EX (d.4)
INTERIM
INVESTMENT SUBADVISORY AGREEMENT
BETWEEN
AETNA LIFE INSURANCE AND ANNUITY COMPANY
AND
ZURICH XXXXXXX INVESTMENTS, INC.
INVESTMENT SUBADVISORY AGREEMENT, made as of the 5th day of April, 2002, between
Aetna Life Insurance and Annuity Company (to be renamed ING Life Insurance and
Annuity Company effective May 1, 2002) (the "Adviser"), an insurance corporation
organized and existing under the laws of the State of Connecticut, and Zurich
Xxxxxxx Investments, Inc. (to be renamed Deutsche Investment Management Americas
Inc. effective April 5, 2002) ("Subadviser"), a corporation organized and
existing under the laws of Delaware.
WHEREAS, the Adviser has entered into an Investment Advisory Agreement dated as
of December 4, 2001 ("Advisory Agreement") with PPI Partners, Inc. (to be
renamed ING Partners, Inc. effective May 1, 2002) ("Company"), which is engaged
in business as an open-end management investment company registered under the
Investment Company Act of 1940 ("1940 Act"); and
WHEREAS, the Company is and will continue to be a series fund having two or more
investment portfolios, each with its own assets, investment objectives, policies
and restrictions; and
WHEREAS, the Company shareholders are and will be separate accounts maintained
by insurance companies for variable life insurance policies and variable annuity
contracts (the "Policies") under which income, gains, and losses, whether or not
realized, from assets allocated to such accounts are, in accordance with the
Policies, credited to or charged against such accounts without regard to other
income, gains, or losses of such insurance companies; and
WHEREAS, the Subadviser is engaged principally in the business of rendering
investment advisory services and is registered as an investment adviser under
the Investment Advisers Act of 1940 ("Advisers Act"); and
WHEREAS, the Board of Directors and the Adviser desire to retain the Subadviser
as subadviser for the PPI Xxxxxxx International Growth Portfolio (to be renamed
ING Xxxxxxx International Growth Portfolio effective May 1, 2002) (the
"Portfolio"), a portfolio of the Company, to furnish certain investment advisory
services to the Adviser and the Company and the Subadviser is willing to furnish
such services;
NOW, THEREFORE, in consideration of the premises and mutual promises herein set
forth, the parties hereto agree as follows:
1. APPOINTMENT. Adviser hereby appoints the Subadviser as its investment
Subadviser with respect to the Portfolio for the period and on the terms set
forth in this Agreement. The Subadviser accepts such appointment and agrees to
render the services herein set forth, for the compensation herein provided.
2. DUTIES OF THE SUBADVISER
A. INVESTMENT SUBADVISORY SERVICES. Subject to the supervision of the
Company's Board of Directors ("Board") and the Adviser, the Subadviser
shall act as the investment Subadviser and shall supervise and direct the
investments of the Portfolio in accordance with the portfolio's
investment objective, policies, and restrictions as provided in the
Company's Prospectus and Statement of Additional Information, as
currently in effect and as amended or supplemented from time to time
(hereinafter referred to as the "Prospectus"), and such other limitations
as the Company may impose by notice in writing to the Subadviser. The
Subadviser shall obtain and evaluate such information relating to the
economy, industries, businesses, securities markets, and individual
securities as it may deem necessary or useful in the discharge of its
obligations hereunder and shall formulate and implement a continuing
program for the management of the assets and resources of the Portfolio
in a manner consistent with the Portfolio's investment objective,
policies, and restrictions, and in compliance with the requirements
applicable to registered investment companies under applicable laws and
those requirements applicable to both regulated investment companies and
segregated asset accounts under Subchapters M and L of the Internal
Revenue Code of 1986, as amended ("Code"). To implement its duties, the
Subadviser is hereby authorized to:
(i) buy, sell, exchange, convert, lend, and otherwise trade in
any stocks, bonds, and other securities or assets on behalf
of the Portfolio; and
(ii) directly or through the trading desks of the Subadviser or
its affiliate place orders and negotiate the commissions (if
any) for the execution of transactions in securities or
other assets with or through such brokers, dealers,
underwriters or issuers as the Subadviser may select.
