EXHIBIT 8(a)
AGREEMENT
THIS AGREEMENT ("Agreement") made as of December 1, 1998, is by and between
HOTCHKIS AND WILEY, a division of the Capital Management Group of Xxxxxxx Xxxxx
Asset Management, L.P. ("Adviser") and THE UNITED STATES LIFE INSURANCE COMPANY
IN THE CITY OF NEW YORK, a New York corporation ("USL").
W I T N E S S E T H:
WHEREAS, each of the investment companies listed on Schedule One hereto
("Schedule One," as the same may be amended from time to time), is registered as
an open-end management investment company under the Investment Company Act of
1940, as amended (the "Act") (such investment companies are hereinafter called
the "Funds, whether one or more); and
WHEREAS, each of the Funds is available as the investment vehicle for certain
separate accounts of USL, established for variable life insurance policies
and/or variable annuity contracts offered by USL (the "Separate Account,"
whether one or more); and
WHEREAS, USL has entered into a participation agreement dated December 1, 1998
among USL, American General Securities Incorporated, Advisor and the Funds (the
"Participation Agreement," as the same may be amended from time to time); and
WHEREAS, Adviser provides, among other things, investment advisory and/or
administrative services to the Funds; and
WHEREAS, Princeton Funds Distributor, Inc (formerly known as Xxxxxxx Xxxxx Funds
Distributor Inc.) ("Distributor") is the distributor of the Funds; and
WHEREAS, Adviser desires USL to provide the administrative services specified in
the attached Exhibit A ("Administrative Services"), in connection with the
ownership of interests of the Separate Account, which is the owner of shares of
the Funds for the benefit of persons who maintain their ownership interests in
the Separate Account, whose interests are included in the master account
("Master Account") referred to in paragraph 1, of Exhibit A ("Shareholders"),
and USL is willing and able to provide such Administrative Services on the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter contained, each party hereto severally agrees as follows:
1. USL agrees to perform the Administrative Services specified in Exhibit A
hereto for the benefit of the Shareholders.
2. USL represents and agrees that it will maintain and preserve all records as
required by law to be maintained and preserved in connection with providing
the Administrative Services, and will otherwise comply with all laws, rules
and regulations applicable to the Administrative Services.
3. USL agrees to provide copies of all the historical records relating to
transactions between the
Funds and Shareholders, and all written communications and other related
materials regarding the Fund(s) to or from such Shareholders, as reasonably
requested by Adviser or its representatives (which representatives, include,
without limitation, its auditors, legal counsel or the Distributor), to
enable Adviser or its representatives to monitor and review the
Administrative Services performed by USL, or comply with any request of the
board of directors, or trustees or general partners (collectively, the
"Directors") of any Fund, or of a governmental body, self-regulatory
organization or Shareholder.
In addition, USL agrees that it will permit Adviser, the Funds or their
representatives, to have reasonable access to its personnel and records in
order to facilitate the monitoring of the quality of the Administrative
Services.
4. USL may, with the prior consent of Adviser, contract with or establish
relationships with other parties for the provision of the Administrative
Services or other activities of USL required by this Agreement, or the
Participation Agreement, provided that USL shall be fully responsible for the
acts and omissions of such other parties.
5. USL hereby agrees to notify Adviser promptly if for any reason it is unable
to perform fully and promptly any of its obligations under this Agreement.
6. USL represents that it is not registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and it is not
required to be so registered, including as a result of entering into this
Agreement and performing the Administrative Services, and other obligations
of USL set forth in this Agreement.
7. The provisions of the Agreement shall in no way limit the authority of
Adviser, or any of the Funds or Distributor to take such action as any of
such parties may deem appropriate or advisable in connection with all matters
relating to the operations of any of such Funds and/or sale of its shares.
