SERVICES AGREEMENT
THIS AGREEMENT is made and entered into as of the 15th day of December, 2000, by
and between Preferred Life Insurance Company of New York, a New York life
insurance company having its principal office and place of business at Xxxx
Xxxxxx Xxx 00000, Xxxxxx Xxxxxx Xxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Preferred"),
and Prudential Investment Management Services LLC ("PIMS"), a Delaware limited
liability company having its principal office and place of business at 000
Xxxxxxxx Xxxxxx, Xxxxxxx Center Three, 14'h Floor, Xxxxxx, Xxx Xxxxxx 00000.
WHEREAS, the mutual funds listed on Exhibit A hereto (the "Funds") have engaged
PIMS to distribute shares of the Funds and have permitted PIMS to select and
appoint entities such as Preferred to provide administrative services to
Preferred's customers invested in its separate accounts (the "Separate
Accounts") that issue variable annuity or variable life insurance contracts (the
"Variable Contracts"); and WHEREAS, PIMS is a duly registered broker-dealer
under the federal securities laws and serves as the distributor and principal
underwriter of the Funds; and
WHEREAS, PIMS desires to appoint Preferred to act as servicing agent to provide
the various administrative services and functions described in Exhibit B hereto
(the "Services") to the Separate Accounts and/or the Variable Contracts and
Preferred is willing and able to furnish such Services on the terms and
conditions hereinafter set forth; and Funds;
WHEREAS, it is contemplated that the Separate Accounts may invest their assets
in the Funds;
NOW THEREFORE, for and in consideration of the promises and mutual covenants
hereinafter contained, the parties agree as follows:
Article 1. Terms of Appointment
Section 1.1 Subject to the terms and conditions set forth in this Agreement, and
all Exhibits and Schedules attached hereto, PIMS hereby employs and appoints
Preferred to act as, and Preferred agrees to act as, servicing agent for the
authorized shares of the Funds issued to the Separate Accounts.
Section 1.2 Preferred agrees to perform the Services with respect to the
Separate Accounts and/or the Variable Contracts.
Section 1.3 The parties hereto agree that the Services are administrative
services and are not investment advisory., marketing or distribution services.
Section 1.4 Preferred agrees that it shall maintain and preserve all records
required by law to be maintained and preserved in connection with providing the
Services to the Separate Accounts and the Variable Contracts, and shall
otherwise comply with all laws, rules and regulations applicable to the
Services. Upon written request of the Funds or PIMS, Preferred shall provide
such materials as may reasonably be requested to enable the Funds, PIMS and
their respective representatives and agents to monitor and review the Services,
or to comply with any request of the board of directors of the Funds or of a
governmental body or self-regulatory organization. Preferred agrees that it
shall permit the Funds, PIMS and their respective representatives and agents to
have reasonable access to Preferred's personnel and records to monitor the
performance of the Services.
Section 1.5 In addition to the Services, Preferred shall perform such other
duties and functions, and shall be paid such amounts therefor, as may from time
to time be reflected in a written amendment to Exhibit B, signed and dated by
each party hereto. The fees payable to Preferred as compensation for such other
duties and functions shall be reflected in a written amendment to Schedule A
signed and dated by each party hereto.
Section 1.6 The provisions of this Agreement shall in no way limit the authority
of the Funds to take such action as they may deem appropriate or advisable in
connection with all matters relating to the operations of the Funds and/or the
sale of the Funds' shares.
Section 1.7 PIMS hereby consents to the provision of the Services by Preferred.
Article 2. Fees and Expenses
Section 2.1 For performance of Services by Preferred pursuant to this Agreement,
PIMS will make payments to Preferred from PIMS' own resources as compensation,
an annual maintenance fee for assets of the Separate Accounts invested in the
Funds, as set out in the fee schedule attached hereto as Schedule A.
Section 2.2 PIMS agrees to pay all fees within thirty (30) business days
following the end of each calendar quarter. Preferred may request back-up
documentation that supports the fee calculation within seven (7) days after
receipt of the its fee. During Preferred's review of the back-up documentation
(which review shall not exceed seven (7) days) and during the pendency of any
disputes over the fee, PIMS shall not be obligated to pay any disputed portion
of the fee.
