EXHIBIT (h)(40)(a)
MARKETING AND ADMINISTRATIVE
SERVICES SUPPORT AGREEMENT
THIS MARKETING AND ADMINISTRATIVE SERVICES SUPPORT AGREEMENT is made as of
the ____ day of __________, 2006, (the "Agreement") by and between Xxxxxx
Retail Management Limited Partnership, a Massachusetts limited partnership (the
"Distributor") and The United States Life Insurance Company in the City of New
York ("USL"). USL and the Distributor are referred to collectively herein as
the "Parties."
WHEREAS, USL is the issuer of variable annuity contracts and variable life
insurance policies (the "Contracts");
WHEREAS, USL has entered into a Participation Agreement, as may be amended
(the "Participation Agreement"), with Putnam Variable Trust, a Massachusetts
business trust (the "Trust) and Distributor, pursuant to which the Trust agreed
to make shares of certain of its portfolios, listed in on Schedule B to the
Participation Agreement, as such Schedule may be amended from time to time (the
"Portfolios"), available for purchase by one or more of USL's separate accounts
or divisions thereof (each, a "Separate Account") for Contract owners to
allocate Contract value;
WHEREAS, USL desires to provide certain marketing, administrative and
recordkeeping services (collectively, the "Services") to Contract owners in
connection with their allocation of Contract value and purchase payments to the
Portfolios; and
WHEREAS, Distributor desires to retain USL to provide such Services and to
compensate USL for providing such services.
NOW THEREFORE, the Parties agree as follows:
Section I - Representations and Warranties
(A) USL represents and warrants that it is an insurance company licensed
under the laws of the State of New York.
(B) USL represents and warrants that it will not accept compensation for
promoting or selling shares of the Portfolios in the form of commissions on
brokerage transactions directed to it by a Portfolio.
(C) USL represents and warrants that it will not accept compensation for
promoting or selling shares of the Portfolios in the form of commissions
directed to it by any Portfolio from any broker or dealer which has executed
portfolio securities transactions for that Portfolio.
(D) USL represents and warrants that it has not entered into any agreement
with any Portfolio or Distributor or any of Distributor's affiliates pursuant
to which that Portfolio or Distributor or any of Distributor's affiliates is
expected to direct brokerage commissions to it to compensate it for promoting
or selling any Portfolio's shares.
Section II - Services; Payments
(A) USL shall perform all Services with respect to Contract owner values and
USL's assets from which investments in shares of the Portfolios are made,
including, without limitation, the following services:
(1) Maintaining separate records for each Contract owner, which shall
reflect the Portfolio shares purchased and redeemed and Portfolio share
balances attributable to such Contract owners. USL will maintain an omnibus
account with each Portfolio on behalf of Contract owners, and such accounts
shall be in the name of USL (or its nominee) as the record owner of Portfolio
shares attributable to such Contract owners.
(2) Disbursing to or crediting to the benefit of Contract owners all
proceeds of redemptions of shares of the Portfolios in relation to Contract
owner requests to redeem their Contract value and processing all dividends and
other distributions reinvested in shares of the Portfolios.
(3) Preparing and transmitting to Contract owners, as required by law,
periodic statements showing allocations to sub-accounts investing in the
Portfolios, purchases and redemptions of Portfolio shares and dividends and
other distributions paid in relation to Contract owner transaction requests,
and such other information as may be required, from time to time, by Contract
owners.
(4) Maintaining and preserving all records required by law to be
maintained and preserved in connection with providing the foregoing services
for Contract owners with respect to the Portfolios.
(5) Generating written confirmations to Contract owners, for
transactions respecting the Portfolios, to the extent required by law.
(6) Administering the distribution to existing Contract owners of
Portfolio prospectuses, proxy materials, periodic reports to shareholders and
other materials that the Portfolios provide to their shareholders.
(7) Aggregating and transmitting purchase and redemption orders to the
Portfolios on behalf of, or with respect to, Contract owners.
(8) Providing marketing assistance with respect to the offer of the
Portfolios.
(9) Providing formalized business planning.
(10) Support and marketing of the Portfolios to USL's sales
representatives through internal sources (such as Internet web sites and
mailings).
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(11) Providing market share data to Distributor.
(12) Assisting and facilitating new product approval on a timely basis.
(13) Enabling Distributor to participate in and present at due diligence
meetings for financial advisers.
(14) Consistent and timely communication to Distributor regarding
internal policies.
(15) Allowing Distributor to educate USL's sales and marketing
representatives.
(16) Communicating Distributor policies and procedures to USL's sales
and marketing representatives.
(17) Promoting or providing preferred access to the Xxxxxx portfolios in
the Trust within USL's contracts.
(B) In consideration of USL performing the Services, Distributor agrees to
pay USL, quarterly, a marketing and administrative support services fee at the
annual rate provided in Schedule A of the average daily net assets of Portfolio
shares held by USL pursuant to the Participation Agreement. USL agrees that it
will not seek reimbursement for expenses for performing the Services under the
Trust's Distribution Plan adopted pursuant to Rule 12b-1 under the 1940 Act
(where applicable). In addition, USL represents and agrees that no charge
imposed by it on Contract owners is specifically intended or designed to
compensate USL for the Services for which payment is made by Distributor under
this Marketing and Administrative Services Agreement. Fees contemplated under
this paragraph (B) shall be wired to USL pursuant to the wiring instructions in
Schedule B.
