Exhibit 1.8.(a)(2)
ADMINISTRATIVE SERVICES AGREEMENT
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Liberty Life Assurance Company of Boston ("INSURER") and A I M
ADVISORS, INC. ("AIM") (collectively, the "Parties") mutually agree to the
arrangements set forth in this Administrative Services Agreement (the
"Agreement") dated as of ___________, 1999.
WHEREAS, AIM is the investment adviser to AIM Variable Insurance Funds,
Inc. (the "Fund"); and
WHEREAS, AIM has entered into an amended Master Administrative Services
Agreement, dated May 1, 1998, with the Fund ("Master Agreement") pursuant to
which it has agreed to provide, or arrange to provide, certain administrative
services, including such services as may be requested by the Fund's Board of
Directors from time to time; and
WHEREAS, INSURER issues variable life insurance policies and/or
variable annuity contracts (collectively, the "Contracts"); and
WHEREAS, INSURER has entered into a participation agreement, dated
___________ __, 1999 ("Participation Agreement") with the Fund, pursuant to
which the Fund has agreed to make shares of certain of its portfolios
("Portfolios") available for purchase by one or more of INSURER's separate
accounts or divisions thereof (each, a "Separate Account"), in connection with
the allocation by Contract owners of purchase payments to corresponding
investment options offered under the Contracts; and
WHEREAS, INSURER and AIM expect that the Fund, and its Portfolios, can
derive substantial savings in administrative expenses by virtue of having one or
more Separate Accounts of INSURER each as a single shareholder of record of
Portfolio shares, rather than having numerous public shareholders of such
shares; and
WHEREAS, INSURER and AIM expect that the Fund, and its Portfolios, can
derive such substantial savings because INSURER performs the administrative
services listed on Schedule A hereto for the Fund in connection with the
Contracts issued by INSURER; and
WHEREAS, INSURER has no contractual or other legal obligation to
perform such administrative services, other than pursuant to this Agreement and
the Participation Agreement; and
WHEREAS, INSURER desires to be compensated for providing such
administrative services; and
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WHEREAS, AIM desires that the Fund benefit from the lower
administrative expenses resulting from the administrative services performed by
INSURER; and
WHEREAS, AIM desires to retain the administrative services of INSURER
and to compensate INSURER for providing such administrative services;
NOW, THEREFORE, the Parties agree as follows:
Section 1. Administrative Services; Payments Therefor.
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(a) INSURER shall provide the administrative services set out in
Schedule A hereto and made a part hereof, as the same may be amended from time
to time. For such services, AIM agrees to pay to INSURER a quarterly fee
("Quarterly Fee") equal to a percentage of the average daily net assets of the
Fund attributable to the Contracts issued by INSURER ("INSURER Fund Assets") at
the following annual rates:
Annual Rate Total Average Quarterly Net Assets for All Portfolios
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0.__% Less than $100 million
0.__% $100 million or more
(b) AIM shall calculate the Quarterly Fee at the end of each calendar
quarter and will make such payment to INSURER, without demand or notice by
INSURER, within 30 days thereafter, in a manner mutually agreed upon by the
Parties from time to time.
(c) From time to time, the Parties shall review the Quarterly Fee to
determine whether it exceeds or is reasonably expected to exceed the incurred
and anticipated costs, over time, of INSURER. The Parties agree to negotiate in
good faith a reduction to the Quarterly Fee as necessary to eliminate any such
excess or as necessary to reflect a reduction in the fee paid by the Fund to AIM
pursuant to the Master Agreement.
Section 2. Nature of Payments.
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The Parties to this Agreement recognize and agree that AIM's payments
hereunder are for administrative services only and do not constitute payment in
any manner for investment advisory services or for costs of distribution of
Contracts or of Portfolio shares, and are not otherwise related to investment
advisory or distribution services or expenses. INSURER represents and warrants
that the fees to be paid by AIM for services to be rendered by INSURER pursuant
to the terms of this Agreement are to compensate the INSURER for providing
administrative services to the Fund, and are not designed to reimburse or
compensate INSURER for providing administrative services with respect to the
Contracts or any Separate Account.
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Section 3. Term and Termination.
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Any Party may terminate this Agreement, without penalty, on 60 days
written notice to the other Party. Unless so terminated, this Agreement shall
continue in effect for so long as AIM or its successor(s) in interest, or any
affiliate thereof, continues to perform in a similar capacity for the Fund, and
for so long as INSURER provides the services contemplated hereunder with respect
to Contracts under which values or monies are allocated to a Portfolio.
Section 4. Amendment.
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This Agreement may be amended upon mutual agreement of the Parties in
writing.
Section 5. Notices.
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All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have been duly given if delivered
LIBERTY LIFE ASSURANCE
COMPANY OF BOSTON
000 Xxxxxxx Xxx
Xxxxx, Xxx Xxxxxxxxx 00000 Facsimile:
Attn: Xxxxxx X. Xxxxxxx
EVP and COO Individual
LIBERTY LIFE ASSURANCE
COMPANY OF BOSTON
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile:
Attn: Xxxxxxx X. X'Xxxxxxx
A I M Advisors, Inc.
00 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esquire
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Section 6. Miscellaneous.
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(a) Successors and Assigns. This Agreement shall be binding upon the
Parties and their transferees, successors and assigns. The benefits of and the
right to enforce this Agreement shall accrue to the Parties and their
transferees, successors and assigns.
(b) Assignment. Neither this Agreement nor any of the rights,
obligations or liabilities of any Party hereto shall be assigned without the
written consent of the other Party.
