subject to
use by Company shall be deemed to be transferred, assigned, conveyed or leased
by performance or use pursuant to this Agreement.
3. EXERCISE OF JUDGMENT IN RENDERING SERVICES. In providing any
services hereunder which require the exercise of judgment by Provider, Provider
shall perform any such services in accordance with any standards and guidelines
Company develops and communicates to Provider. In performing any services
hereunder, Provider shall at all times act in a manner reasonably calculated to
be in or not opposed to the best interests of Company.
4. CONTROL. The performance of services by Provider for Company
pursuant to this Agreement shall in no way impair the absolute control of the
business and operations of Provider or Company by their respective Boards of
Directors. Provider shall act hereunder so as to assure the separate operating
identity of Company.
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5. SERVICES. The performance of Provider under this Agreement with
respect to the business and operations of Company, including without limitation
the kinds of investments to be purchased and sold for the account of Company
hereunder, shall at all times be subject to the direction and control of the
Board of Directors of Company.
Subject to the terms, conditions and limitations of this Agreement,
Provider shall provide to Company the services set forth in Appendix A, which is
attached hereto and made a part of this Agreement.
6. CHARGES. Charges for the services provided hereunder shall
include all direct and directly allocable expenses, reasonably and equitably
determined to be attributable to Company by Provider, plus a reasonable charge
for direct overhead, the amount of such charge for overhead to be agreed upon by
the parties from time to time. Subject to New York Insurance Department
Regulation 33, the bases for determining such charges to Company shall be those
used by Provider for internal cost distribution. Such bases shall be modified
and adjusted by mutual agreement where necessary or appropriate to reflect
fairly and equitably the actual incidence of cost incurred by Provider on behalf
of Company. Cost analyses will be made from time to time by Provider to
determine, as closely as possible, the actual cost of services rendered and
facilities made available to Company hereunder. Provider shall forward to
Company the information developed by these analyses, and such information shall
be used to develop bases for the distribution of expenses which more currently
reflect the actual incidence of cost incurred by Provider on behalf of Company.
Provider's determination of charges hereunder shall be presented to
Company, and if Company objects to any such determination, it shall so advise
Provider within thirty (30) days of receipt of notice of said determination.
Unless the parties can reconcile any such objection,
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they shall agree to the selection of a firm of independent certified public
accountants which shall determine the charges properly allocable to Company and
shall, within a reasonable time, submit such determination, together with the
basis therefor, in writing to Provider and Company whereupon such determination
shall be binding. The expenses of such a determination by a firm of independent
certified public accountants shall be borne equally by Provider and Company.
4. In addition, at the first regular Board of Directors meeting of the Company
immediately following the end of each calendar year during the term of this
Agreement, the Board of Directors of Company shall review the fees charged by
Provider for the preceding calendar year. If, pursuant to any such review, the
Board of Directors of Company shall determine that the fee charged by Provider
for the preceding calendar year is not reflective of the cost to Provider of
performing the services provided for hereunder, the Company shall so notify the
Provider, and such notice shall specify the amount of the fee that is reflective
of Provider's actual costs of performing the services. In such event, the fee
for the Provider's performing the services hereunder beginning on October 1 of
such year and continuing until later modified pursuant to this section (whether
by mutual agreement or pursuant to an independent accountant's determination)
shall be the amount specified in the Company's notice to Provider. Fees will be
paid quarterly in arrears.
7. PAYMENT. Provider shall submit to Company within thirty (30)
days of the end of each calendar quarter a written statement of the amount owed
by Company for services pursuant to this Agreement in that calendar quarter, and
Company shall pay to Provider within fifteen (15) days following receipt of such
written statement the amount set forth in the statement.
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8. ACCOUNTING RECORDS AND DOCUMENTS. Provider shall be responsible
for maintaining full and accurate accounts and records of all services rendered
pursuant to this Agreement and such additional information as Company may
reasonably request for purposes of its internal bookkeeping and accounting
operations. Provider shall keep such accounts and records insofar as they
pertain to the computation of charges hereunder available at its principal
offices for audit, inspection and copying by Company and persons authorized by
it or any governmental agency having jurisdiction over Company during all
reasonable business hours.