B. SUBADVISER UNDERTAKINGS. In all matters relating to the
performance of this Agreement, the Subadviser shall act in conformity
with the Company's Articles of Incorporation, By-Laws, and current
Prospectus and with the written instructions and directions of the Board
and the Adviser. The Subadviser hereby agrees to:
(i) regularly (but no less frequently than quarterly) report to
the Board and the Adviser with respect to the implementation
of the investment program and, in addition, provide such
statistical information and special reports concerning the
Portfolio and/or important developments materially affecting
the investments held, or contemplated to be purchased, by
the Portfolio, as may reasonably be requested by the Board
or the Adviser and agreed to by the Subadviser, including
attendance at Board meetings, as reasonably requested, to
present such information and reports to the Board;
(ii) consult with the Company's pricing agent regarding the
valuation of securities that are not registered for public
sale, not traded on any securities markets, or otherwise may
be deemed illiquid for purposes of the 1940 Act and for
which market quotations are not readily available;
(iii) provide any and all information, records and supporting
documentation about accounts the Subadviser manages that
have investment objectives, policies, and strategies
substantially similar to those employed by the Subadviser in
managing the Portfolio which may be reasonably necessary,
under applicable laws, to allow the Company or its agent to
present historical performance information concerning the
Subadviser's similarly managed accounts, for inclusion in
the Company's Prospectus and any other reports and materials
prepared by the Company or its agent, in accordance with
regulatory requirements;
(iv) establish appropriate personnel contacts with the Adviser
and the Company's Administrator in order to provide the
Adviser and Administrator with information as reasonably
requested by the Adviser or Administrator; and
(v) execute account documentation, agreements, contracts and
other documents as the Adviser shall be requested by
brokers, dealers, counterparties and other persons to
execute in connection with its management of the assets of
the Portfolio, provided that the Subadviser receives the
express agreement and consent of the Adviser and/or the
Board to execute such documentation, agreements, contracts
and other documents. In such respect, and only for this
limited purpose, the Subadviser shall act as the Adviser
and/or the Portfolio's agent and attorney-in-fact.
C. ADVISER AND COMPANY UNDERTAKINGS. To facilitate the Subadviser's
fulfillment of its obligations under this Agreement, the Adviser and the
Company will undertake the following:
(i) the Adviser agrees promptly to provide the Subadviser with
all amendments or supplements to the Prospectus, the
Company's Articles of Incorporation, and By-Laws;
(ii) the Company and the Adviser each agrees, on an ongoing
basis, to notify the Subadviser expressly in writing of each
change in the fundamental and nonfundamental investment
policies of the Portfolio;
(iii) the Adviser agrees to provide or cause to be provided to the
Subadviser with such assistance as may be reasonably
requested by the Subadviser in connection with its
activities pertaining to the Portfolio under this Agreement,
including, without limitation, information concerning the
Portfolio, its available funds, or funds that may reasonably
become available for investment, and information as to the
general condition of the Portfolio's affairs;
(iv) the Adviser agrees to provide or cause to be provided to the
Subadviser on an ongoing basis, such information as is
reasonably requested by the Subadviser for performance by
the Subadviser of its obligations under this Agreement, and
the Subadviser shall not be in breach of any term of this
Agreement or be deemed to have acted negligently if the
Adviser fails to provide or cause to be provided such
requested information and the Subadviser relies on the
information most recently furnished to the Subadviser; and
(v) the Adviser will promptly provide the Subadviser with any
guidelines and procedures applicable to the Subadviser or
the Portfolio adopted from time to time by the Board and
agrees to promptly provide the Subadviser copies of all
amendments thereto.
D. The Subadviser, at its expense, will furnish: (i) all necessary
investment and management facilities and investment personnel, including
salaries, expenses and fees of any personnel required for it to
faithfully perform its duties under this Agreement; and (ii)
administrative facilities, including bookkeeping, clerical personnel and
equipment required for it to faithfully and fully perform its duties and
obligations under this Agreement.
E. The Subadviser will select brokers and dealers to effect all Portfolio
transactions subject to the conditions set forth herein. The Subadviser
will place all necessary orders with brokers, dealers, or issuers, and
will negotiate brokerage commissions if applicable. The Subadviser is
directed at all times to seek to execute brokerage transactions for the
Portfolio in accordance with such policies or practices as may be
established by the Board and the Adviser and described in the current
Prospectus as amended from time to time. In placing orders for the
purchase or sale of investments for the Portfolio, in the name of the
Portfolio or its nominees, the Subadviser shall use its best efforts to
obtain for the Portfolio the most favorable price and best execution
available, considering all of the circumstances, and shall maintain such
records as are required of an investment adviser under applicable law.
Subject to the appropriate policies and procedures approved by the
Adviser and the Board, the Subadviser may, to the extent authorized by
Section 28(e) of the Securities Exchange Act of 1934, cause the Portfolio
to pay a broker or dealer that provides brokerage or research services to
the Subadviser, an amount of commission for effecting a portfolio
transaction in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if the
Subadviser determines, in good faith, that such amount of commission is
reasonable in relationship to the value of such brokerage or research
services provided viewed in terms of that particular transaction or the
Subadviser's overall responsibilities to the Portfolio or its other
advisory clients. To the extent authorized by said Section 28(e) and the
Adviser and the Board, the Subadviser shall not be deemed to have acted
unlawfully or to have breached any duty created by this Agreement or
otherwise solely by reason of such action. In addition, subject to
seeking the best execution available, the Subadviser may also consider
sales of shares of the Portfolio as a factor in the selection of brokers
and dealers.
