AMENDED AND RESTATED
ADMINISTRATIVE SERVICES AGREEMENT
Franklin Xxxxxxxxx Services, LLC
Commonwealth Annuity and Life Insurance Company
(formerly "Allmerica Financial Life Insurance and Annuity Company")
THIS AMENDED AND RESTATED ADMINISTRATIVE SERVICES AGREEMENT (the
"Agreement") is made by and between Franklin Xxxxxxxxx Services, LLC (the "Fund
Administrator") and Commonwealth Annuity and Life Insurance Company
("Commonwealth Annuity" formerly Allmerica Financial Life Insurance and Annuity
Company "AFLIAC") (Commonwealth Annuity is hereinafter refers to in this
Agreement as the "Company").
WHEREAS, The Company, First Allmerica Financial Life Insurance Company
("FAFLIC") and the Fund Administrator have entered into an Administrative
Services Agreement, dated as of December 1, 2000 and subsequently amended May 1,
2002 (the "Prior Agreement"), concerning certain administrative services with
respect to each series ("Fund" or "Funds") of Franklin Xxxxxxxxx Variable
Insurance Products Trust (the "Trust") listed on the Schedule B of the Prior
Agreement;
WHEREAS, in connection with the acquisition of AFLIAC by The Xxxxxxx Sachs
Group, Inc., the name of Allmerica Financial Life Insurance and Annuity Company
was changed to Commonwealth Annuity and Life Insurance Company effective as of
September 25, 2006;
WHEREAS, Commonwealth Annuity and FAFLIC each desires to enter into a
separate Administrative Services Agreement with the Fund Administrator for their
variable life or variable annuity insurance contracts covered by the Agreement,
respectively.
NOW, THEREFORE, in consideration of past and prospective business
relations, the Fund Administrator and the Company agree to replace the Prior
Agreement in its entirety with two amended and restated agreements, with this
Agreement created for Commonwealth Annuity as follows:
1. ADMINISTRATIVE SERVICES. Administrative services for the Company's Separate
Accounts (the "Account" or "Accounts") which invest in the Funds pursuant to the
Participation Agreement, and administrative services for purchasers of variable
life and annuity contracts (the "Contracts") issued by the Company through the
Accounts, are and shall be the responsibility of the Company. Administrative
services with respect to the Funds in which the Accounts invest, and for
purchasers of shares of the Funds, are and shall be the responsibility of the
Fund Administrator or its affiliates. The Company has agreed to assist the Fund
Administrator, as the Fund Administrator may request from time to time, with the
provision of administrative services ("Administrative Services") to the Funds,
on a sub-administration basis, as they may relate to the investment in the Funds
by the Accounts. It is anticipated that the Administrative Services may include,
but may not be limited to, the services listed on Schedule A.
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2. ADMINISTRATIVE EXPENSE PAYMENTS. The Fund Administrator recognizes the
Company, on behalf of the Accounts, as the shareholder of shares of the Funds
purchased under the Participation Agreement on behalf of the Accounts. The Fund
Administrator further recognizes that it will derive a substantial
administrative convenience by virtue of having the Company be the shareholder of
record of shares of the Funds purchased under the Participation Agreement,
rather than multiple shareholders having record ownership of such shares. The
Fund Administrator recognizes that the Company will provide administrative
services necessary to facilitate investment in the Funds.
In consideration of the Administrative Services provided by the Company and the
administrative convenience resulting to the Fund Administrator described above,
the Fund Administrator agrees to pay the Company a fee as set forth in Schedule
B.
3. COMPUTATION OF ADMINISTRATIVE EXPENSE PAYMENTS. As soon as practicable after
the end of each quarter, the Company will send the Fund Administrator, at the
address indicated in this Paragraph 3 and in the manner set forth below, a
statement of the average daily net assets for the preceding quarter, of shares
of the Fund as to which the fee stated in Schedule B is to be calculated. The
Fund Administrator will calculate and pay the Company its fee within thirty (30)
days after the end of the three-month periods ending in January, April, July and
October. Such payment will be by wire transfer unless the amount thereof is less
than $500. Wire transfers will be sent to the bank account and in the manner
specified by the Company. Such wire transfer will be separate from wire
transfers of redemption proceeds and distributions. Amounts less than $500 shall
be paid by check or by another method acceptable to both parties.
