ADMINISTRATIVE SERVICES AGREEMENT
This Agreement is made as of the 1st day of July, 2001, by and between
INVESCO Funds Group, Inc. ("INVESCO"), and Pan-American Assurance Company
("Pan-American"), a Louisiana corporation, collectively, the "Parties."
WITNESSETH:
WHEREAS, INVESCO serves as the administrator for the INVESCO Variable
Investment Funds, Inc. ( the "Company"); and
WHEREAS, Pan-American has entered into an agreement, dated July 1st, 2001,
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
Pan-American 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 Pan-American, at
its expense, will provide various administrative and shareholder contact
services with respect to prospective and actual Variable Contract Owners of
Pan-American; 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:
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Pan-American agrees to provide services to the Company and INVESCO including the
following:
a) responding to inquiries from Pan-American Contract Owners using one or more
of the Portfolios as an investment vehicle regarding the services performed
by Pan-American 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, Pan-American 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 Pan-American 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, Pan-American, and having
that shareholder be responsible for the servicing of the Contract Owners,
INVESCO will pay an administrative service fee to Pan-American, as described
below:
a) INVESCO shall pay to Pan-American 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
Pan-American, at the annual rate of 0.25% on the aggregate net assets
placed by Pan-American 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 Pan-American
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 Pan-American 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 Pan-American 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) Pan-American 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 Pan-American 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 Pan-American
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 Pan-American 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
Pan-American Financial Services, Inc.
000 Xxxxxxx Xx., Xxx. 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxx with a copy to Xxxxxx Xxxxxx.
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. PAN-AMERICAN ASSURANCE COMPANY
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx Xxxxx
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Xxxxxx X. Xxxxxx Name: Xxxxxx Xxxxx
Senior Vice President & Treasurer Title: VP and Actuary
INVESCO VARIABLE INVESTMENT FUNDS, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Treasurer
