ADMINISTRATIVE SERVICES AGREEMENT
WESTERN-SOUTHERN LIFE ASSURANCE COMPANY ("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 March 31, 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 insurgence policies and/or
variable annuity contracts (collectively, the "Contracts"); and
WHEREAS, INSURER has entered into a participation agreement, dated
March 31, 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
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.
(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
.0% Less than $10 million
.15% $10 million but less than $200 million
.20% $200 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.
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.
SECTION 3. TERM AND TERMINATION.
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.
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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
Western-Southern Life Assurance Company
000 Xxxxxxxx
Xxxxxxxxxx, Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. XxXxxxxx
A I M ADVISORS, INC.
00 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esquire
SECTION 6. MISCELLANEOUS
(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 tile 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.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date of first above written.
LIFE INSURANCE, COMPANY
By:
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Title: Senior Vice President
A I M ADVISORS, INC.
By:
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Title:
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SCHEDULE A
ADMINISTRATIVE SERVICES FOR
AIM VARIABLE INSURANCE FUNDS, INC.
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
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 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 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
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
Contract owner redemption requests 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 Contract owner purchase
payments and transfers allocated to the Separate Accounts investing in each
Portfolio. INSURER shall transmit net purchase payments to the Fund's custodian.
C. ACCOUNTING SERVICES
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
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
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
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,
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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.
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