SERVICE AGREEMENT
between
THE MANUFACTURERS LIFE INSURANCE COMPANY (U.S.A.)
and
XXXX XXXXXXX LIFE INSURANCE COMPANY
1. GENERAL SERVICES....................................................... 2
2. PERSONNEL.............................................................. 3
5. RECORDS................................................................ 3
6. COMPLIANCE WITH LAW.................................................... 5
7. PROVISION OF SERVICES.................................................. 6
8. COMPENSATION........................................................... 6
9. CLAIM SETTLEMENT....................................................... 7
10. RESERVATION OF AUTHORITY............................................... 7
11. RIGHT OF COMPANY TO CONTRACT WITH THIRD PARTIES........................ 8
12. AVAILABILITY OF PROVIDER TO CONTRACT WITH OTHERS....................... 8
13. CONFLICTS OF INTEREST.................................................. 9
14. LIMITATION OF LIABILITY................................................ 9
15. ASSIGNMENT............................................................. 9
16. SEVERABILITY........................................................... 9
17. ENTIRE AGREEMENT....................................................... 9
18. HEADINGS............................................................... 10
19. TERMINATION............................................................ 10
20. GOVERNING LAW.......................................................... 10
21. CURRENCY............................................................... 10
22. COUNTERPART............................................................ 10
SERVICE AGREEMENT
THIS AGREEMENT, effective as of 12:01 A.M. (EDT), April 28, 2004.
BETWEEN
The Manufacturers Life Insurance Company (U.S.A.)
a stock life insurance company domiciled in Michigan
("Company")
and
Xxxx Xxxxxxx Life Insurance Company
a stock life insurance company domiciled in Massachusetts
("Provider")
WHEREAS, Provider and Company have become affiliates as a result of the
acquisition by Manulife Financial Corporation of Xxxx Xxxxxxx Financial
Services, Inc. and its affiliates as of April 28, 2004 ("the "Acquisition"); and
WHEREAS Manulife Financial Corporation and its affiliates and Xxxx Xxxxxxx
Financial Services, Inc. and its affiliates will be undergoing a reorganization
subsequent to, and as a result of, the Acquisition: and
WHEREAS, during the course of the reorganization, Company desires to have
Provider provide various administrative, information technology, investment
advisory, investment management, and support services in Company's business
operations as Company may request; and
WHEREAS, Provider and Company desire that an agreement be made between them
concerning the operation of their businesses for their mutual benefit;
NOW THEREFORE, in consideration of the premises and the mutual covenants
hereinafter expressed, and other good and valuable consideration, the parties
agree as follows:
1. DEFINITIONS
In this Agreement the following definitions shall apply:
(a) "Company Affiliate" means any affiliate of Company, save and except
for Xxxx Xxxxxxx Financial Services, Inc., and its direct and indirect
subsidiaries.
(b) "Provider Affiliate" means any one of Xxxx Xxxxxxx Financial Services,
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Inc. and its direct and indirect subsidiaries, except for Company.
2. GENERAL SERVICES
Subject to the terms, conditions and limitations of this Agreement,
Provider agrees, to the extent, if any, requested by Company and agreed to
by Provider, to provide diligently and in a professional manner such
administrative, information technology, investment advisory, investment
management, and support services for Company as Company determines to be
reasonably necessary in the conduct of its operations, including but not
limited to, data processing, claims, legal, tax, accounting, internal
audit, corporate compliance, human resources, payroll, purchasing and
supply, office planning, printing and art, life insurance, reinsurance,
investment advisory and management, real estate and mortgage
administration, marketing, treasury, and actuarial services (collectively
"Services"). In addition to such Services, Provider also agrees, if
requested by Company, to provide personnel to perform Services for Company
at Company's premises and under Company's direction and control (herein
referred to as the "leased employees").