(C) The Trust shall calculate the marketing and administrative support
services fee at the end of each calendar quarter and will make such payment to
USL, without demand or notice by USL, within 30 days thereafter, in a manner
mutually agreeable by the Parties from time to time.
(D) USL will furnish to Distributor or its designees such information as
Distributor may reasonably request, and will otherwise cooperate with
Distributor in the preparation of reports concerning this Agreement, as well as
any other reports or filing that may be required by law.
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Section III - Nature of Payments for Services
The Parties to this Agreement recognize and agree that Distributor's payments
to USL are for marketing and administrative services only and do not constitute
payment in any manner for investment advisory services. The amount of marketing
and administrative expense payments made by Distributor to USL pursuant to this
Agreement are not intended to be, and shall not be deemed to be, indicative of
Distributor's bona fide profits or of the actual costs to USL of providing
marketing and administrative services to Distributor.
Section IV - Disclosure
Consistent with any current legal requirements, including without limitation,
the Securities Exchange Act of 1934, the rules thereunder and the applicable
rules of any self-regulatory organization, in effect at any time during the
term of this Agreement, or as requested by Contract owners, USL agrees to
provide written point of sale disclosure to its Contract owners describing the
Services provided by it pursuant to this Agreement, the payments made by
Distributor pursuant to this Agreement and the payment schedule(s) agreed to by
Distributor pursuant to this Agreement in consideration of such Services.
Section V- Maintenance of Records
Each party shall maintain and preserve all records as required by law to be
maintained and preserved in connection with providing the services described
herein. Upon the reasonable request of Distributor, USL will provide
Distributor or its representative, copies of all such records.
Section VI - Term and Termination
(A) The Parties acknowledge and agree that USL has provided the Services
referenced in this Agreement since January 1, 2005 and that the provisions of
this Agreement shall be deemed to have been effective since such date. This
Agreement shall remain in full force and effect for a period of one year from
the date hereof and shall be automatically renewed thereafter for successive
one-year periods, unless otherwise terminated.
(B) This Agreement may be terminated with respect to any Portfolio by
Distributor or by USL without penalty, upon sixty (60) days' prior written
notice to the other party.
(C) This Agreement will automatically terminate on the date of termination
of the Participation Agreement.
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Section VII - Amendment; Entire Agreement
This Agreement constitutes the entire agreement between the Parties with
respect to the Services and no modification, amendment or waiver of any of the
provisions of this Agreement shall be effective unless made in writing
specifically referring to this Agreement and signed by the Parties hereto.
Section VIII - Notices
All notices and other communications to either USL or Distributor will be duly
given if mailed, telegraphed or telecopied to the address set forth below, or
at such other address as either party may provide in writing to the other party.
The United States Life Insurance Company in the City of New York
0000 Xxxxx Xxxxxxx, X00-00
Xxxxxxx, Xxxxx 00000
Attn: General Counsel
Putnam Variable Trust
x/x Xxxxxx LLC
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: General Counsel
Section IX--Miscellaneous
(A) Successors and Assigns. This Agreement shall be binding upon the Parties
and their transferees, successors and permitted assigns. The benefits of and
the right to enforce this Agreement shall accrue to the Parties and their
transferees, successors and assigns. No party may assign either this Agreement
or any of its rights, interests, or obligations hereunder without the prior
written approval of the other party.
(B) Intended Beneficiaries. Nothing in this Agreement shall be construed to
give any person or entity other than the Parties, any legal or equitable claim,
right or remedy. Rather, this Agreement is intended to be for the sole and
exclusive benefit of the Parties.
(C) 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.
(D) Applicable Law. This Agreement shall be interpreted, construed, and
enforced in accordance with the laws of the Commonwealth of Massachusetts.
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(E) Severability. This Agreement shall be severable as it applies to each
Portfolio, and action on any matter shall be taken separately for each
Portfolio affected by the matter. 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 if the invalid or unenforceable
portion had not been inserted.
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed in its name and on its behalf by its duly authorized representative.
The United States Life Insurance Company ATTEST:
in the City of New York
By: By:
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Title: Title:
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Xxxxxx Retail Management Limited Partnership
By:
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Title:
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SCHEDULE A
Beginning on the date hereof and during the term of this Agreement and for
Services that were performed during the calendar year ended December 31, 2005,
Dealer shall be compensated in accordance with the Fee Schedule set forth below:
a. "Relevant Assets" shall mean the Portfolio shares held by American
General and listed on Schedule B to the Participation Agreement.
b. The Fee shall be calculated and paid each quarter based on the Asset
Based Component as follows
Asset Based Component:
Annual rate of __% (______basis points) of the value of the Relevant
Assets.
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SCHEDULE B
BANK NAME:
BANK ABA # :
ACCOUNT #:
NAME ON ACCOUNT:
DESCRIPTION:
Please e-mail backup calculations to:
Mailing Address:
Contact phone #:
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