8. In consideration of the performance of Administrative Services by USL,
Adviser agrees to pay USL the following fees:
a. in connection with the Equity Income VIP Portfolio, Adviser shall pay USL
a monthly fee at an annual rate equal to (i) .15% of the first $20 Million
of the Fund's average daily net assets maintained in the Master Account
for the Shareholders; and (ii) .25% of the Fund's average daily net assets
maintained in the Master Account for the Shareholders in excess of $20
Million; and
b. in connection with the Low Duration VIP Portfolio, Adviser shall pay USL a
monthly fee at an annual rate equal to (i) .065% of the first $20 Million
of the Fund's average daily net assets maintained in the Master Account
for the Shareholders; and (ii) .07% of the Fund's average daily net assets
maintained in the Master Account for the Shareholders in excess of $20
Million.
The foregoing fee will be paid by Advisor on a calendar quarterly basis,
and in this regard, as soon as practicable after the end of each quarter,
USL will provide Adviser an invoice for the
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amount of the fee due for each Fund. Each invoice will be accompanied by a
statement showing in reasonable detail the calculation of the fees. Payments
are due within 60 days after receipt of the invoices. For the month in which
this Agreement becomes effective or terminates, the fee for the abbreviated
month will be pro-rated for the number of days in that month during which
this Agreement was in effect.
The determination of applicable assets shall be made by averaging the assets
of the applicable portfolios of the Funds maintained in the Master Account
for the Shareholders as of the last Business Day (as defined in the
Participation Agreement) of each month falling within the applicable
calendar quarter.
Notwithstanding anything in this Agreement or the Participation Agreement
appearing to the contrary, the payments by Adviser to USL relate solely to
the performance by USL of the Administrative Services described herein only,
and do not constitute payment in any manner for any investment advisory
services, or for costs associated with the distribution of any variable
annuity or variable life insurance contracts. The amount of administrative
expense payments made by Adviser to USL pursuant to this Agreement are not
intended to be, and shall not be deemed to be, determinative of Advisers
bonafide profits from serving as Adviser to the funds.
9. USL shall indemnify and hold harmless each of the Funds, Adviser and
Distributor and each of their respective officers, Directors, employees and
agents from and against any and all losses, claims, damages, expenses, or
liabilities that any one or more of them may incur including without
limitation reasonable attorneys' fees, expenses and costs arising out of or
related to the performance or non-performance by USL of the Administrative
Services under this Agreement.
10. This Agreement may be terminated without penalty at any time by USL or by
Adviser as to one or more of the Funds collectively, upon sixty days (60)
written notice to the other party. Notwithstanding the foregoing, the
provisions of paragraphs 2, 3, 9 and 11 of this Agreement, shall continue in
full force and effect after termination of this Agreement.
This Agreement shall not require USL to preserve any records (in any medium
or format) relating to this Agreement beyond the time periods otherwise
required by the laws to which USL or the Funds are subject provided that
such records shall be offered to the Funds in the event USL decides to no
longer preserve such records following such time periods.
11. After the date of any termination of this Agreement in accordance with
paragraph 10 of this Agreement, no fee will be due with respect to any
amounts first placed in the Master Account for the benefit of Shareholders
after the date of such termination. However, notwithstanding any such
termination, Adviser will remain obligated to pay USL the fee specified in
paragraph 8 of this Agreement, with respect to the value of each Fund's
average daily net assets maintained in the Master Account as of the date of
such termination, for so long as such amounts are held in the Master Account
and USL continues to provide the Administrative Services with respect to
such amounts in conformity with this Agreement.
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This Agreement, or any provision hereof, shall survive termination to the
extent necessary for each party to perform its obligations with respect to
amounts for which a fee continues to be due subsequent to such termination.
12. USL understands and agrees that the obligations of Adviser under this
Agreement are not binding upon any of the Funds, upon any of their Board
members or upon any shareholder of any of the Funds.
13. It is understood and agreed that in performing the services under this
Agreement USL, acting in its capacity described herein, shall at no time be
acting as an agent for Adviser, Distributor or any of the Funds. USL
agrees, and agrees to cause its agents, not to make any representations
concerning any of the Funds except those contained in the Funds' then-
current prospectus; in current sales literature furnished by the Funds,
Adviser or Distributor to USL; in the then current prospectus for a variable
annuity contract or variable life insurance policy issued by USL or then
current sales literature with respect to such variable annuity contract or
variable life insurance policy, approved by Adviser.
