EXHIBIT 8(d)(iii)
AMENDED REIMBURSEMENT AGREEMENT
REIMBURSEMENT AGREEMENT
REIMBURSEMENT AGREEMENT (the "Agreement") made by and between XXXXXXX
XXXXXX INVESTMENTS, INC., a Delaware corporation ("Xxxxxxx Xxxxxx"), with a
principal place of business in Boston, Massachusetts and USAA LIFE INSURANCE
COMPANY, a Texas corporation (the "Company"), with a principal place of business
in San Antonio, Texas on behalf of the Separate Account of USAA Life Insurance
Company, a separate account of the Company, and any other separate account of
the Company as designated by the Company from time to time, upon written notice
to the Fund in accordance with Section 8 herein (the "Account").
WHEREAS, Xxxxxxx Xxxxxx has caused to be organized Xxxxxxx Variable Life
Investment Fund (the "Fund"), a Massachusetts business trust created under a
Declaration of Trust dated March 15, 1985, as amended, the beneficial interest
in which is divided into several series, each designated a "Portfolio" and
representing the interest in a particular managed portfolio of securities; and
WHEREAS, the purpose of the Fund is to act as the investment vehicle for
the separate accounts established for variable life insurance policies and
variable annuity contracts to be offered by insurance companies which have
entered into reimbursement agreements substantially identical to this Agreement;
and
WHEREAS, the parties desire to express their agreement as to certain
matters;
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements hereinafter contained, the parties hereto agree as follows:
1. Additional Definitions.
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For purposes of this Agreement, the following definition shall apply:
(a) "Shares" means shares of beneficial interest, without par value, of
any Portfolio, now or hereafter created, of the Fund.
2. Access to Other Products.
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Xxxxxxx Xxxxxx shall permit the Company to participate in any registered
investment company other than the Fund which is intended as the funding vehicle
for insurance products and for which Xxxxxxx Xxxxxx or an affiliate of Xxxxxxx
Xxxxxx acts as investment adviser, on the same basis as other insurance
companies are permitted to participate in such a registered investment company.
This provision shall not require Xxxxxxx Xxxxxx to make available to the Company
shares of any investment company which is organized solely as the funding
vehicle for insurance products offered by a single insurance company or a group
of affiliated insurance companies.
3. Right to Review and Approve Sales Materials.
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The Company shall furnish, or shall cause to be furnished, to Xxxxxxx
Xxxxxx or its designee, at least twenty days prior to its intended use, each
piece of promotional material in which Xxxxxxx Xxxxxx or the Fund is named. No
such material shall be used unless Xxxxxxx Xxxxxx or its designee shall have
approved such use in writing, or twenty days shall have elapsed without
approval, rejection or objection since receipt by Xxxxxxx Xxxxxx or its designee
of such material.
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Xxxxxxx Xxxxxx shall furnish, or shall cause to be furnished, to the
Company or its designee, at least twenty days prior to its intended use, each
piece of promotional material in which the Company or its separate account(s) is
named. No such material shall be used unless the Company or its designee shall
have approved such use in writing, or twenty days shall have elapsed without
approval, rejection or objection since receipt by the Company or its designee of
such material.
4. Sales Organization Meetings.
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Representatives of Xxxxxxx Xxxxxx or its designee shall meet with the sales
organizations of the Company at such reasonable times and places as may be
agreed upon by the Company and Xxxxxxx Xxxxxx or its designee for the purpose of
educating sales personnel about the Fund.
5. Duration.
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This Agreement shall continue in effect for five (5) years from the date of
its execution, except that the obligation of each party hereto to indemnify the
other party hereto shall continue with respect to all losses, claims, damages,
liabilities or litigation based upon the acquisition of Shares purchased as the
funding vehicle for any variable life insurance policy or variable annuity
contract issued by the Company or any affiliated insurance company.
