Xxxxxxx, Xxxxx Asset Management, L.P.
00 Xxx Xxxx
Xxx Xxxx, XX 00000
January 2nd, 2005
Allmerica Financial Life Insurance and Annuity Company
c/o
Goldman Xxxxx & Co
0 Xxx Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
This letter sets forth the agreement between Allmerica Financial Life
Insurance and Annuity Company ("you" or the "Company") and the undersigned
("we", "Xxxxxxx Xxxxx Asset Management, L.P." or "GSAM")) concerning certain
administrative services to be provided by you, with respect to the Xxxxxxx Xxxxx
Variable Insurance Trust (the "Trust").
1. THE TRUST. The Trust is a Delaware statutory 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 Massachusetts life insurance company.
The Company issues variable annuity contracts and variable life insurance
policies (the "Contracts") supported by Separate Accounts (the "Separate
Account"; if more than one, the term "Separate Account" shall apply to each
Separate Account subject hereto) which is registered with the SEC as a unit
investment trust. The Company has entered into a participation agreement (the
"Participation Agreement") with the Trust pursuant to which the Company
purchases shares of the Trust for the Separate Account supporting the Company's
Contracts.
3. XXXXXXX, XXXXX & CO. Xxxxxxx, Xxxxx & Co. serves as the distributor
for the Trust. Xxxxxxx Xxxxx Asset Management, L.P. serves as the Trust's
investment adviser. GSAM 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 Agreement, we are 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 or GSAM, as they may relate to the investment in the Trust by the Separate
Account. It is anticipated that such services may include (but shall not be
limited to) the mailing of Trust reports, notices, proxies and proxy statements
and other informational materials to owners of the Contracts supported by the
Separate Account; the transmission of purchase and redemption requests to the
Trust's transfer
agent; the maintenance of separate records for each owner of a Contract
reflecting shares purchased and redeemed and share balances attributable to such
Contract Owner in the form of units; the preparation of various reports for
submission to the Trust's Trustees; the provision of shareholder support
services with respect to the Portfolios serving as funding vehicles for the
Company's Contracts; and the services listed on Schedule A.
5. PAYMENT FOR ADMINISTRATIVE SERVICES. In consideration of the services
to be provided by you, we shall pay you on a quarterly basis, from our assets,
including GSAM's BONA FIDE profits as investment adviser to the Trust, an amount
equal to __ basis points (0.__ %) 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 GSAM at the end of each calendar quarter and will be paid
to the Company within sixty (60) business days thereafter.
6. NATURE OF PAYMENTS. The parties to this letter agreement recognize and
agree that GSAM's payments to the Company relate to administrative services only
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.
You represent that:
(i) you may legally receive the payments contemplated by this Agreement.
(ii) the administrative services provided by GSAM under this Agreement are
not ones for which the Trust has agreed to perform, provide or pay for
under the Participation Agreement.
(iii) to the extent required by applicable law, You have taken payments
received from GSAM under this Agreement into account in making any
determinations pursuant to Section 26(f)(2)(A) and 26(f)(3) of the Act.
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.
8. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
that:
(a) it is an insurance company duly organized and in good standing
under Massachusetts State insurance law;
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(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; and
(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, GSAM and their affiliates.
9. 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.
10. AMENDMENT. This letter agreement may be amended only upon mutual
agreement of the parties hereto in writing.
11. 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.
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.
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Very truly yours,
Xxxxxxx Xxxxx Asset Management, L.P.
By:
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Name:
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Title:
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Acknowledged and Agreed to:
ALLMERICAN FINANCAIL LIFE INSURANCE AND ANNUITY COMPANY
By:
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Name:
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Title:
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:
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SCHEDULE A
MAINTENANCE OF BOOKS AND RECORDS
- Record issuance of shares
- Record transfers (via net purchase orders)
- Reconciliation and balancing of the Separate Account at the Trust
level in the general ledger, at various banks and within systems
interface to the summary of each Contract Owner's position
PURCHASE ORDERS
- Determination of net amount available for investment by the Trust
- Deposit of receipts at Trust custodian by Trust (wire order)
- Notify custodian of estimated amount required to pay dividend
distributions or reinvestments
REDEMPTION ORDERS
- Determination of net amount required for redemptions by Trust
- Notification of custodian and Trust of cash required to meet payments
- Cost of share redemptions
FUND-RELATED CONTRACT OWNER SERVICES
- Printing and mailing costs associated with dissemination of Trust
prospectus to existing Contract Owners (which shall not include
proxies)
- Telephonic support for Contract Owners with respect to inquiries about
the Trust (not including information related to sales of annuity
contracts)
- []COMPANY DOES NOT USUALLY PAY FOR THESE]
- Printing and mailing costs associated with dissemination of Trust
reports and notices to existing Contract Owners or prospects (other
than proxies)
OTHER ADMINISTRATIVE SUPPORT
- Sub-accounting services
- Providing other administrative support to the Trust as mutually agreed
between insurer and the Trust
- Relieving the Fund of other usual or incidental administrative
services provided to individual shareholders
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