Xxxxxxx, Xxxxx Asset Management, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
April 1, 2008
Commonwealth Annuity and Life Insurance Company
000 Xxxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Ladies and Gentlemen:
This letter sets forth the agreement between Commonwealth Annuity and Life
Insurance Company ("you" or the "Company") and the undersigned ("we" or
"Xxxxxxx, Xxxxx Asset Management, L.P.", or "GSAM") concerning certain
administrative services to be provided by you, with respect to the Xxxxxxx
Xxxxx Variable Insurance Trust (the "Trust").
1. THE TRUST. The Trust is a Delaware statutory 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 Massachusetts life insurance company. The
Company issues variable annuity contracts (the "Contracts") supported by
Separate Accounts listed in Participation Agreement dated August 1, 2007 (the
"Separate Account"; if more than one, the term "Separate Account" shall apply
to each Separate Account subject hereto) 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. GSAM 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 (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 quarterly basis, from our
assets, including our BONA FIDE profits as investment adviser to the Trust,
an amount equal to the following amounts per annum of the average aggregate
net asset value of shares of the Trust held by the Separate Account under the
Participation Agreement.
Equity Funds 0.22%
Fixed Income Funds 0.05%
Money Market Funds 0.05%
Index Funds 0.003%
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 and paid as mutually agreed upon by the parties.
6. NATURE OF PAYMENTS. The parties to this letter agreement recognize and
agree that GSAM'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.
- the administrative services provided under this Agreement are not ones
for which the Trust has agreed to perform, provide or pay for under the
Participation 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 Massachusetts 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, GSAM and their affiliates.
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 Asset Management, L.P.
By: /s/ Xxxx Xxxxxx
---------------
Name: Xxxx Xxxxxx
Title: Managing Director
Date: February 23, 2012
Acknowledged and Agreed to:
COMMONWEALTH AND ANNUITY LIFE
INSURANCE COMPANY
By: /s/ Xxxx Xxxxx
--------------
Name: Xxxx Xxxxx
Title: Senior Vice President and Chief Operating Officer
Date: March 5, 2012
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 xxxxxx, at various banks and within systems interface to
the summary of each Contract Owner's position
FUND-RELATED CONTRACT OWNER SERVICES
- Printing and mailing costs associated with dissemination of Trust
prospectus to existing Contract Owners
- Telephonic support for Contract Owners with respect to inquiries about
the Trust (but not inquiries about the Contracts) unrelated to the
sales of Contracts or distribution of Trust shares
- 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 existing 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 Trust of the burden of providing other usual or
incidental administrative services provided to individual shareholders