For purposes of this Paragraph 3, the average daily net asset value of the
shares of a Fund will be based on the net assets reported by the Trust on behalf
of each Fund to the Company. No adjustments will be made to such net assets to
correct errors in the net asset value so reported for any day unless such error
is corrected and the corrected net asset value per share is reported to the
Company before 5:00 p.m. Eastern time on the first Business Day after the day to
which the error relates. "Business Day" will mean any day on which the New York
Stock Exchange is open for trading and on which the Fund calculates its net
asset value pursuant to the rules of the Securities and Exchange Commission.
For purposes of this Paragraph 3, the address shall be Corporate Accounting,
Franklin Resources, Xxx Xxxxxxxx Xxxxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000;
Attention: Xxxx Xxxxxxxx, Manager.
4. CONFIDENTIALITY OF PAYMENT RATE. The Company acknowledges that the rate and
amount of payments to be made to the Company under this Agreement are
proprietary and confidential information of the Fund Administrator and its
affiliates, and that disclosure of this information to third parties may cause
damage to Fund Administrator or its affiliates. The Company agrees to take any
and all reasonable actions to limit disclosure of this information to only those
of its employees, officers, consultants and agents who need the information in
order to perform their duties, and to notify such persons of the terms of this
paragraph. In the event any other party seeks to compel disclosure of
confidential information
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through judicial or administrative process, then the Company shall promptly give
the Fund Administrator written notice of such demand and, if requested by the
Fund Administrator, shall cooperate in the Fund Administrator's efforts to
challenge or limit any such disclosure. Violation of the confidentiality
provision shall be grounds for immediate termination of the Agreement by the
Fund Administrator in its sole discretion. Nothing in this Agreement shall
prevent the Company from disclosing the existence of this Agreement in the
Contracts' prospectuses or elsewhere.
5. NATURE OF PAYMENTS. The parties to this Agreement recognize and agree that
the Fund Administrator's payments to the Company relate to Administrative
Services only and do not constitute payment in any manner for investment
advisory services, for costs of distribution of Contracts or of shares of the
Fund, or for services that the Company is otherwise required to perform, and
that these payments are not otherwise related to investment advisory or
distribution services or expenses. The amount of the payments made by the Fund
Administrator to the Company under this Agreement shall not be deemed to be
conclusive with respect to actual administrative expenses incurred by the
Company or savings of the Fund Administrator.
6. NOTICE. Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth in
Schedule C of this Agreement or at such other address as such party may from
time to time specify in writing to the other party. The quarterly statements
called for in Paragraph 3 above should be sent to the Fund Administrator at the
address specified in Paragraph 3.
7. TERMINATION. This Agreement may be terminated upon thirty (30) days' written
notice from one party to the other party.
8. REPRESENTATION. The Company represents and agrees that it will maintain and
preserve all records as required by law to be maintained and preserved in
connection with providing the Administrative Services, and will otherwise comply
with all laws, rules and regulations applicable to Administrative Services.
9. AMENDMENT. This Agreement may be amended only upon mutual agreement of the
parties hereto in writing.
10. ASSIGNMENT. This Agreement shall not be assigned by either party without the
prior written consent of the other party, which consent shall not be
unreasonably withheld or delayed; provided, however, that such limitation shall
not apply should the Fund Administrator cease to be the fund administrator for
the Trust and the successor fund administrator for the Trust is willing to
assume Fund Administrator's responsibilities hereunder.
11. COUNTERPARTS. This Agreement may be executed in counterparts, each of which
will be deemed an original but all of which will together constitute one and the
same instrument.
12. ENTIRE AGREEMENT. This Agreement, together with the attached Schedules,
contains the entire agreement among the parties with respect to the matters
dealt with herein, and
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supersedes any prior or inconsistent agreements, documents, understandings or
arrangements among the parties with respect to the subject matter of this
Agreement, including, but not limited to, the Administrative Services Agreement,
dated December 1, 2000 and any amendment thereof, among Franklin Xxxxxxxxx
Services, Inc., Allmerica Financial Life Insurance and Annuity Company and First
Allmerica Financial Life Insurance Company.
13. INDEMNIFICATION. This Agreement will be subject to the indemnification
provisions of the Participation Agreement.