F. On occasions when the Subadviser deems the purchase or sale of a
security to be in the best interest of the Portfolio as well as other
clients of the Subadviser, the Subadviser to the extent permitted by
applicable laws and regulations, and subject to the Adviser approval of
the Subadviser's procedures, may, but shall be under no obligation to,
aggregate the orders for securities to be purchased or sold to attempt to
obtain a more favorable price or lower brokerage commissions and
efficient execution. In such event, allocation of the securities so
purchased or sold, as well as the expenses incurred in the transaction,
will be made by the Subadviser in the manner the Subadviser considers to
be the most equitable and consistent with its fiduciary obligations to
the Portfolio and to its other clients.
G. With respect to the provision of services by the Subadviser hereunder,
the Subadviser will maintain all accounts, books and records with respect
to the Portfolio as are required of an investment adviser of a registered
investment company pursuant to the 1940 Act and the Advisers Act and the
rules under both statutes.
X. The Subadviser and the Adviser acknowledge that the Subadviser is not
the compliance agent for the Portfolio, and does not have access to all
of the Company's books and records necessary to perform certain
compliance testing. However, to the extent that the Subadviser has agreed
to perform the services specified in Section 2A, the Subadviser shall
perform compliance testing with respect to the Portfolio based upon
information in its possession and upon information and written
instructions received from the Adviser or the Administrator.
I. Unless the Adviser gives the Subadviser written instructions to the
contrary, the Subadviser shall use its good faith judgment in a manner
which it reasonably believes best serves the interests of the Portfolio's
shareholders to vote or abstain from voting all proxies solicited by or
with respect to the issuers of securities in which assets of the
Portfolio may be invested. The Adviser shall furnish the Subadviser with
any further documents, materials or information that the Subadviser may
reasonably request to enable it to perform its duties pursuant to this
Agreement.
X. Xxxxxxxxxx hereby authorizes Adviser to use Subadviser's name and any
applicable trademarks in the Company's Prospectus, as well as in any
advertisement or sales literature used by the Adviser or its agents to
promote the Company and/or to provide information to shareholders of the
Portfolio. Upon termination of this Agreement, the Adviser and the
Company shall immediately cease to use such name and trademarks, except
as necessary to comply with disclosure requirements under the federal
securities laws.
During the term of this Agreement, the Adviser shall furnish to the
Subadviser at its principal office all prospectuses, proxy statements,
reports to shareholders, sales literature, or other material prepared for
distribution to shareholders of the Company or the public, which refer to
the Subadviser or its clients in any way, prior to the use thereof, and
the Adviser shall not use any such materials if the Subadviser reasonably
objects within five business days (or such other time as may be mutually
agreed) after receipt thereof. The Adviser shall ensure that materials
prepared by employees or agents of the Adviser or its affiliates that
refer to the Subadviser or its clients in any way are consistent with
those materials previously approved by the Subadviser. Subadviser will
provide reasonable marketing support to Adviser in connection with the
promotion of the Portfolio.
3. COMPENSATION OF SUBADVISER. The Adviser will pay the Subadviser, with
respect to the Portfolio, the compensation specified in Appendix A to this
Agreement. Payments shall be made by the Adviser or the Company on the second
business day of each month into an interest bearing escrow account and disbursed
pursuant to the terms of the Escrow Agreement by and among the Adviser, the
Sub-adviser and the Company's custodian dated as of April 5, 2002, as set forth
in Appendix B; however, this advisory fee will be calculated based on the daily
average value of the Portfolio's assets and accrued on a daily basis.
Compensation for any partial period shall be pro-rated based on the length of
the period.
4. LIABILITY OF SUBADVISER. Neither the Subadviser nor any of its directors,
officers, employees or agents shall be liable to the Adviser or the Company for
any loss or expense suffered by the Adviser or the Company resulting from its
acts or omissions as Subadviser to the Portfolio, except for losses or expenses
to the Adviser or the Company resulting from willful misconduct, bad faith, or
gross negligence in the performance of, or from reckless disregard of, the
Subadviser's duties under this Agreement. Neither the Subadviser nor any of its
agents shall be liable to the Adviser or the Company for any loss or expense
suffered as a consequence of any action or inaction of other service providers
to the Company in failing to observe the instructions of the Adviser, provided
such action or inaction of such other service providers to the Company is not a
result of the willful misconduct, bad faith or gross negligence in the
performance of, or from reckless disregard of, the duties of the Subadviser
under this Agreement.
