Xxxxx 00, 0000
Xx. Xxxxxx Xxxxx
Managing Director
Xxxxxx Guaranty Trust Company of New York
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Xx. Xxxxx:
This letter sets forth the agreement between National Life Insurance Company
(the "Company") and Xxxxxx Guaranty Trust Company of New York ("Xxxxxx")
concerning certain administrative services.
1. Administrative Services and Expenses. Administrative services for the
Company's Separate Accounts (the "Accounts") which invest in the X.X.
Xxxxxx Series Trust II (the "Fund") pursuant to the Participation Agreement
among the Company and the Fund, dated March 23, 1998 (the "Participation
Agreement"), and for purchasers of variable annuity and/or variable life
insurance contracts (the "Contracts") issued through the Accounts, are the
responsibility of the Company. Certain administrative services for the Fund
in which the Accounts invest, and shareholder services for purchasers of
shares of the Fund, are the responsibility of Xxxxxx.
Xxxxxx recognizes the Company as the sole shareholder of record of shares
of Portfolios offered by the Fund (the "Portfolios") purchased under the
Participation Agreement on behalf of the Accounts. Xxxxxx further
recognizes that it will derive a substantial savings in administrative and
shareholder servicing expenses by virtue of having the Company as the
shareholder of record of shares of the Fund purchased under the
Participation Agreement, rather than multiple shareholders having record
ownership of such shares. The administrative and shareholder servicing
expenses for which Xxxxxx will derive such savings are set forth in
Schedule A to this letter agreement.
2. Expense Payments. In consideration of the anticipated administrative and
shareholder servicing expense savings resulting from the Company's services
set forth above, Xxxxxx agrees to pay the Company a fee (the "Fee"),
computed daily and paid monthly in arrears, equal to the following percent
of the daily net asset value of the shares of the Portfolios held in the
subaccount of the Account:
X.X. Xxxxxx International Opportunities Portfolio .20%
X.X. Xxxxxx Small Company Portfolio .20%;
provided, however, that to the extent and for so long as assets in any one
or more of the above listed Portfolios held in the subaccounts of the
Accounts equal or exceed $50,000,000, calculated on a per Portfolio basis
and not aggregated among all Portfolios (the "Requisite Amount"), the Fee
with respect to each Portfolio containing assets at the Requisite Amount
shall be increased to address increased expense savings as follows:
X.X. Xxxxxx International Opportunities Portfolio .25%
X.X. Xxxxxx Small Company Portfolio .25%;
(b) As soon as practicable after the end of each month, the company will
send Xxxxxx, at the address and in the manner set forth in the
Participation Agreement, a statement of the average daily net asset value
for the preceding month of the shares of each such Portfolio as to which
the fee stated in this Paragraph 2 is calculated, together with a statement
of the amount of such fee. For purposes of this paragraph 2, the average
daily net asset value of the shares of the Fund will be based on the net
asset values reported by such Fund to the Company.
3. Nature of Payments. The parties to this letter agreement recognize and
agree that Xxxxxx'x payments to the Company relate to administrative and
shareholder 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
administrative and shareholder servicing expense payments made by Xxxxxx to
the Company pursuant to Paragraph 2 of this letter agreement will not be
deemed to be conclusive with respect to actual administrative and
shareholder servicing expenses or savings of Xxxxxx.
4. Representations. The Company represents and warrants that in performing the
services and receiving the compensation described in this letter agreement
it will comply with all applicable laws, rules and regulations.
5. Term. This letter agreement will remain in full force and effect for so
long as any assets of the Fund are attributable to amounts invested by the
Company under the Participation Agreement, unless terminated in accordance
with Paragraph 6 of this letter agreement. Fees will continue to be due and
payable with respect to the shares attributable to existing Contracts for
only so long as such payments comply with applicable laws, rules and
regulations.
6. Termination. This letter agreement will be terminated upon mutual agreement
of the parties hereto in writing.
7. Amendment. This letter agreement may be amended only upon mutual agreement
of the parties hereto in writing.
8. Counterparts. This letter 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.
If this letter agreement is consistent with your understanding of the matters we
discussed concerning administrative and shareholder servicing expenses payments,
please sign below and return a signed copy to us.
Very truly yours,
NATIONAL LIFE INSURANCE COMPANY
By:/s/Xxxxxx von Gal
_________________
Treasurer
Acknowledged and Agreed:
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK
By:/s/Xxxxxx X. X. Xxxxx
_____________________
Xxxxxx X. X. Xxxxx
Managing Director
Attachment: Schedule A
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 fund level in
the general ledger, at various banks and within systems interface
Communication with the Fund
___________________________
~ Purchase Orders
- Determination of net amount available for investment by the Fund
- Deposit of receipts at the Fund's custodian (generally by wire transfer)
- Notification of the custodian of the estimated amount required to pay
dividend or distribution
~ Redemption Orders
- Determination of net amount required for redemptions by the Fund
- Notification of the custodian and Fund of cash required to meet payments
- Cost of share redemption
~ Daily pricing
Processing Distributions from the Fund
______________________________________
~ Process ordinary dividends and capital gains
~ Reinvest the Fund's distributions
Report
______
~ Periodic information reporting to the Fund
Fund-related Contractowner Services
___________________________________
~ Financial consultant's advice to contractowners with respect to Fund
inquiries (not including information about performance or related to sales)
~ Communications to contractowners regarding Fund and subaccount performance
Other Administrative Support
____________________________
~ Providing other administrative support for the Fund as mutually agreed
between the Company and the Fund or the Adviser
~ Relieving the Fund of other usual or incidental administrative services
provided to individual contractowners
