Exhibit 1.A(8)(c)(vii)
ADMINISTRATIVE SERVICES AGREEMENT
SECURITY LIFE OF DENVER INSURANCE 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, 2000.
WHEREAS, MLAM is the investment adviser to the Xxxxxxx Xxxxx Variable
Series Funds, Inc. (the "Fund"); and
WHEREAS, the Insurer issues variable life insurance policies (the
"Policies"); and
WHEREAS, the Insurer and the Fund have entered into a Fund
Participation Agreement ("Participation Agreement") dated May 1, 2000, providing
for the sale of shares of the Fund to certain segregated separate accounts of
the Insurer; and
WHEREAS, amounts invested in the Policies by policy holders are
deposited in one or more 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 (the "Portfolios"); 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 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) the Insurer shall calculate the payment contemplated
by this Section 1 at the end of each fiscal quarter
and will invoice such payment to MLAM, which shall
remit payment 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 administration 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 any Fund.
3. TERM AND TERMINATION.
(a) Any Party may terminate this Agreement, without
penalty, on ninety day's advance written notice to
the other Party. Unless so terminated, this Agreement
shall continue in effect for so long as MLAM or its
successor(s) in interest, or any affiliate thereof,
continues to perform in a similar capacity for the
Fund, and for so long as Insurer or its successors(s)
in interest, or any affiliate thereof, provides the
services contemplated hereunder with respect to
Contracts under which values or monies are allocated
to a Portfolio.
(b) 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.
4. AMENDMENT.
This Agreement may be amended only upon mutual agreement of
the parties hereto in writing.
5. 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 Xxxxxxxxxxx, General
Counsel; and
(b) to the Insurer, at Office of the General Counsel,
0000 Xxxxxxxx, Xxxxxx, Xxxxxxxx 00000, Attention:
Variable Counsel.
6. 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.
SECURITY LIFE INSURANCE COMPANY OF DENVER
By: /s/ Xxx Xxxxxxxxxx
Name: Xxx Xxxxxxxxxx
Title: Executive Vice President
XXXXXXX XXXXX ASSET MANAGEMENT, L.P.
By: Princeton Services, Inc.
its General Partner
/s/ 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 policyholders.
o Preparation of reports to certain third-party reporting services.
SCHEDULE B
PORTFOLIOS OF MERRILL APPLICABLE FEE RATE
XXXXX VARIABLE SERIES FUNDS, INC.
(CLASS A SHARES)
Xxxxxxx Xxxxx Global Growth Focus Fund 0.15%
Xxxxxxx Xxxxx Balanced Capital Focus Fund 0.15%
Xxxxxxx Xxxxx Index 500 Portfolio 0.05%
