EXHIBIT 1.(8)(d)(iv)
[USAA LOGO]
________, 1998
BY EXPRESS DELIVERY
Xxxxxxx Xxxxxx Investments, Inc.
Xxxxxxx Investor Services, Inc.
Xxxxxxx Variable Life Investment Fund
0 Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Executives:
We are writing to augment and clarify certain of the terms and
conditions of: (1) the participation agreement, dated February 3, 1995, by and
between USAA Life Insurance Company ("USAA Life"), on behalf of the Separate
Account of USAA Life Insurance Company ("Separate Account") and the Life
Insurance Separate Account of USAA Life Insurance Company ("Life Insurance
Separate Account"), and the Xxxxxxx Variable Life Investment Fund ("Fund")
(hereinafter "Participation Agreement"); (2) the reimbursement agreement,
dated February 3, 1995, by and between USAA Life and Xxxxxxx, Xxxxxxx & Xxxxx
("SS&C") (hereinafter "Reimbursement Agreement"); and (3) the participating
contract and policy agreement, dated February 3, 1995, by and between USAA
Investment Management Company ("IMCO") and Xxxxxxx Investor Services, Inc.
("SIS") (hereinafter "Policy Agreement").
Unless otherwise noted, the provisions set out below are intended to
apply to the Participation Agreement, Reimbursement Agreement and the Policy
Agreement (collectively, the "Agreements") and, to the extent contrary to or
inconsistent with any provision in any Agreement, shall modify such provision.
The headings used herein are for convenience of reference only.
Kindly acknowledge your acceptance and agreement to the following by
affixing your signature to the last page of this letter.
AVAILABLE PORTFOLIOS.
The Fund's Capital Growth Portfolio ("Portfolio" or "Capital Growth
Portfolio") is the only Fund series that USAA Life currently intends to make
available for investment through the Separate Account and the Life Insurance
Separate Account. Accordingly, any obligations of USAA Life with respect to
capital contributions or expense reimbursements required to be made under the
Participation Agreement shall be limited to the Capital Growth Portfolio,
until such time as USAA Life notifies the Fund that it intends to use one or
more additional portfolios.
0000 Xxxxxxxxxxxxxx Xxxx Xxx Xxxxxxx, Xxxxx 00000 1-800-531-8000
In San Antonio 498-8000
Xxxxxxx Xxxxxx Investments, Inc.
________, 1998
Page 2
PURCHASES AND REDEMPTIONS.
1. TIMELY PRICING AND ORDERS. The Fund or its designated agent will use
all commercially reasonable efforts to provide to USAA Life the closing net
asset value and any dividend and capital gain information for the Portfolio by
5:15 p.m., Central time on each Business Day. "Business Day" shall mean any
day on which the Fund calculates the net asset value of its Funds pursuant to
rules of the Securities and Exchange Commission and as described in the Fund's
Prospectus. USAA Life will use these data to calculate unit values, which in
turn will be used to process transactions that receive that same Business
Day's Separate Account or Life Insurance Separate Account unit value. Such
Separate Account or Life Insurance Separate Account processing will be done
the same evening, and corresponding orders with respect to Fund shares will be
placed the morning of the following Business Day. USAA Life will use all
commercially reasonable efforts to place such orders with the Fund by 9 a.m.,
Central time.
2. TIMELY PAYMENTS. USAA Life or its designated agent will transmit
orders for purchases and redemptions of Fund shares to SIS, and will wire
payment for net purchases to a custodial account designated by the Fund on the
same day as the order for Fund shares is placed, to the extent practicable.
Payment for net redemptions will be wired by the Fund to an account designated
by USAA Life on the same day as the order is placed, to the extent
practicable, but in any event within such reasonably practicable period of
time after the order is placed as would enable USAA Life to pay redemption
proceeds in compliance with Section 22(e) of the Investment Company Act of
1940.
3. APPLICABLE PRICE. The Fund shall effect any orders to purchase or
redeem Portfolio shares that USAA Life submits on behalf of the Separate
Account, based on transactions under variable annuity contracts issued by USAA
Life ("Contracts"), and on behalf of the Life Insurance Separate Account,
based on transactions under variable life insurance policies ("Policies"), at
the Portfolio's net asset value per share as of the close of business on the
Business Day the order is received by USAA Life or its designee, acting as
agent for the Fund, provided that such order is received prior to the time as
of which the Fund calculates net asset value on that Business Day. If such
order is received after that time, the order will be effected at the
Portfolio's net asset value as of the close of business on the next Business
Day. Any orders to purchase shares of an available Fund not based on
transactions under Contracts or Policies will be effected at the Fund's net
asset value per share next computed after the order is received by the Fund.
4. REDEMPTIONS. The Fund shall redeem for cash from USAA Life those full
or fractional shares of the Portfolio that USAA Life requests from time to
time.
Xxxxxxx Xxxxxx Investments, Inc.
________, 1998
Page 3
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS.
