ADMINISTRATIVE SERVICES AGREEMENT
This Agreement is made as of the 21st day of June, 2000, by and between
INVESCO Funds Group, Inc. ("INVESCO"), and Western Reserve Life Assurance
Company of Ohio ("Western Reserve"), an Ohio corporation, collectively, the
"Parties."
WITNESSETH:
WHEREAS, INVESCO serves as the administrator for the INVESCO Variable
Investment Funds, Inc. ( the "Company"); and
WHEREAS, Western Reserve has entered into an agreement, dated October 8th,
1999, with the Company and INVESCO (the "Fund Participation Agreement") pursuant
to which INVESCO will make shares of certain of its Portfolios available to
certain variable life insurance and/or variable annuity contracts offered by
Western Reserve through certain separate accounts (the "Separate Accounts") at
net asset value and with no sales charges, subject to the terms of the Fund
Participation Agreement; and
WHEREAS, the Fund Participation Agreement provides that the Company will
bear the costs of preparing, filing with the Securities and Exchange Commission,
printing or duplicating and mailing the Company's (or the Portfolios')
prospectus, statement of additional information and any amendments or
supplements thereto, periodic reports to shareholders, Fund proxy material and
other shareholder communications (collectively, the "Fund Materials") required
by law to be sent to owners of Contracts ("Contract Owners") who have allocated
any Contract value to a Portfolio; and
WHEREAS, the Fund Participation Agreement provides that Western Reserve, at
its expense, will provide various administrative and shareholder contact
services with respect to prospective and actual Variable Contract Owners of
Western Reserve; and
WHEREAS, the Fund Participation Agreement makes no provision for the rate
at which each party shall incur expenses in connection with the servicing of
Contract Owners who have allocated Contract value to a portfolio, including, but
not limited to, responding to various Contract Owner inquiries regarding a
Portfolio; and
WHEREAS, the Parties hereto wish to allocate the expenses in a manner that
is fair and equitable, and consistent with the best interests of Contract
Owners; and
WHEREAS, the Parties hereto wish to establish a means for allocating the
expenses that does not entail the expense and inconvenience of separately
identifying and accounting for each item of Fund expense;
NOW THEREFORE, in consideration of the mutual benefits and promises
contained herein, the Parties hereto agree as follows:
I. SERVICES PROVIDED:
Western Reserve agrees to provide services to the Company and INVESCO including
the following:
a) responding to inquiries from Western Reserve Contract Owners using one or
more of the Portfolios as an investment vehicle regarding the services
performed by Western Reserve as they relate to INVESCO, the Company or its
Portfolios;
b) providing information to INVESCO or the Company and to Contract Owners with
respect to shares attributable to Contract Owner accounts;
c) communicating directly with Contract Owners concerning INVESCO or the
Company's operations;
e) providing such similar services as INVESCO or the Company may reasonably
request to the extent permitted or required under applicable statutes,
rules and regulations.
II. EXPENSE ALLOCATIONS:
Subject to Section III hereof, and the provisions of Article IV of the Fund
Participation Agreement, Western Reserve or its affiliates shall initially bear
the costs of the following:
a) printing and distributing all Fund Materials to be distributed to
prospective Contract owners except as may otherwise be provided in the Fund
Participation Agreement;
b) printing and distributing all sales literature or promotional material
developed by Western Reserve or its affiliates and relating to the
Contracts;
c) servicing Contract Owners who have allocated Contract value to a Portfolio,
which servicing shall include, but is not limited to, the items listed in
Paragraph I of this Agreement.
III. PAYMENT OF EXPENSES:
In recognition of the substantial savings in administrative expenses to INVESCO
and the Company by virtue of having a sole shareholder, Western Reserve, and
having that shareholder be responsible for the servicing of the Contract Owners,
INVESCO will pay an administrative service fee to Western Reserve, as described
below:
a) INVESCO shall pay to Western Reserve an Administrative Services Fee
(hereinafter, the "Quarterly Fee") equal to a percentage of the average
daily net assets of the Portfolios attributable to Contracts offered by
Western Reserve, at the annual rate of 0.25% on the aggregate net assets
placed by Western Reserve in the INVESCO VIF Funds designated in Schedule B
of the Fund Participation Agreement, as may be amended from time to time.
