EXHIBIT 8(d)(iv)
AMENDED LETTER AGREEMENT
[LOGO OF USAA LIFE INSURANCE COMPANY APPEARS HERE]
March 16, 1998
BY EXPRESS DELIVERY
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Xxxxxxx Xxxxxx Investments, Inc.
Xxxxxxx Investor Services, Inc.
Xxxxxxx Variable Life Investment Fund
0 Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Executives:
We are writing to augment and clarify certain of the terms and conditions of:
(1) the participation agreement, dated February 3, 1995, by and between USAA
Life Insurance Company ("USAA Life"), on behalf of the Separate Account of USAA
Life Insurance Company ("Separate Account") and the Life Insurance Separate
Account of USAA Life Insurance Company ("Life Insurance Separate Account"), and
the Xxxxxxx Variable Life Investment Fund ("Fund") (hereinafter "Participation
Agreement"); (2) the reimbursement agreement, dated February 3, 1995, by and
between USAA Life and Xxxxxxx, Xxxxxxx & Xxxxx ("SS&C") (hereinafter
"Reimbursement Agreement"); and (3) the participating contract and policy
agreement, dated February 3, 1995, by and between USAA Investment Management
Company ("IMCO") and Xxxxxxx Investor Services, Inc. ("SIS") (hereinafter
"Policy Agreement").
Unless otherwise noted, the provisions set out below are intended to apply to
the Participation Agreement, Reimbursement Agreement and the Policy Agreement
(collectively, the "Agreements") and, to the extent contrary to or inconsistent
with any provision in any Agreement, shall modify such provision. The headings
used herein are for convenience of reference only.
Kindly acknowledge your acceptance and agreement to the following by affixing
your signature to the last page of this letter.
AVAILABLE PORTFOLIOS.
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The Fund's Capital Growth Portfolio ("Portfolio" or "Capital Growth
Portfolio") is the only Fund series that USAA Life currently intends to make
available for investment through the Separate Account and the Life Insurance
Separate Account. Accordingly, any obligations of USAA Life with respect to
capital contributions or expense reimbursements required to be made under the
Participation Agreement shall be limited to the Capital Growth Portfolio, until
such time as USAA Life notifies the Fund that it intends to use one or more
additional portfolios.
Xxxxxxx Xxxxxx Investments, Inc.
March 16, 1998
Page 2
PURCHASES AND REDEMPTIONS.
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1. Timely Pricing and Orders. The Fund or its designated agent will use all
commercially reasonable efforts to provide to USAA Life the closing net asset
value and any dividend and capital gain information for the Portfolio by 5:15
p.m., Central time on each Business Day. "Business Day" shall mean any day on
which the Fund calculates the net asset value of its Funds pursuant to rules of
the Securities and Exchange Commission and as described in the Fund's
Prospectus. USAA Life will use these data to calculate unit values, which in
turn will be used to process transactions that receive that same Business Day's
Separate Account or Life Insurance Separate Account unit value. Such Separate
Account or Life Insurance Separate Account processing will be done the same
evening, and corresponding orders with respect to Fund shares will be placed the
morning of the following Business Day. USAA Life will use all commercially
reasonable efforts to place such orders with the Fund by 9 a.m., Central time.
2. Timely Payments. USAA Life or its designated agent will transmit
orders for purchases and redemptions of Fund shares to SIS, and will wire
payment for net purchases to a custodial account designated by the Fund on the
same day as the order for Fund shares is placed, to the extent practicable.
Payment for net redemptions will be wired by the Fund to an account designated
by USAA Life on the same day as the order is placed, to the extent practicable,
but in any event within such reasonably practicable period of time after the
order is placed as would enable USAA Life to pay redemption proceeds in
compliance with Section 22(e) of the Investment Company Act of 1940.
3. Applicable Price. The Fund shall effect any orders to purchase or redeem
Portfolio shares that USAA Life submits on behalf of the Separate Account, based
on transactions under variable annuity contracts issued by USAA Life
("Contracts"), and on behalf of the Life Insurance Separate Account, based on
transactions under variable life insurance policies ("Policies"), at the
Portfolio's net asset value per share as of the close of business on the
Business Day the order is received by USAA Life or its designee, acting as agent
for the Fund, provided that such order is received prior to the time as of which
the Fund calculates net asset value on that Business Day. If such order is
received after that time, the order will be effected at the Portfolio's net
asset value as of the close of business on the next Business Day. Any orders to
purchase shares of an available Fund not based on transactions under Contracts
or Policies will be effected at the Fund's net asset value per share next
computed after the order is received by the Fund.
4. Redemptions. The Fund shall redeem for cash from USAA Life those full
or fractional shares of the Portfolio that USAA Life requests from time to time.
Xxxxxxx Xxxxxx Investments, Inc.
March 16, 1998
Page 3
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS.
