EXHIBIT (8)(a)
AGREEMENT
It is hereby agreed as follows:
I. THE PARTIES
A. The AIG Life Companies
American International Life Assurance Company of New York ("AILIFE") is a New
York stock life insurance corporation. AIG Life Insurance Company ("AIG Life")
is a Pennsylvania stock life insurance company, AILIFE and AIG Life will be
collectively referred to herein as the "Companies." An affiliated company of the
Companies ("Distributor") is a broker/dealer, registered as such with the
Securities and Exchange Commission (the "SEC") pursuant to the Securities
Exchange Act of 1934 (the "1934 Act") and is a member of the National
Association of Securities Dealers, Inc. (the "NASD"). Distributor acts as the
distributor of variable annuity contracts and variable life insurance policies
issued by the Companies and their affiliated companies.
B. Delaware Management Company, Inc.
Delaware Management Company, Inc. ("Delaware") is a Delaware Corporation with
its principal place of business in Philadelphia, Pennsylvania. Delaware acts as
the investment manager for a number of mutual funds commonly known as the
"Delaware Group of Funds."
II. BASIS FOR THIS AGREEMENT
The Companies wish to market insurance products using Delaware Group Premium
Fund as soon as practical. Delaware wishes to manage a fund and component series
which can be expected to reach a size that will ultimately be a profitable use
of Delaware's resources.
The Companies and Delaware currently have effective registrations for Delaware
Group Premium Fund, variable annuity contracts and registrations pending for
variable life contracts.
The Companies and Delaware hereby agree that the Agreement between the Companies
and Delaware's predecessor ("old Delaware") dated May 20, 1987 as assigned, is
terminated effective on the date of this Agreement and that this Agreement
constitutes the sole terms and conditions between the parties as set forth in
Section VII.A.
III. RESPONSIBILITIES AND AUTHORITY OF THE COMPANIES
The Companies will be solely responsible for all marketing of the Delaware Group
Premium Fund.
.. The Companies will determine all aspects of the product design and
features except the investment management and policies of the
underlying funds.
.. The Companies will have the exclusive right to use the Delaware Group
Premium Fund in insurance products it chooses for a minimum of 2 years
from the date of
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the first public sale. This exclusive right will continue indefinitely
if customer assets under management reach an economic size, $250 MM,
for the Fund by the end of the 2 year period. The addition of another
Series to the Fund will increase the amount by $50 MM for each Series.
The Companies will be responsible for contract holder servicing, filing
of reports and updated registrations, and other administrative matters
related to the Variable Products or Separate Accounts.
IV. RESPONSIBILITIES AND AUTHORITY OF DELAWARE
Delaware will be solely responsible for and bear the cost of the management of
the Delaware Group Premium Fund and its component Series. The Fund's Board of
Directors will be responsible for setting the Fund's policies.
.. Delaware will provide investment and all administrative management for
the Fund at the rate(s) and in the manner specified in the prospectus.
.. Delaware will pay for services up to specified limits during the first
2 years following the date of first public sale as provided in Schedule
A.
.. If the Fund does not reach $250 MM within 2 years of the date of the
first public sale, Delaware has the right to market the
Delaware Group Premium Fund to other separate accounts and the
Companies will take whatever legal steps are reasonably requested to
accomplish this objective. If legal and regulatory changes permit,
Delaware may expand its marketing efforts beyond separate
accounts if the $250 MM size is not reached within the said two year
period.
.. Delaware will take all reasonable actions on a timely basis
which are necessary to keep the Fund available for use by the
Companies.
V. RIGHT TO DISCONTINUE THE VARIABLE PRODUCTS
The Companies may immediately discontinue offering any of the Variable Products
at any time. In the event the Companies shall discontinue offering the Variable
Products, Delaware shall have the right to offer the Fund to other insurers.
The Companies may immediately discontinue offering any of the Variable Products
if either party reasonably determines that regulatory changes (including but not
limited to securities, tax and insurance law, rulings or interpretations
thereof) create a reasonable legal or financial risk with respect to future
sales of such a Variable Product or Products.
VI. TERMINATION
This Agreement may be terminated by Delaware at any time after five years from
the date of first public sale upon the giving of 180 days' prior written notice;
provided however that if the Fund does not reach $250 MM in assets by the end of
2 years from the date of first public sale, Delaware may terminate this
Agreement upon 180 days notice. The Companies may terminate this Agreement upon
180 days prior, written notice. In the event of such termination, the parties
will undertake whatever actions may be necessary to protect the Companies'
responsibility to its policyholders as required
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by applicable state or federal law or regulation. Delaware will not take any
action to cause any Companies policyholder to surrender, exchange or terminate
any Variable Product sold hereunder unless otherwise agreed to by the parties.
VII. GENERAL PROVISIONS
A. The Agreement
This Agreement is the complete and exclusive statement of the agreement between
the parties as to the subject matter hereof which supersedes all proposals or
agreements, oral or written, and all other communications or letters of intent
between the parties related to the subject matter of this Agreement.
B. Modification or Amendment
This Agreement can only be modified by a written agreement duly signed by the
persons authorized to sign agreements on behalf of the parties. Variance from
the terms or conditions of this Agreement or any order of other written
notification will be of no effect.
C. Separability
If any provision or provisions of this Agreement shall be held, to be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or be impaired thereby.