9. OTHER RECORDS AND DOCUMENTS. All books, records, and files
established and maintained by Provider by reason of its performance under this
Agreement which, absent this Agreement, would have been held by Company, shall
be deemed the property of Company, and shall be subject to examination at all
times by Company and persons authorized by it or any governmental agency having
jurisdiction over Company, and shall be delivered to Company at least quarterly.
With respect to original documents other than those provided for in
Section 5 hereof which would otherwise be held by Company and which may be
obtained by Provider in performing under this Agreement, Provider shall deliver
such documents to Company within thirty (30) days of their receipt by Provider
except where continued custody of such original documents is necessary to
perform hereunder.
10. RIGHT TO CONTRACT WITH THIRD PARTIES. Nothing herein shall be
deemed to grant Provider an exclusive right to provide services to Company, and
Company retains the right to contract with any third party, affiliated or
unaffiliated, for the performance of services as are available to or have been
requested by Company pursuant to this Agreement.
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11. CONTACT PERSON(S). Company and Provider each shall appoint one
or more individuals who shall serve as contact person(s) for the purpose of
carrying out this Agreement. Such contact person(s) shall be authorized to act
on behalf of their respective parties as to the matters pertaining to this
Agreement. Effective upon execution of this Agreement, the initial contact
person(s) shall be those set forth in Appendix B. Each party shall notify the
other, in writing, as to the name, address and telephone number of any
replacement for any such designated contact person.
12. TERMINATION. This Agreement shall remain in effect until
terminated by either Provider or Company upon giving thirty (30) days or more
advance written notice. Upon termination, Provider shall promptly deliver to
Company all books and records that are, or are deemed by this Agreement to be,
the property of Company.
13. SETTLEMENT ON TERMINATION. No later than sixty (60) days after
the effective date of termination of this Agreement, Provider shall deliver to
Company a detailed written statement for all charges due and not included in any
previous statement to the effective date of termination. The amount owed shall
be due and payable within fifteen (15) days of receipt of such statement.
14. ASSIGNMENT. This Agreement and any rights pursuant hereto shall
not be assignable by either party hereto, except as set forth herein or by
operation of law. Except as and to the extent specifically provided in this
Agreement, nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto, or their respective legal
successors, any rights, remedies, obligations or liabilities, or to relieve any
person other than the parties hereto, or their respective legal successors, from
any obligations or liabilities that would otherwise be applicable. The
representations, warranties, covenants and agreements
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contained in this Agreement shall be binding upon, extend to and inure to the
benefit of the parties hereto, their, and each of their, successors and assigns
respectively.
15. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York
applicable to contracts made and to be performed in that State, without regard
to principles of conflict of laws.
16. ARBITRATION. Any unresolved dispute or difference between the
parties arising out of or relating to this Agreement, or the breach thereof,
except as provided in Section 3, shall be settled by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
and the Expedited Procedures thereof. The award rendered by the Arbitrator shall
be final and binding upon the parties, and judgment upon the award rendered by
the Arbitrator may be entered in any Court having jurisdiction thereof. The
arbitration shall take place in New York, New York.
17. NOTICE. All notices, statements or requests provided for
hereunder shall be deemed to have been duly given when delivered by hand to an
officer of the other party, or when deposited with the U.S. Postal Service, as
first class certified or registered mail, postage prepaid, overnight courier
service, telex or telecopier, addressed
(a) If to Provider to:
The Manufacturers Life Insurance Company
000 Xxxxx Xxxxxx Xxxx
Xxxxxxx Xxxxxxx Xxxxxx X0X 0X0
Attention: Senior Vice President, Investments
Attention: Portfolio Manager, The Manufacturers Life Insurance
Company of New York
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If to Company to:
The Manufacturers Life Insurance Company of New York
International Corporate Center at Rye
000 Xxxxxxxx Xxxxx Xxxxxx
Xxx, Xxx Xxxx 00000
Attention: Vice President
or to such other persons or places as each party may from time to time designate
by written notice sent as aforesaid.