5. NON-EXCLUSIVITY. The services of the Subadviser to the Portfolio and the
Company are not to be deemed to be exclusive, and the Subadviser shall be free
to render investment advisory or other services to others (including other
investment companies) and to engage in other activities. It is understood and
agreed that the directors, officers, and employees of the Subadviser are not
prohibited from engaging in any other business activity or from rendering
services to any other person, or from serving as partners, officers, directors,
trustees, or employees of any other firm or corporation, including other
investment companies. Furthermore, the Company and the Adviser recognize that
the Subadviser may give advice, and take action, with respect to its other
clients that may differ from the advice given, or the time or nature of action
taken, with respect to the Portfolio.
6. ADVISER OVERSIGHT AND COOPERATION WITH REGULATORS. The Subadviser shall
cooperate in providing records, reports and other materials relating to the
Company that are in its possession, at the request of the Adviser, and in
response to inquiries by regulatory and administrative bodies having proper
jurisdiction over the Company, in connection with the services provided pursuant
to this Agreement; provided, however, that this agreement to cooperate does not
apply to the provision of information, reports and other materials which the
Subadviser reasonably believes the regulatory or administrative body does not
have the authority to request or which is privileged or confidential information
of the Subadviser.
7. RECORDS. The records relating to the services provided under this
Agreement required to be established and maintained by an investment adviser
under applicable law or those required by the Adviser or the Board of Directors
for the Subadviser to prepare and provide shall be the property of the Company
and shall be under its control; however, the Company shall permit the Subadviser
to retain such records (either in original or in duplicate form) as it shall
reasonably require in order to carry out its duties. In the event of the
termination of this Agreement, such records shall promptly be returned to the
Company by the Subadviser free from any claim or retention of rights therein.
The Subadviser shall keep confidential any information concerning the Adviser or
any Subadviser's duties hereunder and shall disclose such information only if
the Company has authorized such disclosure or if such disclosure is expressly
required or requested by applicable federal or state regulatory authorities.
8. DURATION OF AGREEMENT. This Agreement shall become effective as of the
date set forth in the first paragraph of this Agreement and shall remain in
force and effect for not more than 150 days unless earlier terminated under the
provisions of Section 12.
9. REPRESENTATIONS OF SUBADVISER. The Subadviser represents, warrants, and
agrees as follows:
A. The Subadviser: (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as this
Agreement remains in effect; (ii) is not prohibited by the 1940 Act or
the Advisers Act from performing the services contemplated by this
Agreement; (iii) has met, and will continue to meet for so long as this
Agreement remains in effect, any other applicable federal or state
requirements, or the applicable requirements of any regulatory or
industry self-regulatory organization, necessary to be met in order to
perform the services contemplated by this Agreement; (iv) has the
authority to enter into and perform the services contemplated by this
Agreement; and (v) will immediately notify the Adviser of the occurrence
of any event that would disqualify the Subadviser from serving as an
investment adviser of an investment company pursuant to Section 9(a) of
the 1940 Act or otherwise.
B. The Subadviser has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act and, if it has not already
done so, will provide the Adviser and the Company with a copy of such
code of ethics, together with evidence of its adoption.
C. The Subadviser has provided the Adviser and the Company with a copy of
its Form ADV as most recently filed with the SEC and hereafter will
furnish a copy of its annual amendment to the Adviser.
10. PROVISION OF CERTAIN INFORMATION BY SUBADVISER. The Subadviser will
promptly notify the Adviser in writing of the occurrence of any of the following
events:
A. the Subadviser fails to be registered as an investment adviser under
the Advisers Act or under the laws of any jurisdiction in which the
Subadviser is required to be registered as an investment adviser in order
to perform its obligations under this Agreement;
B. the Subadviser is served or otherwise receives notice of any action,
suit, proceeding, inquiry, or investigation, at law or in equity, before
or by any court, public board, or body, involving the affairs of the
Company;
C. a controlling stockholder of the Subadviser or the portfolio manager
of the Portfolio changes or there is otherwise an actual change in
control or management of the Subadviser.
11. PROVISION OF CERTAIN INFORMATION BY THE ADVISER. The Adviser will
promptly notify the Subadviser in writing of the occurrence of any of the
following events:
A. the Adviser fails to be registered as an investment adviser under the
Advisers Act or under the laws of any jurisdiction in which the Adviser
is required to be registered as an investment adviser in order to perform
its obligations under this Agreement;
B. the Adviser is served or otherwise receives notice of any action,
suit, proceeding, inquiry, or investigation, at law or in equity, before
or by any court, public board, or body, involving the affairs of the
Company;
C. a controlling stockholder of the Adviser changes or there is otherwise
an actual change in control or management of the Adviser.