6. Indemnification.
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(a) The Company agrees to indemnify and hold harmless Xxxxxxx Xxxxxx and
each of its directors and officers and each person, if any, who controls Xxxxxxx
Xxxxxx within the meaning of Section 15 of the Securities Act of 1933 (the
"Act") against any and all
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losses, claims, damages, liabilities or litigation (including legal and other
expenses) to which Xxxxxxx Xxxxxx or such directors, officers or controlling
person may become subject under the Act, under any other statute, at common law
or otherwise, arising out of the acquisition of any Shares by any person which
(i) may be based upon any wrongful act by the Company, any of its employees or
representatives, any affiliate of or any person acting on behalf of the Company
or a principal underwriter of its insurance products, or (ii) may be based upon
any untrue statement or alleged untrue statement of a material fact contained in
a registration statement or prospectus covering Shares or any amendment thereof
or supplement thereto or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading if such a statement or omission was made in reliance upon
information furnished to Xxxxxxx Xxxxxx or the Fund by the Company, provided,
however, that in no case (i) is the Company's indemnity in favor of a director
or officer or any other person deemed to protect such director or officer or
other person against any liability to which any such person would otherwise be
subject by reason of willful misfeasance, bad faith, or gross negligence in the
performance of his duties or by reason of his reckless disregard of obligations
and duties under this Agreement or (ii) is the Company to be liable under its
indemnity agreement contained in this Paragraph 6 with respect to any claim made
against Xxxxxxx Xxxxxx or any person indemnified unless Xxxxxxx Xxxxxx or such
person, as the case may be, shall have notified the Company in writing pursuant
to Paragraph 8 within a reasonable time after the summons or other first legal
process
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giving information of the nature of the claims shall have been served upon
Xxxxxxx Xxxxxx or upon such person (or after Xxxxxxx Xxxxxx or such person shall
have received notice of such service on any designated agent), but failure to
notify the Company of any such claim shall not relieve the Company from any
liability which it has to Xxxxxxx Xxxxxx or any person against whom such action
is brought otherwise than on account of the indemnity agreement contained in
this Paragraph 6. The Company shall be entitled to participate, at its own
expense, in the defense, or, if it so elects, to assume the defense of any suit
brought to enforce any such liability, but, if it elects to assume the defense,
such defense shall be conducted by counsel chosen by it and satisfactory to
Xxxxxxx Xxxxxx, to its officers and directors, or to any controlling person or
persons, defendant or defendants in the suit. In the event that the Company
elects to assume the defense of any such suit and retain such counsel, Xxxxxxx
Xxxxxx, such officers and directors or controlling person or persons, defendant
or defendants in the suit, shall bear the fees and expenses of any additional
counsel retained by them, but, in case the Company does not elect to assume the
defense of any such suit, the Company will reimburse Xxxxxxx Xxxxxx, such
officers and directors or controlling person or persons, defendant or defendants
in such suit, for the reasonable fees and expenses of any counsel retained by
them. The Company agrees promptly to notify Xxxxxxx Xxxxxx pursuant to Paragraph
8 of the commencement of any litigation or proceedings against it in connection
with the issue and sale of any Shares.
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(b) Xxxxxxx Xxxxxx agrees to indemnify and hold harmless the Company and
each of its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the Act against any and all losses,
claims, damages, liabilities or litigation (including legal and other expenses)
to which the Company or such directors, officers or controlling persons may
become subject under the Act, under any other statute, at common law or
otherwise, arising out of the acquisition of any Shares by any person which (i)
may be based upon any wrongful act by Xxxxxxx Xxxxxx, any of its employees or
representatives or a principal underwriter of the Fund, or (ii) may be based
upon any untrue statement or alleged untrue statement of a material fact
contained in a registration statement or prospectus covering Shares or any
amendment thereof or supplement thereto or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading if such statement or omission was made in
reliance upon information furnished to the Company by Xxxxxxx Xxxxxx; provided,
however, that in no case (i) is Xxxxxxx Xxxxxx'x indemnity in favor of a
director or officer or any other person deemed to protect such director or
officer or other person against any liability to which any such person would
otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of his duties or by reason of his reckless
disregard of obligations and duties under this Agreement or (ii) is Xxxxxxx
Xxxxxx to be liable under its indemnity agreement contained in this Paragraph 6
with respect to any claims made against the Company or any such director,
officer or controlling person unless it or such director, officer or
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controlling person, as the case may be, shall have notified Xxxxxxx Xxxxxx in
writing pursuant to Paragraph 8 within a reasonable time after the summons or
other first legal process giving information of the nature of the claim shall
have been served upon it or upon such director, officer or controlling person
(or after the Company or such director, officer or controlling person shall have
received notice of such service on any designated agent), but failure to notify
Xxxxxxx Xxxxxx of any claim shall not relieve it from any liability which it may
have to the Company or any person against whom such action is brought otherwise
than on account of its indemnity agreement contained in this Paragraph 6.