USAA Life, on behalf of the Separate Account and the Life Insurance
Separate Account, hereby elects to reinvest all dividends and capital gains
distributions in additional shares of the Capital Growth Portfolio at the net
asset values on the payment date of such dividends and capital gains
distributions until USAA Life otherwise notifies the Fund in writing. USAA
Life reserves the right to revoke this election and to receive all such
dividends and capital gain distributions in cash. The Fund shall promptly
notify USAA Life of the number of shares so issued as payment of such
dividends and distributions.
AMENDMENT TO POLICY AGREEMENT.
As an additional inducement for IMCO to enter into the Policy Agreement,
SIS hereby agrees with IMCO as follows:
(1) in connection with Sections 6 and 12 of the Policy Agreement, SIS
will give IMCO thirty days' written notice before suspending sales or
withdrawing the offering of Shares (as defined in the Policy Agreement)
or terminating the Policy Agreement, except that sales of Shares may be
suspended or the offering of Shares withdrawn or the Policy Agreement
terminated without notice (i) if the continued offering or sale of
Shares would violate any applicable statute or regulation, order or
decree of any court, governmental agency or self-regulatory organization
having jurisdiction, or (ii) if in the sole discretion of the Trustees
of the Fund, including a majority of those Trustees who are not
"interested persons" as defined in the Investment Company Act of 1940,
as amended, of the Trust or of its investment adviser, such action is
determined to be necessary in the best interests of the Shareholders of
the Portfolio.
(2) no unilateral amendment pursuant to Section 6 of the Policy
Agreement shall be effective against IMCO unless it is accompanied by a
written notice from SIS stating that the amendment is necessary to
prevent the continued offering or sale of Shares from violating any
applicable statute or regulation, order or decree of any court,
governmental agency or self-regulating organization having jurisdiction.
Xxxxxxx Xxxxxx Investments, Inc.
________, 1998
Page 4
FUND MATERIALS.
The Fund, at its expense, shall provide USAA Life or its designee with
camera ready copy or computer diskette versions of all prospectuses (including
supplements thereto), statements of additional information, annual and
semi-annual reports, and proxy materials (collectively, "Fund Materials"), to
be printed and distributed by USAA Life or IMCO to existing and prospective
Contract or Policy owners, as appropriate. USAA Life agrees to bear the cost
of printing and distributing such Fund Materials.
TAX MATTERS.
1. The Fund, SS&C, or SIS will notify USAA Life immediately upon having
a reasonable basis for believing that the Portfolio has ceased to comply with
the requirements of Section 817(h) of the Internal Revenue Code of 1986, as
amended ("Code") or that the Portfolio might not so comply in the future. In
connection with a failure to comply with the Section 817(h) diversification
requirements, SS&C shall cooperate with USAA Life by providing it with full
explanation as to the circumstances that caused the failure, and the reasons
why the failure was inadvertent.
2. The limitation against liability set out in paragraph 6(c)(viii) of
the Reimbursement Agreement shall apply only where it can be shown that the
failure of USAA Life to comply with clauses 6(c)(i) through (vii) materially
contributed to the liability.
3. Each Agreement shall terminate, at the option of USAA Life or IMCO,
as the case may be, in the event of a non-curable failure by the Portfolio to
comply with the provisions of Subchapter M or Section 817(h) of the Code. To
the extent that any Agreement by its terms provides for one or more rights or
obligations thereunder to survive the termination of that Agreement, those
provisions shall survive the termination of that Agreement under this
paragraph.
MISCELLANEOUS.
(a) The Fund, SS&C, and SIS agree to make available to USAA Life and its
affiliates, to the extent permitted by applicable law, any arrangement for
utilization of the Portfolio, which arrangement has been or will be made
generally available to any other life insurance company or any affiliate of a
life insurance company.
Xxxxxxx Xxxxxx Investments, Inc.
________, 1998
Page 5
(b) This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.
(c) The name "Xxxxxxx Variable Life Investment Fund" is the designation
of the Trustees for the time being under a Declaration of Trust dated March
15, 1985, as amended, and all persons dealing with the Fund must look solely
to the property of the Fund for the enforcement of any claims against the Fund
as neither the Trustees, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of the Fund. No Portfolio
shall be liable for any obligations properly attributable to any other
Portfolio.
---------------------------------
Very truly yours,
USAA LIFE INSURANCE COMPANY
By:
-------------------
Xxxxx X. Xxxxxx
President
USAA INVESTMENT
MANAGEMENT COMPANY
By:
--------------------
Xxxx X. Xxxxxxxx
Senior Vice President
Investments Services
Xxxxxxx Xxxxxx Investments, Inc.
________, 1998
Page 6
We hereby agree to and accept the provisions set out above.
XXXXXXX XXXXXX INVESTMENTS, INC.
By:
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Xxxx X. Xxxxxx
XXXXXXX INVESTOR SERVICES, INC.
By: __________________
XXXXXXX VARIABLE LIFE INVESTMENT FUND
By:
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Xxxxx X. Xxxxx