(c) Intended Beneficiaries. Nothing in this Agreement shall be
construed to give any person or entity other than the Parties, as well as the
Fund, any legal or equitable claim, right or remedy. Rather, this Agreement is
intended to be for the sole and exclusive benefit of the Parties, as well as the
Fund.
(d) 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.
(e) Applicable Law. This Agreement shall be interpreted, construed, and
enforced in accordance with the laws of the State of Delaware without reference
to the conflict of law principles thereof.
(f) Severability. If any portion of this Agreement shall be found to be
invalid or unenforceable by a court or tribunal or regulatory agency of
competent jurisdiction, the remainder shall not be affected thereby, but shall
have the same force and effect as if the invalid or unenforceable portion had
not been inserted.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date of first above written.
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON
By: __________________________________
Title: ___________________________________
A I M ADVISORS, INC.
By: __________________________________
Title: ___________________________________
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SCHEDULE A
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ADMINISTRATIVE SERVICES FOR
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AIM VARIABLE INSURANCE FUNDS, INC.
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INSURER shall provide certain administrative services respecting the
operations of the Fund, as set forth below. This Schedule, which may be amended
from time to time as mutually agreed upon by INSURER and AIM, constitutes an
integral part of the Agreement to which it is attached. Capitalized terms used
herein shall, unless otherwise noted, have the same meaning as the defined terms
in the Agreement to which this Schedule relates.
A. Records of Portfolio Share Transactions; Miscellaneous Records
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1. INSURER shall maintain master accounts with the Fund, on behalf of
each Portfolio, which accounts shall bear the name of INSURER as the record
owner of Portfolio shares on behalf of each Separate Account investing in the
Portfolio.
2. INSURER shall maintain a daily journal setting out the number of
shares of each Portfolio purchased, redeemed or exchanged by INSURER that are
attributable to Contract owners each day, as well as the net purchase or
redemption orders for Portfolio shares submitted each day, to assist AIM, the
Fund and/or the Fund's transfer agent in tracking and recording Portfolio share
transactions, and to facilitate the computation of each Portfolio's net asset
value per share. INSURER shall promptly provide AIM, the Fund, and the Fund's
transfer agent with a copy of such journal entries or information appearing
thereon in such format as may be reasonably requested from time to time. INSURER
shall provide such other assistance to AIM, the Fund, and the Fund's transfer
agent as may be necessary to cause various Portfolio share transactions effected
by INSURER that are attributed to Contract owners to be properly reflected on
the books and records of the Fund.
3. In addition to the foregoing records, and without limitation,
INSURER shall maintain and preserve all records as required by law to be
maintained and preserved in connection with providing administrative services
hereunder.
B. Order Placement and Payment
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1. INSURER shall determine the net amount to be transmitted to the
Separate Accounts as a result of redemptions of each Portfolio's shares based on
redemption requests by INSURER that are attributable to Contract owners and
shall disburse or credit to the Separate Accounts all proceeds of redemptions of
Portfolio shares. INSURER shall notify the Fund of the cash required to meet
redemption payments.
2. INSURER shall determine the net amount to be transmitted to the Fund
as a result of purchases of Portfolio shares based on purchase payments and
transfers by INSURER that are attributable to Contract owners and that are
allocated to the Separate Accounts investing in each Portfolio. INSURER shall
transmit net purchase payments to the Fund's custodian.
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C. Accounting Services
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INSURER shall perform miscellaneous accounting services as may be
reasonably requested from time to time by AIM, which services shall relate to
the business contemplated by the Participation Agreement between INSURER and the
Fund, as amended from time to time. Such services shall include, without
limitation, periodic reconciliation and balancing of INSURER's books and records
with those of the Fund with respect to such matters as cash accounts, Portfolio
share purchase and redemption orders placed with the Fund, dividend and
distribution payments by the Fund, and such other accounting matters that may
arise from time to time in connection with the operations of the Fund as related
to the business contemplated by the Participation Agreement.
D. Reports
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INSURER acknowledges that AIM may, from time to time, be called upon by
the Fund's Board of Directors ("Board"), to provide various types of information
pertaining to the operations of the Fund and related matters, and that AIM also
may, from time to time, decide to provide such information to the Board in its
own discretion. Accordingly, INSURER agrees to provide AIM with such assistance
as AIM may reasonably request so that AIM can report such information to the
Fund's Board in a timely manner. INSURER acknowledges that such information and
assistance shall be in addition to the information and assistance required of
INSURER pursuant to the Fund's mixed and shared funding SEC exemptive order,
described in the Participation Agreement.
INSURER further agrees to provide AIM with such assistance as AIM may
reasonably request with respect to the preparation and submission of reports and
other documents pertaining to the Fund to appropriate regulatory bodies and
third party reporting services.
E. Fund-related Contract Owner Services
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INSURER agrees to print and distribute, in a timely manner, prospectuses,
statements of additional information, supplements thereto, periodic reports,
proxy materials and any other materials of the Fund required by law or otherwise
to be given to its shareholders, including, without limitation, Contract owners
investing in Portfolio shares. INSURER further agrees to provide telephonic
support for Contract owners, including, without limitation, advice with respect
to inquiries about the Fund and each Portfolio thereof (not including
information about performance or related to sales), communicating with Contract
owners about Fund (and Separate Account) performance, and assisting with proxy
solicitations, specifically with respect to soliciting voting instructions from
Contract owners.
F. Miscellaneous Services
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INSURER shall provide such other administrative support to the Fund as mutually
agreed between INSURER and AIM or the Fund from time to time. INSURER shall,
from time to time, relieve the Fund of other usual or incidental administration
services of the type ordinarily borne by mutual funds that offer shares to
individual members of the general public.
