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EXHIBIT (8)(a)(ii)
September 1, 1998
Mr. Xxxxx Xxxxxxx
President - Financial SBU
Xxxxxx Investor Life Insurance Company
0 Xxxxxx Xxxxx
Xxxx Xxxxx, XX 00000-0000
Dear Xx. Xxxxxxx:
We are please that Xxxxxx Investors Life Insurance Company (the "Company") has
entered into an agreement dated Sept. 1, 1998, with Evergreen Variable Annuity
Trust (the "Trust") providing for the purchase by the Company of shares of the
Trust for certain of the Company's separate accounts to fund benefits for
Variable Insurance Products (the "Participation Agreement"). This letter sets
forth the agreement between the Company and Evergreen Asset Management Corp.,
First Union National Bank of North Carolina and Keystone Investment Management
Company (collectively the "Advisers" and individually the "Adviser") concerning
certain administrative services the Company will provide the Trust and its
Portfolios.
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 the Trust pursuant to
the Participation Agreement, and for purchasers of certain Variable
Insurance Products issued through the Accounts, are the responsibility of
the Company. Administrative services for the Portfolios, in which the
Account invests, and for purchasers of shares of the Portfolios, are the
responsibility of the Trust. Notwithstanding the foregoing, however, the
Company will provide to the Trust and its Portfolios certain administrative
services, as set forth below and which may be amended from time to time,
including, but not limited to, the following:
a) Aggregate allocation, transfer, and liquidation orders of the Account.
b) Print and mail to owners of Variable Insurance Products copies of the
Portfolios' prospectuses and other materials that the Trust is
required by law or otherwise to provide to its shareholders, but that
the Company is not otherwise required to provide to owners of Variable
Insurance Products.
c) Provide financial consultants with advice with respect to inquiries
related to the Portfolios (not including information related to
sales).
d) Provided such other administrative support for the Trust as mutually
agreed to by the Company and the Advisers to the extent permitted or
required under applicable statutes, and relieve the Trust of other
usual or incidental administrative services provided to individual
owners of Variable Insurance Products.
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2. Service fee. In consideration of the anticipated administrative expense
savings resulting to the Trust from the Company's services, the Advisers
agree to pay the Company at the end of each calendar month a fee ("Service
Fee") which will accrue daily at an annual rate of 25 basis points (.25%)
of the first $50,000,000 of the aggregate net asset value of all of the
issued and outstanding shares of the Portfolios held in the subaccounts of
the Accounts, reduced to 20 basis points (.20%) per annum of such aggregate
net asset value in excess of $50,000,000 up to $100,000,000 and further
reduced to eighteen basis points (.18%) of such aggregate net asset value
in excess of $100,000,000.
3. Nature of Payments. The parties to this letter agreement recognize and
agree that the Advisers' 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
Variable Insurance Products, for investment advisory services or for costs
of distribution of Variable Insurance Products or of shares of the Portfo-
lios and that these payments are not otherwise related to investment advi-
sory or distribution services or expenses.
4. Representations and Warranties:
a) Each 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 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
Variable Insurance Products 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 an owner of a Variable
Insurance Product invested in a Variable Insurance Product using the
Portfolios as investment vehicles.
c) The Company represents, warrants and agrees that: (1) the payment of
the Service Fee by the Advisers 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 Variable
Insurance Products or Accounts; (2) no portion of the Service Fee will
be rebated by the Company to any owners of Variable Insurance
Products; and (3) if the Company or the Adviser, with advice of
counsel, determines that it is required or appropriate under
applicable law, the Company will disclose to each owner of a Variable
Insurance Product the existence of the Service Fee received by
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the Company pursuant to this letter agreement 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 Advisers and
their 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 Advisers' willful
misfeasance, bad faith or gross negligence in the performance of
their duties.
b) The Advisers agree 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 willfil
wrongful act of the Advisers in performing their services under this
letter agreement, from the inaccuracy or breach of any 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. The Advisers
also agree to indemnify and hold harmless the Company and its
directors, officers, agents, and employees from any and all loss,
liability and expense resulting from the Trust's failure, whether
unintentional or in good faith or otherwise, to comply with the
diversification requirements set forth in Section 817(h) of the
Internal Revenue Code of 1986, as amended, and the rules and
regulations thereunder.
6. Termination.
a) Any party may terminate this letter agreement, without penalty, on
sixty (60) days' written notice to the other parties.
b) This letter agreement will terminate at the option of any party in the
event of the termination of the Participation Agreement.
c) This letter agreement will terminate immediately upon the
determination of any 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 process or as provided in paragraph 4c herein.
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9. Assignment. This letter agreement may not be assigned (as that term is
defined in the Investment Company Act of 1940) by any party without the
prior written approval of the other parties, which approval will not be
unreasonably withheld, except that the Advisers may assign their
obligations under this letter agreement, including the payment of all or
any portion of the Service Fee, to the Trust or to an entity under common
control with the Advisers or that serves as a successor investment adviser
to the Trust, in each case 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
Illinois.
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 you agree to the foregoing, please sign the enclosed copy of this letter and
return it to Xxxxxxx X. Xxxxxx, The Evergreen Fund, 000 Xxxxxxxx Xxxxxx, Xxxxxx,
XX 00000.
Sincerely,
Evergreen Asset Management Corp. Keystone Investment Management Company
By: /s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxx
------------------------ -------------------------
Name: Name:
Title: Title:
AGREED
First Union National Bank Xxxxxx Investors Life Insurance
of North Carolina Company
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxxxx, Xx.
------------------------ ---------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxxx X. Xxxxxxx, Xx.
Title: Senior Vice President Title: Vice President