Article 3. Representations and Warranties of Preferred
Preferred represents and warrants to PIMS that:
a) Preferred is a life insurance company duly organized and existing and in
good standing under the laws of the state of New York.
b) Preferred is either duly registered as a transfer agent under Section
17A(c)(1) or has been advised by its legal counsel that Preferred is exempt
from having to so register in order to provide the services specified in
this Agreement, and is duly qualified and has all requisite licenses and
authority to carry on its business in Ohio and in all other jurisdictions
in which is conducts business.
c) Preferred is authorized to enter into and perform this Agreement, and the
performance of its obligations hereunder will not violate or conflict with
any governing documents or agreements of Preferred or any applicable law.
d) Preferred has and will continue to have access to the necessary facilities,
equipment and personnel to perform the Services in accordance with the best
industry practice.
Article 4. Representation and Warranties of PIMS
PIMS represents and warrants to Preferred that:
a) PIMS is a limited liability company duly organized, existing and in good
standing under the laws of the State of Delaware.
b) PIMS is duly registered as a broker-dealer under the federal securities
laws, is a member of the National Association of Securities Dealers, Inc.
("NASD") and is duly qualified and has all requisite licenses and authority
to carry on its business in the State of New Jersey and in all other
jurisdictions in which it conducts business.
c) PIMS is authorized to enter into and perform this Agreement, and the
performance of its obligations hereunder will not violate or conflict with
any governing documents or agreements of PIMS or any applicable law.
d) PIMS has and will continue to have access to the necessary facilities,
equipment and personnel to perform its obligations under this Agreement.
Article 5. Covenants of Preferred and PIMS
Section 5.1 PIMS and Preferred agree that all non-public books, records,
information and data pertaining to the business of the other party that are
exchanged or received pursuant to the negotiations or the carrying out of this
Agreement shall remain confidential, and shall not be voluntarily disclosed to
any other person, except as may be required by law or by such party to carry out
this Agreement or an order of any court, governmental agency or regulatory body
having jurisdiction.
Section 5.2 In case of any requests or demands for the inspection of shareholder
records of the Funds, Preferred will notify the Funds and PIMS and secure
instructions from an authorized officer(s) of the Funds and PIMS as to such
inspection.
Article 6. Redemptions, Repurchases and Exchanges
Section 6.1 The Prospectus for each Fund describes the provisions whereby the
Fund, under all ordinary circumstances, will redeem Shares held by the Separate
Accounts on demand. Preferred agrees that it will not make any representations
to the Separate Accounts or the Variable Contracts relating to the redemption of
Shares other than the statements contained in the Prospectus and the underlying
organizational documents of the Fund, to which it refers, and that Preferred
will pay as redemption proceeds to the Variable Contracts the net asset value
determined after receipt of the order as discussed in the Prospectus.
Section 6.2 Preferred agrees that it will comply with any restrictions and
limitations on purchases, redemptions and exchanges described in each Fund's
Prospectus, as may be modified by the Participation Agreement entered into by
and among Preferred, PIMS, The Prudential Series Fund, Inc. and The Prudential
Insurance Company of America, dated as of 2000 (the "Participation Agreement").
Article 7. Fund Information
Section 7.1 Preferred agrees that neither it nor any of its partners, directors,
officers, employees, and agents is authorized to give any information or make
any representations concerning Shares of any Fund except those contained in the
Fund's then current Prospectus or in materials provided by PIMS.
Section 7.2 PIMS will supply to Preferred Prospectuses and additional
information relating to the Funds. Preferred agrees to use only material
relating to the Funds that: (i) is supplied by PIMS, or (ii) conforms to the
requirements of all applicable laws or regulations of any government or
authorized agency having jurisdiction over the offering or sale of Shares of the
Funds and is approved in writing by PIMS in advance of its use.
