EXHIBIT 8(E)(II)
AMENDED EXPENSE ALLOCATION AGREEMENT
This Agreement is made as of the 16th day of December, 1994, and
amended as of the 16th day of March, 1998, by and between USAA Life Insurance
Company, a Texas corporation ("USAA Life"), Xxxx Xxxxx & Company, Incorporated,
a Delaware corporation ("Distributor"), and Xxxx Xxxxx Management, Inc., a New
York corporation ("Adviser") (collectively, the "Parties").
W I T N E S S E T H:
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WHEREAS, the Distributor and Adviser serve as the principal
underwriter and investment adviser, as amended, respectively, of The Xxxxx
American Fund, a Massachusetts business trust ("Trust"), which currently
consists of six separate series (each, a "Portfolio"); and
WHEREAS, USAA Life has entered into an agreement, dated December 16th,
1994, with the Trust, Distributor, and Adviser, as amended ("Participation
Agreement"), pursuant to which the Trust and Distributor will make shares of
each Portfolio listed from time to time on Schedule A thereto available to USAA
Life at net asset value and with no sales charges, subject to the terms of the
Participation Agreement; and
WHEREAS, the Participation Agreement provides that the Trust will bear
the costs of preparing, filing with the Securities and Exchange Commission and
setting for printing the Trust's prospectus, statement of additional information
and any amendments or supplements thereto, periodic reports to shareholders,
Trust proxy material and other shareholder communications (collectively, the
"Trust Materials"), and that the Trust will provide USAA Life with camera ready
copies of all Trust Materials required by law to be sent to owners of Contracts
("Contract owners") or Policies ("Policy owners") who have allocated any
Contract or Policy value to a Portfolio; and
WHEREAS, the Participation Agreement provides that USAA Life shall
print in quantity and deliver to existing Contract or Policy owners the Trust
Materials, and that the costs of printing in quantity and delivering to existing
Contract owners such Trust Materials will be allocated between USAA Life or its
affiliates and the Trust or its affiliates as they shall determine by separate
agreement; and
WHEREAS, the Participation Agreement provides that the expenses of
distributing a Portfolio's shares and the Contracts and the Polices will be
allocated between USAA Life, or its affiliates and the Trust, or its affiliates,
as they shall determine by separate agreement; and
WHEREAS, USAA Life will incur various administrative expenses in
connection with the servicing of Contract or Policy owners who have allocated
Contract or Policy value to a Portfolio, including, but not limited to,
responding to various Contract or Policy owner inquiries regarding a Portfolio;
and
WHEREAS, the Parties hereto wish to allocate the expenses in a manner
that is fair and equitable, and consistent with the best interests of Contract
and Policy owners; and
WHEREAS, the Parties hereto wish to establish a means for allocating
the expenses that does not entail the expense and inconvenience of separately
identifying and accounting for each item of Trust expense;
NOW THEREFORE in consideration of the mutual benefits and promises
contained herein, the Parties hereto agree as follows:
1. Expense Allocations.
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1.1. Trust Materials.
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(a) Subject to Section 2 hereof, USAA Life or its affiliates shall
initially bear the costs of printing in quantity and distributing all Trust
Materials required by law to be distributed to existing Contract or Policy
owners who have allocated Contract or Policy value to a Portfolio.
(b) Subject to Section 2 hereof, USAA Life or its affiliates shall
initially bear the costs of printing in quantity and mailing all Trust Materials
to prospective Contract or Policy owners.
1.2. Sales Materials.
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(a) The Distributor and Adviser, as they may allocate between themselves,
shall bear the costs of preparing all sales literature or other promotional
material relating to each Portfolio (collectively, "Trust Sales Materials").
(b) Subject to Section 2 hereof, USAA Life or its affiliates shall
initially bear the costs of printing in quantity all Trust Sales Materials, and
preparing and printing in quantity all sales literature or other promotional
material relating to the Contracts or Policies (collectively, "USAA Sales
Materials").
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(c) Subject to Section 2 hereof, USAA Life or its affiliates shall
initially bear the costs of mailing all Trust and USAA Sales Materials to
prospective Contract or Policy owners.
1.3. Contract Owner Servicing.
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Subject to Section 2 hereof, USAA Life or its affiliates shall initially
bear all costs of servicing Contract or Policy owners who have allocated
Contract or Policy value to a Portfolio, which servicing shall include, but is
not limited to, responding to various Contract owner inquiries regarding a
Portfolio.
2. Payment of Expenses.
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(a) The Distributor and Adviser, as they may allocate between themselves,
shall pay to USAA Life a quarterly fee equal to a percentage of the average
daily net assets of the Portfolio attributable to Contracts and Policies, at the
annual rate of .10% (hereinafter, "Quarterly Fee"), in connection with the
expenses incurred by USAA Life under Section 1.1, Section 1.2 and Section 1.3
hereof. The payment of the Quarterly Fee shall commence at the end of the first
calendar quarter in which Contract or Policy value has been allocated to a
Portfolio.
(b) From time to time, the Parties hereto shall review the Quarterly Fee
to determine whether it reasonably approximates the incurred and anticipated
costs, over time, of USAA Life in connection with its duties hereunder. The
Parties agree to negotiate in good faith any change to the Quarterly Fee
proposed by a Party in good faith.
3. Term of Agreement.
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This Agreement shall continue in effect for so long as the Adviser or its
successor(s) in interest, or any affiliate thereof, continues to perform in a
similar capacity for the Trust, and for so long as any Contract or Policy value
or any monies attributable to USAA Life is allocated to a Portfolio.
4. Notices.
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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:
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USAA Life Insurance Company
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx, Esq.
FAX: 000-000-0000
Xxxx Xxxxx Management, Inc.
00 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxx
FAX: 000-000-0000
Xxxx Xxxxx & Company, Incorporated
00 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxx
FAX: 000-000-0000
5. Applicable Law.
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Except insofar as the 1940 Act or other federal laws and regulations may be
controlling, this Agreement will be construed and the provisions hereof
interpreted under and in accordance with Texas law, without regard for that
state's principles of conflict of laws.
6. Execution in Counterparts.
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This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together will constitute one and the same instrument.
7. Severability.
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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.
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8. Rights Cumulative.
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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.
9. Headings.
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The headings used in this Agreement are for purposes of reference only and
shall not limit or define the meaning of the provisions of this Agreement.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized officers
signing below.
USAA LIFE INSURANCE COMPANY
By: /s/ Xxxxx X. Xxxxxx
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Title: President
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XXXX XXXXX MANAGEMENT, INC.
By: /s/ Xxxxxxx Xxxx
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Title: Executive Vice President
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XXXX XXXXX & COMPANY, INCORPORATED
By: /s/ Xxxxxxx Xxxx
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Title: Executive Vice President
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