Exhibit 1.A(8)(c)(iv)
SERVICE AGREEMENT
This Agreement is made as of the 1st day of December 1997 by and
between Xxxxxxxxx & Xxxxxx Management Incorporated, a New York corporation
("NBMI"), and Security Life of Denver Insurance Company ("Life Company"), a
Colorado corporation, collectively, the "Parties."
W I T N E S S E T H:
WHEREAS, NBMI serves as the investment adviser of Xxxxxxxxx & Xxxxxx
Advisers Management Trust (the "Trust"), which currently consists of several
separate series (each, a "Portfolio"); and
WHEREAS, the Life Company has entered into an agreement, dated
September 28, 1994, with Trust and NBMI as amended May 1, 1995 to add Advisers
Managers Trust as a party (the "Sales Agreement") pursuant to which the Trust
will make shares of each Portfolio listed from time to time on Appendix A
thereto available to certain variable life insurance and/or variable annuity
contracts offered by Life Company through certain separate accounts (the
"Separate Accounts") at net asset value and with no sales charges, subject to
the terms of the Sales Agreement; and
WHEREAS, the Sales Agreement provides that Trust will bear the costs of
preparing, filing with the Securities and Exchange Commission, printing or
duplicating and mailing Trust's 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 existing owners of Contracts
("Contract owners") who have allocated any Contract value to a Portfolio; and
WHEREAS, the Sales Agreement provides that the Trust, at its expense,
will provide Life Company with camera ready copies or copies suitable for
duplication of all Fund Materials with respect to prospective Contract owners of
Life Company; and
WHEREAS, the Sales Agreement makes no provision for which party shall
incur various administrative 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;
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NOW THEREFORE, in consideration of the mutual benefits and promises
contained herein, the Parties hereto agree as follows:
I. SERVICES PROVIDED:
Security Life agrees to provide services including but not limited to
the following:
a) delivering and responding to inquiries respecting Trust
prospectuses, reports, notices, proxies and proxy statements
and other information respecting the Portfolios (but not
including services paid for by the Trust such as printing and
mailing);
b) facilitating the tabulation of Contract owners' votes in the
event of a meeting of Trust shareholders;
c) providing and administering Contract features for the benefit
of Contract owners participating in the Trust, including fund
transfers, dollar cost averaging, asset allocation, portfolio
rebalancing, earnings sweep, and pre-authorized deposits and
withdrawals;
d) responding to inquiries from Life Company Contract owners
using one or more of the Portfolios as an investment vehicle
regarding the services performed by Life Company as they
relate to Trust or its Portfolios;
e) providing information to NBMI, the Trust, or the Trust's
transfer agent and to Contract owners with respect to shares
attributable to Contract owner accounts;
f) facilitating the printing and mailing of shareholder
communications from Trust as may be required pursuant to
Paragraph 4 of the Sales Agreement;
g) responding to inquiries from Contract owners concerning the
Trust and its operations;
h) providing such similar services as NBMI or Trust may
reasonably request to the extent permitted or required under
applicable statutes, rules and regulations.
II. EXPENSE ALLOCATIONS:
Subject to Section III hereof, Life Company 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;
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b) printing and distributing all sales literature or promotional
material developed by Life Company 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:
a) NBMI shall pay to Life Company a quarterly fee at the annual
rate of .10% (10 basis points) on the average daily net assets
of the Portfolio attributable to Contracts up to $50 million,
and the annual rate of .15% (15 basis points) on the average
daily net assets of the Portfolio attributable to Contracts
over $50 million, including all existing balances
(hereinafter, the "Quarterly Fee"), in connection with the
expenses incurred by Life Company under Section I hereof. The
payment of the Quarterly Fee shall commence at the end of the
first calendar quarter after the date hereof in which Contract
value has been allocated to a Portfolio. The payment to the
Life Company under this paragraph will be paid within thirty
(30) days of the end of each calendar quarter.
b) 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 Life Company
in connection with its duties hereunder. The Parties agree to
negotiate in good faith any change to the Quarterly Fee
proposed by a Party in good faith.
c) This Agreement shall not modify any of the provisions of
Paragraph 4 of the Sales Agreement, but shall supplement those
provisions.
IV. TERM OF AGREEMENT:
Any Party may terminate this Agreement, without penalty, on 60 days'
written notice to the other Party. Unless so terminated, this Agreement
shall continue in effect for so long as NBMI or its successor(s) in
interest, or any affiliate thereof, continues to perform in a similar
capacity for Trust, and for so long as any Contract value or any monies
attributable to Life Company is allocated to a Portfolio. This
Agreement may be amended only upon mutual agreement of the parties in
writing
V. INDEMNIFICATION:
a) Life Company agrees to indemnify and hold harmless NBMI and
its officers and directors, from any and all loss, liability
and expense resulting from the negligence or willful wrongful
act of Life Company under this Agreement, except
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to the extent such loss, liability or expense is the result of
the willful misfeasance, bad faith or negligence of NBMI in
the performance of its duties.
b) NBMI agrees to indemnify and hold harmless Life Company and
its officers and directors from any and all loss, liability
and expense resulting from the negligence or willful wrongful
act of the Advisers under this Agreement, except to the extent
such loss, liability or expense is the result of the willful
misfeasance, bad faith or negligence of Life Company in the
performance of its duties.
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:
Xxxxxxxxx & Xxxxxx Management Inc.
Xxxxxxxxx & Xxxxxx Advisers Management Trust
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxx Xxxxxxx, General Counsel
FAX: 000-000-0000
Security Life of Denver Insurance Company
0000 Xxxxxxxx
Xxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxx, Esq.
FAX: 000-000-0000
VII. APPLICABLE LAW:
Except insofar as the Investment Company Act of 1940 or other federal
laws and regulations may be controlling, this Agreement will be
construed and the provisions hereof interpreted under and in accordance
with New York law, without regard for that state's principles of
conflict of laws.
VIII. EXECUTION IN COUNTERPARTS:
This Agreement may be executed simultaneously in one or more
counterparts, each of which taken together will constitute one and the
same instrument.
IX. SEVERABILITY:
If any provision of this Agreement is held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement
will not be affected thereby.
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X. RIGHTS CUMULATIVE:
The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, that the Parties are entitled to
under federal and state laws.
XI. NO EFFECT ON OTHER AGREEMENTS
Nothing in this Agreement shall amend, modify or supersede any
contractual terms, obligations or covenants among or between any of the
Life Company, NBMI, the Trust or Advisers Managers Trust previously or
currently in effect, including those contractual terms, obligations or
covenants contained in the Sales Agreement.
XII. HEADINGS:
The headings used in this Agreement are for purposes of reference only
and shall not limit or define the meaning of the provisions of this
Agreement.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers signing below.
XXXXXXXXX & XXXXXX MANAGEMENT, SECURITY LIFE OF DENVER INSURANCE
INCORPORATED COMPANY
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxx X. Hard
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Name: Xxxxxx X. Xxxxxxxx Name: Xxxxx X. Hard
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Title: Senior Vice President Title: Senior Vice President
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