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EXHIBIT (8)(b)(ii)
Xxxxxxx, Xxxxx & Co.
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Sept. 24, 1998
Xxxxxx Investors Life Insurance Company
Xxx Xxxxxx Xxxxx
Xxxx Xxxxx, XX 00000
Ladies and Gentlemen:
This letter sets forth the agreement between Xxxxxx Investors Life
Insurance Company ("you" or the "Company") and the undersigned ("we" or
"Xxxxxxx, Xxxxx & Co.") concerning certain administrative services to be
provided by you, with respect to the Xxxxxxx Sachs Variable Insurance Trust (the
"Trust").
1. The Trust. The Trust is a Delaware business trust registered with
the Securities and Exchange Commission (the "SEC") under the Investment Company
Act of 1940, as amended (the "Act"), as an open-end management investment
company. The Trust consists of one or more separate series ("Portfolios") of
shares and serves as a funding vehicle for variable annuity contracts and
variable life insurance contracts. As such, the Trust sells its shares to
insurance companies and their separate accounts. With respect to various
provisions of the Act, the SEC requires that owners of variable annuity
contracts and variable life insurance contracts be provided with materials and
rights afforded to shareholders of a publicly-available SEC-registered mutual
fund.
2. The Company. The Company is a Illinois life insurance company. The
Company issues variable life insurance policies and variable annuity contracts
(the "Contracts") supported by one or more separate accounts of the Company (the
"Separate Account"; if more than one, the term "Separate Account" shall apply to
each Separate Account subject hereto). The Company has entered into a
participation agreement dated September 24, 1998 (the "Participation Agreement")
with the Trust pursuant to which the Company purchases shares of the Trust for
the registered Separate Account supporting the Company's Contracts.
3. Xxxxxxx, Xxxxx & Co. Xxxxxxx, Xxxxx & Co. serves as the distributor
for the Trust. Xxxxxxx Sachs Asset Management International ("GSAMI"), an
affiliate of Xxxxxxx, Xxxxx & Co., serves as the investment adviser to the
International Equity and Global Income Funds. GSAMI supervises and assists in
the overall management of the Trust's affairs under an Investment Management
Agreement with the Trust, subject to the overall authority of the Trust's Board
of Trustees in accordance with Delaware law. Under the Investment Management
Agreements, GSAMI is compensated for providing investment advisory and certain
administrative services.
4. Administrative Services. You have agreed to assist us, as we may
request from time to time, with the provision of administrative services to the
Trust and the Portfolios, as they relate to investment in the Trust by the
Separate Account. It is anticipated that such services may include, but shall
not be limited to: the aggregation of allocation, transfer and liquidation
orders of the Separate Account; the printing and mailing to owners of Contracts
copies of the Portfolios' prospectuses and other materials that the Trust is
required by law or otherwise to provide to its shareholder, but that the Company
is not otherwise required to provide to owners of Contracts;
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providing financial consultants with advice with respect to inquiries related to
the Portfolios (not including information about performance or related to
sales); and providing such other administrative support for the Trust as
mutually agreed to by the Company and Xxxxxxx, Sachs & Co., to the extent
permitted or required under applicable statutes.
5. Payment for Administrative Services. In consideration of the
services to be provided by you, we shall pay you on a monthly basis, from our
assets, including GSAMI's bona fide profits as investment adviser to the Trust,
an amount equal to 20 basis points (0.20%) per annum of the average aggregate
net asset value of shares of the Trust held by the Separate Account under the
Participation Agreement. For purposes of computing the payment to the Company
contemplated under this Paragraph 5, the average aggregate net asset value of
shares of the Trust held by the Separate Account over a one-month period shall
be computed by totaling the Separate Account's aggregate investment (share net
asset value multiplied by total number of shares held by the Separate Account)
on each calendar day during the month, and dividing by the total number of
calendar days during such month. The payment contemplated by this Paragraph 5
shall be calculated by GSAMI at the end of each calendar month and will be paid
to the Company within ten (10) business days thereafter.
6. Nature of Payments. The parties to this letter agreement recognize
and agree that payments to the Company pursuant to Section 5 hereof relate to
the administrative services detailed herein and do not constitute payment in any
manner for investment advisory services or for costs of distribution of the
Contracts or of Trust shares; and, further, that these payments are not
otherwise related to investment advisory or distribution services or expenses,
or administrative services which the Company is required to provide to owners of
the Contracts pursuant to the terms thereof.
7. Term. This letter agreement shall remain in full force and effect
for an initial term of one year, and shall automatically renew for successive
one-year periods unless either party notifies the other upon sixty (60) days'
written notice of its intent not to continue this agreement. This letter
agreement shall terminate automatically upon the redemption of the Separate
Account's investment in the Trust, or upon termination of the Trust's obligation
to sell its shares under the Participation Agreement.
8. Representations and Warranties. The Company represents and warrants
that:
(a) it is an insurance company duly organized and in good standing
under Illinois insurance law;
(b) its entering into and performing its obligations under this
letter agreement does not and will not violate its charter
documents or by-laws, rules or regulations, or any agreement to
which it is a party;
(c) it will keep confidential any information acquired in connection
with the matters contemplated by this letter agreement regarding
the business and affairs of the Trust, Xxxxxxx, Xxxxx & Co. and
their affiliates; and
(d) 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
the services contemplated herein.
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9. Indemnification.
(a) The Company agrees to indemnify and hold harmless Xxxxxxx, Sachs
& Co. and its affiliates, partners, 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 Xxxxxxx, Xxxxx & Co.'s or its
affiliates' willful misfeasance, bad faith or gross negligence
in the performance of its duties.
(b) Xxxxxxx, Xxxxx & Co. and its affiliates agree to indemnify and
hold harmless the Company and its directors, officers, agents
and employees from any and all loss, liability and expenses
resulting from any gross negligence or willful wrongful act of
Xxxxxxx, Xxxxx & Co. or its affiliates 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 of its duties.
10. Assignment. This letter agreement may not be assigned (as that term
is defined in the Act) by any party without the prior written approval of the
other parties, which approval will not be unreasonably withheld.
11. Interpretation. This letter agreement shall be construed in
accordance with the laws of the State of Delaware, without giving effect to the
principles of conflicts of laws, subject to the following rules:
(a) This letter agreement shall be subject to the provisions of the
Act, and the rules, regulations and rulings thereunder,
including such exemptions from that statute, rules and
regulations as the SEC may grant, and the terms herein shall be
limited, interpreted and construed in accordance therewith.
(b) The captions in this letter agreement are included for
convenience of reference and in no way define or delineate any
of the provisions herein or otherwise affect their construction
or effect.
12. Amendment. This letter agreement may be amended only upon mutual
agreement of the parties hereto in writing.
13. Counterparts. This letter 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.
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If this letter agreement is consistent with your understanding of the
matters we discussed concerning your administrative services, kindly sign below
and return a signed copy to us.
Very truly yours,
Xxxxxxx, Xxxxx & Co.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
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Title: Vice President
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XXXXXXX SACHS ASSET MANAGEMENT INTERNATIONAL
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
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Title: Director
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Acknowledged and Agreed to:
XXXXXX INVESTORS LIFE INSURANCE COMPANY
By: /s/ Xxxx X. Xxxxxxx, Xx.
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Name: Xxxx X. Xxxxxxx, Xx.
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Title: Marketing Officer
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