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EXHIBIT 8(l)
FORM OF USA ADMINISTRATION SERVICES, INC.
SERVICES AGREEMENT
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THIS AGREEMENT ("Agreement") made as of this 30th day of May,
1997 by and between IL Annuity and Insurance Company (Client), a Massachusetts
Corporation, and USA Administration Services, Inc. (USA), a Kansas Corporation.
WHEREAS, Client is or will be in the business of issuing and
underwriting life insurance and/or annuity products; and
WHEREAS, USA has developed an administration capability to provide for
the administrative support and servicing of life insurance and annuity
products, which includes administrative processes, administrative support
personnel, software, data processing equipment, and other services
("Administration Functions");
WHEREAS, Client desires to appoint USA as its Third Party
Administrator in connection with the specific life insurance and/or annuity
products identified in Schedule A ("Contract" or "Contracts"), and USA desires
to provide such services and necessary facilities, equipment, and personnel to
perform those Third Party Administrator functions set forth in Schedule B;
NOW, THEREFORE, in consideration of the mutually acceptable terms of
this Agreement, the parties agree as follows:
Article 1 Appointment as Agent to Provide Services.
1.01 Subject to the terms and conditions set forth in this
Agreement, Client hereby appoints and retains USA, and USA hereby agrees to act
as Client's agent to provide the services, functions and procedures described
in Schedule B (such services are described collectively hereinafter as
"Services").
1.02 Additional services may be added to this Agreement as
Services by a written amendment to Schedule B. USA, however, has sole
discretion to permit any such amendments to Schedule B. Client shall be
responsible for any additional costs resulting from implementing any requested
amendments to Schedule B. Such costs will be mutually agreed to, in writing, by
the parties.
Article 2 Services; and Performance Standards.
2.01 USA shall perform the Services provided for in Schedule B in
accordance
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with performance standards set forth in Schedule B or incorporated by reference
therein ("Performance Standards"). Whenever Client has not established a
standard, USA agreed to follow generally accepted customer and standards
accepted in the insurance industry in performing such services.
2.02 If at any time USA's performance of Services is not in compliance
with the Performance Standards, USA shall use its best efforts to take
necessary curative actions to bring its performance into compliance within
thirty (30) days of Client giving USA written notice of USA's non-compliance.
2.03 When Client determines that either the Services or Performance
Standards needs modification in response to any Federal or state law or
regulation, it shall inform USA of the change in such law or regulation, and
the parties shall seek to come to a mutually agreeable modification of this
Agreement in response to same. Client shall be responsible for any increased
costs associated with such modification. Such costs will be mutually agreed
to, in writing, by the parties.
2.04 USA shall have the right, at any time, and from time to time, to
alter and modify the Administration Functions and any systems, programs,
procedures or facilities used or employed in performing its duties and
obligations hereunder, provided that no such alteration or modification that
materially adversely affects the Services Client receives under this Agreement
will be implemented without USA first obtaining Client's consent, which shall
not be unreasonably withheld. "Materially" means, without limitation, any
departure or deviation from (a) the Performance Standards set forth in Schedule
B or the standards set forth in this Agreement or (b) any applicable laws,
rules and regulations.
2.05 If Client requests that USA design and implement an enhancement
to accommodate either one or more special features peculiar to Client's
Contracts, or, if Client requests any other changes, then USA shall investigate
the feasibility, time and cost for such enhancements or changes. Any
enhancement or change specific to Client's needs shall be designed and
implemented only after a written agreement to do so is reached between USA and
Client. Client will be responsible, in such cases, for any additional costs
associated with such an enhancement. Such costs will be mutually agreed
to, in writing, by the parties.
2.06 USA will make its standard operating reports available to Client
at no additional expense. If Client requests modification to USA's standard
reports, or requests other customized reports beyond the scope of the standard
reports, Client and USA must mutually agree on their format and content. Client
shall be responsible for any increased cost associated with such modified or
customized reports, if any. Such costs will be mutually agreed to, in writing,
by the parties.
Article 3 Fees and Expenses.
3.01 In consideration of the Services to be performed by USA pursuant
to this Agreement, Client shall pay USA the fees and expenses described on
Schedule C. Such amount shall be due upon receipt of USA's monthly billing
statement. The fees contained in the billing will be for past services.
USA shall not be entitled to compensation or other payments except as
expressly set forth on Schedule C unless such compensation or payments are
agreed to in writing between USA and Client. All fees and expenses are payable
in United States Dollars.
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3.02 Client shall also reimburse USA for all reasonable out-of-pocket
expenses incurred in its performance of this Agreement, as described on Schedule
C. Any such expenses shall be subject to the prior consent of the Client, and
if over $2,000 prior written consent.
3.03 USA may impose a late payment charge of 1.5 percent per month, or
the highest rate permitted by law, whichever is lower, on balances due under
this Agreement but unpaid for over thirty (30) days. Client may, however
withhold amounts which are due under this Agreement and in good faith disputed,
and not have such amounts subject to USA's late payment charge, provided that:
(A) Client provides USA with written notice describing its dispute with USA
before the payment is due; (B) the parties use their best effort to resolve the
dispute within ninety (90) days after Client's notice; and (C) in the event the
dispute is not resolved within ninety (90) days, disputed amounts would be
resolved by arbitration.
3.04 Client shall pay or reimburse USA for all Federal, state and
local sales, excise, use and/or similar taxes based on payments to be made
hereunder, (excluding, however, any tax on USA's income) unless Client has
provided USA with evidence reasonably satisfactory to USA that such payments
are exempt from any such taxes.
3.05 On each anniversary date of this Agreement's effective date, USA
may increase the charges identified on Schedule C by a rate equal to the
percentage increase in the United States Department of Labor Consumer Price
Index -- All Urban Consumers (1982-84 = 100).
Article 4 Allocation of Responsibilities Between Client and USA.
4.01 Notwithstanding any other provision of this Agreement, Client
retains sole legal responsibility and authority for the Services provided to
its Contract holders and agents. USA has no responsibility or liability under
the Contracts and, accordingly, may not modify or cause to be modified any term
or condition of any Contract or waive any term or condition thereof. The
Contracts are solely the liability of Client, are solely underwritten by
Client, and USA shall not provide or be responsible for any underwriting
services for the Contracts, the Contracts' sales and/or marketing, and/or the
Contracts' separate accounts, where applicable.
4.02 Client shall, on a timely basis, provide USA with current, final
forms of its contracts, prospectuses and applications, and the names and states
of license of all insurance and/or broker-dealer agents and representatives
authorized to sell the Contracts.
4.03 Client shall, on a timely basis, provide USA with information it
needs to carry out the Services it is to provide under this Agreement.
4.04 Client shall solely be responsible for interpreting the language
of the Contracts' provisions (including benefits), and determining the rates,
(premium, interest, etc.) product pricing, claims evaluation and payment
procedures applicable to the Contracts. Client must provide USA in a timely
fashion with its written rules, procedures and documentation pertaining to the
servicing of the Contracts.
Further, if Client
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modifies or amends such rules, procedures and documentation, USA will not be
obligated to implement any such modification or amendment until mutually
agreeable terms of a corresponding modification or amendment of the Services
have been reached between Client and USA.
4.05 USA shall use only such advertising pertaining to the Contracts
that has been approved in writing by Client in advance of its use.
4.06 USA will promptly notify Client in writing if it receives written
notice of any lawsuit, regulatory complaint or demand by any third party which
may materially affect Client. In the event any Contract holder notifies or
complains to USA that his or her claim has been wrongfully or improperly
denied/handled or has any other complaint or problem regarding his or her
Contract, USA shall notify such Contract holder that he or she has the right to
submit a request for review to Client of his or her complaint or problem.
Article 5 Banking Arrangements.
5.01 The payment to USA of any premiums or charges for the Contracts
by or on behalf of a Contract holder shall be deemed to have been received by
Client, and the payment of return premiums or claim payments forwarded by
Client to USA shall not be deemed to have been paid to a Contract holder or
claimant until such payments are received by the Contract holder or claimant.
5.02 Banking arrangements will be established upon the mutual written
agreement of Client and USA. In all cases, Client will be the sole owner and
solely responsible for establishing and maintaining such bank account(s) which
will be in Client's name. In the event that USA collects premiums, or disburses
funds on behalf of Client, such premiums or disbursements will be completed by
USA in a fiduciary capacity. USA shall comply with all applicable Federal and
State laws, rules and regulations. For all deposits, USA will immediately (an
in no event longer than twenty-four (24) hours) make such deposits of
premiums into such bank account designated and owned by Client. Client shall
require the bank in which Client's bank account(s) are maintained to send all
original account statements to Client, clearly reporting all deposits and
withdrawals. USA shall receive copies of the account statements for
reconciliation purposes, and upon Client's request, promptly furnish Client
with copies of all such bank records pertaining the deposits and
withdrawals it made to Client's bank account(s) on behalf of Client.
Reconciliation should be completed by USA within a reasonable time from receipt
of account statement from Client. Any problem with such reconciliation should
be promptly reported to Client and the bank where the account is located.
Article 6 USA's Representations, Warranties and Covenants.
USA represents and warrants to Client that:
6.01 USA is a corporation duly organized and existing in good standing
under the laws of the State of Kansas.
6.02 USA has the power and authority under the laws of the State of
Kansas and under its charter and by-laws to enter into and perform the Services
contemplated in this Agreement.
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6.03 All requisite corporate and other acts or proceedings required to
be taken to authorize the execution, delivery and performance of this Agreement
have been taken.
6.04 USA is a licensed Third Party Administrator in each state where
said license is required of USA for the Services performed under this
Agreement and USA shall maintain all licenses required by and comply with
applicable state laws, rules and regulations.
6.05 USA has and will continue to have and maintain the necessary
facilities to perform Services under this Agreement.
6.06 Whenever required by a state, USA shall maintain a deposit or a
bond in favor of such state to be held in trust for the benefit and protection
of that state's Contract holders and insurers whose monies USA handles. In
addition, USA shall comply with any other bond and insurance requirements of
applicable state law.
6.07 USA is covered under a fidelity/crime bond, with a limit of at
least $1 million. Such a bond, or its replacement, covers USA from damages
resulting from any acts or occurrences covered under said bond. USA is also
covered under a Professional Liability Policy, or its replacement, with a limit
of at least $1 million for damages resulting from any acts, errors or omissions
in the performance of professional services.
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Article 7 Client's Representations, Warranties and Covenants.
Client represents and warrants to USA that:
7.01 Client is a corporation duly organized and existing in good
standing under the laws of Massachusetts.
7.02 Client is qualified and licensed to carry on its business in those
jurisdictions in which it transacts business and is required to be qualified or
licensed.
7.03 Client has the power and authority under law and under its charter
and by-laws to enter into and perform its obligations under this Agreement.
7.04 All requisite corporate and other acts or proceedings required to
be taken to authorize the execution, delivery and performance of this Agreement
have been taken.
7.05 All of the prospectuses, contracts and other forms provided or
required by Client shall have been approved by all required regulatory agencies
and are or shall be in compliance with all applicable Federal, state, and local
laws and regulations.
7.06 Client has and will continue to comply with all laws with respect
to the Contracts and it has and will continue to make all required filings with
regulatory agencies in connection with the offer, sale, or administration of
the Contracts.
7.07 Client shall fulfill all of its lawful obligations with respect to
the Contracts, regardless of any dispute between Client and USA.
Article 8 Confidentiality
8.01 Client acknowledges that USA has sole ownership or other
proprietary rights in and to the Administration Functions, and that the
Administration Functions constitute USA's confidential material and trade
secrets.
8.02 Except as is necessary for USA's administration of the Contracts
or as required by law, Client agrees to maintain the confidentiality of, and
not disclose to any third party (excluding independent auditors, regulatory
examiners and legal counsel), the Administration Functions, or any other
information about USA's internal affairs, business plans, and business
practices. Client further agrees not to use any such information regarding the
Administration Functions, or any information about USA's internal affairs,
business plans and business practices in competition with USA. If Client is
ordered by a court of competent jurisdiction to disclose Client's or USA's
confidential information, or it is served with or otherwise becomes aware of
a motion or similar request (including, but not limited to depositions,
interrogatories, requests for documents, subpoenas, or civil investigative
demands) that such an order be issued, Client shall not be liable for
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disclosure of such confidential information required by such order if Client
promptly notifies USA in writing of such order. This notification is to permit
USA to seek a protective order or take other appropriate action at USA's cost.
Client will also cooperate in USA's efforts to obtain a protective order or
other reasonable assurance that confidential treatment will be accorded USA's
confidential information.
If, in the absence of a protective order, Client is, in the written
opinion of Client's counsel addressed to USA, compelled as a matter of law to
disclose USA's confidential information, Client may disclose to the party
compelling disclosure only the part of USA's confidential information as is
required by law to be disclosed (in which case, prior to such disclosure,
Client will advice and consult with USA and its counsel as to such disclosure
and the nature and wording of such disclosure) and Client will use its best
efforts to obtain confidential treatment therefor.
8.03 USA either owns the software or has licensed to use the software
which supports the Services it will provide under this Agreement. USA shall be
the owner and shall have the right to all copyrights, patents, and other
similar protection that flow from the work product that results from any
programming services USA performs for Client, including, but not limited to,
program code, documentation, specifications, logic, and design.
8.04 USA shall hold the software source code for the software
component of the Administration Functions in escrow with Transamerica
Reinsurance (TARe), assign TARe as escrow agent, and TARe shall make such
source code available to Client at no charge under a license agreement in the
event that USA files for bankruptcy or ceases to engage in the business of
providing Third Party Administration services.
Article 9 Books, Records, Data and Audits.
9.01 USA shall establish and maintain procedures for the safekeeping
of policy forms, check forms and facsimile signature imprinting devices, if
any, and all other documents, reports, records, books and files related to the
Contracts (excluding the Administration Functions), and all transactions
between USA, Client and Client's Contract holders and agents (collectively,
"Client's Books and Records"). USA shall maintain Client's Books and Records
in an accessible and usable form to Client and place for the duration of
this Agreement and seven years thereafter, according to industry standards
reasonably applied and as required by applicable law, including but not limited
to Rules 17a-3 and 17a-4 of the Securities Exchange Act of 1934, as amended.
9.02 USA shall maintain the records and other data pertaining to the
Contracts at all times in order to provide back-up recordkeeping. USA shall
maintain backup computer tape files on a daily basis stored in an off-site
location.
9.03 Upon reasonable notice to USA, Client and any applicable insurance
or securities regulator shall have full and free access, during ordinary
business hours, to Client's Books and Records, which shall be in a usable form.
Client and the applicable
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insurance or securities regulator shall keep confidential USA's confidential
information or trade secrets (as described in Article 8) contained in Client's
Books and Records.
9.04 Upon reasonable notice to USA, Client or its duly authorized
independent auditors have the right under this Agreement to perform on-site
audits of Client's Book and Records directly pertaining to the Contracts, and
the Services performed under this Agreement and to interview management
personnel involved in performing the services of USA in this Agreement, and to
review systems of internal controls. Such audits shall take place in
accordance with reasonable procedures as defined by generally accepted auditing
practices. Client shall reimburse USA for any unreasonable costs and expenses
(including personnel time and materials) incurred in connection with such
audits.
9.05 It is expressly understood and agreed that Client's Books and
Records are Client's sole property, and that such property shall be held by USA
as an agent, during the term of this Agreement. All information furnished by
Client or its Contract holders to USA hereunder (including Client's Books and
Records, data, information, financial information and information about its
internal affairs, business plans and business practices) is confidential (the
"Client Confidential Information") and USA shall not disclose such information,
directly or indirectly, to any third party except to the extent that USA is
required by law to make such disclosure, is required to perform the Services,
or as authorized in writing by Client. If USA is requested to disclose any
Client confidential information, USA will promptly notify Client to permit
Client to seek a protective order or take other appropriate action at Client's
sole cost. USA will also cooperate in Client's efforts to obtain a protective
order or other reasonable assurance that confidential treatment will be
accorded the Client confidential information. If, in the absence of a
protective order, USA is, in the written opinion of USA's counsel addressed to
Client, compelled as a matter of law to disclose the Client confidential
information, USA may disclose to the party compelling disclosure only the part
of the Client confidential information as is required by law to be disclosed
(in which case, prior to such disclosure, USA will advice and consult with
Client and its counsel as to such disclosure and the nature and wording of such
disclosure) and USA will use its best efforts to obtain confidential treatment
therefor.
9.06 Each party shall promptly notify the other of any demand or
request by any court, Federal, state, local or provincial government agency or
other regulatory body to examine or audit the Contracts serviced under this
Agreement.
Article 10 Delivery of Materials to Covered Individuals.
10.01 Any policies, certificates, booklets, termination notices or
other written communications delivered by Client to USA for delivery to
Contract holders will be promptly delivered by USA after receipt by USA of
Client's delivery instructions.
Article 11 Trademarks.
11.01 Neither USA nor Client shall use trademarks or service marks
without the prior written consent of the owners.
Article 12 Limitation of Liability/Warranty of Fitness.
12.01 In the event a malfunction of any computer software or equipment
which supports the Administration Functions causes an error or mistake in any
record, report,
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data, information or output under the terms of this Agreement, USA shall at its
expense correct and reprocess such records, provided that either: (A) Client
shall promptly notify USA in writing of such error or mistake; or (B) the
Contract holder shall promptly notify USA or Client of such error or mistake.
USA may, prior to its correction or reprocessing, in its discretion, require
Client's written instructions regarding such error or mistake.
12.02 In the case of any breach by USA related to this Agreement or
any transaction under this Agreement, regardless of the basis of the claim, USA
will only be liable for:
A. Bodily injury (including death) and damage to real property
and tangible personal property; and
B. The amount of actual loss or damage suffered by Client,
limited to the aggregate of the fees Client paid to USA
under this Agreement during the eight months immediately
preceding the occurrence of the claim, whichever is less.
12.03 Notwithstanding anything to the contrary herein, USA shall
not be responsible for, and Client shall indemnify and hold USA harmless from
and against, any and all costs, expenses, losses, damages, charges, counsel
fees, payments, and liability which may be asserted against USA or for which it
may be held liable, arising out of or attributable to:
A. Any action taken by USA in good faith and with due diligence
in compliance with the terms of this Agreement;
B. Client's failure to:
(1)comply with Federal, state or local laws or regulations
with respect to the offering and/or sale of the Contracts
or the records maintained;
(2)use and employ the Administration Functions and its
facilities in accordance with the procedures as set forth
and described in the reference manuals USA delivered to
Client;
(3)utilize USA's control procedures as set forth and described
in the reference manuals USA delivered to Client; or
(4)verify promptly reports received through use of the
Administration Functions.
C. Client's refusal or failure to comply with the terms of this
Agreement, or, which arise out of Client's action or
willful misconduct, or, which arise out of Client's breach
of any representation or warranty hereunder;
D. Client's errors and mistakes in the use of the Administration
Functions, and its facilities and control procedures;
E. Third party claims against Client for loss or damage; or
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F. USA's reliance on or use of information, data, records and
documents received from Client, its custodian or other
agents in performing the Services.
12.04 Notwithstanding anything to the contrary herein, Client shall
not be responsible for and USA shall indemnify and hold Client harmless from
and against, any and all costs, expenses, losses, damages, charges, counsel
fees, payments, and liability which may be asserted against Client or for which
it may be held liable, arising out of or attributable to:
A. Any action taken by Client in good faith and with due diligence
in compliance with the terms of this Agreement;
C. USA's refusal or failure to comply with the terms of this
Agreement, or, which may arise out of USA's action or willful
misconduct, or, which arise out of USA's breach of any
representations or warranties hereunder;
D. USA's errors and mistakes in the use of the Administration
Functions, and its facilities and control procedures; or
E. Third party claims against USA for loss or damages.
12.05 In no event shall USA be liable to Client under any provision
of this Agreement for exemplary, special, punitive or consequential damages.
12.06 No action, regardless of its form, may be brought more than
three (3) years after the cause of action has accrued.
Article 13 Dispute Resolution.
13.01 Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be settled by Client and USA by means
of arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, and judgment upon the award rendered by the
arbitrator(s) shall be final and binding upon the parties and may be entered
and enforced as a judgment in any court having jurisdiction thereof.
Notwithstanding the foregoing, Client agrees that the provisions of Article 8
or 13 herein may be enforced by temporary or permanent injunction, without the
necessity of a bond. Such injunctive relief shall be in addition to and not in
place of any other remedy provided in this Agreement.
Article 14 Term and Termination.
14.01 The effective date of this Agreement is the date first written
above, unless otherwise agreed to by the parties.
14.02 Subject to termination as provided herein, this Agreement shall
remain in force and effect for a period of four (4) years from its effective
date.
14.03 This Agreement is renewable at terms that will be negotiated no
later than one hundred eighty (180) days prior to the termination of this
Agreement, otherwise this Agreement will terminate pursuant to its terms.
14.04 This Agreement may be terminated by Client with written notice
to USA
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one hundred eighty (180) days prior to the desired termination date. In the
event of such notice of termination, the Agreement shall terminate no earlier
than the one hundred eightieth day following receipt of such notice. Client may
execute a standard perpetual License Agreement and pay USA a discounted license
fee.
In consideration for early termination, if Client does not execute a
standard License Agreement, then Client agrees to pay USA the minimum monthly
maintenance fee for the number of months remaining in the initial term of this
Agreement.
14.05 If Client materially breaches this Agreement or fails to pay fees
and expenses hereunder, USA may give Client written notice of its breach of
this Agreement, and if such breach shall not have been remedied within sixty
(60) days after such written notice is given, USA may then terminate this
Agreement by giving Client thirty (30) days written notice of such intention to
terminate this Agreement.
14.06 If USA fails to comply with the material obligations and
Performance Standards contained in this Agreement, Client shall notify USA in
writing of such failure. "Material" means, without limitation, any departure or
deviation from (a) the Performance Standards set forth in Schedule B or the
standards set forth in this Agreement or (b) any applicable laws, rules and
regulations. If USA has not corrected such failure within a time
frame set reasonably by Client in writing, but in no event less than thirty
(30) days, Client may then immediately terminate this Agreement without
prejudice to of any of Client's rights or remedies against USA for breach of
this Agreement. In such a case, there will be no early termination fee charged
to the Client. Following such termination, Client may, at its option, enter
into a license agreement and pay USA a one time license fee, or transition, at
Client's expense, the administration of Client's Contracts to its own systems
and facilities or to another third party administrator.
14.07 During the period between the delivery of the notice of
termination and the effective date of termination, this Agreement shall remain
in effect and the parties shall continue to operate in accordance with the
terms of this Agreement except as the parties may otherwise agree in writing.
14.08 If USA elects to terminate this Agreement pursuant to Section
14.05 and for other than the nonpayment of fees and expenses, and, if Client
shall so request in writing, USA shall continue to provide Services under this
Agreement to Client for a period of four (4) months following such termination,
with such Services to be provided in accordance with the terms of this
Agreement and at 133 percent of the fees in effect for the term immediately
preceding such four (4) month period.
14.09 In the event that this Agreement is terminated, USA agrees that,
in order to assist in providing uninterrupted Services to Client, it shall
offer Client reasonable assistance to Client in converting Client's records
from the Administration Functions to whatever service or system Client selects,
subject to Client's payment to USA for such assistance at USA's standard rates
and fees in effect at that time.
14.10 Client shall provide written notice to any state or Federal
regulatory agency of any termination or cancellation or any other change in
this Agreement as required by any applicable law or regulation.
14.11 Upon termination of this Agreement, Client will return to USA all
documentation and information relating to the Administration Functions and any
other
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similar or related materials (and any copies thereof) confidential to USA.
Subject to Articles 8 and 9 hereof, USA will return Client's Books and Records.
Notwithstanding the above, any computer hardware, including storage media, upon
which Client's data is stored shall remain the sole property of USA. Client
agrees to allow USA reasonable access to all such returned records in the event
that USA requests such access for any reasonable and legitimate purpose,
including as a result of any regulatory request, litigation or any similar
necessity.
Article 15 Force Majeure.
15.01 If USA is unable to perform Services under this Agreement
because of strikes, equipment or transmission failure or damage, or other
causes beyond its control, e.g. floods, riots, or acts of god, then USA will
use its best efforts to assist Client to obtain alternate sources for the
Services. USA will not be liable for any interruption in the Services or
damages resulting from such causes, but USA shall cooperate with Client to
minimize and mitigate the damage, loss of data, delays or errors resulting from
an uncontrollable event.
Article 16 Non-Solicitation.
16.01 Neither USA nor its parent or affiliates shall use Client's
Books and Records or other of Client's proprietary information to contact
Client's Contract holders or any person with any interest or expectations in
the Contracts for the purpose of inducing them to purchase any non-Client
product. USA shall not sell or disclose in any manner (except to provide
Services under this Agreement) a list, partial or complete, of the applicants
for Contracts or Client's Contract holders or persons with any interest or
expectation in any Contract.
Article 17 Notices and Requests.
17.01 All notices and requests in connection with this Agreement shall
be given or made upon the respective parties in writing and shall be deemed
given as of the day deposited in the U.S. mails, postage pre-paid, certified or
registered, return receipt requested, and addressed as follows:
If to USA: USA Administration Services, Inc.,
▇▇▇▇▇ ▇▇▇▇▇▇▇, #▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: J. ▇▇▇▇▇ ▇▇▇▇▇▇
If to Client: IL Annuity and Insurance Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
or to such other address(es) as the party to receive the notice or request so
designated by written notice to the other party.
Article 18 Insolvency.
18.01 It is expressly agreed by the parties that in the event either
USA or Client becomes insolvent or otherwise admits in writing its inability to
pay its debts when they become due, becomes bankrupt, seeks protection under
any law for the protection of insolvents, or has a receiver or conservator
appointed for it under any law pertaining to insolvency, that such event in and
of itself shall be deemed to be a material breach of this Agreement and
that the other party's obligation to perform or its right to receive the
benefits of this Agreement is terminated.
Article 19 Governing Laws.
19.01 This Agreement shall be governed by and construed in accordance
with the laws of the State of Kansas without regard to conflicts of law
principles.
Article 20 Enforceability.
20.01 If any provision of this Agreement shall be held to be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall in no way be affected or impaired thereby.
Article 21 No Waiver.
21.01 The failure of either party to exercise in any respect any right
provided for herein shall not be deemed to be a waiver of such right or of any
right hereunder.
Article 22 Assignments.
22.01 This Agreement and the rights and duties hereunder shall not be
assignable by the parties hereto except upon the written consent of the other
party, which shall not be unreasonably withheld.
22.02 This Agreement shall inure to the benefit of and be binding upon
the
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parties hereto and their respective successors and permitted assigns.
Article 23 Independent Contractor.
23.01 Client recognizes USA as an independent contractor. Nothing
contained herein shall be construed to create the relationship of employer and
employee between Client and USA.
23.02 USA is neither obliged nor expected to provide Services to
Client exclusively. Nothing contained herein shall prevent or restrict USA from
acting as a Third Party Administrator or providing any other service for other
insurance companies or others, whether or not affiliated with USA, in any
jurisdiction with respect to any insurance or annuity product, including
products which may be competitive to those of Client.
Article 24 Miscellaneous.
24.01 The headings in this Agreement are for purposes of reference only
and shall not affect in any way the meaning, construction or interpretation of
this Agreement.
24.02 This Agreement may be executed in several counterparts, each of
which is an original, but all of which together shall constitute one
instrument.
24.03 All of the Schedules which are referred to in this Agreement
shall be part of this Agreement.
24.04 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
matter thereof, whether oral or written and this Agreement may not be modified
except in a written instrument executed by both of the parties hereto.
24.05 Each party shall promptly deliver to the other a copy of any
preliminary or final examination or audit report with regard to the Contracts
serviced or Services provided under this Agreement which is issued by any
Federal, state, or local governmental agency within ten (10) days after it
receives it.
24.06 The rights and obligations of the parties set forth in Articles
6, 8, 9, 13 and 14 herein, shall survive the termination of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf by and through their duly
authorized officers.
USA ADMINISTRATION SERVICES, INC.
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By /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
Date June 3, 1997
IL ANNUITY AND INSURANCE COMPANY
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Date 6/2/97
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LISTING OF ATTACHED SCHEDULES:
SCHEDULE ITEM
A SPECIFIC CONTRACTS
B USA SERVICES AND FUNCTIONS
SMART GUIDE
C PROFESSIONAL FEES
D STANDARD SYSTEMS REPORTS
E EXAMPLES: STANDARD SYSTEM EXTRACTS
F PENALTY SCHEDULE
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