19. ENTIRE AGREEMENT. This Agreement, together with such amendments
as may from time to time be executed in writing by the parties in accordance
with Section 1505 of the New York Insurance Law, constitutes the entire
agreement and understanding between the parties in respect of the transactions
contemplated hereby and supersedes the Prior Agreement, as well as all other
prior agreements, arrangements and understandings relating to the subject matter
hereof.
20. PRIOR AGREEMENT. The Company represents that the Prior Agreement
will be terminated and appropriate authorizations will be given to custodians of
Company's assets to permit Provider to perform investment services pursuant to
this Agreement as of the Effective Date hereof.
21. SECTION HEADINGS. Section headings contained herein are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
22. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate by their respective officers duly authorized so to do, and
their respective corporate seals to be affixed hereto, as of the date and year
first above written.
(Seal) THE MANUFACTURERS LIFE INSURANCE COMPANY
BY
-------------------------------------
Xxxx X. Xxxxxxxxxx
Senior Vice President and General
Manager U.S. Operations
Attest:
--------------------------------
(Seal) THE MANUFACTURERS LIFE INSURANCE COMPANY
OF NEW YORK
BY
-------------------------------------
Xxxxxx X. Xxxxx
President
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APPENDIX A
INVESTMENT SERVICES
Pursuant to Paragraph 2 of the Investment Services Agreement of which
this is Appendix A, Company does hereby appoint Provider to act for Company as
its investment advisor and authorizes Provider to provide asset management
services as described herein as to all monies, stocks, bonds, securities and
mortgages held in the Company's General Account provided that:
1. All investments made by Provider on behalf of Company shall be
approved or preauthorized by the Board of Directors of Company or by such
committee of the Board charged with supervision of investments and shall be in
accordance with investment policies and objectives, rules and regulations
established periodically by the Board of Directors of Company or by such
committee of the Board charged with the supervision thereof. Provider shall
acquire or dispose of any specific investment if so directed by the Board of
Directors of Company.
2. All investments made by Provider on behalf of Company shall be
in those classes of investments prescribed by Section 1405 of the New York
Insurance Law or as otherwise permitted Company by law; provided, however, that
nothing contained herein shall authorize the Provider to purchase or dispose of
on the Company's behalf without its prior written approval any interest in real
property, mortgages or any investment not included within one of the following
categories:
(a) Cash Balances - Cash may be invested in U.S. Treasury bills and
A1, P1-rated commercial paper, bankers acceptances and certificates of deposit.
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(b) Corporate Bonds - The purchase of corporate bonds may include
bonds, notes, debentures and other evidences of indebtedness issued, assumed or
guaranteed by a corporation incorporated under the laws of the United States of
America, or of any state, district or territorial possession thereof; or of the
Dominion of Canada or any province thereof, provided that the bonds are rated
class 1 or 2 by the Securities Valuation Office of the National Association of
Insurance Commissioners.
(c) Government Obligations - The purchase of government obligations
will include bonds, notes, bills and other evidences of indebtedness issued,
assumed or guaranteed by the U.S. Government, its agencies or instrumentalities
or of any state or municipality thereof; or of the Dominion of Canada or any
province thereof; provided the bonds are investment grade as defined by Xxxxx'x
and S&P.
(d) Mortgage-Backed Securities - The purchase of mortgage-backed
securities will be limited to:
i. The Government National Mortgage Association (GNMA);
ii. The Federal National Mortgage Association (FNMA);
iii. The Federal Home Loan Mortgage Corporation (FHLMC); or
iv. Any other entity provided that all the underlying loans
are FHA-insured or VA guaranteed loans, or are any other U.S. government
guaranteed loans.