Article 8. Indemnification
Section 8.1 Preferred agrees to indemnify, defend and hold harmless PIMS and the
Funds and their predecessors, successors, and affiliates, each current or former
partner, officer, director, employee, shareholder or agent and each person who
controls or is controlled by PIMS from any and all losses, claims, liabilities,
costs, and expenses, including attorney fees, that may be assessed against or
suffered or incurred by any of them howsoever they arise, and as they are
incurred, which relate in any way to: (i) any alleged violation of any statute
or regulation (including without limitation the securities laws and regulations
of the United States or any state or foreign country) or any alleged tort or
breach of contract, related to the actions of Preferred pursuant to this
Agreement (except to the extent that PIMS' negligence or failure to follow
correct instructions received from Agent is the cause of such loss, claim,
liability, cost or expense); (ii) any redemption or exchange pursuant to
instructions received from Preferred or its partners, affiliates, officers,
directors, employees or agents; or (iii) the breach by Preferred of any of its
representations and warranties specified herein or Preferred's failure to comply
with the terms and conditions of this Agreement, whether or not such action,
failure, error, omission, misconduct or breach is committed by Preferred or its
predecessor, successor, or affiliate, each current or former partner, officer,
director, employee or agent and each person who controls or is controlled by
Preferred.
Section 8.2 PIMS agrees to indemnify, defend and hold harmless Preferred and its
predecessors, successors and affiliates, each current or former partner,
officer, director, employee or agent, and each person who controls or is
controlled by Preferred from any and all losses, claims, liabilities, costs and
expenses, including attorney fees, that may be assessed against or suffered or
incurred by any of them which arise, and which relate in any way to: (i) any
untrue statement of or omission to state a material fact contained in the
Prospectus or any written sales literature or other marketing materials provided
by PIMS to Preferred, required to be stated therein or necessary to make the
statements therein not misleading or (ii) the breach by PIMS of any of its
representations and warranties specified herein or PIMS' failure to comply with
the terms and conditions of this Agreement, whether or not such action, failure,
error, omission, misconduct or breach is committed by PIMS or its predecessor,
successor, or affiliate, each current or former partner, officer, director,
employee or agent and each person who controls or is controlled by PIMS.
Section 8.3 Preferred agrees to notify PIMS, within a reasonable time, of any
claim or complaint or any enforcement action or other proceeding with respect to
Shares against Preferred or its partners, affiliates, officers, directors,
employees or agents, or any person who controls Preferred, within the meaning of
Section 15 of the Securities Act of 1933, as amended.
Section 8.4 Each party's obligations under these indemnification provisions
shall survive any termination of this Agreement.
Article 9. Dispute Resolution; Governing Law
Section 9.1 In the event of a dispute concerning any provision of this
Agreement, either party may require the dispute to be submitted to binding
arbitration under the commercial arbitration rules and procedures of the NASD.
The parties agree that, to the extent permitted under such arbitration rules and
procedures, the arbitrators selected shall be from the securities industry.
Judgment upon any arbitration award may be entered by any state or federal court
having jurisdiction.
Section 9.2 This Agreement shall be governed and construed in accordance with
the laws of the state of New Jersey, not including any provision which would
require the general application of the law of another jurisdiction.
Article 10. Investigations and Proceedings
The parties to this Agreement agree to cooperate fully in any regulatory
investigation or proceeding or judicial proceeding with respect to activities of
either party under this Agreement and promptly to notify the other party of any
such investigation or proceeding.
Article 11. Captions
All captions used in this Agreement are for convenience only, are not a part
hereof, and are not to be used in construing or interpreting any aspect hereof.
Article 12. Effect on Other Agreements
This Agreement shall not amend, modify or supersede any contractual terms,
obligations or covenants between Preferred and PIMS previously or currently in
effect, including the contractual terms, obligations or covenants contained in
the Participation Agreement.
Article 13. Severability
Whenever possible, each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law. If, however, any
provision of this Agreement is held under applicable law to be invalid, illegal,
or unenforceable in any respect, such provision shall be ineffective only to the
extent of such invalidity, and the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be affected or impaired in any
way.