12. TERMINATION OF AGREEMENT. Notwithstanding the foregoing, this Agreement
may be terminated at any time, without the payment of any penalty, by vote of
the Board or by a vote of a majority of the outstanding voting securities of the
Portfolio on not more than 10 days' prior written notice to the Subadviser. This
Agreement may also be terminated by the Adviser: (i) on at least 60 days' prior
written notice to the Subadviser, without the payment of any penalty; (ii) upon
material breach by the Subadviser of any of the representations and warranties,
if such breach shall not have been cured within a 20-day period after notice of
such breach; or (iii) if the Subadviser becomes unable to discharge its duties
and obligations under this Agreement. The Subadviser may terminate this
Agreement at any time, without the payment of any penalty, on at least 60 days'
prior notice to the Adviser. This Agreement shall terminate automatically in the
event of its assignment or upon the termination of the Advisory Agreement
between the Company and the Adviser.
13. AMENDMENT OF AGREEMENT. No provision of this Agreement may be changed,
waived, discharged, or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge,
or termination is sought, and no material amendment of this Agreement shall be
effective until approved by vote of a majority of the Directors who are not
"interested persons" (as defined in the 1940 Act) of any party to this
Agreement, cast in person at a meeting called for the purpose of such approval.
14. MISCELLANEOUS.
A. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of Maryland without giving effect to the conflicts
of laws principles thereof, and the 1940 Act. To the extent that the
applicable laws of the State of Maryland conflict with the applicable
provisions of the 1940 Act, the latter shall control.
B. CAPTIONS. The Captions contained in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
C. ENTIRE AGREEMENT. This Agreement represents the entire agreement and
understanding of the parties hereto and shall supersede any prior
agreements between the parties concerning management of the Portfolio and
all such prior agreements shall be deemed terminated upon the
effectiveness of this Agreement.
D. INTERPRETATION. Nothing herein contained shall be deemed to require
the Company to take any action contrary to its Articles of Incorporation,
By-Laws, or any applicable statutory or regulatory requirement to which
it is subject or by which it is bound, or to relieve or deprive the Board
of its responsibility for and control of the conduct of the affairs of
the Company.
E. DEFINITIONS. Any question of interpretation of any term or provision
of this Agreement having a counterpart in or otherwise derived from a
term or provision of the 1940 Act shall be resolved by reference to such
term or provision of the 1940 Act and to interpretations thereof, if any,
by the United States courts or, in the absence of any controlling
decision of any such court, by rules, releases or orders of the SEC
validly issued pursuant to the Act. As used in this Agreement, the terms
"majority of the outstanding voting securities," "affiliated person,"
"interested person," "assignment," "broker," "investment adviser," "net
assets," "sale," "sell," and "security" shall have the same meaning as
such terms have in the 1940 Act, subject to such exemptions as may be
granted by the SEC by any rule, release or order. Where the effect of a
requirement of the federal securities laws reflected in any provision of
this Agreement is made less restrictive by a rule, release, or order of
the SEC, whether of special or general application, such provision shall
be deemed to incorporate the effect of such rule, release, or order.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized signatories as of the date and year first
above written.
Aetna Life Insurance and Annuity Company
By: /s/ Xxxxxx X. Xxxxxxxxxxx
--------------------------------
Attest:
--------------------------------
/s/ Xxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxxxxxxx
-------------------------
Name: Xxxx X. Xxxxxx Title: Vice President
Title: Assistant Secretary
Zurich Xxxxxxx Investments, Inc.
By: /s/ X. Xxxxx Xxxxxxx
--------------------------------
Attest:
--------------------------------
/s/ Xxxxxxxx X. Xxxxxxxxx Name: X. Xxxxx Xxxxxxx
------------------------------ Title: SVP
Name: Xxxxxxxx X. Xxxxxxxxx
Title: V.P.
APPENDIX A
FEE SCHEDULE
PPI Xxxxxxx International Growth .75% on the first $20 million of average
daily net assets
.65% on the next $15 million
.50% on the next $65 million
.40% on the next $200 million
.30% on assets over $300 million
APPENDIX B
SUBADVISORY FEE
ESCROW AGREEMENT
BETWEEN
AETNA LIFE INSURANCE AND ANNUITY COMPANY,
ZURICH XXXXXXX INVESTMENTS, INC.
AND
INVESTORS BANK & TRUST COMPANY
This Escrow Agreement (the "Agreement") dated as of this 5th day of
April, 2002, is among Aetna Life Insurance and Annuity Company (to be renamed
ING Life Insurance and Annuity Company effective May 1, 2002) (the "Adviser"),
an insurance company organized and existing under the laws of the State of
Connecticut, Zurich Xxxxxxx Investments, Inc. (to be renamed Deutsche Investment
Management Americas Inc. effective April 5, 2002) (the "Subadviser"), a Delaware
corporation, and Investors Bank & Trust Company, the custodian for Portfolio
Partners, Inc. (to be renamed ING Partners Inc. effective May 1, 2002) (the
"Company"), as escrow agent (the "Escrow Agent").
