UNDERWRITING AND DISTRIBUTION AGREEMENT
AGREEMENT made this 1st day of January, 2002, by and between The
Manufacturers Life Insurance Company of New York ("Manulife New York"), a New
York corporation, and Manulife Financial Securities LLC ("MFS"), a Delaware
limited liability company.
WITNESSETH:
WHEREAS, Manulife New York sells certain insurance products listed on
Exhibit A hereto (the "Insurance Contracts"), some of which are regulated as
securities under the federal securities laws (the "Registered Insurance
Contracts"), and
WHEREAS, Manulife New York has entered into an Underwriting and Distribution
Agreement dated October 7, 1997 with Manufacturers Securities Services, LLC
("MSS"), whereby MSS was appointed as its principal underwriter and exclusive
representative for the distribution of Manulife New York insurance products
(the "Prior Agreement"); and
WHEREAS, MFS is registered with the Securities and Exchange Commission
("SEC") as a broker-dealer under the 1934 Act, is a member of the National
Association of Securities Dealers, Inc. ("NASD") and has been duly appointed
and licensed as an insurance agent of Manulife New York; and
WHEREAS, Manulife New York wishes to terminate the Prior Agreement and to
(i) arrange for the underwriting of all Registered Insurance Contracts through
MFS in conformity with the requirements of the Securities Exchange Act of 1934
("1934 Act"), (ii) arrange for the distribution of all of its Insurance
Contracts through MFS and (iii) authorize MFS to enter into agreements with
selling entities with respect thereto.
NOW, THEREFORE, the parties here to agree as follows:
1.(a) Manulife New York hereby appoints MFS as the principal underwriter of,
and its exclusive representative for the distribution of, the Insurance
Contracts, and MFS hereby agrees to use its best efforts to arrange for the
sale of the Insurance Contracts by general agents and, in connection with
Registered Insurance Contracts, by other broker-dealer registered under the
1934 Act. MFS agrees to assist such entities and their representatives and
associated persons to the extent that and in such manner as MFS shall deem
appropriate in order to enhance the sale of Insurance Contracts and the payment
of purchase payments thereunder.
(b) The territory to which this Agreement shall apply shall be limited
to the State of New York.
2.(a) With the consent of Manulife New York, MFS may execute agreements for
the sale and distribution of the Insurance Contracts ("Selling Agreements")
with (i) other general agent/broker-dealers duly qualified under applicable
Federal and state laws to offer and sell the Registered Insurance Contracts;
and (ii) general agents to offer and sell Manulife New York insurance products
other than the Registered Insurance Contracts. Manulife New York may, in its
sole discretion, refuse to consent to a Selling Agreement or refuse to appoint
a general agent or sub-agent pursuant thereto.
(b) Such Selling Agreements shall contain such terms and conditions as
MFS shall deem appropriate and which are acceptable to Manulife New York. Such
agreements may provide that any confirmation required to be sent in connection
with the issuance of Insurance Contracts or the receipt of purchase payments
thereunder will be sent by Manulife New York. All Selling Agreements shall
provide that no commission or expense allowance shall be paid in excess of the
limitations imposed by Section 4228 of the New York
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Insurance Law. Commissions and expense allowances paid by MFS pursuant to a
Selling Agreement shall not exceed the amounts payable to MFS by Manulife New
York hereunder with respect to the Insurance Contracts. All such compensation
plans shall be on the same basis, whether commission based or fund based, as
the corresponding compensation plan between Manulife New York and MFS pursuant
hereto, and payments shall have the same timing and duration.
(c) MFS shall provide Manulife New York with information regarding the
commissions and expense allowances payable by MFS under each Selling Agreement
upon its inception, and shall advise Manulife New York upon the implementation
of any revision to a plan of compensation thereunder. Such information shall
thereafter be maintained by Manulife New York in its files for a period of not
less than six years.
3. Manulife New York will prepare and maintain all books and records
relating to the Insurance Contracts including such books and records as MFS is
required to maintain under the 1934 Act to the extent such requirements are
applicable to the Registered Insurance Contracts. For purposes of this
Agreement, books and records maintained for MFS for the Registered Insurance
Contracts shall be deemed to be the property of MFS and shall be subject at all
times to examination by the SEC in accordance with Section 17(a) of the 1934
Act.
4. MFS will not accept or receive on behalf of Manulife New York any
Registered Insurance Contract purchase payment. MFS will not permit any other
broker-dealer to participate in the distribution of the Registered Insurance
Contracts unless such broker-dealer agrees that (i) it will not accept any
purchase payment other than the first and (ii) it will not accept any first
purchase payment unless made payable to Manulife New York. Such broker-dealer
must also agree to forward promptly to Manulife New York at the service office
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designated by it any first purchase payment received by such broker-dealer
together with a completed Registered Insurance Contract application. Manulife
New York reserves the right to reject any application in its sole discretion.
5. Manulife New York will furnish to MFS currently effective prospectuses
relating to Registered Insurance Contracts in such numbers as MFS may
reasonably require from time to time. MFS shall be responsible for the review
of sales materials and agrees to use its best efforts to obtain any approvals
or clearances required from the NASD or other regulatory authorities, if
applicable, with respect to such sales materials. Any sales materials prepared
by MFS or its designee, must be approved by Manulife New York prior to use.
