EXHIBIT 99(8)(d)
Franklin Xxxxxxxxx Services, Inc.
000 Xxxxxxxx Xxxxxx Xxxx.
Xxx Xxxxx, XX 00000
Re: Administrative Services Agreement
Gentlemen:
This letter sets forth the agreement (the "Agreement") between American General
Life Insurance Company (the "Company") and Franklin Xxxxxxxxx Services, Inc.
(the "Fund Administrator") concerning certain administrative services with
respect to the series (each a "Fund") of Templeton Variable Products Series Fund
(the "Trust"), as specified in the Participation Agreement identified below, as
of ___________, 1998.
1. Administrative Services and Expenses. Administrative services for the
Company's Separate Accounts (the "Accounts") with respect to their ongoing
investments in the Funds pursuant to the Fund Participation Agreement, as
amended from time to time, among the Company, the Trust, and Franklin Xxxxxxxxx
Distributors, Inc. (the "Underwriter"), among others, dated ___________, 1998
(the "Participation Agreement"), and administrative services for purchasers of
variable life and annuity contracts (the "Contracts") issued through the
Accounts, are and shall be the responsibility of the Company. Administrative
services for the Funds in which the Account invests, and for purchasers of
shares of the Funds, are and shall be the responsibility of the Fund
Administrator or its affiliates. The administrative and other
services provided by the Company that are subject to this letter agreement are
set forth in Schedule A hereto.
2. Administrative Expense Payments. The Fund Administrator recognizes the
Company, on behalf of the Accounts, as the shareholder of shares of the Funds
purchased under the Participation Agreement on behalf of the Accounts. The Fund
Administrator further recognizes that it will derive a substantial
administrative convenience by virtue of having the Company be the shareholder of
record of shares of the Funds purchased under the Participation Agreement,
rather than multiple shareholders having record ownership of such shares. The
Fund Administrator recognizes that the Company will provide administrative
services necessary to facilitate investment in the Funds.
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In consideration of the administrative services provided by the Company and the
administrative convenience resulting to the Fund Administrator described above,
the Fund Administrator agrees to pay the Company a fee, computed daily and paid
quarterly in arrears, equal to ten (10) basis points (0.10%) per year applied to
the average daily net assets of the shares of the Funds held in the subaccounts
of the Accounts.
The Fund Administrator will calculate and pay the Company its fee within thirty
(30) days after the end of the three-month periods ending in January, April,
July and November. Such payment will be by wire transfer unless the amount
thereof is less than $500. Wire transfers will be sent to the bank account and
in the manner specified by the Company. Such wire transfer will be separate from
wire transfers of redemption proceeds and distributions. Amounts less than $500
shall be paid by check or by another method acceptable to both parties. The Fund
Administrator will not adjust the amount of any payment to correct errors or for
any other reason, unless the Company notifies the Fund Administrator in writing
of its request for an adjustment within thirty (30) days after receipt of the
payment.
The Company acknowledges that the rate and amount of payments to be made to
Company under this Paragraph 2 are proprietary and confidential information of
the Fund Administrator and its affiliates, and that disclosure of this
information to third parties may cause damage to Fund Administrator or its
affiliates. The Company agrees to take any and all reasonable actions to limit
disclosure of this information to only those of its employees, officers,
consultants and agents who need the information in order to perform their
duties, and to notify such persons of the terms of this paragraph. With respect
to individuals who have confidential information at the date of this Agreement,
the Company shall have satisfied its obligation under this paragraph by
disseminating written notice of this paragraph to individuals who are likely to
have had access to this information, as determined by the Company's management
in its sole discretion. In the event any other party seeks to compel disclosure
of confidential information through judicial or administrative process, then the
Company shall promptly give Fund Administrator written notice of such demand
and, if requested by Fund Administrator, shall cooperate in Fund Administrator's
efforts to challenge or limit any such disclosure. Violation of the
confidentiality provision of Paragraph 2 shall be grounds for immediate
termination of the Agreement by the Fund Administrator in its sole discretion.
Nothing in this Agreement shall prevent the Company from disclosing the
existence of this Agreement or similar agreements in the Contracts' prospectuses
or elsewhere.
3. Nature of Payments. The parties to this letter agreement recognize and
agree that the Fund Administrator's payments to the Company relates to
administrative services only and do not constitute payment in any manner for
investment advisory services or for costs of distribution of Contracts or of
shares of the Fund, and that these payments are not otherwise related to
investment advisory or distribution services or expenses. The amount of the
payments made by the Fund Administrator to the Company pursuant to Paragraph 2
of this letter agreement will not be deemed to be conclusive with respect to
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actual administrative expenses incurred by the Company or savings of the Fund
Administrator.