14. ARBITRATION. 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 of the American Arbitration
Association. Each party will pay its own costs and expenses. Judgment upon any
arbitration award may be entered by any court having jurisdiction. This
Agreement shall be interpreted in accordance with the laws of the state of
California and shall be subject to any applicable federal securities laws.
15. TRUST NOT A PARTY. The parties to this Agreement acknowledge and agree that
the Trust is not directly or indirectly a party to this Agreement. If, however,
the Trust shall be so deemed, the parties to this Agreement acknowledge and
agree that any liabilities of the Trust arising, directly or indirectly, under
this Agreement will be satisfied out of the assets of the Trust and that no
trustee, officer, agent or holder of shares of beneficial interest of the Trust
or any Fund will be personally liable for such liabilities. No Fund of the Trust
will be liable for the obligations or liabilities of any other Fund.
This Agreement is executed as of April 3, 2007.
FRANKLIN XXXXXXXXX SERVICES, LLC
By:
------------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
COMMONWEALTH ANNUITY AND LIFE
INSURANCE COMPANY
By:
------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: President and Chief Executive
Officer
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SCHEDULE A
ADMINISTRATIVE SERVICES
MAINTENANCE OF BOOKS AND RECORDS
- Assist as necessary to maintain book entry records on behalf of the Funds
regarding issuance to, transfer within (via net purchase orders) and
redemption by the Accounts of Fund shares.
- Maintain general ledgers regarding the Accounts' holdings of Fund shares,
coordinate and reconcile information, and coordinate maintenance of ledgers
by financial institutions and other contract owner service providers.
COMMUNICATION WITH THE FUNDS
- Serve as the designee of the Funds for receipt of purchase and redemption
orders from the Account and to transmit such orders, and payment therefor,
to the Funds.
- Coordinate with the Funds' agents respecting daily valuation of the Funds'
shares and the Accounts' units.
- Purchase Orders
- Determine net amount available for investment in the Funds.
- Deposit receipts at the Funds' custodians (generally by wire
transfer).
- Notify the custodians of the estimated amount required to pay
dividends or distributions.
- Redemption Orders
- Determine net amount required for redemptions by the Funds.
- Notify the custodian and Funds of cash required to meet payments.
- Purchase and redeem shares of the Funds on behalf of the Accounts at the
then-current price in accordance with the terms of each Fund's then current
prospectus.
- Assistance in enforcing procedures adopted on behalf of the Trust to
reduce, discourage, or eliminate market timing transactions in a Fund's
shares in order to reduce or eliminate adverse effects on a Fund or its
shareholders.
PROCESSING DISTRIBUTIONS FROM THE FUNDS
- Process ordinary dividends and capital gains.
- Reinvest the Funds' distributions.
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REPORTS
- Periodic information reporting to the Funds, including, but not limited to,
furnishing registration statements, prospectuses or private offering
memorandum, statements of additional information, reports, solicitations
for instructions, disclosure statements, sales or promotional materials and
any other filings with the Securities and Exchange Commission with respect
to the Accounts invested in the Funds, if necessary.
- Periodic information reporting about the Funds to contract owners,
including necessary delivery of the Funds' prospectus and annual and
semi-annual reports.
FUND-RELATED CONTRACT OWNER SERVICES
- Maintain adequate fidelity bond or similar coverage for all Company
officers, employees, investment advisors and other individuals or entities
controlled by the Company who deal with the money and/or securities of the
Funds.
- Provide general information with respect to Fund inquiries (not including
information about performance or related to sales).
- Provide information regarding performance of the Funds and the subaccounts
of the Accounts.
- Oversee and assist the solicitation, counting and voting or contract owner
voting interests in the Funds pursuant to Fund proxy statements.
OTHER ADMINISTRATIVE SUPPORT
- Provide other administrative and legal compliance support for the Funds as
mutually agreed upon by the Company and the Funds or the Fund
Administrator.
- Relieve the Funds of other usual or incidental administrative services
provided to individual contract owners.
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SCHEDULE B
ADMINISTRATIVE EXPENSE PAYMENT
The Fund Administrator agrees to pay the Company a fee, computed daily and
paid quarterly in arrears, equal to an annual rate as set forth below, applied
to the average daily net assets of the shares of the Funds held in the
subaccounts of the Accounts. The payment will be computed and paid in the manner
described more completely in the Agreement.
