Exhibit 8.17
ADMINISTRATIVE SERVICES AGREEMENT
AMERICAN FIDELITY ASSURANCE COMPANY (the "Insurer") and XXXXXXX XXXXX ASSET
MANAGEMENT, L.P. ("MLAM") mutually agree to the arrangements set forth in this
Agreement (the "Agreement") dated as of May 1, 1999.
WHEREAS, MLAM is the investment adviser to the Xxxxxxx Xxxxx Variable
Series Funds, Inc. (the "Fund"); and
WHEREAS, the Insurer issues variable annuities (the "Policies"); and
WHEREAS, the Insurer and the Fund have entered into an Amended and Restated
Fund Participation Agreement dated May 1, 1999 providing for the sale of shares
of the Fund to certain segregated separate accounts of the Insurer (the
"Participation Agreement"); and
WHEREAS, amounts invested in the Policies by policy holders are deposited
in separate accounts of the Insurer which will in turn purchase shares of
certain portfolios of the Fund, each of which is an investment option offered by
the Policies; and
WHEREAS, the Fund expects to derive substantial savings in administrative
expenses by virtue of having separate accounts of the Insurer as shareholders of
record of Fund shares, rather than numerous public shareholders, and having the
Insurer perform certain administrative services for the Fund (which are
identified on Schedule A hereto); and
WHEREAS, neither MLAM nor the Insurer has any contractual or other legal
obligation to perform such administrative services for the Fund; and
WHEREAS, the Insurer desires to be compensated for providing such
administrative services to the Fund; and
WHEREAS, MLAM desires that the Fund benefit from the lower administrative
expenses expected to result from the administrative services performed by the
Insurer; and
WHEREAS, MLAM accordingly would prefer to compensate the Insurer for
providing administrative services to the Fund from its own funds, derived from
its own resources, including its bona fide profits, rather than request that the
Fund bear the costs of such compensation:
NOW, THEREFORE, the parties agree as follows:
1. Administration Expense Payments.
(a) MLAM agrees to pay the Insurer an amount as identified and described
on Schedule B hereto of that portion of the gross annual investment
advisory fees paid by the Fund to MLAM attributable to certain
investments in portfolios of the Fund by separate accounts of the
Insurer.
(b) MLAM shall calculate the payment contemplated by this Section 1 at the
end of each fiscal quarter and will make such payment to the Insurer,
without demand or notice by the Insurer, reasonably promptly
thereafter.
2. Nature of Payments.
The parties to this Agreement recognize and agree that MLAM's payments to
the Insurer are for administrative services only and do not constitute payment
in any manner for investment advisory services or for costs of distribution of
Policies or of Fund shares and are not otherwise related to investment advisory
or distribution services or expenses. The amount of administrative expense
payments made by MLAM to the Insurer pursuant to Section 1(a) of this Agreement
are not intended to be, and shall not be deemed to be, indicative of MLAM's bona
fide profits from serving as investment adviser to the Fund.
3. Term.
This Agreement shall remain in full force and effect for a period of one
year from the date hereof and shall be automatically renewed thereafter for
successive one-year periods, unless otherwise terminated in accordance with
Section 4 hereof.
4. Termination.
(a) This Agreement will be terminated upon mutual agreement of the parties
hereto in writing.
(b) Either party to this Agreement may, by notice to the other party
delivered more than thirty (30) days prior to the expiration of any
one-year term of this Agreement, elect to terminate this Agreement as
of the end of such term.
(c) This Agreement shall automatically terminate upon (i) the termination
of the Participation Agreement between the Insurer and the Fund, or
(ii) the dissolution or bankruptcy of any party hereto, or in the
event that any party hereto is placed in receivership or
rehabilitation, or in the event that the management of its affairs is
assumed by any governmental, regulatory or judicial authority.
5. Amendment.
This Agreement may be amended only upon mutual agreement of the parties
hereto in writing.
6. Notices.
All notices, requests, demands and other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered
(a) to MLAM, at 000 Xxxxxxxx Xxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000,
attention: Xxxxxxx X. Xxxxxxxxxxx, General Counsel; and
(b) to the Insurer, at American Fidelity Assurance Company, at 0000 X.
Xxxxxxx Xxxxxxxxx, 0 Xxxx, Xxxxxxxx Xxxx, Xxxxxxxx 00000-0000,
attention: Annuity Product Manager, Strategic Development Division.
7. Miscellaneous.
(a) Successors and Assigns. This Agreement shall be binding upon the
parties hereto 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 either 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 hereto any legal
or equitable claim, right or remedy. Rather, this Agreement is
intended to be for the sole and exclusive benefit of the parties
hereto.
(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 New York, without
reference to the conflict of law 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 of the invalid or
unenforceable portion had not been inserted.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
AMERICAN FIDELITY ASSURANCE COMPANY
By: XXXX X. XXX
Name: Xxxx X. Xxx
Title: President
XXXXXXX XXXXX ASSET MANAGEMENT, L.P.
By: Princeton Services, Inc.,
its General Partner
XXXXX X. XXXXX
Xxxxx X. Xxxxx
Executive Vice President
Schedule A
ADMINISTRATIVE SERVICES FOR THE FUND
Maintenance of books and records
o Maintaining an inventory of share purchases to assist transfer agent
in recording issuance of shares
o Performing miscellaneous accounting services to assist transfer agent
in recording transfers of shares (via net purchase orders).
o Reconciliation and balancing of the separate account at the Fund level
in the general ledger and reconciliation of cash accounts at general
account.
Purchase Orders
o Determination of net amount of cash flow into Fund.
o Reconciliation and deposit of receipts at Fund and confirmation
thereof.
Redemption Orders
o Determination of net amount required for redemptions by Fund.
o Notification to Fund of cash required to meet payments.
o Cost of share redemptions.
Reports
o Periodic information reporting to the Fund.
Fund-Related Contract Owner Services
o Telephonic support for contract owners with respect to inquiries about
the Fund (not including information about performance or related to
sales.)
Other Administrative Support
o Sub-Accounting services.
o Providing other administrative support to the Fund as mutually agreed
between the Insurer and the Fund.
o Relieving the Fund of other usual or incidental administrative
services provided to individual shareholders, as mutually agreed in
writing between the parties.
o Preparation of reports to certain third-party reporting services, as
mutually agreed in writing between the parties.
Schedule B
Basis of Fees Applicable Rate of Fee
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From the gross annual investment advisory 10 basis points (0.10%)
fees paid by the Fund to MLAM attributable
to aggregate investments in portfolios of
the Fund by Separate Account B,
established September 20, 1996, of the
Insurer related to insurance contracts
sold other than through Merrill Lunch
Financial Consultants, as a percentage of
the average daily net asset value of such
investments.
