OppenheimerFunds
OppenheimerFunds, Inc.
Xxx Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx Xxx Xxxx XX 00000-0000
December 1, 1999
Tel 000 000 0000
Preferred Life Insurance Company of New York
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxx
Dear Xx. Xxxx:
The following constitutes a letter of understanding (the "Agreement") whereby
OppenheimerFunds, Inc. ("OFI") intends to compensate Preferred Life Insurance
Company of New York ("Preferred") for providing administrative support services
to contract owners of any variable annuity and variable life insurance products
issued or administered by Preferred Life Insurance Company of New York
("Preferred Products") with contract values allocated to investment options
investing in Xxxxxxxxxxx Variable Account Funds ("OVAF"), a series investment
company dedicated to insurance company separate accounts for which OR acts as
investment manager. Such services are described in Schedule A hereto, which is
made a part of the Agreement. This Agreement may be cancelled by any party upon
ten days written notice: (1) if the participation agreement for Preferred
Products between OFI, Preferred and OVAF is terminated; (2) if either party is
subject to a change of control; or (3) if it is not permissible to continue this
Agreement under laws, rules or regulations applicable to OVAF, OR or Preferred.
Either party may also cancel this Agreement upon ninety days' written notice if
neither Preferred nor any underwriter under its control actively promotes
Preferred Products with any of OVAF's portfolios as underlying option(s) to
customers. Either party may also cancel this Agreement upon six months' prior
written notice.
This Agreement will be effective as of February 1, 2000. Payment will be made to
Preferred quarterly during the term this Agreement is in effect, no later than
thirty days following the end of the quarter starting with the quarter ending
March 31, 2000. Payments shall be computed as set forth in Schedule C hereto.
Other terms and conditions:
A. Except to the extent that Preferred's, OFFs or OVAF's counsel may deem it
necessary or advisable to disclose in their respective prospectuses or
elsewhere, the terms of this Agreement will be held confidential by each party.
The party making such disclosure shall provide advance written notification,
including particulars, to the other party that it is making such disclosure.
B. No other fees, sales meeting costs or other expenses will be required of OR
(or any subsidiary or division) or OVAF in connection with the Preferred
Products.
C. On reasonable advance written notice to Preferred, and upon compliance by
Preferred with any necessary legal requirements, OFI or a subsidiary may pay all
or a portion of the fees provided for in this Agreement under any service fee or
Rule 12b-1 plan hereafter adopted by OVAF, which shall satisfy that portion of
OFPs payment obligation hereunder.
D. OFI will be responsible for calculating the fee payable hereunder; however,
each party shall provide each other party or its designated agent reasonable
access to its records to permit it to audit or review the accuracy of the
charges submitted by Preferred for payment under this Agreement, and the
accuracy of payments by OFI.
E. The letter agreement from OFI to Preferred and Allianz Life Insurance Company
of North America, dated November 15, 1999, is hereby replaced in its entirety by
this Agreement. This Agreement does not modify or replace any other agreement
pertaining to any Xxxxxxxxxxx fund other than OVAF.
F.Should any term of this Agreement conflict with the terms of that certain fund
Participation Agreement (the "Participation Agreement") entered into by and
between OVAF, OFI and Preferred as of November 15, 1999, then the Participation
Agreement shall control.
We look forward to a long and prosperous relationship. If this Agreement meets
with your approval, please have the enclosed duplicate copy of this letter
signed on behalf of Preferred, and return it to my attention.
Sincerely,
/s/ Xxxxxxx Xxxxx
Xxxxxxx F.X. Xxxxx
Title: Vice President,
OppenheimerFunds, Inc.
Agreed to and accepted on behalf of
PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
Xxxxxxx X. Xxxxxxxxxxx
Title: Secretary
Schedule A
(Administrative Support Services to be Provided by Preferred)
Maintenance of Books and Records
Assist as necessary to maintain book entry records on behalf of the Funds
regarding issuance to, transfer within (via net purchase orders) and redemption
by the Accounts of Fund shares. Maintain general ledgers regarding the Accounts'
holdings of Fund shares, coordinate and reconcile information, and coordinate
maintenance of ledgers by other contract owner service providers.