D. Assignment
This Agreement and the rights, duties and obligations of the parties hereto
shall not be assignable by either party hereto without the prior written consent
of the other, and any purported assignment shall be void.
E. Arbitration
Any controversy relating to this Agreement shall be determined by arbitration in
the City of Wilmington, Delaware, in accordance with the Commercial Arbitration
Rules of the American Arbitration Association using arbitrators who will follow
substantive rules law. The dispute shall be determined by an arbitrator
acceptable to both parties who shall be selected within 7 days of filing of
notices of intention to arbitrate. Otherwise, the dispute shall be determined by
a panel of three arbitrators selected as follows:
Within 7 days of filing notice of intention to arbitrate, each party
will appoint one arbitrator. These two arbitrators will then name a
third arbitrator, who shall be an attorney admitted before the bar of
any state of the United States, to preside over the panel. If either
party fails to appoint an arbitrator within 7 days, either party may
request the American Arbitration Association to appoint the necessary
arbitrator(s) pursuant to its rules.
Arbitrators shall be compensated for their services at the standard hourly rate
charged in their private professional activities. Each party will pay its own
costs and expenses. Federal rules for civil procedure shall apply. All testimony
shall be transcribed. The award of the panel shall be accompanied by findings of
fact and a statement of reasons for the decision. All parties agree to be bound
by the results of this arbitration; judgment upon the award so rendered may be
entered and enforced in any court of
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competent jurisdiction. To the extent reasonably practicable, both parties agree
to continue performing their respective obligations under this Agreement while
the dispute is being resolved. All matters relating to such arbitration shall be
maintained in confidence.
F. Waiver
No waiver by either party of any default by the other in the performance of any
promise, term or condition of this Agreement shall be construed to be a waiver
by such party of any other or subsequent default in performance of the same or
any other convenant, promise, term or condition hereof. No prior transactions or
dealings between the parties shall be deemed to establish any custom or usage
waiving or modifying any provision hereof.
G. Acts Beyond the Control of the Parties
No liability shall result to either party, nor shall either party be deemed to
be in default hereunder, as a result of delay in its performance or from its
nonperformance hereunder caused by circumstances beyond its control, including
but not limited to: act of God, act of war, riot, epidemic, fire, flood or other
disaster, or act of government. Nevertheless, the party shall be required to be
diligent in attempting to remove such cause or causes.
H. Relationship
Each of the parties will act as an independent contractor under the terms of
this Agreement and neither is now, or in the future, an agent or legal
representative of the other for any purpose. Neither party has any right or
authority to supervise or control the activities of the other party's employees
in connection with the performance of this Agreement or to assign or create any
application of any kind, express or implied, on behalf of the other party or to
bind it in any way, to accept any service of process upon it or to receive any
notice of any nature whatsoever on its behalf.
I. Governing Law
This Agreement shall be governed by and interpreted in accordance with the laws
of the State of Delaware.
J. Captions
Captions contained in this Agreement are for reference purposes only and do not
constitute part of this Agreement.
K. Notice
All notices which are required to be given or submitted pursuant to this
Agreement shall be in writing and shall be deemed given when deposited with the
United States Postal Service, postage prepaid, registered or certified mail,
return receipt requested, to the addresses set forth below or to such other
address as the parties may, from time to time designate.
President
American International Life Assurance Company of New York
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
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President
AIG Life Insurance Company
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
President
Delaware Management Company, Inc.
One Commerce Square
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
L. Notification of Claims
Each party hereto shall promptly notify the other in writing of any claims,
demands or actions having any bearing on this Agreement.
M. Performance in Accordance with Law
Each party agrees to perform its obligations hereunder in accordance with all
applicable laws, rules and regulations now or hereafter in effect.
N. Binding Agreement
This Agreement shall be binding upon and inure to the benefit of the parties
hereto, their successors and permitted assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement at Wilmington,
Delaware on June 29, 1988.
DELAWARE MANAGEMENT COMPANY, INC.
By:
------------------------------
AMERICAN INTERNATIONAL LIFE
ASSURANCE COMPANY OF NEW YORK
By:
------------------------------
AIG LIFE INSURANCE COMPANY
By:
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SCHEDULE A
Expenses Delaware Will Defray
In order to benefit the shareholders of the Fund, Delaware will reimburse for
servicing expenses subject to the limits specified below.
During the first 2 years from the date of the first public sale, Delaware will
reimburse up to the scheduled amounts below to defray a portion of accumulated
expenses, which shall include, but not be limited to, printing costs, legal,
accounting and actuarial fees, and administrative costs.
First Year
----------
Fund
Asset $ Limit on Delaware
Levels Expense Undertaking
S250 MM $625,000
over $250 MM 0
--------
Total Possible Expense Undertaking $625,000
Second Year
-----------
Fund $ Limit on Delaware Expense
Asset Expense Undertaking
Levels
$250 MM $625,000
over $250 MM 0
--------
Total Possible Expense Undertaking $625,000
In addition, Delaware will limit the remaining portion of its fees after the
above defrayals on the fixed income Series for the first six months or until
each Series reaches S25 MM whichever comes first. Delaware will limit its fees
to the extent necessary to maintain the total expenses of these series at 80
basis points for each series.
Delaware, shall be provided with adequate verification of expenses to be
reimbursed.
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