SERVICE AGREEMENT
WITH
INVESTMENT ADVISER
AGREEMENT, effective as of May 1, 1998, between Aeltus Investment
Management, Inc. (the "Adviser"), a Connecticut Corporation, and Aetna Life
Insurance and Annuity Company (the "Company"), a Connecticut corporation, for
the provision of described administrative services by the Company in connection
with the sale of shares of Aetna Variable Fund, Aetna Variable Encore Fund,
Aetna Income Shares, Aetna Balanced VP, Inc., Aetna GET Fund, on behalf of each
of its series, Aetna Generation Portfolios, Inc., on behalf of each of its
series, and Aetna Variable Portfolios, Inc., on behalf of each of its series
(the "Funds") as described in the Fund Participation Agreement dated May 1,
1998, between the Company, the Funds 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:
a. responding to inquiries from owners of, or participants in,
the Company variable annuity or variable life contracts using
the Funds as an investment vehicle ("Contractholders")
regarding the services performed by the Company that relate to
the Funds;
b. providing information to Adviser and Contractholders with
respect to Fund shares attributable to Contractholder
accounts;
c. communicating directly with Contractholders 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 Contractholders and participants
shall be the responsibility of the Company and shall not be
the responsibility of the Funds 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 shareholder
services, 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 amounts
indicated on the attached Schedule A, with respect to all
shares sold through the Company.
(b) The parties agree 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.
3. 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 under this Agreement or a breach of a material provision of
this Agreement, 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.
4. 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 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.
5. 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 Funds, or
if the Participation Agreement is terminated.
6. 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 to disclose this arrangement.
7. This 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.
8. 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, or recognized overnight courier service 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.
To the Company:
Aetna Life Insurance and Annuity Company
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
To the Adviser:
Aeltus Investment Management, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx
Any notice, demand or other communication given in a manner prescribed in this
Section 8 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.
AELTUS INVESTMENT MANAGEMENT, INC.
By: /s/J. Xxxxx Xxx
______________________________________
Managing Director and Chief Operating Officer
AETNA LIFE INSURANCE AND ANNUITY COMPANY
By: /s/Xxxxx X. Xxxxxxx
_________________________________________
Senior Vice President