DATE OF
BEGINNING OF
PERIOD FOR
PRODUCT NAME/ FUNDS OF THE TRUST FEE COMPUTATION
# COMPANY REGISTRATION NO. (ALL CLASS 2 SHARES UNLESS NOTED) RATE OF FEE
-----------------------------------------------------------------------------------------------------------------
1. Commonwealth Commonwealth Annuity Franklin Growth and Income 0.10% 08/01/06
Annuity and Life Advantage Securities Fund
Insurance Company 33-39702 Franklin Large Cap Growth Securities
Fund
Franklin Small-Mid Cap Growth
Securities Fund
Mutual Shares Securities Fund
Xxxxxxxxx Foreign Securities Fund
2. Commonwealth Commonwealth Annuity Franklin Large Cap Growth Securities 0.10% 08/01/06
Annuity and Life Estate Optimizer Fund
Insurance Company 333-58385 Franklin Small-Mid Cap Growth
Securities Fund
3. Commonwealth Commonwealth Annuity Franklin Growth and Income 0.10% 08/01/06
Annuity and Life Immediate Variable Securities Fund
Insurance Company Annuity Franklin Small-Mid Cap Growth
333-81861 Securities Fund
Franklin Small Cap Value Securities
Fund
Mutual Shares Securities Fund
Xxxxxxxxx Foreign Securities Fund
4. Commonwealth Commonwealth Annuity Franklin Growth and Income 0.10% 08/01/06
Annuity and Life Select Life Plus Securities Fund
Insurance Company 333-84879 Franklin Large Cap Growth Securities
Fund
Franklin Small-Mid Cap Growth
Securities Fund
Franklin Small Cap Value Securities
Fund
Mutual Shares Securities Fund
Xxxxxxxxx Foreign Securities Fund
5. Commonwealth Annuity Scout (Value Templeton Mutual Shares Securities 0.10% 08/01/06
Annuity and Life Generation) Fund
Insurance Company 333-87099 Developing Markets Securities Fund
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DATE OF
BEGINNING OF
PERIOD FOR
PRODUCT NAME/ FUNDS OF THE TRUST FEE COMPUTATION
# COMPANY REGISTRATION NO. (ALL CLASS 2 SHARES UNLESS NOTED) RATE OF FEE
-----------------------------------------------------------------------------------------------------------------
6. Commonwealth Delaware Xxxxxx Xxxxxxxx Small-Mid Cap Growth 0.10% 08/01/06
Annuity and Life Medallion Securities Fund
Insurance Company 333-81281 Mutual Shares Securities Fund
Delaware I, II, and III Xxxxxxxxx Foreign Securities Fund
33-44380 Xxxxxxxxx Growth Securities Fund
7. Commonwealth ExecAnnuity Plus Franklin Growth and Income 0.10% 08/01/06
Annuity and Life 33-39702 Securities Fund
Insurance Company Franklin Large Cap Growth Securities
Fund
Franklin Small-Mid Cap Growth
Securities Fund
Mutual Shares Securities Fund
Xxxxxxxxx Foreign Securities Fund
8. Commonwealth ExecutiveSolutions, Xxxxxxxxx Foreign Securities Fund 0.10% 08/01/06
Annuity and Life Group VEL
Insurance Company 33-92658
9. Commonwealth First Union XXX Xxxxxxxxx Foreign Securities Fund 0.10% 08/01/06
Annuity and Life Form no. 3029-99 Templeton Global Asset Allocation
Insurance Company Fund
10. Commonwealth First Union Private Xxxxxxxxx Foreign Securities Fund 0.10% 08/01/06
Annuity and Life Placement Annuity Templeton Global Asset Allocation
Insurance Company Forms 3034-00 and Fund
3034-99
11. Commonwealth Fulcrum Xxxxxxxxx Foreign Securities Fund 0.10% 08/01/06
Annuity and Life 333-11377
Insurance Company
12. Commonwealth FundQuest (Directed Templeton Mutual Shares Securities 0.10% 08/01/06
Annuity and Life Advisory Solutions) Fund
Insurance Company 333-90543 Developing Markets Securities Fund
13. Commonwealth Optim-L Franklin Large Cap Growth Securities 0.10% 08/01/06
Annuity and Life 333-86274 Fund
Insurance Company Franklin Small-Mid Cap Growth
Securities Fund
Franklin Small Cap Value Securities
Fund
Mutual Shares Securities Fund
Xxxxxxxxx Foreign Securities Fund