Subject to any other service agreements existing between Company and
Provider, including any investment advisory, investment management, and
loan participation agreements, to the extent, if any, that Company
requests, and Provider agrees, to perform functions in connection with the
management of any portion of Company's assets, Provider shall ensure that
such assets of Company are invested in accordance with the stated
investment philosophy and investment objectives of the account in which
such assets are held, subject always to Company's investment guidelines
and policies as such guidelines and policies may be amended by Company
from time to time, restrictions of Company's articles of incorporation and
by- laws, as amended from time to time, any applicable provisions of the
Insurance Code of the state in which Company is domiciled and the
regulations thereunder, the Securities and Exchange Commission rules and
regulations, the Employee Retirement Income Security Act of 1974 as
amended and regulations thereunder, the provisions of any undertaking
given by Manulife Financial Corporation to the Office of the
Superintendent of Financial Institutions (Canada), where applicable, and
the provisions of any undertaking given by Company or any Company
Affiliate to any regulatory authority to which Company or any Company
Affiliate is subject, where applicable.
Company agrees that Provider may employ any one or more Provider
Affiliate(s) to provide any of the Services that Provider is responsible
to provide under this Agreement, subject to the terms, conditions, and
limitations set forth herein. Any such Provider Affiliate(s) shall agree
to be bound by all the terms and conditions of this Agreement. Provider
shall at all times remain liable for the performance of Services by any
Provider Affiliate(s) to the same extent as if Provider itself had
performed such Services, and Provider shall be responsible for all costs
incurred
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by any Provider Affiliate(s) in performing such Services. Any premiums
collected by Provider on behalf of Company shall be held by Provider in a
fiduciary capacity with respect to Company and shall be paid over to
Company immediately following collection
3. PERSONNEL
(a) Provider shall determine which of its employees are available to
provide services for Company.
(b) It is understood and agreed that the officers and employees of
Provider, including leased employees, in providing Services pursuant
to this Agreement for Company, shall, with respect to all forms of
their compensation, be acting as employees of Provider.
(c) Provider retains full liability to such officers and employees,
including leased employees, for their remuneration for providing
Services pursuant to this Agreement, including welfare, salaries,
benefits, required employer contributions and tax obligations and in
no event shall such officers and employees have a claim for
remuneration from Company. Provider agrees to hold harmless and
indemnify Company as a result of any claim for remuneration by any
director, officer or employee, including any leased employee, of
Provider for providing Services pursuant to this Agreement.
(d) Company agrees that the right to hire, discharge, or reassign
employees, including leased employees, providing Services under this
Agreement, is solely the right of Provider. However, Provider agrees
that it will not reassign a leased employee without supplying a
replacement employee satisfactory to Company.
(e) In the event that Provider employs any Provider Affiliate to provide
any of the services that Provider is responsible to provide pursuant
to this Agreement, any employees of such Provider Affiliate, in
providing such Services shall, with respect to all forms of their
compensation, be acting as employees of such Provider Affiliate.
4. RECORDS
(a) Company shall own and control all files, documents, correspondence,
papers and other records of every kind and description maintained and
prepared by Provider in connection with the Services provided by
Provider
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hereunder and Provider shall prepare and maintain such basic policy
records and other business records as are usual and customarily
prepared and necessary for Company to provide in its proper function
as an insurer and to meet all regulatory requirements. Provider shall
not disclose or use any records prepared by reason of this Agreement
in any manner except as expressly authorized herein or directed by
Company and shall keep confidential any information obtained by
reason of this Agreement. Upon termination of this Agreement and if
requested by Company, Provider shall promptly return to Company or
its designee all such records.
(b) At the request of Company, Provider shall furnish the Insurance
Commissioner of the jurisdiction in which Company is domiciled, the
Commissioner of the Securities and Exchange Commission ( collectively
the "Commissioner"), and any regulatory authority to which Company and
any Company Affiliate are subject, with any information or reports in
connection with any of the Services provided hereunder which the
Commissioner, or such regulatory authority may request.
(c) Company shall have access to the books and records of Provider during
regular business hours and shall have the right to examine and audit
the books and records pertaining to the business operations serviced
under this Agreement.
