ADMINISTRATIVE SERVICES AGREEMENT
This Agreement is made as of the 15th day of July, 2001, by and between
INVESCO Funds Group, Inc. ("INVESCO"), and Golden American Life Insurance
Company ("Golden American"), a Delaware corporation, collectively, the
"Parties."
WITNESSETH:
-----------
WHEREAS, INVESCO serves as the administrator for the INVESCO Variable
Investment Funds, Inc. (the "Company"); and
WHEREAS, Golden American has entered into an agreement, dated July 15,
2001, with the Company, INVESCO Distributors, Inc. and INVESCO (the " Fund
Participation Agreement") pursuant to which the Company will make shares of
certain of its managed portfolio of securities ("Portfolios") available to
certain variable life insurance and/or variable annuity contracts offered by
Golden American through certain separate accounts (the "Separate Accounts") at
net asset value and with no sales charges, subject to the terms of the Fund
Participation Agreement; and
WHEREAS, the Fund Participation Agreement provides that the Company will
bear the costs of preparing, filing with the Securities and Exchange Commission,
printing or duplicating and mailing the Company's (or the Portfolios')
prospectus, statement of additional information and any amendments or
supplements thereto, periodic reports to shareholders, Fund proxy material and
other shareholder communications (collectively, the "Fund Materials") required
by law to be sent to owners of Contracts ("Contract Owners") who have allocated
any Contract value to a Portfolio; and
WHEREAS, the Fund Participation Agreement provides that Golden American,
at its expense, will provide various administrative and shareholder contact
services with respect to prospective and actual Variable Contract Owners of
Golden American; and
WHEREAS, the Fund Participation Agreement makes no provision for the rate
at which each party shall incur expenses in connection with the servicing of
Contract Owners who have allocated Contract value to a portfolio, including, but
not limited to, responding to various Contract Owner inquiries regarding a
Portfolio; and
WHEREAS, the Parties hereto wish to allocate the expenses in a manner
that is fair and equitable, and consistent with the best interests of Contract
Owners; and
WHEREAS, the Parties hereto wish to establish a means for allocating the
expenses that does not entail the expense and inconvenience of separately
identifying and accounting for each item of Fund expense;
NOW THEREFORE, in consideration of the mutual benefits and promises
contained herein, the Parties hereto agree as follows:
I. SERVICES PROVIDED:
------------------
Golden American agrees to provide services to the Company and INVESCO including
the following:
a) responding to inquiries from Golden American Contract Owners using one or
more of the Portfolios as an investment vehicle regarding the services
performed by Golden American as they relate to INVESCO, the Company or its
Portfolios;
b) providing information to INVESCO or the Company and to Contract Owners with
respect to shares attributable to Contract Owner accounts;
c) communicating directly with Contract Owners concerning INVESCO or the
Company's operations;
e) providing such similar services as INVESCO or the Company may reasonably
request to the extent permitted or required under applicable statutes,
rules and regulations.
II. EXPENSE ALLOCATIONS:
--------------------
Subject to Section III hereof, and the provisions of Article IV of the Fund
Participation Agreement, Golden American or its affiliates shall initially bear
the costs of the following:
a) printing and distributing all Fund Materials to be distributed to
prospective Contract Owners except as may otherwise be provided in the Fund
Participation Agreement;
b) printing and distributing all sales literature or promotional material
developed by Golden American or its affiliates and relating to the
Contracts;
c) servicing Contract Owners who have allocated Contract value to a Portfolio,
which servicing shall include, but is not limited to, the items listed in
Paragraph I of this Agreement.
III. PAYMENT OF EXPENSES:
-------------------
In recognition of the substantial savings in administrative expenses to INVESCO
and the Company by virtue of having a sole shareholder, Golden American, and
having that shareholder be responsible for the servicing of the Contract Owners,
INVESCO will pay an administrative service fee to Golden American, as described
below:
a) INVESCO shall pay to Golden American an Administrative Services Fee
(hereinafter, the "Quarterly Fee") equal to a percentage of the average
daily net assets of the Portfolios attributable to Contracts offered by
Golden American, at the annual rate of 0.25% on the aggregate net assets
placed by Golden American in the Portfolios of the Company designated in
Schedule B of the Fund Participation Agreement, as may be amended from time
to time. The Quarterly Fee is in consideration of the expenses incurred by
Golden American pursuant to Section II hereof. The payment of the Quarterly
Fee shall commence on the date first indicated above.
b) INVESCO shall pay to Golden American an additional Support Fee
(hereinafter, the "Support Fee") equal to a percentage of the average daily
net assets of the Portfolios attributable to Contracts offered by Golden
American, at the annual rate of 0.225% on the aggregate net assets placed
by Golden American in the Portfolios of the Company designated in Schedule
B of the Fund Participation Agreement, as may be amended from time to time.
The Support Fee is in consideration of the expenses incurred by Golden
American pursuant to Section II hereof. The payments of the Support Fee
shall commence on the date first indicated above.
c) From time to time, the Parties hereto shall review the Quarterly Fee to
determine whether it reasonably approximates the incurred and anticipated
costs, over time, of Golden American in connection with its duties
hereunder. The Parties agree to negotiate in good faith any change to the
Quarterly Fee proposed by another Party in good faith.
c) This Agreement shall not modify any of the provisions of Article IV or
Article VI of the Fund Participation Agreement, but shall supplement those
provisions.
IV. TERM OF AGREEMENT:
------------------
This Agreement shall continue in effect for so long as Golden American or its
successor(s) in interest, or any affiliate thereof, continues to hold shares of
the Company or its Portfolios, and continues to perform in a similar capacity
for the Company and INVESCO.
V. INDEMNIFICATION:
----------------
a) Golden American agrees to indemnify and hold harmless the Company and
INVESCO, and their officers, employees, and directors, from any and all
loss, liability and expense resulting from the gross negligence or willful
wrongful act of Golden American under this Agreement, except to the extent
such loss, liability or expense is the result of the willful misfeasance,
bad faith or gross negligence of the Company or INVESCO in the performance
of its duties, or by reason of the reckless disregard of their obligations
and duties under this Agreement.
b) The Company and INVESCO agree to indemnify and hold harmless Golden
American and its officers, employees, and directors from any and all loss,
liability and expense resulting from the gross negligence or willful
wrongful act of the Company or INVESCO under this Agreement, except to the
extent such loss, liability or expense is the result of the willful
misfeasance, bad faith or gross negligence of Golden American in the
performance of its duties, or by reason of the reckless disregard of its
obligations and duties under this Agreement.
VI. NOTICES:
--------
Notices and communications required or permitted hereby will be given to the
following persons at the following addresses and facsimile numbers, or such
other persons, addresses or facsimile numbers as the Party receiving such
notices or communications may subsequently direct in writing:
INVESCO Funds Group, Inc.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx - Senior Vice President
FAX: 000-000-0000
Golden American Life Insurance Company
0000 Xxxxxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx
