August 8, 1997
ReliaStar Bankers Security Life Insurance Company
0xx Xxxxx
00 Xxxxxxxxxx Xxx. Xxxxx
Xxxxxxxxxxx, XX 00000
Dear Sirs or Madams:
This letter sets forth the agreement between ReliaStar Bankers Security
Life Insurance 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 August 8, 1997 (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, such payments to commence following
the month in which the average monthly value of investments by the
Accounts, together with investments in the Portfolios by separate
accounts of ReliaStar Life Insurance Company and Northern Life
Insurance Company, reaches $50 million. The Service Fee will be
correspondingly suspended if the average monthly value of such
investments drops below $50 million in any month.
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 (as calculated by the Portfolios) for 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 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 Fee 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 the
Company is not a fiduciary with respect to the Contracts for
purposes of the Employee Retirement Income Securities Act of
1974 ("ERISA").
c. The Company represents, warrants and agrees that: (1) the
Company's receipt of the Service Fee is in compliance with
Section 26 of the Investment Company Act of 1940 ("1940 Act")
to the extent Section 26 is applicable to the Contracts; (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 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's willful misfeasance,
bad faith or gross negligence in the performance if 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 (other than affiliates of the Company) 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 0000 Xxx) 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.
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: _______________________________
Name: _______________________________
Title: _______________________________
RELIASTAR BANKERS SECURITY LIFE
INSURANCE COMPANY
By: _______________________________
Name: _______________________________
Title: _______________________________
Attachment: Schedule A
SCHEDULE A
Pursuant to the letter agreement to which this Schedule is attached, the Company
or an affiliate will perform administrative services including, but not limited
to, the following:
1. Print and mail to Contract owners or otherwise disseminate copies of
the Portfolios' prospectuses, proxy materials, 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 subaccount) 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.
