OppenheimerFunds® OppenheimerFunds, Inc. 498 Seventh Avenue, 10th Floor New York, NY 10018 Tel 212.323.0200
EXHIBIT 8.12(e)
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OppenheimerFunds® OppenheimerFunds, Inc. 000 Xxxxxxx Xxxxxx, 00xx Xxxxx Xxx Xxxx, XX 00000 Tel 000.000.0000 |
May 1, 2003
Xxxxxx Investors Life Insurance Company
0000 XxXxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxxx
Dear Xx. Xxxxxxxxxx:
The following constitutes a letter of understanding (the “Agreement”) whereby OppenheimerFunds, Inc. (“OFI”) intends to compensate Xxxxxx Investors Life Insurance Company (“Zurich Xxxxxx”) for providing administrative support services to contract owners of any Zurich Xxxxxx variable annuity and variable life insurance products (“Zurich Xxxxxx Products”) with contract values allocated to investment options investing in Service shares of Xxxxxxxxxxx Variable Account Funds (“OVAF”), a series investment company dedicated to insurance company separate accounts for which OFI acts as investment manager. Such services are described in Schedule A hereto, which is made a part of the Agreement. This Agreement may be cancelled by any party upon ten days written notice if it is not permissible to continue this Agreement under laws, rules or regulations .applicable to OVAF, OFI or Zurich Xxxxxx. Either party may also cancel this Agreement upon six months’ written notice. Termination will not, however, affect the rights of the Insurance Company Recipient to receive payments under the Distribution and Service Plan Agreements.
This Agreement will be effective as of May 1, 2003. Payment will be made to Zurich Xxxxxx quarterly during the term this Agreement is in effect, no later than thirty days following the end of the quarter starting with the quarter ending June 30, 2003. Payments shall be computed and paid as set forth in Schedule C hereto.
Other terms and conditions:
A. Except to the extent that counsel to Zurich Xxxxxx, OFI or OVAF may deem it necessary or advisable to disclose in their respective prospectuses or elsewhere, the terms of this Agreement will be held confidential by each party. The party making such disclosure shall provide advance written notification, including particulars, to the other party that it is making such disclosure.
B. Except as stated in the Participation Agreement (the “Participation Agreement”) entered into by Zurich Xxxxxx, OFI and OVAF as of May 1, 2003, no other fees, sales meeting costs or other expenses will be required of OFI (or any subsidiary or division) or OVAF in connection with the Zurich Xxxxxx Products.
C. OFI will be responsible for calculating the fee payable hereunder.
D. Each party shall provide each other party or its designated agent reasonable access to its records to permit it to audit or review the accuracy of the charges submitted for payment under this Agreement.
E. OFI may transfer or assign its rights, duties and obligations hereunder or interest herein to any entity owned, directly or indirectly, by Xxxxxxxxxxx Acquisition Corp. (OFI’s ultimate parent corporation) or to a successor in interest pursuant to a merger, reorganization, stock sale, asset sale or other transaction, without Zurich Xxxxxx’x consent.
F. Should any term of this Agreement conflict with the terms of the Participation Agreement, then the Participation Agreement shall control.
We look forward to a long and prosperous relationship. If this Agreement meets with your approval, please have the enclosed duplicate copy of this letter signed on behalf of Zurich Xxxxxx, and return it to my attention.
| Sincerely, |
| /s/ Xxxxxxxx Xxxxxx |
| Xxxxxxxx Xxxxxx |
| Vice President |
| OppenheimerFunds, Inc. |
Agreed to and accepted on behalf of
XXXXXX INVESTORS LIFE INSURANCE COMPANY
| By: | /s/ [illegible] Xxxxxx | |
| Title: |
Schedule A
(Administrative Support Services to be Provided by Zurich Xxxxxx)
Maintenance of Books and Records
Assist as necessary to maintain book entry records on behalf of the Funds regarding issuance to, transfer within (via net purchase orders) and redemption by the Accounts of Fund shares. Maintain general ledgers regarding the Accounts’ holdings of Fund shares, coordinate and reconcile information, and coordinate maintenance of ledgers by other contract owner service providers.