6.(a) Manulife New York agrees to reimburse MFS for services and facilities
provided by MFS to Manulife New York pursuant to this Agreement. The charge to
Manulife New York for such services and facilities shall be at cost and shall
include all direct and directly allocable expenses, reasonably and equitably
determined to be attributable to Manulife New York by MFS, 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.
(b) Subject to New York Insurance Department Regulation 33, the bases
for determining such charges to Manulife New York shall be those used by MFS
for internal cost distribution (including, where appropriate, time records
prepared at least annually for this purpose). 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 MFS on behalf of
Manulife New York.
(c) MFS's determination of charges hereunder shall be presented to
Manulife New York, and if Manulife New York objects to any such determination,
it shall so
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advise MFS within thirty (30) days of receipt of notice of said determination.
Unless the parties can reconcile any such objection, they shall agree to the
selection of a firm of independent certified public accountants which shall
determine the charges properly allocable to Manulife New York and shall, within
a reasonable time, submit such determination, together with the basis
therefore, in writing to MFS and Manulife New York 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 MFS and Manulife New
York.
(d) MFS shall submit to Manulife New York within thirty (30) days of the
beginning of each calendar quarter a written statement of the amount estimated
to be owed by Manulife New York for services and the use of facilities pursuant
to this Agreement in that calendar quarter, and Manulife New York shall pay to
MFS within fifteen (15) days following receipt of such written statement the
amount set forth in the statement.
(e) Within thirty (30) days after the end of each calendar year, MFS
will submit to Manulife New York a detailed written statement of the charges
due from Manulife New York to MFS in that calendar year, included in any
previous statements, and any balance payable or to be refunded as shown in such
statement shall be paid or refunded within fifteen (15) days following receipt
of such, written statement by Manulife New York.
7. (a) All commissions and expense allowances in connection with Insurance
Contract sales shall be paid by or on behalf of MFS in accordance with the
terms of the applicable Selling Agreement then in effect.
(b) With respect to Registered Insurance Contracts, MFS authorizes
Manulife New York to make an electronic payment or credit of commissions and
expense allowances due from MFS to general agents/broker dealers which (I) have
entered into Selling
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Agreements with MFS; and (2) participate in an electronic premium and funds
transfer system utilized by Manulife New York. MFS will be responsible for
furnishing Manulife New York with any records and information necessary to
determine the amounts to be so paid or credited. It is understood and agreed
that such payments and credits shall be made solely on MFS's behalf, and that
Manulife New York assumes no direct obligation under any Selling Agreement to
pay commissions and expense allowance to such general agents/broker-dealers.
Any amounts due to MFS in excess of such payments or credits shall be remitted
directly to MFS in accordance with Section 6 hereof.
8. Subject to Section 3 hereof, all books, records, and files established
and maintained by MFS by reason of its performance under this Agreement which,
absent this Agreement, would have been held by Manulife New York, shall be
deemed the property of Manulife New York, and shall be subject to examination
at all times by Manulife New York and persons authorized by it or any
governmental agency having jurisdiction over it.
With respect to original documents which would otherwise be held by
Manulife New York and which may be obtained by MFS in performing under this
Agreement, MFS shall deliver such documents (whether in original form or in a
durable medium consistent with Regulation No. 152) to Manulife New York within
thirty (30) days of their receipt by MFS except where continued custody of such
documents is necessary to perform hereunder.
9. MFS shall have no right to incur any indebtedness on behalf of Manulife
New York pursuant to this Agreement. MFS hereby authorizes Manulife New York to
set off MFS's liabilities to Manulife New York against any and all amounts
otherwise payable to MFS pursuant here.o.
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10. Manulife New York represents that the Prior Agreement will be terminated
as of the effective date hereof and that all existing Selling Agreements will
be amended as of that date to substitute MFS for MSS thereunder.
11. This Agreement shall be construed in accordance with and governed by the
law of the State of New York.
12. This Agreement shall take effect as of the date set forth above and may
be terminated at any time by either party hereto on sixty (60) days' written
notice.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
THE MANUFACTURERS LIFE INSURANCE COMPANY OFNEWYORK
/s/ Xxxxx X. Xxxxxxxxx
By ----------------------------------------------
Attest: Xxxxxxxx X. Xxxxxxxxxx Xxxxx X. Xxxxxxxxx, President
MANULIFE FINANCIAL SECURITIES LLC
/s/ Xxxx Xxxxxxxx
By ----------------------------------------------
Atteset: Xxxxxxxx X. Xxxxxxxxxx Xxxx Xxxxxxxx, President and Manager
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EXHIBIT A
INSURANCE CONTRACTS
(Products which are not Registered Insurance Contracts are identified as such.)
(i) Individual variable annuities or fixed and variable annuities
(ii) Fixed annuities (registered and non-registered)
(iii) Term life insurance (non-registered)
(iv) Universal life insurance (non-registered)
(v) Variable life insurance
(vi) Variable universal life insurance
(vii) Group annuities (non-registered)
(ix) Such other Insurance Products as are from time to time agreed by the
parties to the foregoing Agreement and added to this Schedule A in
accordance therewith.
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