WHEREAS, the Adviser has entered into an Investment Advisory Agreement,
dated December 4, 2001, with the Company which is engaged in business as an
open-end management investment company registered under the Investment Company
Act of 1940 (the "1940 Act");
WHEREAS the shares of beneficial interest of the Company are divided
into more than one separate series;
WHEREAS, the Adviser has retained Subadviser to render subadvisory
services for the PPI Xxxxxxx International Growth Portfolio (to be renamed ING
Xxxxxxx International Growth Portfolio effective May 1, 2002) (the "Portfolio),
pursuant to an Interim Subadvisory Agreement dated April 5, 2002 (the "Interim
Subadvisory Agreement"), under Rule 15a-4 of the 1940 Act, as amended;
WHEREAS, Rule 15a-4 requires that compensation earned by the Subadviser
under the Interim Subadvisory Agreement be held in an interest bearing escrow
account until such time as certain required conditions have been met;
WHEREAS, the purpose of this Agreement is to establish an escrow
account for the Company meeting the requirements of the Rule 15a-4; and
WHEREAS, the Adviser and Subadviser desire to establish the escrow
account as provided herein for the deposit of funds received from the Adviser or
the Company in payment of subadvisory fees to Subadviser in connection with the
Portfolio pursuant to Rule 15a-4 and pursuant to the Interim Subadvisory
Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is agreed as follows:
1. Appointment of Escrow Agent. Investors Bank & Trust Company is hereby
appointed as Escrow Agent upon the terms and conditions hereof. Escrow
Agent xxxxxx accepts such appointment and agrees to hold all of the
funds deposited into escrow with it, together with all interest and
income thereon and other proceeds thereof, in accordance with the terms
hereof and to perform its other duties hereunder.
2. Deposits and the Escrow Amount. Upon effectiveness of the Interim
Subadvisory Agreement, and periodically thereafter, the Adviser or the
Company will wire funds for deposit with the Escrow Agent in connection
with the Subadviser's compensation specified in Section 3 of the
Interim Subadvisory Agreement (the "Deposits"), which are to be held by
the Escrow Agent in accordance with the terms and provisions of this
Agreement. The Deposits, together with all interest earned thereon and
other proceeds thereof, and all distributions in respect thereof, or in
exchange therefor, is hereinafter referred to as the "Escrow Amount."
The Escrow Amount shall be held by the Escrow Agent in a segregated
account designated as the "Xxxxxxx Subadvisory Fee Escrow Account" (the
"Escrow Account").
3. Distributions from the Escrow Amount. The Escrow Agent shall distribute
via wire transfer the Escrow Amount, after deducting the compensation
due to the Escrow Agent pursuant to Section 13 hereof, to the
Subadviser promptly upon receipt of a letter signed by a duly
authorized officer of the Adviser, substantially in the form attached
hereto as Exhibit A at the earlier of the following: (a) if a majority
of the Portfolio's outstanding voting securities approve a subadvisory
agreement between the Adviser and Subadviser or its affiliate by the
end of the 150-day term of the Interim Subadvisory Agreement, or (b) if
the Company obtains exemptive relief permitting the Adviser to enter
into a subadvisory agreement without shareholder approval, provided
that the Company's Board of Directors approves such subadvisory
agreement. The Adviser shall deliver such letter promptly upon the
termination of the Interim Subadvisory Agreement. If a majority of the
Portfolio's outstanding voting securities have not approved a
subadvisory agreement between the Adviser and Subadviser or its
affiliate by the end of the 150-day term of the Interim Subadvisory
Agreement, or exemptive relief permitting the Adviser to enter into
such subadvisory agreement without a shareholder vote is not obtained,
the Escrow Agent shall distribute to the Subadviser out of the Escrow
Account the lesser of (a) the Subadviser's costs incurred in performing
the Interim Subadvisory Agreement plus interest earned on such amount
while in escrow, or (b) the total amount in the Escrow Account, plus
interest earned. This Agreement shall terminate upon the complete
liquidation of the Escrow Account.
4. (a) Interest. The Escrow Agent is hereby instructed to invest all
Deposits in short-term U.S. government securities, repurchase
agreements secured by U.S. government securities, and/or deposits in an
FDIC-insured bank (including Escrow Agent).
(b) Certification of Taxpayer Identification Number. Subadviser agrees
to provide the Escrow Agent with a certified taxpayer identification
number by signing and returning a Form W-9 to the Escrow Agent within
30 days from the date hereof. The parties hereto understand that, in
the event their taxpayer identifications numbers are not certified to
the Escrow Agent, the Escrow Agent may be required to withhold a
portion of any interest or other income earned on the investment of the
Deposits in accordance with the Internal Revenue Code of 1986, as
amended.