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USAA Life, on behalf of the Separate Account and the Life Insurance
Separate Account, hereby elects to reinvest all dividends and capital gains
distributions in additional shares of the Capital Growth Portfolio at the net
asset values on the payment date of such dividends and capital gains
distributions until USAA Life otherwise notifies the Fund in writing. USAA Life
reserves the right to revoke this election and to receive all such dividends and
capital gain distributions in cash. The Fund shall promptly notify USAA Life of
the number of shares so issued as payment of such dividends and distributions.
AMENDMENT TO POLICY AGREEMENT.
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As an additional inducement for IMCO to enter into the Policy Agreement,
SIS hereby agrees with IMCO as follows:
(1) in connection with Sections 6 and 12 of the Policy Agreement, SIS will
give IMCO thirty days' written notice before suspending sales or
withdrawing the offering of Shares (as defined in the Policy Agreement) or
terminating the Policy Agreement, except that sales of Shares may be
suspended or the offering of Shares withdrawn or the Policy Agreement
terminated without notice (i) if the continued offering or sale of Shares
would violate any applicable statute or regulation, order or decree of any
court, governmental agency or self-regulatory organization having
jurisdiction, or (ii) if in the sole discretion of the Trustees of the
Fund, including a majority of those Trustees who are not "interested
persons" as defined in the Investment Company Act of 1940, as amended, of
the Trust or of its investment adviser, such action is determined to be
necessary in the best interests of the Shareholders of the Portfolio.
(2) no unilateral amendment pursuant to Section 6 of the Policy Agreement
shall be effective against IMCO unless it is accompanied by a written
notice from SIS stating that the amendment is necessary to prevent the
continued offering or sale of Shares from violating any applicable statute
or regulation, order or decree of any court, governmental agency or self-
regulating organization having jurisdiction.
Xxxxxxx Xxxxxx Investments, Inc.
March 16, 1998
Page 4
FUND MATERIALS.
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The Fund, at its expense, shall provide USAA Life or its designee with
camera ready copy or computer diskette versions of all prospectuses (including
supplements thereto), statements of additional information, annual and semi-
annual reports, and proxy materials (collectively, "Fund Materials"), to be
printed and distributed by USAA Life or IMCO to existing and prospective
Contract or Policy owners, as appropriate. USAA Life agrees to bear the cost of
printing and distributing such Fund Materials.
TAX MATTERS.
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1. The Fund, SS&C, or SIS will notify USAA Life immediately upon having a
reasonable basis for believing that the Portfolio has ceased to comply with the
requirements of Section 817(h) of the Internal Revenue Code of 1986, as amended
("Code") or that the Portfolio might not so comply in the future. In connection
with a failure to comply with the Section 817(h) diversification requirements,
SS&C shall cooperate with USAA Life by providing it with full explanation as to
the circumstances that caused the failure, and the reasons why the failure was
inadvertent.
2. The limitation against liability set out in paragraph 6(c)(viii) of the
Reimbursement Agreement shall apply only where it can be shown that the failure
of USAA Life to comply with clauses 6(c)(i) through (vii) materially contributed
to the liability.
3. Each Agreement shall terminate, at the option of USAA Life or IMCO, as
the case may be, in the event of a non-curable failure by the Portfolio to
comply with the provisions of Subchapter M or Section 817(h) of the Code. To
the extent that any Agreement by its terms provides for one or more rights or
obligations thereunder to survive the termination of that Agreement, those
provisions shall survive the termination of that Agreement under this paragraph.
MISCELLANEOUS.
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(a) The Fund, SS&C, and SIS agree to make available to USAA Life and its
affiliates, to the extent permitted by applicable law, any arrangement for
utilization of the Portfolio, which arrangement has been or will be made
generally available to any other life insurance company or any affiliate of a
life insurance company.
Xxxxxxx Xxxxxx Investments, Inc.
March 16, 1998
Page 5
(b) This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the Commonwealth of Massachusetts.
(c) The name "Xxxxxxx Variable Life Investment Fund" is the designation of
the Trustees for the time being under a Declaration of Trust dated March 15,
1985, as amended, and all persons dealing with the Fund must look solely to the
property of the Fund for the enforcement of any claims against the Fund as
neither the Trustees, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of the Fund. No Portfolio
shall be liable for any obligations properly attributable to any other
Portfolio.
_________________________________
Very truly yours,
USAA LIFE INSURANCE COMPANY
By: /s/ XXXXX X. XXXXXX
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XXXXX X. XXXXXX
President
USAA INVESTMENT
MANAGEMENT COMPANY
By: /s/ XXXX X. XXXXXXXX
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XXXX X. XXXXXXXX
Senior Vice President
Investments Services
Xxxxxxx Xxxxxx Investments, Inc.
March 16, 1998
Page 6
We hereby agree to and accept the provisions set out above.
XXXXXXX XXXXXX INVESTMENTS, INC.
By: /s/ XXXX X. XXXXXX
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XXXXXXX INVESTOR SERVICES, INC.
By: /s/ XXXX X. XXXXXX
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XXXXXXX VARIABLE LIFE INVESTMENT FUND
By: /s/ XXXXXXX X. XXXXXX
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