SERVICE AGREEMENT
WITH
INVESTMENT ADVISER
AGREEMENT, effective as of December 8, 1997, between Janus Capital
Corporation (the "Adviser"), a Colorado corporation, and Aetna Insurance Company
of America (the "Company"), a Connecticut corporation, for the provision of
described administrative services by the Company in connection with the sale of
shares of Janus Aspen Series (the "Fund") as described in the Fund Participation
Agreement dated December 8, 1997 between the Company, the Fund and the Adviser
(the "Fund Participation Agreement").
In consideration of their mutual promises, the Adviser and the Company agree as
follows:
1. The Company agrees to provide the following services to the Adviser and
the Fund:
a. responding to inquiries from owners of or Participants in the
Company variable annuity contracts and variable life insurance
policies using the Funds as an investment vehicle ("Contract
Owners") regarding the services performed by the Company that
relate to the Funds;
b. providing information to Adviser and Contract Owners with respect
to Fund shares attributable to Contract Owner accounts;
c. communicating directly with Contract Owners concerning the Funds'
operations;
d. providing such other similar services as Adviser may reasonably
request pursuant to Adviser's agreement with the Funds to the
extent permitted under applicable federal and state requirements.
2. (a) Administrative services to Contract Owners and Participants shall
be the responsibility of the Company and shall not be the
responsibility of the Fund or the Adviser. The Adviser recognizes
the Company as the sole shareholder of Fund shares issued under
the Fund Participation Agreement, and that substantial savings
will be derived in administrative expenses, such as significant
reductions in postage expense and shareholder communications, by
virtue of having a sole shareholder for each of the Accounts
rather than multiple shareholders. In consideration of the savings
resulting from such arrangement, and to compensate the Company for
its costs, the Adviser agrees to pay to the Company and the
Company agrees to accept as full compensation for all services
rendered hereunder an amount described in Schedule A attached
hereto and made a part of this Agreement as may be amended from
time to time with the mutual consent of the parties hereto.
(b) The Company represents and warrants that the Adviser's payments to
the Company are for administrative services only and do not
constitute payment in any manner for investment advisory services
or for costs of distribution.
(c) For the purposes of computing the administrative fee reimbursement
contemplated by this Section 2, the average aggregate amount
invested by the Company over a one month period shall be computed
by totaling the Company's aggregate investment (share net asset
value multiplied by total number of shares held by the Company) on
each business day during the month and dividing by the total
number of business days during each month.
(d) The Adviser will calculate the reimbursement of administrative
expenses at the end of each month and will make such reimbursement
to the Company within 30 days thereafter. The reimbursement
payment will be accompanied by a statement showing the calculation
of the monthly amounts payable by the Adviser and such other
supporting data as may be reasonably requested by the Company.
Payment will be wired by the Adviser to an account designated by
the Company.
3. (a) The Company represents and warrants that: (1) it and its employees
meet and it will use its best efforts to assure that its agents
meet the requirements of applicable law, including but not limited
to federal and state securities law and state insurance law, for
the performance of services contemplated herein; (2) the fee
provided herein does not include any payment to the Company that
is prohibited under the Employee Retirement Income Securities Act
of 1974 ("ERISA") with respect to any assets of a Contract Owner
invested in a Contract using the Funds as investment vehicles; and
(3) the Company is (i) registered as a broker-dealer (ii) has
entered into arrangements with an affiliate to act as its
broker-dealer, or (iii) is not required to be registered as a
broker-dealer pursuant to the Securities Exchange Act of 1934 (the
"Exchange Act") or any applicable state securities laws in order
to enter into and perform the services set forth in this
Agreement.
(b) The Company represents, warrants and agrees that, if required by
applicable law, as determined solely in discretion of the Company,
the Company will disclose to each Contract Owner the existence of
the fee received by the Company pursuant to this Agreement in a
form consistent with the requirements of applicable law.
4. The Company agrees to indemnify and hold harmless the Adviser and its
directors, officers, and employees from any and all loss, liability and
expense resulting from any gross negligence or willful wrongful act of
the Company or its employees or agents under this Agreement or a breach
of a material provision of this Agreement,
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except to the extent such loss, liability or expense is the result of
the Adviser's misfeasance, bad faith or gross negligence in the
performance of its duties.
5. The Adviser agrees to indemnify and hold harmless the Company and its
directors, officers, and employees from any and all loss, liability and
expense resulting from any gross negligence or willful wrongful act of
the Adviser or its employees or agents under this Agreement or a breach
of a material provision under this Agreement, except to the extent such
loss, liability or expense is the result of the Company's own
misfeasance, bad faith or gross negligence in the performance of its
duties.
6. Either party may terminate this Agreement, without penalty, (i) on sixty
(60) days written notice to the other party, for any cause or without
cause, or (ii) on reasonable notice to the other party, if it is not
permissible to continue the arrangement described herein under laws,
rules or regulations applicable to either party or the Fund, or if the
Participation Agreement is terminated.
This Agreement may not be assigned (as that term is defined in the 0000
Xxx) by either party without the prior written approval of the other
party, which approval will not be unreasonably withheld, except that the
Adviser may assign its obligations under this Agreement, including the
payment of all or any portion of the fee, to the Fund upon one hundred
and twenty (120) days' written notice to the Company if legally
permissible to do so and provided Fund and/or Adviser agree to pay for
any costs or expenses incurred with such charge (e.g. prospectuses, etc.)
unless such change is able to be made in the ordinary course of updating
the prospectus for its annual update.)
7. The terms of this arrangement will be held confidential by each party
except to the extent that either party or its counsel may deem it
necessary under applicable law to disclose this arrangement.
8. This Agreement together with the Fund Participation Agreement represents
the entire Agreement of the parties on the subject matter hereof and it
cannot be amended or modified except in writing, signed by the parties.
This Agreement may be executed in one or more separate counterparts, all
of which, when taken together, shall constitute one and the same
Agreement.
9. All notices and other communications hereunder shall be given or made in
writing and shall be delivered personally, or sent by telex, telecopier
or registered or certified mail, postage prepaid, return receipt
requested, to the party to whom they are directed at the following
addresses, or at such other addresses as may be designated by notice from
such party to the other party.
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To Aetna:
Aetna Insurance Company of America
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Counsel
To Adviser:
Janus Capital Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Any notice, demand or other communication given in a manner prescribed in this
Section 9 shall be deemed to have been delivered on receipt.
IN WITNESS WHEREOF, the parties to this Agreement have caused this Agreement to
be executed by their authorized officers as of the day and year first above
written.
JANUS CAPITAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------
Date: 12/2/97
-----------------------------
AETNA INSURANCE COMPANY OF AMERICA
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------
Date: 12/8/97
-----------------------------
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Schedule A
In consideration of the services provided by the Company, the Adviser agrees to
pay the Company an amount equal to 20 basis points (0.20%) per annum on the
first $500 million of the average aggregate amount invested by the Company in
the Fund under the Fund Participation Agreement, and 25 basis points (0.25%) per
annum on the total average aggregate amount invested by the Company in the Fund
under the Fund Participation Agreement, in excess of $500 million after the
total aggregate assets invested by the Company in the Fund exceeds $1.25
billion.
Dated this 8th day of December, 1997.
JANUS CAPITAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------
Date: 12/2/97
-----------------------------
AETNA INSURANCE COMPANY OF AMERICA
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------
Date: 12/8/97
-----------------------------
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