SERVICE AGREEMENT
AGREEMENT, effective as of _____________ 1997, between
OppenheimerFunds, Inc. (the "Adviser"), a Colorado corporation, and Aetna Life
Insurance and Annuity Company (the "Company"), a Connecticut corporation, for
the provision of described administrative services by the Company in connection
with the sale of shares of the Xxxxxxxxxxx Variable Account Funds (the "Fund")
as described in the Fund Participation Agreement dated February ___, 1997
between the Company, the Fund and the Adviser (the "Fund Participation
Agreement").
In consideration of their mutual promises, the Adviser and the Company agree as
follows:
1. The Company agrees to provide the following services to the Adviser:
a. responding to inquiries from owners of the Company variable
annuity contracts and variable life insurance policies using
the Funds as an investment vehicle ("Contractholders")
regarding the services performed by the Company that relate to
the Funds;
b. providing information to Adviser and Contractholders with
respect to Fund shares attributable to Contractholder
accounts;
c. communicating directly with Contractholders concerning the
Funds' operations;
d. providing such other similar services as Adviser may
reasonably request pursuant to Adviser's agreement with the
Funds to the extent permitted under applicable federal and
state requirements.
2. (a) Administrative services to Contractholders owners and
participants shall be the responsibility of the Company and
shall not be the responsibility of the Fund or the Adviser.
The Adviser recognizes the Company as the sole shareholder of
Fund shares issued under the Fund Participation Agreement, and
that substantial savings will be derived in administrative
expenses, such as significant reductions in postage expense
and shareholder communications, by virtue of having a sole
shareholder for each of the Accounts rather than multiple
shareholders. In consideration of the savings resulting from
such arrangement, and to compensate the Company for its costs,
the Adviser agrees to pay to the Company and the Company
agrees to accept as full compensation for all services
rendered hereunder an amount equal to 20 basis points (.20%)
per annum on the first $100 million (excluding assets
attributable to the CLIAC acquisition) of the average
aggregate amount invested by the Company in the Fund under the
Fund Participation Agreement, and 25 basis points (.25%) per
annum on the total average aggregate amount invested by the
Company in the Fund under the Fund Participation Agreement, in
excess of $100 million (excluding assets attributable to the
CLIAC acquisition).
(b) The parties agree that the Adviser's payments to the Company
are for administrative services only and do not constitute
payment in any manner for investment advisory services or for
costs of distribution.
(c) For the purposes of computing the administrative fee
reimbursement contemplated by this Section 2, the average
aggregate amount invested by the Company over a one month
period shall be computed by totaling the Company's aggregate
investment (share net asset value multiplied by total number
of shares held by the Company) on each business day during the
month and dividing by the total number of business days during
each month.
(d) The Fund will calculate the reimbursement of administrative
expenses at the end of each month and will make such
reimbursement to the Company within 30 days thereafter. The
reimbursement payment will be accompanied by a statement
showing the calculation of the monthly amounts payable by the
Adviser and such other supporting data as may be reasonably
requested by the Company. Payment will be wired by the Adviser
to an account designated by the Company.
3. 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 under this Agreement or a breach of a material provision of
this Agreement, except to the extent such loss, liability or expense is
the result of the Adviser's own willful misfeasance, bad faith or gross
negligence in the performance of its duties.
4. The Adviser agrees to indemnify and hold harmless the Company 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 Adviser under this Agreement or a breach of a material provision
under this Agreement, except to the extent such loss, liability or
expense is the result of the Company's own willful misfeasance, bad
faith or gross negligence in the performance of its duties.
5. Either party may terminate this Agreement, without penalty, (i) on
sixty (60) days written notice to the other party, for any cause or
without cause, or (ii) on reasonable notice to the other party, if it
is not permissible to continue the arrangement described herein under
laws, rules or regulations applicable to either party or the Fund, or
if the Participation Agreement is terminated.
6. The terms of this arrangement will be held confidential by each party
except to the extent that either party or its counsel may deem it
necessary to disclose this arrangement.
7. This Agreement represents the entire Agreement of the parties on the
subject matter hereof and it cannot be amended or modified except in
writing, signed by the parties.
This Agreement may be executed in one or more separate counterparts,
all of which, when taken together, shall constitute one and the same
Agreement.
8. All notices and other communications hereunder shall be given or made
in writing and shall be delivered personally, or sent by telex,
telecopier or registered or certified mail, postage prepaid, return
receipt requested, to the party to whom they are directed at the
following addresses, or at such other addresses as may be designated by
notice from such party to the other party.
To Aetna:
Aetna Life Insurance and Annuity Company
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Counsel
To OFI:
OppenheimerFunds, Inc.
0 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Executive Vice President
& General Counsel
Any notice, demand or other communication given in a manner prescribed in this
Section 8 shall be deemed to have been delivered on receipt.
IN WITNESS WHEREOF, the parties to this Agreement have caused this Agreement to
be executed by their authorized officers as of the day and year first above
written.
OPPENHEIMERFUNDS, INC.
By:________________________________________________
Date:______________________________________________
AETNA LIFE INSURANCE AND ANNUITY COMPANY
By:________________________________________________
Date:______________________________________________
