EXHIBIT (h)(45)(a)
Xxxxxxx, Xxxxx & Co.
00 Xxx Xxxx
Xxx Xxxx, XX 00000
December 19, 2003
American General Life Insurance Company
0000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Ladies and Gentlemen:
This letter sets forth the agreement between American General Life
Insurance Company ("you" or the "Company") and the undersigned ("we" or
"Xxxxxxx, Xxxxx & Co.") concerning certain administrative services to be
provided by you, with respect to the Xxxxxxx Sachs Variable Insurance Trust (the
"Trust").
1. The Trust. The Trust is a Delaware business trust registered with the
Securities and Exchange Commission (the "SEC") under the Investment Company Act
of 1940, as amended (the "Act"), as an open-end management investment company.
The Trust consists of one or more separate series ("Portfolios") of shares and
serves as a funding vehicle for variable annuity contracts and variable life
insurance contracts. As such, the Trust sells its shares to insurance companies
and their separate accounts. With respect to various provisions of the Act, the
SEC requires that owners of variable annuity contracts and variable life
insurance contracts be provided with materials and rights afforded to
shareholders of a publicly-available SEC-registered mutual fund.
2. The Company. The Company is a Texas life insurance company. The
Company issues variable annuity contracts and variable life policies (the
"Contracts") supported by the separate accounts listed in Schedule 1 of the
Participation Agreement (as defined below) (the "Separate Account"; if more than
one, the term "Separate Account" shall apply to each Separate Account subject
hereto) each of which is registered with the SEC as a unit investment trust. The
Company has entered into a participation agreement (the "Participation
Agreement") with the Trust pursuant to which the Company purchases shares of the
Trust for the Separate Account supporting the Company's Contracts.
3. Xxxxxxx, Xxxxx & Co. Xxxxxxx, Xxxxx & Co. serves as the distributor
for the Trust. Xxxxxxx Sachs Asset Management ("GSAM"), an operating division of
Xxxxxxx, Xxxxx & Co., serves as the Trust's investment adviser. GSAM supervises
and assists in the overall management of the Trust's affairs under an Investment
Management Agreement with the Trust, subject to the overall authority of the
Trust's Board of Trustees in accordance with Delaware law. Under the Investment
Management Agreement, we are compensated for providing investment advisory and
certain administrative services.
4. Administrative Services. You have agreed to assist us, as we may
request from time to time, with the provision of administrative services to the
Trust, as they may relate to the investment in the Trust by the Separate
Account. It is anticipated that such services may include
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(but shall not be limited to) the mailing of Trust reports, notices, proxies and
proxy statements and other informational materials to owners of the Contracts
supported by the Separate Account; the transmission of purchase and redemption
requests to the Trust's transfer agent; the maintenance of separate records for
each owner of a Contract reflecting shares purchased and redeemed and share
balances attributable to such Contract Owner in the form of units; the
preparation of various reports for submission to the Trust's Trustees; the
provision of shareholder support services with respect to the Portfolios serving
as funding vehicles for the Company's Contracts; and the services listed on
Schedule A.
5. Payment for Administrative Services. In consideration of the services
to be provided by you, we shall pay you on a monthly basis, from our assets,
including GSAM's bona fide profits as investment adviser to the Trust, an amount
equal to ____ basis points (__ %) per annum of the average aggregate net asset
value of shares of the Trust held by the Separate Account under the
Participation Agreement. For purposes of computing the payment to the Company
contemplated under this Paragraph 5, the average aggregate net asset value of
shares of the Trust held by the Separate Account over a one-month period shall
be computed by totaling the Separate Account's aggregate investment (share net
asset value multiplied by total number of shares held by the Separate Account)
on each calendar day during the month, and dividing by the total number of
calendar days during such month. The payment contemplated by this Paragraph 5
shall be calculated by GSAM at the end of each calendar quarter and will be paid
to the Company within sixty (60) business days thereafter.
6. Nature of Payments. The parties to this letter agreement recognize and
agree that Xxxxxxx, Sachs & Co.'s payments to the Company relate to
administrative services only and do not constitute payment in any manner for
investment advisory services or for costs of distribution of the Contracts or of
Trust shares; and, further, that these payments are not otherwise related to
investment advisory or distribution services or expenses, or administrative
services which the Company is required to provide to owners of the Contracts
pursuant to the terms thereof. You represent that you may legally receive the
payments contemplated by this Agreement.
7. Term. This letter agreement shall remain in full force and effect for
an initial term of one year, and shall automatically renew for successive
one-year periods unless either party notifies the other upon sixty (60) days'
written notice of its intent not to continue this agreement. This letter
agreement shall terminate automatically upon the redemption of the Separate
Account's investment in the Trust, or upon termination of the Trust's obligation
to sell its shares under the Participation Agreement.
8. Representations and Warranties. The Company represents and warrants
that:
(a) it is an insurance company duly organized and in good standing
under Texas insurance law;
(b) its entering into and performing its obligations under this
letter agreement does not and will not violate its charter
documents or by-laws, rules or regulations, or any agreement to
which it is a party; and
(c) it will keep confidential any information acquired in connection
with the matters contemplated by this letter agreement regarding
the business and affairs of the Trust, Xxxxxxx, Xxxxx & Co. and
their affiliates.
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9. Interpretation. This letter agreement shall be construed in accordance
with the laws of the State of Delaware, without giving effect to the principles
of conflicts of laws, subject to the following rules:
(a) This letter agreement shall be subject to the provisions of the
Act, and the rules, regulations and rulings thereunder, including
such exemptions from that statute, rules and regulations as the
SEC may grant, and the terms herein shall be limited, interpreted
and construed in accordance therewith.
(b) The captions in this letter agreement are included for
convenience of reference and in no way define or delineate any of
the provisions herein or otherwise affect their construction or
effect.
10. Amendment. This letter agreement may be amended only upon mutual
agreement of the parties hereto in writing.
11. Counterparts. This letter agreement may be executed in counterparts,
each of which shall be deemed an original but all of which shall together
constitute one and the same instrument.
If this letter agreement is consistent with your understanding of the
matters we discussed concerning your administrative services, kindly sign below
and return a signed copy to us.
Very truly yours,
Xxxxxxx, Xxxxx & Co.
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
Acknowledged and Agreed to:
AMERICAN GENERAL LIFE INSURANCE COMPANY
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
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SCHEDULE A
Maintenance of books and records
- Record issuance of shares
- Record transfers (via net purchase orders)
- Reconciliation and balancing of the Separate Account at the Trust
level in the general ledger, at various banks and within systems
interface to the summary of each Contract Owner's position
Purchase orders
- Determination of net amount available for investment by the Trust
- Deposit of receipts at Trust custodian by Trust (wire order)
- Notify custodian of estimated amount required to pay dividend
distributions or reinvestments
Redemption orders
- Determination of net amount required for redemptions by Trust
- Notification of custodian and Trust of cash required to meet payments
- Cost of share redemptions
Fund-related Contract Owner services
- Printing and mailing costs associated with dissemination of Trust
prospectus to prospective Contract Owners
- Telephonic support for Contract Owners with respect to inquiries about
the Trust (not including information related to sales of annuity
contracts)
- Trust proxies (solicitation of voting instructions and preparation of
materials, inclusive of printing, distribution, tabulation, and
reporting)
- Printing and mailing costs associated with dissemination of Trust
reports and notices to prospective Contract Owners
Other administrative support
- Sub-accounting services
- Providing other administrative support to the Trust as mutually agreed
between insurer and the Trust
- Relieving the Fund of other usual or incidental administrative
services provided to individual shareholders
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