Exhibit (8)(p)
JANUS CAPITAL CORPORATION
December 6, 1996
Xx. Xxxx X. Xxxxxxxx
Senior Vice President
Xxxxxxx Investors Life Insurance Company
10th Floor, Xxxxxxxx Center
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Dear Xx. Xxxxxxxx:
This letter sets forth the agreement between Annuity Investors Life
Insurance Company (the "Company"), and Janus Capital Corporation (the
"Adviser"), concerning certain administrative services.
1. ADMINISTRATIVE SERVICES AND EXPENSES. Administrative services for the
separate accounts of the Company (the "Accounts") which invest in one or more
portfolios (collectively, the "Portfolios") of Xxxxx Xxxxx Series (the
"Trust") pursuant to the Participation Agreement between the Company and the
Trust dated September 1, 1995 (the "Participation Agreement"), and for
purchasers of variable annuity or life insurance contracts (the "Contracts")
issued through the Accounts are the responsibility of the Company.
Administrative services for the Portfolios, in which the Accounts invest, and
for purchasers of shares of the Portfolios, are the responsibility of the
Trust. These administrative services the Company intends to provide to the
Trust and its Portfolios are set forth in Schedule A attached to this letter
agreement, which may be amended from time to time.
2. SERVICE FEE. In consideration of the anticipated administrative expense
savings resulting to the Trust from the Company's services, the Adviser
agrees to pay the Company a fee ("Service Fee"), computed daily and paid
monthly in arrears, at an annual rate equal to fifteen (15) basis points
(0.15%) of the average monthly value of the shares of the Portfolios held in
the Accounts, such payments to commence following the month in which the
average monthly value of investments by the Accounts reaches $50 million. The
Service Fee will be correspondingly suspended if the average monthly value of
such investments drops below $50 million in any month.
For purposes of this Paragraph 2, the average monthly value of the shares of
the Portfolios will be based on the sum of the daily net asset values
calculated by the Portfolios in a month divided by the number of days in the
month.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000-4923
303/333-3863
3. NATURE OF PAYMENTS. The parties to this letter agreement recognize and agree
that the Adviser's payments to the Company relate to administrative services
only and do not constitute payment in any manner for administrative services
provided by the Company to the Account or to the Contracts, for investment
advisory services or for costs of distribution of Contracts or of shares of
the Portfolios, and that these payments are not otherwise related to
investment advisory or distribution services or expenses.
4. REPRESENTATIONS AND WARRANTIES.
a. The Adviser represents and warrants that in the event the Trustees of the
Trust approve the payment of all or any portion of the Service Fee by the
Trust, the Trust will calculate in the same manner the Service Fee to all
insurance companies that have entered into Service Fee arrangements with
the Adviser and/or the Trust (the "Participating Insurance Companies").
b. The Company represents and warrants that: (1) it and its employees and
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; and (2) it will not purchase
Trust shares of the Portfolios with Account assets derived from
tax-qualified retirement plans except indirectly, through Contracts
purchased in connection with such plans and that the Service Fee 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 Portfolios as
investment vehicles.
c. The Company represents, warrants and agrees that: (1) the payment of the
Service Fee by the Adviser is designed to reimburse the Company for
providing administrative services to the Trust that the Trust would
customarily pay and does not represent reimbursement to the Company for
providing administrative services to the Contract or Account as described
in Section 26 of the Investment Company Act of 1940 (the "!940 Act") and
the rules and regulations thereunder; (2) no portion of the Service Fee
will be rebated by the Company to any Contract owner; and (3) if required
by applicable law, the Company will disclose to each Contract owner the
existence of the Service Fee received by the Company pursuant to this
letter agreement in a form consistent with the requirements of applicable
law and will disclose the amount of the Service Fee, if any, that is paid
by the Trust.
5. INDEMNIFICATION
a. 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 in performing its services under this letter agreement, from the
inaccuracy or breach of any representation made in this letter agreement,
or from a breach of a material provision of this letter agreement, except
to the extent such loss, liability or expense is the result of the
Adviser's willful misfeasance, bad faith or gross negligence in the
performance of its duties.
2
b. The Adviser agrees to indemnify and hold harmless the Company and its
directors, officers, agents and employees from any and all loss, liability
and expense resulting from any gross negligence or willful wrongful act of
the Adviser in performing its services under this letter agreement, from
the inaccuracy or breach of any representation made in this letter
agreement, or from a breach of a material provision of this letter
agreement, except to the extent such loss, liability or expense is the
result of the Company's willful misfeasance, bad faith or gross negligence
in the performance of its duties.
6. TERMINATION.
a. Either party may terminate this letter agreement, without penalty, on
sixty (60) days' written notice to the other party.
b. This letter agreement will terminate at the option of either party in the
event of the termination of the Participation Agreement.
c. This letter agreement will terminate immediately upon the determination of
either party, with the advice of counsel, that the payment of the Service
Fee is in conflict with applicable law.
7. AMENDMENT. This letter agreement may be amended only upon mutual agreement of
the parties hereto in writing.
8. CONFIDENTIALITY. The terms of this letter agreement will be treated as
confidential and will not be disclosed to the public or any outside party
except with each party's prior written consent, as required by law or
judicial process or as provided in paragraph 4c herein.
9. ASSIGNMENT. This letter agreement may not be assigned (as that term is
defined in the 1940 Act) 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 letter agreement,
including the payment of all or any portion of the Service Fee, to the Trust
upon thirty (30) days' written notice to the Company.
10.GOVERNING LAW. This letter agreement will be construed and the provisions
hereof interpreted under and in accordance with the laws of the State of
Colorado.
11.COUNTERPARTS. This letter 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.
If this letter agreement is consistent with your understanding of the matters we
discussed concerning administrative expense payments, kindly sign below and
return a signed copy to us.
Very truly yours,
JANUS CAPITAL CORPORATION
By: /S/ XXXXX X. XXXXXXXX
---------------------------
Name: XXXXX X. XXXXXXXX
Title: VICE PRESIDENT
ANNUITY INVESTORS LIFE INSURANCE COMPANY
By: /S/ XXXX X. XXXXXXXX
----------------------------
Name: XXXX X. XXXXXXXX
Title: SENIOR VICE PRESIDENT
Attachment: Schedule A
3
Schedule A
Pursuant to the letter agreement to which this Schedule is attached, the Company
will perform administrative services including, but not limited to, the
following:
1. Print and mail to Contract owners copies of the Portfolios'
prospectuses, proxy materials, periodic fund reports to shareholders and other
materials that the Trust is required by law or otherwise to provide to its
shareholders.
2. Provide Contract owner services including, but not limited to,
financial consultants' advice with respect to inquiries related to the
Portfolios (not including information about performance or related to sales) and
communicating with Contract owners about Portfolio (and subaccount) performance.
3. Provide other administrative support for the Trust as mutually
agreed to by the Company and the Adviser and relieve the Trust of other usual or
incidental administrative services provided to individual Contract owners.
