Xxxxxxx, Xxxxx Asset Management, L.P.
00 Xxx Xxxx
Xxx Xxxx, XX 00000
January 2nd, 2005
Allmerica Financial Life Insurance and Annuity Company
c/o
Goldman Xxxxx & Co
0 Xxx Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
This letter sets forth the agreement between Allmerica Financial Life
Insurance and Annuity Company ("you" or the "Company") and the undersigned
("we", "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 and variable life insurance
policies (the "Contracts") supported by Separate Accounts (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. Xxxxxxx Xxxxx Asset Management, L.P. 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 or
GSAM, 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 GSAM's bona fide profits as investment adviser to the
Trust, an amount equal to basis points (0.__ %) 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 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:
(i) you may legally receive the payments contemplated by this Agreement.
(ii) the administrative services provided by GSAM under this Agreement
are not ones for which the Trust has agreed to perform, provide or pay
for under the Participation Agreement.
(iii) to the extent required by applicable law, You have taken payments
received from GSAM under this Agreement into account in making any
determinations pursuant to Section 26(f)(2)(A) and 26(f)(3) of the Act.
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.
8. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants that:
(a) it is an insurance company duly organized and in good standing under
Massachusetts State insurance law;
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(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.
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Very truly yours,
Xxxxxxx Xxxxx Asset Management, L.P.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Acknowledged and Agreed to:
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
------- ----------------------------
Name: Xxxxxxx X. Xxxxxxx
------- --------------------------------
Title: President and CEO
------- -------------------------------
: --------------------------------------------------------
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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 existing Contract Owners (which shall not include proxies)
- Telephonic support for Contract Owners with respect to inquiries about the
Trust (not including information related to sales of annuity contracts)
- []COMPANY DOES NOT USUALLY PAY FOR THESE]
- Printing and mailing costs associated with dissemination of Trust reports
and notices to existing Contract Owners or prospects (other than proxies)
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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