14. This Agreement, including the provisions set forth herein in paragraph 8,
may only be amended pursuant to a written instrument signed by the party to
be charged. This Agreement may not be assigned by a party hereto, by
operation of law or otherwise, without the prior written consent of the
other party.
15. This Agreement shall be governed by the laws of the State of California,
without giving effect to the principles of conflicts of law of such
jurisdiction.
16. This Agreement, including Exhibit A and Schedule One, constitutes the entire
agreement between the parties with respect to the matters dealt with herein
and supersedes any previous agreements and documents with respect to such
matters. The parties agree that Schedule One may be replaced from time to
time with a new Schedule One to accurately reflect any changes in the Funds
available as investment vehicles under the Participation Agreement.
17. All notices, requests, demands and other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered to:
a. Advisor, at: Hotchkis and Wiley
Attention: Xxxxxx Swan, Esq.
000 X. Xxxxxxxx Xx., Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
b. USL, at: The United States Life Insurance Company
in the City of New York
Attention: Xxxx Xxxxxxx, Esq.
000 Xxxxxx Xxxx
Xxx Xxxx, XX 00000-0000
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
THE UNITED STATES LIFE INSURANCE COMPANY
IN THE CITY OF NEW YORK
By: /s/ XXXXX X. XXXXXXXX
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Xxxxx X. Xxxxxxxx
Vice President
HOTCHKIS AND WILEY, A DIVISION OF
THE CAPITAL MANAGEMENT GROUP OF
XXXXXXX XXXXX ASSET MANAGEMENT, L.P.
By: /s/ XXXXX X. XXXXXX
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Name: Chief Admin. Officer
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Title: 12/16/98
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SCHEDULE ONE
FUNDS: AVAILABLE PORTFOLIOS OF THE FUNDS:
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Hotchkis and Wiley Variable Trust Equity Income VIP Portfolio
Low Duration VIP Portfolio
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EXHIBIT A
Pursuant to the Agreement by and among the parties hereto, USL shall perform the
following Administrative Services:
1. Maintain separate records for each Shareholder, which records shall reflect
shares purchased and redeemed for the benefit of the Shareholder and share
balances held for the benefit of the Shareholder. USL shall maintain the
Master Account with the transfer agent of each of the Funds on behalf of
Shareholders and such Master Account shall be in the name of USL or its
nominee as the record owner of the shares held for such Shareholders.
2. For each of the Funds, disburse or credit to Shareholders all proceeds of
redemptions of shares of the Fund and all dividends and other distributions
not reinvested in shares of the Fund or paid to the Separate Account holding
the Shareholders' interests.
3. Prepare and transmit to Shareholders periodic account statements showing the
total number of shares held for the benefit of the Shareholder as of the
statement closing date (converted to interests in the Separate Account),
purchases and redemptions of Fund shares for the benefit of the Shareholder
during the period covered by the statement, and the dividends and other
distributions paid for the benefit of the Shareholder during the statement
period (whether paid in cash or reinvested in Fund shares).
4. Transmit to Shareholders proxy materials and reports and other information
received by USL from any of the Funds and required to be sent to Shareholders
under the federal securities laws and, upon request of any of the Funds'
transfer agent, transmit to Shareholders material Fund communications deemed
by the Fund, through its Board of Directors or other similar governing body,
to be necessary and proper for receipt by all Fund beneficial shareholders.
5. Transmit to each of the Funds' transfer agent purchase and redemption orders
on behalf of Shareholders.
6. Provide to the Funds, or to the transfer agent for any of the Funds, or any
of the agents designated by any of them, such periodic reports as shall
reasonably be concluded to be necessary to enable each of the Funds and the
Distributor to comply with any applicable State Blue Sky requirements.
7. When and if applicable, tax reporting and withholding for Shareholder
interest.
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