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DATE OF
BEGINNING OF
PERIOD FOR
PRODUCT NAME/ FUNDS OF THE TRUST FEE COMPUTATION
# COMPANY REGISTRATION NO. (ALL CLASS 2 SHARES UNLESS NOTED) RATE OF FEE
-----------------------------------------------------------------------------------------------------------------
14. Commonwealth Pioneer C-Vision Franklin Small-Mid Cap Growth 0.10% 08/01/06
Annuity and Life 333-64831 Securities Fund
Insurance Company Pioneer No-Load Xxxxxxxxx Foreign Securities Fund
333-90535 Templeton Global Asset Allocation
Pioneer Vision 2 Fund
33-85916
Pioneer XtraVision
333-81017
15. Commonwealth Premier Choice Franklin Growth and Income 0.10% 08/01/06
Annuity and Life (Agency C-Shares) Securities Fund
Insurance Company 333-38274 Franklin Large Cap Growth Securities
Fund
Franklin Small-Mid Cap Growth
Securities Fund
Franklin Small Cap Value Securities
Fund
Mutual Shares Securities Fund
Xxxxxxxxx Foreign Securities Fund
16. Commonwealth Select Acclaim (Select Franklin Large Cap Growth Securities 0.10% 08/01/06
Annuity and Life Secondary) 333-92115 Fund
Insurance Company Select Charter Franklin Small-Mid Cap Growth
333-63093 Securities Fund
Select No-Load Franklin Small Cap Value Securities
(Advocate) 333-90531 Fund
Select Resource Mutual Shares Securities Fund
33-47216 Xxxxxxxxx Foreign Securities Fund
Select Reward
333-78245
17. Commonwealth Select Inheiritage Franklin Small-Mid Cap Growth 0.10% 08/01/06
Annuity and Life 33-70948 Securities Fund
Insurance Company Select Life II Mutual Shares Securities Fund
33-83604
Select SPL (Select III)
333-58551
18. Commonwealth SPL II Franklin Large Cap Growth Securities 0.15% 08/01/06
Annuity and Life 333-84306 Fund
Insurance Company Franklin Small-Mid Cap Growth
Securities Fund
Franklin Small Cap Value Securities
Fund
Mutual Shares Securities Fund
Xxxxxxxxx Foreign Securities Fund
19. Commonwealth ValuPlus Assurance Xxxxxxxxx Foreign Securities Fund 0.10% 08/01/06
Annuity and Life 333-93031
Insurance Company
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DATE OF
BEGINNING OF
PERIOD FOR
PRODUCT NAME/ FUNDS OF THE TRUST FEE COMPUTATION
# COMPANY REGISTRATION NO. (ALL CLASS 2 SHARES UNLESS NOTED) RATE OF FEE
-----------------------------------------------------------------------------------------------------------------
20. Commonwealth Variable Inheiritage Franklin Large Cap Growth Securities 0.10% 08/01/06
Annuity and Life 33-70948 Fund
Insurance Company Franklin Small-Mid Cap Growth
Securities Fund
21. Commonwealth VEL 87/33-14672 Franklin Large Cap Growth Securities 0.10% 08/01/06
Annuity and Life VEL 91/33-90320 Fund
Insurance Company VEL 93/333-57792 Franklin Small-Mid Cap Growth
VELPlus/33-42687 Securities Fund
22. Commonwealth VUL 2001 Survivorship Franklin Growth and Income 0.10% 08/01/06
Annuity and Life 33-90995 Securities Fund
Insurance Company Franklin Large Cap Growth Securities
Fund
Franklin Small-Mid Cap Growth
Securities Fund
Franklin Small Cap Value Securities
Fund
Mutual Shares Securities Fund
Xxxxxxxxx Foreign Securities Fund
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SCHEDULE C
ADDRESSES FOR NOTICES
If to the Company: Commonwealth Annuity and Life Insurance Company
000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxxx, President and CEO
If to the Fund Administrator: Franklin Xxxxxxxxx Services, LLC
Xxx Xxxxxxxx Xxxxxxx, Xxxx. 000, 0xx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
With a copy to: Franklin Xxxxxxxxx Investments
One Franklin Parkway, Bldg. 000, 0xx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
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