Communication with the Funds
Serve as the designee of the Funds for receipt of purchase and redemption orders
from the Account and transmit such orders, and payment therefor, to the Funds.
Coordinate with the Funds' agents respecting daily valuation of the Funds'
shares and the Accounts' units.
Purchase Orders
-Determine net amount available for investment in the Funds.
-Deposit receipts at the Funds or the Funds' custodian (generally by wire
transfer). -Determine net amount required for redemption from the Funds.
Notify the custodian and Funds of cash required to meet payments.
Purchase and redeem shares of the Funds on behalf of the Accounts at the then
current price in accordance with the terms of the Participation Agreement.
Distribute the Fund's prospectus, proxy materials, communications and reports to
Contract owners.
Processing Distributions from the Funds
Record ordinary dividends and capital gain distributions.
Reports
Periodic information reporting to the Funds, including, but not limited to,
furnishing registration statements, prospectuses, statements of additional
information, reports, solicitations for voting instructions, and any other SEC
filings with respect to the Accounts invested in the Funds, as not otherwise
provided for.
Periodic information reporting about the Funds to Contract owners, including any
necessary delivery of the Funds' prospectus and annual and semi-annual reports
to contract owners, as not otherwise provided for.
Fund-related Contract Owner Services
Maintain adequate fidelity bond or similar coverage for all Company officers,
employees, investment advisors and other individuals or entities controlled by
the Company who deal with the money and/or securities of the Funds.
Provide ministerial information with respect to Fund inquiries (but excluding
fund allocation recommendations, performance projections or any other
sales-related information or advice). Oversee and assist the solicitation,
counting and voting or contract owner voting interests in the Funds pursuant to
Fund proxy statements.
Other Administrative Support
Provide other administrative support for the Funds as mutually agreed upon by
the Company and the Funds or the Fund Administrator. Relieve the Funds of other
usual or incidental administrative services provided to individual contract
owners.
Schedule B
Separate Accounts Products
Allianz Life Insurance Company of North America U.S. Allianz Alterity
Variable Account B
Allianz Life Insurance Company of New York U.S. Allianz Alterity
Variable Account C
Schedule C
Payments under this Agreement shall be computed on the average net assets of
OVAF that are attributable to a variable life or variable annuity product listed
on Schedule B hereto (which may be changed from time to time with the mutual
consent of the parties to this Agreement) and that are held by a separate
account listed on Schedule B hereto ("Preferred Assets") during the prior
quarter, subject to adjustment under circumstances where average net assets of
OVAF are attributable to Preferred Assets for a period of less than one quarter.
Preferred Assets do not include assets on which OFI pays Allianz Life Insurance
Company of North America pursuant to the December 1, 1999 letter agreement by
and among them. OFI or its affiliates will pay an administrative assistance fee
to Preferred at the annual rate of 0.25% of Preferred Assets.
AMENDMENT TO SERVICE AGREEMENT
The Participation Agreement dated December 1, 1999 by and among , Preferred Life
Insurance Company of New York, Xxxxxxxxxxx Variable Account Funds, and
OppenheimerFunds, Inc. is hereby amended by deleting the existing Schedule B and
inserting in lieu thereof the following:
SCHEDULE B
(1 st revised edition -effective February 1, 2000)
Separate Accounts
o Preferred Life Insurance Company of New York Variable Account C
Products
o USAllianz Advantage
IN WITNESS WHEREOF, the parties have caused their duly authorized officer's to
execute this amendment to the participation agreement as of February 1, 2000.
Xxxxxxxxxxx Funds, Inc.
/s/ Xxxxxxx Xxxxx
Name: Xxxxxxx F.X. Xxxxx
Title: Vice President,
PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Secretary
