ADMINISTRATIVE SERVICES AGREEMENT
This Agreement is made as of the 13th day of August, 2001, by and between
INVESCO Funds Group, Inc. ("INVESCO"), and IDS Life Insurance Company, a
Minnesota corporation, and IDS Life Insurance Company of New York, a New York
corporation (each a "Insurance Company" and collectively the "Insurance
Companies"), collectively, the "Parties."
WITNESSETH:
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WHEREAS, INVESCO serves as the administrator for the INVESCO Variable
Investment Funds, Inc. (the "Company"); and
WHEREAS, each Insurance Company has entered into agreements, both dated
August 13, 2001, with the Company, INVESCO Distributors, Inc. and INVESCO (each
a " 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 Insurance Companies 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 Insurance
Companies, at their expense, will provide various administrative and shareholder
contact services with respect to prospective and actual Variable Contract Owners
of Insurance Companies; 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:
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Insurance Companies agree to provide services to the Company and INVESCO
including the following:
a) responding to inquiries from Insurance Company Contract Owners using one or
more of the Portfolios as an investment vehicle regarding the services
performed by Insurance Companies 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;
d) 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:
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Subject to Section III hereof, and the provisions of Article IV of the Fund
Participation Agreement, Insurance Companies or their 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 Insurance Companies or their 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:
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In recognition of the substantial savings in administrative expenses to INVESCO
and the Company by virtue of having a sole shareholder, Insurance Companies, and
having that shareholder be responsible for the servicing of the Contract Owners,
INVESCO will pay an administrative service fee to Insurance Companies, as
described below:
a) INVESCO shall pay to Insurance Companies 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
Insurance Companies, at the annual rate of 0.25% on the aggregate net
assets placed by Insurance Companies in the Portfolios of the Company
designated in Schedule B of the Fund Participation Agreements, as may be
amended from time to time. The Quarterly Fee is in consideration of the
expenses incurred by Insurance Companies pursuant to Section II hereof. The
payment of the Quarterly Fee shall commence on the date first indicated
above and shall continue for so long as assets from the variable annuity or
variable life insurance contracts of Insurance Companies remain in the
Portfolios.
b) INVESCO shall pay to Insurance Companies on a quarterly basis 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 Insurance Companies, at the annual rate of 0.25% on the first
$250 million and 0.30% on assets over $250 million of the aggregate net
assets placed by Insurance Companies in the INVESCO VIF Funds designated in
Schedule B of the Fund Participation Agreements, as may be amended from
time to time. The Support Fee is in consideration of the expenses incurred
by Insurance Companies pursuant to Section II hereof. The payments of the
Support Fee shall commence on the date first indicated above and shall
continue for so long as assets from the variable annuity or variable life
insurance contracts of Insurance Companies remain in the Portfolios.
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 Insurance Companies in connection with their duties
hereunder. The Parties agree to negotiate in good faith any change to the
Monthly Fee proposed by another Party in good faith.
d) This Agreement shall not modify any of the provisions of Article IV or
Article VI of the Fund Participation Agreements, but shall supplement those
provisions.
IV. TERM OF AGREEMENT:
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This Agreement shall continue in effect for so long as an Insurance Company 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:
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(a) Insurance Companies agree 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 Insurance Companies 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 the Insurance
Companies and their 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 Insurance Companies in the
performance of their duties, or by reason of the reckless disregard of
their obligations and duties under this Agreement.
VI. NOTICES:
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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:
if to INVESCO or the Company:
INVESCO Funds Group, Inc.
0000 Xxxx Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx - Senior Vice President
FAX: 000 000-0000
if to IDS Life Insurance Company:
IDS Life Insurance Company
1765 AXP Financial Center
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Executive Vice President, Annuities
with a copy to:
IDS Life Insurance Company
50607 AXP Financial Center
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: General Counsel's Office
if to IDS Life Insurance Company of New York:
IDS Life Insurance Company of New York
249 AXP Financial Center
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: President
with a copy to:
IDS Life Insurance Company of Xxx Xxxx
00000 AXP Financial Center
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: General Counsel's Office
VII. APPLICABLE LAW:
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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 Delaware law, without
regard for that state's principles of conflict of laws.
VIII. EXECUTION IN COUNTERPARTS:
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This Agreement may be executed simultaneously in two or more counterparts, each
of which taken together will constitute one and the same instrument.
IX. SEVERABILITY:
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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.
X. RIGHTS CUMULATIVE:
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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. HEADINGS:
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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.
INVESCO FUNDS GROUP, INC. INVESCO VARIABLE INVESTMENT
FUNDS, INC.
By: /s/Xxxxxx X. Xxxxxx By: /s/Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxxx
Senior Vice President & Treasurer Treasurer
IDS LIFE INSURANCE COMPANY Attest:
By: /s/Xxxxx Xxxxxx By: /s/Xxxx Xxxxx Xxxxxxx
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Printed Printed
Name: Xxxxx Xxxxxx Name: Xxxx Xxxxx Xxxxxxx
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Executive Vice President,
As Its: Annuities As Its: Assistant Secretary
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IDS LIFE INSURANCE COMPANY OF NEW Attest:
YORK
By: /s/Xxxxxxx X. Xxxxxxxx By: /s/Xxxx Xxxxx Xxxxxxx
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Printed Printed
Name: Xxxxxxx X. Xxxxxxxx Name: Xxxx Xxxxx Xxxxxxx
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As Its: President As Its: Assistant Secretary
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