5. CONFIDENTIALITY
(a) "Confidential Information" means all confidential or proprietary
information of any party and disclosed by such party (the "Disclosing
Party") pursuant to this Agreement including, but not limited to, all
data and information relating to the business and management of such
party, including proprietary and trade secrets, technology, business
records, accounting records, client lists, abstracts or summaries,
reports, studies, memoranda, correspondence, plans or other written,
oral, printed or otherwise recorded material, and personal
information, including nonpublic personal information of customers or
consumers, belonging to the Disclosing Party, to which access is
obtained hereunder by the other party to this Agreement (the
"Receiving Party"), provided however, that Confidential Information
shall not include any data or information which (i) was known in the
aggregate to the general public prior to the disclosure; (ii) is
already the rightful possession of the Receiving Party prior to its
receipt from the Disclosing Party; (iii) is independently developed by
the Receiving Party; or (iv) any information which is required to be
disclosed under any applicable legislation, or by a court or tribunal
of competent jurisdiction.
(b) Any and all Confidential Information of the Disclosing Party observed,
communicated to and howsoever received by the Receiving Party and its
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directors, officers, employees, and agents, during the term of this
Agreement shall be regarded as disclosed or received in strict
confidence.
(c) The Receiving Party and its directors, officers, employees, and agents
("Representatives") shall have a fiduciary duty of care to protect
such Confidential Information that is in its possession or control
from harm, tampering, misappropriation, unauthorized disclosure, or
loss.
(d) Any Confidential Information of Company that is nonpublic personal
information shall not be used for the benefit of Provider or for the
benefit of any other person or entity, or for any purpose, other than
strictly for the purpose of and as prescribed under this Agreement.
Provider shall only divulge or allow access to such nonpublic personal
information to its Representatives who require access to it for the
purpose of this Agreement or as otherwise provided in this Agreement,
and Provider shall use contractual or other means to provide a
comparable level of protection to such nonpublic personal information
disclosed or made accessible to such Representatives.
Provider shall implement appropriate security measures to ensure the
security and confidentiality of such nonpublic personal information.
Provider acknowledges that Company may be required by privacy
legislation to monitor the compliance of Company's service providers
with Company's customer confidentiality obligations. If so required,
Provider agrees that it will cooperate fully with Company's efforts to
monitor compliance with this Agreement.
(e) The requirements of this Section shall survive the termination of this
Agreement. Each party to this Agreement acknowledges that its failure
to comply with the provisions of this Article shall cause irreparable
harm to the other party, which cannot be adequately compensated for
through monetary damages. In such event, the parties agree that the
injured party may seek injunctive or other equitable relief as
appropriate.
(f) For purposes of this section 5 the terms "non public personal
information", "customer" and "consumer" shall have the meanings given
to them pursuant to Title V of the Xxxxx-Xxxxx- xxxxx Act of 1999
(Public law 106 - 102, 113 Stat. 1338), and any applicable regulations
issued pursuant thereto.
6. COMPLIANCE WITH LAW
(a) In the provision of such Services as described herein, Provider shall
comply with applicable laws, rules and regulations of all applicable
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regulatory authorities having authority over the operations of the
Company or any Company Affiliate for which it is providing services
under this Agreement, including, but not limited to, the Insurance
Department of the jurisdiction in which Company is domiciled, and the
insurance regulatory authorities of other jurisdictions in which any
policies serviced under this Agreement are issued.
(b) Provider shall submit to all regulatory and administrative bodies
having jurisdiction over the Services provided pursuant to this
Agreement, present or future, and provide any information, reports or
other material which any such body by reason of this Agreement may
request or require pursuant to applicable laws and regulations.
(c) Provider acknowledges that the Services that it provides under this
Agreement for Company will enable Company to provide administrative
and support services that Company may provide for any Company
Affiliate in the United States of America, and in providing Services
under this Agreement, Provider shall comply with all applicable
federal and state laws, rules and regulations.