Xxxxxxx Xxxxxx will be entitled to participate at its own expense in the
defense, or, if it so elects, to assume the defense of any suit brought to
enforce any such liability, but if Xxxxxxx Xxxxxx elects to assume the defense,
such defense shall be conducted by counsel chosen by it and satisfactory to the
Company, its directors, officers or controlling person or persons, defendant or
defendants, in the suit. In the event Xxxxxxx Xxxxxx elects to assume the
defense of any such suit and retain such counsel, the Company, its directors,
officers or controlling person or persons, defendant or defendants in the suit,
shall bear the fees and expenses of any additional counsel retained by them,
but, in case Xxxxxxx Xxxxxx does not elect to assume the defense of any such
suit, it will reimburse the Company or such directors, officers or controlling
person or persons, defendant or defendants in the suit, for the reasonable fees
and expenses of any counsel retained by them. Xxxxxxx Xxxxxx agrees promptly to
notify the Company pursuant to Paragraph 8 of the commencement of any litigation
or proceedings against it or any
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of its officers or directors in connection with the issuance or sale of any
Shares.
(c) Xxxxxxx Xxxxxx agrees to indemnify and hold harmless the Company and
each of its directors and officers against any and all losses, claims, damages,
liabilities or litigation arising from the imposition of additional federal
income taxes on the Company or any policyholder solely as a result of a Final
Determination that any Portfolio has failed (x) to comply with the
diversification requirements of section 817(h) of the Internal Revenue Code of
1986, as amended (the "Code"), relating to the diversification requirements for
variable annuity, endowment and life insurance contracts, or (y) to qualify as a
regulated investment company within the meaning of section 851 of the Code;
provided, however, that (i) Xxxxxxx Xxxxxx shall have no liability under this
Paragraph 6(c) if such failure is caused by a third party who is not an employee
or agent of Xxxxxxx Xxxxxx (e.g., the Fund's custodian or another service
provider), and (ii) in no case is Xxxxxxx Xxxxxx'x indemnity under this
Paragraph 6(c) deemed to protect any person against any liability to which that
person would otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of that person's duties or by reason of
reckless disregard by that person of obligations under this Agreement.