5. Adjustments of the Escrow Amount. The Escrow Agent shall receive and
add to the Escrow Amount all Deposits and interest earned thereon and
other proceeds thereof, and subtract from the Escrow Amount all
distributions as provided herein.
6. Concerning the Escrow Agent. The Adviser and Subadviser acknowledge and
agree that the Escrow Agent: (i) shall not be responsible for any of
the agreements referred to herein but shall be obligated only for the
performance of such duties as are specifically set forth in this
Agreement; (ii) shall not be obligated to take any legal or other
action hereunder which might in its judgment involve expense or
liability unless it shall have been furnished with indemnity acceptable
to it; (iii) may rely on, and shall be protected in acting upon, any
written notice, instruction (including, without limitation, wire
transfer instructions, whether incorporated herein or provided in a
separate written instruction), instrument, statement, request or
document furnished to it hereunder and reasonably believed by it to be
genuine and to have been signed or presented by the proper person, and
shall have no responsibility for determining the accuracy thereof, and
(iv) may consult counsel satisfactory to it, including in-house
counsel, and the reasonable advice or opinion of such counsel shall be
full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
7. Indemnification. Neither the Escrow Agent nor any of its directors,
officers, employees or agents shall be liable to anyone for any action
taken or omitted to be taken by it or any of its directors, officers,
employees or agents hereunder except in the case of negligence, bad
faith or willful misconduct. The Adviser and Subadviser jointly and
severally covenant and agree to indemnify the Escrow Agent and hold it
harmless without limitation from and against any loss, liability or
expense of any nature incurred by the Escrow Agent arising out of or in
connection with this Agreement or with the administration of its duties
hereunder, including, but not limited to, reasonable legal fees and
expenses and other costs and expenses of defending or preparing to
defend against any claim of liability, unless such loss, liability or
expense shall be caused by the Escrow Agent's negligence, bad faith or
willful misconduct. In no event shall the Escrow Agent be liable for
indirect, punitive, special or consequential damages. All such
reimbursements and indemnifications shall be paid equally by the
Adviser and Subadviser.
8. Resignation or Removal of Escrow Agent. The Escrow Agent may at any
time resign as Escrow Agent hereunder by giving thirty (30) days prior
written notice of resignation to the other parties hereto and may be
removed by the mutual consent of the Adviser and Subadviser upon thirty
(30) days prior written notice to Xxxxxx Agent. Prior to the effective
date of the resignation or removal as specified in such notice, the
Adviser, or its designee, will issue to the Escrow Agent a written
instruction authorizing redelivery of the Escrow Amount to a successor
escrow agent. Such Successor escrow agent shall be a bank or trust
company, organized and existing under the laws of the United States or
any state thereof, subject to examination by state or federal
authorities, and have capital and surplus in excess of $50,000,000. If
no successor escrow agent is named by the Adviser, or its designee, the
Escrow Agent may apply to a court of competent jurisdiction for the
appointment of a successor escrow agent. Any such successor escrow
agent shall execute and deliver to the predecessor escrow agent an
instrument accepting such appointment, upon which such successor agent
shall, without further act, become vested with all of the rights,
powers and duties of the predecessor escrow agent as if originally
named herein. The provisions of paragraph 7 shall survive the
resignation or removal of the Escrow Agent or the termination of this
Agreement.
9. Dispute Resolution. It is understood and agreed that should any dispute
arise with respect to the delivery, ownership, right of possession,
and/or disposition of the Escrow Amount, or should any claim be made
upon such Escrow Amount by a third party, the Escrow Agent upon receipt
of a written notice of such dispute or claim by the parties hereto or a
third party, is authorized and directed to retain in its possession
without liability to anyone, all or any of said Xxxxxx Amount until
such dispute shall have been settled either by the mutual agreement of
the parties involved or by a final order, decree or judgment of a court
in the United States of America, the time for perfection of an appeal
of such order, decree or judgment having expired. The Escrow Agent may,
but shall be under no duty whatsoever to, institute or defend any legal
proceeding which relates to the Escrow Amount.
10. Consent to Jurisdiction and Service. Each of the parties hereby
absolutely and irrevocably consent and submit to the jurisdiction of
the courts of the State of Maryland and of any federal court of the
United States located in said State in connection with any actions or
proceedings brought against them by the Escrow Agent arising out of or
relating to this Agreement. In any such action or proceeding, the
Adviser and Subadviser hereby absolutely and irrevocably waive personal
service of any summons, complaint, declaration or other process and
hereby absolutely and irrevocably agree that service thereof may be
made by certified or registered first class mail directed to such
parties, at their respective addresses in accordance with paragraph 12
hereof.
11. Force Majeure. The Escrow Agent shall not be responsible for delays or
failures in performance resulting from acts beyond its control. Such
acts shall include but are not limited to acts of God, strikes,
lockouts, riots, acts of war, epidemics, governmental regulations
superimposed after the fact, fire, communication line failures,
computer viruses, power failures, earthquakes or other disasters.