4. This letter agreement will remain in full force and effect from the date
of this Agreement specified on page 1, for so long as any assets of the Funds
are attributable to amounts invested by the Account under the Participation
Agreement, unless terminated in accordance with Paragraph 5 of this letter
agreement. In accordance with the Participation Agreement, the fee described in
Paragraph 2, above, will continue to be due and payable with respect to the
shares attributable to Contracts existing and in effect on the date this letter
agreement is terminated pursuant to Paragraph 5, below.
5. Termination. This letter agreement may be terminated upon either (1)
thirty (30) days' written notice from one party to the other; or (2) upon
cessation of investment by the Account in the Fund pursuant to the Participation
Agreement.
6. Amendment. This letter agreement may be amended only upon mutual
agreement of the parties hereto in writing.
7. Counterparts. This letter agreement may be executed in counterparts,
each of which will be deemed an original but all of which will together
constitute one and the same instrument.
8. Entire Agreement. This letter agreement, together with the attached
Schedules or attachments, contains the entire agreement among the parties and
supersedes any prior or inconsistent agreements, understandings or arrangements
among the parties with respect to the subject matter of this letter agreement,
all of which are merged herein.
9. Arbitration. In the event of a dispute concerning any provision of
this Agreement, either party may require the dispute to be submitted to binding
arbitration under the commercial arbitration rules of the American Arbitration
Association. Judgment upon any arbitration award may be entered by any court
having jurisdiction. This Agreement shall be interpreted in accordance with the
laws of the state of Florida and shall be subject to any applicable federal
securities laws.
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If this letter agreement is consistent with your understanding of the matters we
discussed concerning administrative expense payments, kindly sign below and
return a signed copy.
Very truly yours,
American General Life Insurance Company
By:
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Name:
-----------------------------
Title:
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ATTEST:
By:
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Name:
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Title:
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Acknowledged and Agreed:
FRANKLIN XXXXXXXXX SERVICES, INC.
By:
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Name:
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Title:
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Attachment: Schedule A
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SCHEDULE A
Maintenance of Books and Records
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. Assist as necessary to maintain book entry records on behalf of the
Funds regarding issuance to, transfer within (via net purchase
orders) and redemption by the Accounts of Fund shares.
. Maintain general ledgers regarding the Accounts' holdings of Fund
shares, coordinate and reconcile information, and coordinate
maintenance of ledgers by financial institutions and other
contract owner service providers.
Communication with the Funds
----------------------------
. Serve as the designee of the Funds for receipt of purchase and
redemption orders from the Account and to transmit such orders, and
payment therefor, to the Funds.
. Coordinate with the Funds' agents respecting daily valuation of the
Funds' shares and the Accounts' units.
. Purchase Orders
- Determine net amount available for investment in the Funds.
- Deposit receipts at the Funds' custodians (generally by wire
transfer).
- Notify the custodians of the estimated amount required to pay
dividend or distribution.
. Redemption Orders
- Determine net amount required for redemptions by the
Funds.
- Notify the custodian and Funds of cash required to meet
payments.
. Purchase and redeem shares of the Funds on behalf of the Account at
the then-current price in accordance with the terms of each Fund's
then current prospectus.
. Assist in routing and revising sales and marketing materials to
incorporate or reflect the comments made on behalf of the Trust or
its underwriter.
. Assistance in enforcing procedures adopted on behalf of the Trust to
reduce, discourage, or eliminate market timing transactions in a
Fund's shares in order to reduce or eliminate adverse effects on the
Fund or its shareholders.
Processing Distributions from the Funds
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. Process ordinary dividends and capital gains.
. Reinvest the Funds' distributions.
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Reports
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. Periodic information reporting to the Funds, including, but not
limited to, furnishing registration statements, prospectuses,
statements of additional information, reports, solicitations for
voting instructions, sales or promotional materials and any other SEC
filings with respect to the Accounts invested in the Funds.
. Periodic information reporting about the Funds, including any
necessary delivery of the Funds' prospectus and annual and semi-
annual reports to contract owners.
Fund-related Contract Owner Services
------------------------------------
. Maintain adequate fidelity bond or similar coverage for all Company
officers, employees, investment advisors and other individuals or
entities controlled by the Company who deal with the money and/or
securities of the Funds.
. Provide general information with respect to Fund inquiries (not
including information about performance or related to sales).
. Provide information regarding performance of the Funds and the
subaccounts of the Accounts.
. Oversee and assist the solicitation, counting and voting or contract
owner voting interests in the Funds pursuant to Fund proxy
statements.
Other Administrative Support
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. Provide other administrative and legal compliance support for the
Funds as mutually agreed upon by the Company and the Funds or the
Fund Administrator.
. Relieve the Funds of other usual or incidental administrative
services provided to individual contract owners.
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