7. PROVISION OF SERVICES
The Services to be provided by Provider hereunder may be provided from any
office of Provider or of any Provider Affiliate, as Provider may
determine. Notwithstanding the foregoing, Services provided by leased
employees shall be provided at the offices of Company.
8. COMPENSATION
(a) Company shall pay Provider a fee as compensation for Services
performed or provided pursuant to this Agreement, including the costs
relating to the office space, supplies, and equipment used by
personnel and provided by Provider or any Provider Affiliate in
performing or providing such Services.
(b) The fee for the Services provided shall be determined at fair market
value by reference to the arm's length principle as proposed by the
Organization for Economic Cooperation and Development, consistent with
the interpretations adopted by the Internal Revenue Services pursuant
to Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Internal Revenue Code.
(c) Provider shall submit to Company, no less often than quarterly, a
written statement of the amount charged by Provider for the Services
provided pursuant to this Agreement, and payment shall be made by
Company
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within thirty (30) days of receipt of such statement on a schedule
agreed to by the parties.
(d) Included in any of the foregoing written statements submitted by
Provider to Company shall be any out of pocket expenses which Provider
incurs in the provision of Services pursuant to this Agreement and for
which Provider will be reimbursed by Company.
(e) In the event Company objects to any such charges, it shall so advise
Provider within thirty (30) days of receipt of notice of said written
statement. Unless the parties can reconcile any such objection, they
shall agree to the selection of a firm of independent certified public
accountants or such other body as the parties consider appropriate,
which shall determine the fee 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 expense of such a determination by
a firm of independent certified public accountants or third party
shall be borne equally by Provider and Company.
9. CLAIM SETTLEMENT
Where the Services to be provided relate to the administration of life
insurance policies and annuity contracts, then subject to the terms,
conditions and limitations of this Agreement, and pursuant to claim
settlement policies utilized by Company, and subject to Company's right to
review at any time the procedures followed by Provider in implementing
said settlement policies, Provider shall be authorized to pay, compromise,
or settle any claim or other cause of action arising from such
administration of life insurance policies and annuity contracts.
10. RESERVATION OF AUTHORITY
(a) Provider is not authorized by this Agreement to (i) extend credit for
Company nor (ii) alter, waive or modify any of the terms, conditions,
or limitations of any policy serviced hereunder.
(b) The officers and Board of Directors of Company retain the right to
supervise and control all functions performed by Provider on behalf of
Company.
(c) Company shall retain custody of, responsibility for, and control of,
all investments while Provider advises on and manages the investment
of any
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general and separate account assets of Company.
(d) Company has the ultimate right to control all matters relating to
policy development, underwriting, marketing, cancellation of policies,
cancellation of agency appointments, and the determination of agents'
commissions.
(e) Company retains any duties not delegated to Provider hereunder.
11. RIGHT OF COMPANY TO CONTRACT WITH THIRD PARTIES
(a) Nothing herein shall be deemed to grant Provider an exclusive right to
provide to Company any of the Services that Company may request
Provider to provide under this Agreement, and Company retains the
right to contract with any Company Affiliate or any third party for
the provision of Services that have been requested by Company pursuant
to this Agreement.
(b) In the event Company wishes to directly perform or contract with a
third party to perform any or all of the Services provided by Provider
under this Agreement, Company shall be entitled, upon giving 60 days
or more advance written notice, to terminate this Agreement in whole
or in part as to the services or functions to be performed by Company
or a third party contracted by Company.
