ADMINISTRATIVE SERVICES AGREEMENT
This Agreement is made as of the 21st day of November 2000, by and between
INVESCO Funds Group, Inc. ("INVESCO"), and National Life Insurance Company
("National Life"), a Vermont corporation, collectively, the "Parties."
WITNESSETH:
WHEREAS, INVESCO serves as the administrator for the INVESCO Variable
Investment Funds, Inc. ( the "Company"); and
WHEREAS, National Life has entered into an agreement, dated November 21,
2000, 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 National Life 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 National Life, at
its expense, will provide various administrative and shareholder contact
services with respect to prospective and actual Variable Contract Owners of
National Life; 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:
National Life agrees to provide services to the Company and INVESCO including
the following:
a) responding to inquiries from National Life Contract Owners using one
or more of the Portfolios as an investment vehicle regarding the
services performed by National Life 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, National Life 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 National Life 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, National Life, and
having that shareholder be responsible for the servicing of the Contract Owners,
INVESCO will pay an administrative service fee to National Life, as described
below:
a) INVESCO shall pay to National Life 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 National Life, at the annual rate of 0.25% on the aggregate
net assets placed by National Life 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 National Life 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 National Life 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 National Life 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) National Life 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 National Life 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 National Life
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 National Life 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
National Life Insurance Company
National Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: General Counsel
FAX: 000 000-0000
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. NATIONAL LIFE INSURANCE COMPANY
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx von Gal
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Xxxxxx X. Xxxxxx Name: Xxxxxx von Gal
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
