X. XXXX PRICE ASSOCIATES, INC.
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X.X. Xxx 00000
Xxxxxxxxx, Xxxxxxxx 00000-0000
LETTER AGREEMENT Mail code 8220
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
000-000-0000
000-000-0000
Fax 000-000-0000
September 16, 2002
LEGAL DEPARTMENT
CUNA Mutual Life Insurance Company
Ladies and Gentlemen:
This letter sets forth the agreement ("AGREEMENT") between CUNA
Mutual Life Insurance Company ("COMPANY") (the "Company" and
collectively "you," "your" or the "Company"), on the one hand,
and X. Xxxx Price Associates, Inc. ("PRICE ASSOCIATES") and
X. Xxxx Price International, Inc. ("TRPI") (collectively, "we,"
"our" or the "Price Advisers") on the other, concerning certain
administrative services to be provided by you, with respect to
the X. Xxxx Price Equity Series, Inc., X. Xxxx Price Fixed
Income Series, Inc., and the X. Xxxx Price International
Series, Inc. (individually a "FUND") and collectively, the
"FUNDS").
1. THE FUNDS. Each of the Funds is a Maryland Corporation
registered with the Securities and Exchange Commission (the "SEC")
under the Investment Company Act of 1940, as amended (the "ACT")
as an open-end diversified management investment company. Each Fund
serves as a funding vehicle for variable annuity contracts and
variable life insurance contracts and, as such, sells its shares to
insurance companies and their separate accounts. With respect to
various provisions of the Act, the SEC requires that owners of variable
annuity contracts and variable life insurance contracts be provided
with materials and rights afforded to shareholders of a publicly-
available SEC-registered mutual fund.
2. THE COMPANY. The Company is an Iowa mutual life insurance
company. The Company issues variable life and variable annuity
contracts (the "CONTRACTS") supported by one or more separate accounts
(individually a "SEPARATE ACCOUNT" and collectively the "SEPARATE
ACCOUNTS") which are registered with the SEC as unit investment trusts,
or which are properly exempt from registration. The Company has
entered into a participation agreement with one or more of the Funds
(individually a "PARTICIPATION AGREEMENT" and collectively the
"PARTICIPATION AGREEMENTS") pursuant to which the Company purchases
shares of the Fund for the Separate Account supporting the Company's
Contracts.
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CUNA Mutual Life Insurance Company
September 16, 2002
Page 2
3. PRICE ADVISERS. Price Associates serves as the investment
adviser to the X. Xxxx Price Equity Series, Inc. and X. Xxxx Price
Fixed Income Series, Inc., and TRPI serves as the investment adviser
to the X. Xxxx Price International Series, Inc. The Price Advisers
supervise and assist in the overall management of the Funds' affairs
under respective investment management agreements with each Fund (the
"MANAGEMENT AGREEMENTS"), subject to the overall authority of the
Fund's Board of Directors in accordance with Maryland law. Under the
Management Agreements, the Price Advisers are compensated for providing
investment advisory and certain administrative services (either
directly or through affiliates).
4. ADMINISTRATIVE SERVICES. You have agreed to assist us, as we
may request from time to time, with the provision of administrative
services to the Funds, as they may relate to the investment in a Fund
by the Separate Accounts. It is anticipated that such services may
include (but shall not be limited to): the mailing of Fund reports,
notices, proxies and proxy statements and other informational
materials to holder of the Contracts supported by the Separate
Accounts; the maintenance of separate records for each holder of the
Contracts reflecting shares purchased and redeemed and share balances;
the preparation of various reports for submission to Fund directors;
the provision of advice and recommendations concerning the operation
of the series of the Funds as funding vehicles for the Contracts; the
provision of shareholder support services with respect to the Separate
Account portfolios serving as funding vehicles for the Contracts;
telephone support for holders of Contracts with respect to inquiries
about the Funds; and the provision of other administrative services as
shall be mutually agreed upon from time to time. The Company agrees to
monitor its contractholders' accounts for excessive trading or market
timing activity (as defined in the Fund's prospectus) and agrees to
work with Price Associates to deter or block any future such activity.
5. PAYMENT FOR ADMINISTRATIVE SERVICES. In consideration of the
administrative services to be provided by the Company, we shall make
payments to the Company on a monthly basis ("PAYMENTS") from our
assets, including our bona fide profits as investment advisers to the
respective Funds, an amount equal to 15 basis points (0.15%) per annum
of the average aggregate net asset value of shares of the Funds held
by the Separate Accounts under the Participation Agreements, provided,
however, that such payments shall only be payable with respect to a
Fund for each calendar month during which the aggregate dollar value
of shares of all Funds purchased pursuant to a Participation Agreement
by the insurance companies in the aggregate exceeds $25,000,000.
Subject to the terms of paragraph 6 hereof, each Price Adviser shall
be responsible for payments due pursuant to this Paragraph 5 with
respect to the purchase of shares of a Fund managed by that Price
Adviser. For purposes of
CUNA Mutual Life Insurance Company
September 16, 2002
Page 3
computing the payment to the Company contemplated under this Paragraph
5, the average aggregate net asset value of shares of the Funds held
by the Separate Accounts over a monthly period shall be computed by
totaling each Separate Account's aggregate investment (share net asset
value multiplied by total number of shares held by the Separate
Account) on each business day during the calendar month, and dividing
by the total number of business days during such month. The Payments
contemplated by this Paragraph 5 shall be calculated by Price
Associates at the end of each calendar month and will be paid to each
Company within 30 calendar days thereafter.
6. NATURE OF PAYMENTS. The parties to this Agreement recognize
and agree that Price Advisers' payments to the Company relates to
administrative services only and do not constitute payment in any
manner for investment advisory services or for costs of distribution
of the Contracts or of Fund shares; and further, that these payments
are not otherwise related to investment advisory or distribution
services or expenses, or administrative services which the Price
Advisers are required to provide to owners of the Contracts pursuant
to the terms thereof. You represent that you may legally receive the
payments contemplated by this Agreement.
7. TERM. This Agreement shall remain in full force and effect for
an initial term of two years, and shall automatically renew for
successive one-year periods unless any party informs each of the other
parties upon 60-days written notice of its intent not to continue this
Agreement. This Agreement and all obligations hereunder shall
terminate automatically with respect to the Company and its
relationship with a Fund upon the redemption of the Company's and its
Separate Account's investment in the Fund, or upon termination of its
Participation Agreement with the Fund.
8. AMENDMENT. This Agreement may be amended only upon mutual
agreement of all of the parties hereto in writing.
9. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original but all of which shall
together constitute one and the same instrument.
CUNA Mutual Life Insurance Company
September 16, 2002
Page 4
If this Agreement is consistent with your understanding of the matters
we discussed concerning your administrative services, kindly sign below and
return a signed copy to us.
Very truly yours,
X. XXXX PRICE ASSOCIATES, INC.
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
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Title: Vice President
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X. XXXX PRICE INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
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Title: Vice President
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Acknowledged and Agreed to:
CUNA MUTUAL LIFE INSURANCE COMPANY
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
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Title: Chief Officer - Investments
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