June , 1999
Xxxxxxx X. Xxxxxx
President
Allmerica Financial Life Insurance and Annuity Company
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Dear Xx. Xxxxxx:
This letter sets forth the agreement between Allmerica Financial Life
Insurance and Annuity 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 invests in one
or more portfolios (collectively, the "Portfolios") of Janus Aspen
Series (the "Trust") pursuant to the Participation Agreement between the
Company and the Trust dated June , 1999, (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. The
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.
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 of the Portfolios (as calculated by the Portfolios) on each
calendar day in a month divided by the number of calendar days in the
month.
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 to the Trust only and do not constitute payment
in any manner for administrative services provided by the
[Name]
[Date]
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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 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 "1940 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
[Name]
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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.
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''
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.
[Name]
[Date]
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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/
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Name:
--------------------------
Title:
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ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY
By: /s/
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Name:
--------------------------
Title:
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Attachment: Schedule A
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,
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 sub-account)
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.