(e) Equity Securities - Equity securities are defined to include
preferred stocks that are rated class 1 or 2 by the Securities Valuation Office
of the National Association of Insurance Commissioners, mutual fund shares and
common stocks which are traded on a national stock exchange.
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Securities shall be held in New York State in behalf of and in the name of
Company in a custodial account with a qualified fiduciary agent or in book-entry
form in the Federal Reserve of New York, all such securities, stocks, bonds and
evidences of indebtedness, to which access shall be permitted to the proper
officers of Company, and such representatives of Provider as shall be authorized
from time to time by Company.
4. Provider shall keep and maintain books and records wherein shall
be recorded the business transacted by it on behalf of, in the name of, or on
account of Company. Provider shall furnish the Company a monthly statement of
all investment activities. Provider shall also submit, on a monthly basis, a
statement of all investment activities occurring within the period in question,
as well as a summary of all investments maintained on behalf of Company. Any and
all records maintained by Provider hereunder on behalf of Company shall be and
remain the property of Company.
5. Provider is authorized and agrees as follows:
(b) To analyze, promptly upon receipt, all assets it manages for the
Company pursuant to this Agreement and thereafter, from time to time or as
requested by Company, to analyze such assets, and upon completion of such
analysis, to report to the Company its recommendations as to the sale or other
disposition of any of said assets and as to the investment of cash available for
such purpose in accordance with investment policies and objectives established
periodically by the Board of Directors of Company or by such committee thereof
charged with supervision of investments, and in connection therewith to advise
Company of any investments proposed to be made by Provider in any assets for its
own account and to permit Company the opportunity to purchase its proportionate
share of any such assets, provided that any investment in assets to be jointly
held by Company and any parent, affiliate, or subsidiary of
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Company may be made only under a separate agreement that has been submitted to
and approved by the New York Insurance Department;
(c) To execute the specific instructions of the chief executive
officer of Company or officers designated by him with respect to the sale,
exchange, investment or other disposition of the assets managed hereunder;
(d) To receive and collect on behalf of Company and for Company's
account all sums due on the sale of any investment items held on behalf of
Company under this Agreement, regardless of whether a profit or loss is
realized, and to receive and collect for the account of Company all interest
payments, dividends, of every kind or character, receipts, income items,
profits, commissions, and other sums due or accruing under investments made
pursuant to this Agreement and in connection therewith, to reinvest, deposit, or
otherwise dispose of such monies or assets in accordance with the provisions of
this Agreement and applicable New York Insurance Laws and Regulations; and
(e) To surrender promptly for redemption any securities managed
pursuant to this Agreement with respect to which notice of redemption is
published, and to prepare, sign and file in the name of the Company any proper
certificate or other statement with respect to the ownership of any of said
assets which may be required by law upon receiving payment of any income or
principal, and to exchange temporary for definitive securities, and to exchange
securities in recapitalization and reorganizations, and to deliver securities
upon sales thereof.
6. To facilitate the delivery of securities held by Provider,
Company does hereby constitute and appoint Provider the true and lawful attorney
of Company and authorize Provider in Company's name, place and stead to register
all securities from time to time managed by Provider pursuant to this Agreement,
other than securities in bearer form, in Company's name
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and execute endorsements, assignments or other instruments of transfer of
securities so registered and due bills and dividend orders as Provider may deem
proper in connection with the transfer of any such securities, Provider being
expressly authorized to execute any such instruments either by signing Company's
name alone without any designation of itself as attorney-in-fact, or it may sign
Company's name as such attorney.
7. Whenever Provider receives and collects monies for the account
of Company, Provider will not commingle such monies with its own, but will
deposit such monies in an appropriate separate account in the name of Company in
a bank domiciled and located in the State of New York.
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APPENDIX B
CONTACT PERSON(S) FOR PROVIDER
Xxxxxx X. Xxxxxxx
Senior Vice President, Investments
Xxxx XxxXxxxxx
Portfolio Manager, The Manufacturers Life Insurance Company of
New York
CONTACT PERSON(S) FOR COMPANY
Xxxxxx Xxxxx
President
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