EXHIBIT (h)(40)(a)
SERVICE AGREEMENT
CLASS O
AGREEMENT dated as of ___________________, 2003 between Xxxx Xxxxx
Management, Inc. ("Xxxxx"), a New York Corporation with its principal offices at
000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, as Investment Adviser for The Xxxxx
American Fund (the "Fund"), and American General Life Insurance Company (the
"Company"), a Texas corporation having its principal office and place of
business at 0000-X Xxxxx Xxxxxxx, Xxxxxxx, XX 00000.
In consideration of the promises and mutual covenants set forth in this
Agreement, the Parties agree as follows:
1. Services Provided
The Company agrees to provide services to the Fund including the following:
a) responding to inquiries from the Company Contract owners using Class O
shares of one or more Portfolios of the Fund as an investment vehicle
("Contract Owners") regarding the services performed by the Company as
they relate to the Fund;
b) providing information to Xxxxx and to Contract Owners with respect to
Class O shares attributable to Contract Owner accounts;
c) printing and mailing of shareholder communications from the Fund
consistent with the Participation Agreement dated
_____________________, 2003 (such as proxies, shareholder reports,
annual and semi-annual financial statements and dividend, distribution
and tax notices) as may be required;
d) communication directly with Contract Owners concerning the Fund's
operations;
e) providing such other similar services as Xxxxx may reasonably request
pursuant to the extent permitted or required under applicable
statutes, rules, and regulations.
2. Expense Allocation
Subject to Paragraph 3 hereof, the Company or its affiliates shall
initially bear the costs of the following:
a) printing and distributing the Fund's prospectus, statement of
additional information and any amendments or supplements thereto,
periodic reports to shareholders, Fund
1
proxy material and other shareholder communications (collectively, the
"Fund Materials") to be distributed to prospective Contract Owners;
b) printing and distributing all sales literature or promotional material
developed by the Company or its affiliates and relating to the
contracts;
c) servicing Contract Owners who have allocated Contract value to a
Portfolio, which servicing shall include, but is not limited to, the
items listed in Paragraph 1 of this Agreement.
3. Payment of Expenses
a) Xxxxx will pay the Company a quarterly fee equal to a percentage of
the average daily net assets of the Portfolios attributable to
Contracts, at the annual rate set forth in the following schedule
("Portfolio Servicing Fee"), in connection with the expenses incurred
by the Company under Paragraph 2 hereof: ___ % of assets invested in
Class O Shares of any Portfolio of the Fund.
b) From time to time, the Parties hereto shall review the Portfolio
Servicing Fee to determine whether it reasonably approximates the
incurred and anticipated costs, over time of the Company in connection
with its duties hereunder. The Parties agree to negotiate in good
faith any change to the Portfolio Servicing Fee proposed by a Party in
good faith.
4. Term of Agreement
This Agreement shall continue in effect for so long as Xxxxx or its
successor(s) in interest, or any affiliate thereof, continues to perform in
a similar capacity for the Fund, and for so long as any Contract value or
any monies attributable to the Company is allocated to Class O shares of a
Portfolio, provided, however, that either party may Terminate this
Agreement upon a material breach of this Agreement by the other party that
remains uncured for 60 days after written notice by the terminating party.
However, Portfolio Servicing Fees shall in no event be paid to the Company
more than one year after the termination of this Agreement.
5. Indemnification
a) The Company agrees to indemnify and hold harmless Xxxxx and its
officers, directors and affiliates from any and all loss, liability
and expense resulting from the gross negligence or willful wrongful
act of the Company under this Agreement, except to the extent such
loss, liability or expense is the result of the willful misfeasance,
bad faith or gross negligence of Xxxxx in the performance of its
duties, or by reason of the reckless disregard of its obligations and
duties under this Agreement.
b) Xxxxx agrees to indemnify and hold harmless the Company and its
officers, directors
2
and affiliates from any and all loss, liability and expense resulting
from the gross negligence or willful wrongful act of Xxxxx under this
Agreement, except to the extent such loss, liability or expense is the
result of the willful misfeasance, bad faith or gross negligence of
the Company in the performance of its duties, or by reason of the
reckless disregard of its obligations and duties under this Agreement.
6. Notice
Notices and communications required or permitted hereby will be given to
the following persons at the following addresses and facsimile numbers, or
such other persons, addresses or facsimile numbers as the Party receiving
such notices or communications may subsequently direct in writing:
Xxxx Xxxxx Management, Inc. Xxxx Xxxxx Management, Inc.
000 Xxxxx Xxxxxx 00 Xxxxxxxxxx Xxxxxx
0xx Xxxxx Xxxxxx Xxxx, XX 00000
Xxx Xxxx, XX 00000 Attn: Xxxxxxx X. Xxxx
Attn: Xxx Xxxxxxxx Fax: (000) 000-0000
Fax: (000) 000-0000
Ameican General Life Insurance Company
0000 Xxxxx Xxxxxxx, X00
Xxxxxxx, XX 00000
Attn:_____________________
Fax:______________________
7. Applicable Law
Except insofar as the Investment Company Act of 1940 or other federal laws
and regulations may be controlling, this Agreement will be construed and
the provisions hereof interpreted under and in accordance with New York
law, without regard for that state's principles of conflict of laws.
8. Severability
If any provision of this Agreement is held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement will
not be affected thereby.
9. Rights Cumulative
The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, that the Parties are entitled to under
federal and state laws.
3
10. Assignment
Neither this Agreement nor any rights or obligations hereunder may be
assigned by either party without the prior written consent of the other
party thereto.
11. Amendment
This Agreement may be amended or modified in whole or in part only by a
written agreement executed by both parties.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their duly authorized officers signing below.
XXXX XXXXX MANAGEMENT, INC.
By:_______________________________
Xxxxxxx X. Xxxx
Executive Vice President
AMERICAN GENERAL LIFE
INSURANCE COMPANY
By:_______________________________
Name:_____________________________
Title:____________________________
4