Article 14. Notices
All notices required or permitted under this Agreement shall be in writing and
shall be sent by personal delivery or registered or certified mail, postage
prepaid, or by telecopier confirmed in writing within three business days as
follows:
(a) If to the Funds: Prudential Mutual Funds Gateway Center Three 000 Xxxxxxxx
Xxxxxx, 00xx Xxxxx Xxxxxx, Xxx Xxxxxx 00000-0000 Attention: Secretary
(b) If to Preferred: Preferred Life Insurance Company of New York Post Office
Box 00000 Xxxxxx Xxxxxx Xxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
(c) If to PIMS: Prudential Investment Management Services LLC Gateway Center
Three 000 Xxxxxxxx Xxxxxx, 00xx Xxxxx Xxxxxx, Xxx Xxxxxx 00000-0000 Attention:
Secretary
Such addresses may be changed from time to time by any party by providing
written notice in the manner set forth above. All notices shall be effective
upon delivery or when deposited in the mail addressed as set forth above.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized officers as of the day and year first above written.
PREFERRED LIFE INSURANCE COMPANY OF NEW YORK
By: /s/ Xxxxxxx Xxxxx
Title: VP & Secretary
PRUDENTIAL INVESTMENT MANAGEMENT SERVICES LLC
By: /s/ illegible
Title:
EXHIBIT A
FUNDS
The Prudential Series Fund, Inc.
XX Xxxxxxxx International Growth Portfolio
SP Strategic Partners Focused Growth Portfolio
EXHIBIT B
DUTIES OF PREFERRED
In accordance with procedures established from time to time by agreement between
PIMS and Preferred, Preferred shall provide the following services:
1. Separate Account and Variable Contract Information. Preferred shall
maintain a record of the number of Fund shares held by each Separate
Account, and shall further maintain records of the ownership interests
of each Variable Contract in each Separate Account.
2. Variable Contract Services. Preferred shall investigate all inquiries
from holders of the Variable Contracts relating to their accounts and
shall respond to all communications from holders of the Variable
Contracts and others relating to Preferred's duties hereunder and such
other correspondence as may from time to time be mutually agreed upon
among Preferred and PIMS.
3. Mailing Communications: Proxy Materials. Preferred shall address and
mail at its expense to holders of the Variable Contracts all reports to
shareholders, dividend and distribution notices, and proxy materials
for the Funds' meetings of shareholders. In connection with meetings of
shareholders, Preferred shall prepare with respect to holders of the
Variable Contracts, contractholder lists, and shall mail, and certify
as to the mailing, proxy materials.
4. Sales of Shares:
a) Acceptance of Orders. Preferred shall receive for acceptance orders
from the Separate Accounts for the purchase of shares each business day
and forward payment for the purchase of shares by wire on the same
business day to the Custodian of the Funds (the "Custodian"). In
addition, Preferred shall, pursuant to such purchase orders, coordinate
with PIMS and the Funds' transfer agent to issue the appropriate number
of shares and hold such shares in the appropriate shareholder account.
b) Recordation of the Issuance of Shares. Preferred shall record the
issuance of Fund shares to the Separate Accounts and maintain a record
of the total number of shares which are issued, based upon data
provided to :Preferred by the Custodian.
c) Returned Checks. In the event that any check or other order for the
payment of money of a Customer is returned unpaid for any reason,
Preferred shall: (i) give prompt stop transfer order against all Fund
shares issued as a result of such check or order; and (ii) take such
actions as PIMS may reasonably deem appropriate.
4. Transfers and RedeWtions:
Preferred shall receive for acceptance orders from the Separate Accounts for the
exchange or redemption of Fund shares each business day and forward such orders
to the Funds' transfer agent.
5. Blue Sky Reports: 6.
If in the reasonable judgment of the Funds such information is required by
applicable state securities laws or the interpretation thereof by applicable
regulatory authorities, Preferred shall periodically prepare a report to the
Funds and PIMS, in accordance with a system approved by the Funds and PIMS,
showing by state all sales and redemption of Fund shares.
FEESCHEDULE
SCHEDULE A
With respect to Separate Accounts invested in the Funds, Preferred shall receive
the compensation described below. Such fee shall accrue daily and shall be paid
to Preferred monthly. PIMS shall not pay any fees with respect to Separate
Accounts invested in a Fund in which the average balance is less than $1,000. In
addition, PIMS shall withhold payment until the total cumulative compensation
payable under the Agreement is equal to at least $1,000.
Fund Compensation The Prudential Series Fund, Inc. XX Xxxxxxxx International
Growth Portfolio- .25% of average daily net assets Class II Shares SP Strategic
Partners Focused Growth Portfolio- .25% of average daily net assets Class II
Shares
