INVESTMENT SERVICES AGREEMENT
This Investment Services Agreement (this "Agreement") is made effective as
of 12:01 a.m., Eastern Standard Time, on the 1st day of October, 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, they
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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.
8. ACCOUNTING RECORDS AND DOCUMENTS. Provider shall be responsible for
maintaining full and accurate accounts and records of all services rendered
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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.
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
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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 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.
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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 M4W IE5
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 /s/ Xxxx X. Xxxxxxxxxx
----------------------------------------------
Xxxx X. Xxxxxxxxxx
Senior Vice President and General Manager U.S.
Operations
Attest : Xxxxxxxx X. Xxxxxxxxxx
(Seal) THE MANUFACTURERS LIFE INSURANCE COMPANY NEW OF YORK
BY /s/ Xxxxxx X. Xxxxx
----------------------------------------------
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 Al,
P1-rated commercial paper, bankers acceptances and certificates of deposit.
(b) Corporate Bonds - The purchase of corporate bonds may include bonds,
notes, debentures and other evidences of indebtedness issued, assumed or
guaranteed by a
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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.
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
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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
Company may be made only under a separate agreement that has been submitted to
and approved by the New York Insurance Department;
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(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 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
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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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