The Company agrees that if the Internal Revenue Service asserts in
writing in connection with any governmental audit or review of the Company or,
to the Company's knowledge, of any policyholder, that any Portfolio has failed
to comply with the diversification requirements of section 817(h) of the Code or
the
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Company otherwise becomes aware of any facts that could give rise to any
claim against Xxxxxxx Xxxxxx as a result of such a failure or alleged failure,
(i) the Company shall promptly notify Xxxxxxx Xxxxxx of such assertion or
potential claim; (ii) the Company shall consult with Xxxxxxx Xxxxxx as to how to
minimize any liability that may arise as a result of such failure or alleged
failure; (iii) the Company shall use its best efforts to minimize any liability
of Xxxxxxx Xxxxxx for indemnification resulting from such failure, including,
without limitation, demonstrating, pursuant to Treasury Regulations Section
1.817-5(a) (2), to the Commissioner of the Internal Revenue Service that such
failure was inadvertent; (iv) the Company shall permit Xxxxxxx Xxxxxx and its
legal and accounting advisors to participate in any conferences, settlement
discussions or other administrative or judicial proceedings or contests
(including judicial appeals thereof) with the Internal Revenue Service, any
policyholder or any other claimant regarding any claims that could give rise to
indemnification by Xxxxxxx Xxxxxx as a result of such a failure or alleged
failure; (v) any written materials to be submitted by the Company to the
Internal Revenue Service, any policyholder or any other claimant in connection
with any of the foregoing proceedings or contests (including, without
limitation, any such materials to be submitted to the Internal Revenue Service
pursuant to Treasury Regulations Section 1.817-5(a) (2)), (a) shall be provided
by the Company to Xxxxxxx Xxxxxx (together with any supporting information or
analysis) at least 10 business days prior to the day on which such proposed
materials are to be submitted and (b) shall not be submitted by the Company to
any such person without the express
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written consent of Xxxxxxx Xxxxxx, which shall not be unreasonably withheld;
(vi) the Company shall provide Xxxxxxx Xxxxxx and its advisors with such
cooperation as Xxxxxxx Xxxxxx shall reasonably request (including, without
limitation, by permitting Xxxxxxx Xxxxxx and its accounting and legal advisors
to review the relevant books and records of the Company) in order to facilitate
Xxxxxxx Xxxxxx'x review of any written submissions provided to it pursuant to
the preceding clause or its assessment of the validity or amount of any claim
against it arising from such a failure or alleged failure; (vii) the Company
shall not with respect to any claim of the IRS or any policyholder that would
give rise to a claim for indemnification against Xxxxxxx Xxxxxx (a) compromise
or settle any claim, (b) accept any adjustment on audit, or (c) forego any
allowable judicial appeals, without the express written consent of Xxxxxxx
Xxxxxx, which shall not be unreasonably withheld, provided that the Company
shall not be required to appeal any adverse judicial decision unless Xxxxxxx
Xxxxxx shall have provided an opinion of independent counsel to the effect that
a reasonable basis (consistent with Formal Opinion 85-352 of the American Bar
Association) exists for taking such appeal; and (viii) Xxxxxxx Xxxxxx shall have
no liability as a result of such failure or alleged failure if the Company fails
to comply with any of the foregoing clauses (i) through (vii). Should Xxxxxxx
Xxxxxx refuse to give its written consent to any compromise or settlement of any
claim or liability hereunder, the Company may, in its discretion, authorize
Xxxxxxx Xxxxxx to act in the name of the Company in, and to control the conduct
of, such conferences, discussions, proceedings, contests or appeals and all
administrative or judicial
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appeals thereof, and in that event Xxxxxxx Xxxxxx shall bear the fees and
expenses associated with the conduct of the proceedings that it is so authorized
to control.
For purposes of this Paragraph 6(c), "Final Determination" shall mean, with
respect to any claim, a settlement of such claim (including the acceptance of an
adjustment proposed by the Internal Revenue Service) or a decision of a court of
competent jurisdiction with respect to such claim that has become final after
either the (i) exhaustion of allowable appeals or (2) expiration of the time to
take any such appeal with respect to the claim.
7. Massachusetts Law to Apply.
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This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of The Commonwealth of Massachusetts.
8. Notices.
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Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at such
other address as such party may from time to time specify in writing to the
other party.
If to Xxxxxxx Xxxxxx:
Xxxxxxx Xxxxxx Investments, Inc.
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
(000) 000-0000
Attn: Xxxxx X. Xxxxx
If to the Company:
USAA Life Insurance Company
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
Attn.: Xxxxx X. Xxxxx, Esq.
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9. Miscellaneous.
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The captions in the Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions hereof or otherwise
affect their construction or effect. This Agreement may be executed
simultaneously in two or more counterparts, each of which taken together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed hereto as of the 21st day of May, 1998.
SEAL XXXXXXX XXXXXX INVESTMENTS, INC.
By: /s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
Authorized Officer
SEAL USAA LIFE INSURANCE COMPANY
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: President
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