The Quarterly Fee is in consideration of the expenses incurred by Western
Reserve pursuant to Section II hereof. The payment of the Quarterly Fee
shall commence on the date first indicated above.
b) From time to time, the Parties hereto shall review the Quarterly Fee to
determine whether it reasonably approximates the incurred and anticipated
costs, over time, of Western Reserve in connection with its duties
hereunder. The Parties agree to negotiate in good faith any change to the
Quarterly Fee proposed by another Party in good faith.
c) This Agreement shall not modify any of the provisions of Article IV or
Article VI of the Fund Participation Agreement, but shall supplement those
provisions.
IV. Term of Agreement:
This Agreement shall continue in effect for so long as Western Reserve or its
successor(s) in interest, or any affiliate thereof, continues to hold shares of
the Company or its portfolios, and continues to perform in a similar capacity
for the Company and INVESCO.
V. INDEMNIFICATION:
a) Western Reserve agrees to indemnify and hold harmless the Company and
INVESCO, and their officers, employees, and directors, from any and all
loss, liability and expense resulting from the gross negligence or willful
wrongful act of Western Reserve under this Agreement, except to the extent
such loss, liability or expense is the result of the willful misfeasance,
bad faith or gross negligence of the Company or INVESCO in the performance
of its duties, or by reason of the reckless disregard of their obligations
and duties under this Agreement.
b) The Company and INVESCO agree to indemnify and hold harmless Western
Reserve and its officers, employees, and directors from any and all loss,
liability and expense resulting from the gross negligence or willful
wrongful act of the Company or INVESCO under this Agreement, except to the
extent such loss, liability or expense is the result of the willful
misfeasance, bad faith or gross negligence of Western Reserve in the
performance of its duties, or by reason of the reckless disregard of its
obligations and duties under this Agreement.
VI. NOTICES:
Notices and communications required or permitted hereby will be given to the
following persons at the following addresses and facsimile numbers, or such
other persons, addresses or facsimile numbers as the Party receiving such
notices or communications may subsequently direct in writing:
INVESCO Funds Group, Inc.
0000 Xxxx Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx - Senior Vice President
FAX: 000 000-0000
Western Reserve Life Assurance Company of Ohio
c/o Extraordinary Markets Divisions
0000 Xxxxxxxx Xxxx XX
Xxxxx Xxxxxx, XX 00000
VII. APPLICABLE LAW:
Except insofar as the Investment Company Act of 1940 or other federal laws and
regulations may be controlling, this Agreement will be construed and the
provisions hereof interpreted under and in accordance with Delaware law, without
regard for that state's principles of conflict of laws.
VIII. EXECUTION IN COUNTERPARTS:
This Agreement may be executed simultaneously in two or more counterparts, each
of which taken together will constitute one and the same instrument.
IX. SEVERABILITY:
If any provision of this Agreement is held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement will not be affected
thereby.
X. RIGHTS CUMULATIVE:
The rights, remedies and obligations contained in this Agreement are cumulative
and are in addition to any and all rights, remedies and obligations, at law or
in equity, that the Parties are entitled to under federal and state laws.
XI. HEADINGS:
The headings used in this Agreement are for purposes of reference only and shall
not limit or define the meaning of the provisions of this Agreement.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in
their names and on their behalf by and through their duly authorized officers
signing below.
INVESCO FUNDS GROUP, INC. WESTERN RESERVE LIFE ASSURANCE
COMPANY OF OHIO
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
Senior Vice President & Treasurer Title: Vice President
INVESCO VARIABLE INVESTMENT FUNDS, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Treasurer