12. AVAILABILITY OF PROVIDER TO CONTRACT WITH OTHERS
Company understands and agrees that Provider may provide services to other
companies and to other clients, including any Provider Affiliate. Company
understands that the employees of Provider who assist in the provision of
the Services described above will also devote time to rendering similar
services to the other entities for which Provider also acts as a provider
of services, including cases where Provider acts as investment adviser or
investment manager to such entities. When investment opportunities arise
that may be appropriate for more than one account, fund, or entity for
which the Provider serves as investment adviser or investment manager,
Provider will not favor one entity over another and may allocate
investments among them in an impartial manner which is believed to be
equitable to each entity involved. The allocations will be based on each
entity's investment objectives and its current cash and investment
positions. Because the various entities for which Provider acts as
investment adviser or investment manager have different investment
objectives and positions, Provider may from time to time buy a particular
security for one or more entities while at the same time it sells such
security for another account, fund, or entity.
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13. CONFLICTS OF INTEREST
It is understood that directors, officers and employees of Provider are or
may become interested in Company, as directors, officers, or employees and
that the existence of any such dual interest shall not effect the validity
hereof or of any transactions hereunder, except as otherwise provided in
the articles of incorporation of Company, the charter of Provider, or by
specific provision of applicable law.
14. LIMITATION OF LIABILITY
(a) Provider shall not be liable to Company except for its own willful
misconduct or negligence in providing the Services set forth in this
Agreement.
(b) Company agrees to hold harmless and indemnify Provider (including its
successors, officers, agents, directors, employees, representatives
and Affiliates) from and against all losses, claims, demands, damages,
liabilities and expenses (collectively "Claims") which may be made or
brought against Provider or which it may suffer as a result of
providing Services hereunder, except to the extent that a Claim
results from the willful misconduct or negligence of Provider.
15. ASSIGNMENT
The rights, obligations, and interests of the Parties under this Agreement
shall not be assignable in whole or in part without the prior written
consent of the parties hereto.
16. SEVERABILITY
Should any portion of this Agreement for any reason be held to be void in
law or in equity, the Agreement shall be construed, so far as is possible,
as if such portion had never been contained herein.
17. ENTIRE AGREEMENT
This Agreement revokes any and all prior agreements between the Parties
and contains the entire understanding of the Parties and may not be
amended except
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by an agreement in writing of subsequent date signed by the Parties.
18. HEADINGS
The headings in the Articles of this Agreement are inserted for
convenience of reference only and shall not constitute a part thereof.
19. TERMINATION
Provider may terminate this Agreement without penalty, by 60 days' notice
in writing, delivered personally or addressed to Company at its Executive
Offices at 000 Xxxxx Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx X0X 0X0 Attention:
Treasurer. Company may terminate this Agreement without penalty, by 60
days' notice in writing, delivered personally or addressed to Provider at
its Executive Offices at 000 Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000, Attention: Chief Financial Officer. In any event, however, this
Agreement shall terminate no later than five years after its effective date
20. GOVERNING LAW
This Agreement shall be governed by and construed according to the laws of
the Commonwealth of Massachusetts.
21. CURRENCY
Payment for Services provided by Provider under this Agreement may be in
the lawful currency of the United States of America or in such other
lawful currency as the parties may agree.
22. COUNTERPART
This Agreement may be signed in counterparts.
IN WITNESS WHEREOF, The Manufacturers Life Insurance Company
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(U.S.A) and Xxxx Xxxxxxx Life Insurance Company have caused this Agreement
to be executed and their Corporate Seals affixed hereto affective the date
first mentioned above.
The Manufacturers Life Insurance
Company (U.S.A)
By:
------------------------------
Its:
------------------------------
Date:
------------------------------
Xxxx Xxxxxxx Life Insurance Company
By: /s/ Xxxxxx Xxxxxxx
------------------------------
Its: SEVP & Chief Financial Officer
Date: June 9, 2004
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(U.S.A) and Xxxx Xxxxxxx Life Insurance Company have caused this Agreement
to be executed and their Corporate Seals affixed hereto affective the date
first mentioned above.
The Manufactures Life Insurance
Company (U.S.A)
By: /s/ Xxxx Xxxxxxxxxxx
-----------------------------
Its: EVP & CFO
Date: July 19, 2004
Xxxx Xxxxxxx Life Insurance Company
By:
-----------------------------
Its: -----------------------------
Date: -----------------------------
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