Communication with the Funds
Serve as the designee of the Funds for receipt of purchase and redemption orders from the Account and transmit such orders, and payment therefor, to the Funds. Coordinate with the Funds’ agents respecting daily valuation of the Funds’ shares and the Accounts’ units. Purchase Orders
| — | Determine net amount available for investment in the Funds. |
| — | Deposit receipts at the Funds or the Funds’ custodian (generally by wire transfer). |
| — | Determine net amount required for redemption from the Funds. Notify the custodian and Funds of cash required to meet payments. |
Purchase and redeem shares of the Funds on behalf of the Accounts at the then current price in accordance with the terms of the Participation Agreement. Distribute the Fund’s prospectus, proxy materials, communications and reports to Contract owners.
Processing Distributions from the Funds
Record ordinary dividends and capital gain distributions.
Reports
Periodic information reporting to the Funds, including, but not limited to, furnishing registration statements, prospectuses, statements of additional information, reports, solicitations for voting instructions, and any other SEC filings with respect to the Accounts invested in the Funds, as not otherwise provided for. Periodic information reporting about the Funds to Contract owners, including any necessary delivery of the Funds’ prospectus and annual and semi-annual reports to contract owners, as not otherwise provided for. Provide sales data in a format mutually agreed upon. This data will only be used to support the activities of Zurich Xxxxxx products.
Fund-related Contract Owner Services
Provide ministerial information with respect to Fund inquiries (but excluding fund allocation recommendations, performance projections or any other sales-related information or advice). Oversee and assist the solicitation, counting and voting of contract owner voting interests in the Funds pursuant to Fund proxy statements.
Other Administrative Support
Provide other administrative and support for the Funds as mutually agreed upon by Zurich Xxxxxx and the Funds or the Fund Administrator. Relieve the Funds of other usual or incidental administrative services provided to individual contract owners.
Schedule B
(Zurich Xxxxxx Assets and Zurich Xxxxxx-Administered Assets Upon Which Payments
to Zurich Xxxxxx will be Computed)
| Separate Accounts |
Products | |
| KILICO Variable Annuity Separate Account | Xxxxxx Advantage III | |
| Zurich Preferred Zurich Preferred Plus | ||
| Zurich Archway | ||
Schedule C
Payments under this Agreement shall be computed on the average net assets of Service shares of OVAF that are attributable to variable life or variable annuity products listed on Schedule B hereto (“Zurich Xxxxxx Assets”) during the prior quarter. Such payments will be subject to a limit of one-third of the average management fee paid by that OVAF series to OFI during the prior quarter, at a fee computed each business day, at the following annual rate:
| • | For Zurich Xxxxxx Assets not exceeding $100 million, OFI or its affiliates will pay an administrative assistance fee to Zurich Xxxxxx of 0.15% per annum. |
| • | For Zurich Xxxxxx Assets of $100 million or more, OFI or it affiliates will pay an administrative assistance fee to Zurich Xxxxxx of 0.20% per annum. |
OFI and Zurich Xxxxxx each acknowledges that it intends Zurich Xxxxxx to qualify as an “Insurance Company Recipient” as that term is used in OVAF’s Distribution and Service Plans and Agreements for its Service shares, whereby during the duration of this Agreement, Zurich Xxxxxx may receive additional payments of 0.25% per annum of Zurich Xxxxxx Assets during the prior quarter, subject to the terms and conditions of those Distribution and Service Plans and Agreements. In the event that payment rate is increased at any time, the payment rate in the first paragraph of this Schedule C shall be reduced by the amount such rate is increased above 0.25% per annum.
Payments made to Zurich Xxxxxx under this Agreement will be made by federal funds wire to:
| Bank: | Xxxxx Fargo Minneapolis, MN ABA 000000000 |
| Account Name: | Xxxxxx Investors Life Insurance Company Account Number: 0000000000 Reference: Service Fees | |
| Reference: | Attention: Xxxxx Xxxxxxx |
Notification of wire transfers shall be provided by e-mail or fax to:
| Xxxxxxxxx Xxx Separate Account Accounting Email: xxxxxxxxx.xxx@xxxxxxxxxxxx.xxx Fax: 000-000-0000 |
or to such other person, address, facsimile numbers or accounts as Zurich Xxxxxx may subsequently direct in writing.