12. Notice: Wiring Instructions.
(a) Notice Addresses. Any notice permitted or required hereunder shall
be deemed to have been duly given if delivered personally or if mailed
by certified or registered mail, postage prepaid, to the parties at
their addresses set forth below or to such other address as they may
hereafter designate.
If to the Adviser:
Xxxxxx X. Xxxxxxxxxxx
Aetna Life Insurance and Annuity Company
000 Xxxxxxxxxx Xxxxxx, XX00
Xxxxxxxx, XX 00000
If to the Subadviser:
Zurich Xxxxxxx Investments, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxxxxx
With a copy to: Legal Dept.
If to Escrow Agent:
Investors Bank & Trust Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx Xxxxxx, Managing Director
With a copy to: Xxxx Xxxxx, General Counsel
(b) Wiring Instructions. Any funds to be paid to or by the Escrow Agent
hereunder shall be sent by wire transfer pursuant to the following
instructions (or by such method of payment and pursuant to such
instructions as may be given in advance and in writing to or by the
Escrow Agent, as the case may be, in accordance with paragraph 12 (a),
above):
To the Escrow Agent:
Bank: Investors Bank & Trust Company
ABA #: 000000000
DDA #: 796509107
Attn: Xxxx Xxxx
Ref: ING Xxxxxxx International Growth Portfolio
To Subadviser:
Bank: XX Xxxxxx Xxxxx Bank, New York, NY
ABA #: 000000000
For Credit to Zurich Xxxxxxx Investments, Inc.
A/C # 006-007848
13. Compensation to Escrow Agent. The Subadviser shall be responsible for
payment of the Escrow Agent's service fee. Such fee will be $250 (two
hundred fifty dollars) per month. Such fee shall be prorated for any
partial month and shall be deducted from the Escrow Amount immediately
prior to final distribution made pursuant to paragraph 3.
14. Binding Effect. Except as contemplated by Section 8 hereof, no party
may assign its rights or delegate its obligations under this Agreement
without the prior written consent of the other parties hereto. Subject
to the foregoing, this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective permitted successors
and assigns. If any provision of this Agreement shall be or become
illegal or unenforceable in whole or in part for any reason whatsoever,
the remaining provisions shall nevertheless be deemed valid, binding
and subsisting.
15. Modifications. This Agreement may not be altered or modified without
the written consent of the parties hereto, which consent shall not
constitute a waiver of any of the terms or conditions of this
Agreement, unless such waiver is specified in writing, and then only to
the extent so specified. A waiver of any of the terms and conditions of
this Agreement on one occasion shall not constitute a waiver of the
other terms and conditions of this Agreement, or of such terms and
conditions on any other occasion.
16. Miscellaneous. This Agreement and the rights and obligations of the
parties arising therefrom shall be construed in accordance with the
laws (other than the conflict of laws rules) of the State of Maryland.
This Agreement may be executed in counterparts and each such
counterpart shall constitute one and the same instrument. This
Agreement contains the entire agreement between the parties relating to
the transactions contemplated hereby and all prior contemporaneous
agreements, understandings, representations and statements, oral or
written, are merged herein and superseded hereby. Each of the parties
shall execute such further instruments and take such other actions as
any other party shall reasonably request in order to effectuate the
purposes of this Agreement.
IN WITNESS WHEREOF, the parties have, as of the date above
written, executed this Agreements.
INVESTOR BANK & TRUST COMPANY, as Escrow Agent
By: _____________________________________
Name:
Title:
AETNA LIFE INSURANCE AND ANNUITY COMPANY
By: ______________________________________
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Vice President
ZURICH XXXXXXX INVESTMENTS, INC.
By: ______________________________________
Name:
Title:
EXHIBIT A
Release Letter
[date]
Investors Bank & Trust Company
as Escrow Agent
To Whom It May Concern:
Reference is made to the escrow agreement dated April 5, 2002 among ING
Life Insurance and Annuity Company, Deutsche Investment Management Americas Inc.
and Investors Bank & Trust Company ("the Escrow Agreement") in connection with
the PPI Xxxxxxx International Growth Portfolio. Capitalized terms used but not
otherwise defined herein shall have the meanings assigned to them in the Escrow
Agreement.
This letter constitutes notice that the Interim Sub-Advisory Agreement
has been terminated.
Accordingly, pursuant to Section 3 of the Escrow Agreement, you are
hereby authorized and directed by the undersigned to release and deliver
[$_______ of the/the entire] Escrow Amount to Deutsche Investment Management
Americas, Inc.
Very truly yours,
ING LIFE INSURANCE AND ANNUITY COMPANY
By: _________________________________
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Vice President
