Exhibit 1.A.(8)(i)
ADMINISTRATIVE AND SHAREHOLDER SERVICE AGREEMENT
This Agreement is made as of the 10th day of October, 2000, by and between
DIRECTED SERVICES, INC., ("Adviser") and SOUTHLAND LIFE INSURANCE COMPANY,
("Insurer") collectively "the Parties."
WHEREAS, Adviser serves as the investment adviser of the GCG Trust ("Trust")
which currently consists of 25 separate series (each a "Portfolio"); and
WHEREAS, the Insurer, the Adviser, and the GCG Trust have entered into a
Participation Agreement dated Oct. 10, 2000, as may be amended from time to
time (the "Participation Agreement"), pursuant to which the Insurer, on behalf
of certain of its separate accounts (the "Separate Accounts"), purchases Shares
("Shares") of certain Portfolios of the Trust ("Portfolios") which serve as
investment options under certain variable life insurance contracts ("Variable
Contracts") offered by the Insurer, which Portfolios may be one of several
investment options available under the Variable Contracts; and
WHEREAS, the Adviser and the Trust recognize that they will derive substantial
savings in administrative expenses by virtue of having a sole shareholder rather
than multiple shareholders in connection with each Separate Account's
investments in the Portfolios, and that in the course of soliciting applications
for Variable Contracts issued by the Insurer and in servicing owners of such
Variable Contracts, the Insurer will provide information about the Trust and its
Portfolios from time to time, answer questions concerning the Trust and its
Portfolios, including questions respecting Variable Contract owners' interests
in one or more Portfolios, and provide services respecting investments in the
Portfolios; and
WHEREAS, the Adviser and the Trust wish to compensate the Insurer for the
efforts of the Insurer in providing written and oral information and services
regarding the Trust to Variable Contract owners; and
WHEREAS, the following represents the collective intention and understanding of
the service fee agreement between the Adviser, the Trust and the Insurer.
NOW, THEREFORE, in consideration of the mutual benefits and promises contained
herein, the Parties hereto agree as follows:
I. Services Provided:
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Insurer agrees to provide services including, but not limited to:
a) providing necessary personnel and facilities to establish and
maintain Contract owner accounts and records;
b) recording and crediting debits and credits to the accounts of
Contract owners;
c) paying the proceeds of redemptions to Contract owners;
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d) delivering and responding to inquiries respecting Trust prospectuses,
reports, notices, proxies and proxy statements and other information
respecting the Portfolios (as specified in the Participation
Agreement);
e) facilitating the tabulation of Contract owners' votes in the event of
a meeting of Trust shareholders (as specified in the Participation
Agreement);
f) providing and administering Contract features for the benefit of
Contract owners participating in the Trust, including fund transfers,
dollar cost averaging, asset allocation, portfolio rebalancing,
earnings sweep, and pre-authorized deposits and withdrawals;
g) responding to inquiries from Contract owners using one or more of the
Portfolios as an investment vehicle regarding the services performed
by Insurer as they relate to the Trust or its Portfolios;
h) providing information to Adviser, the Trust, or the Trust's transfer
agent and to Contract owners with respect to shares attributable to
Contract owner accounts;
i) facilitating the printing and mailing of shareholder communications
from the Trust as may be required pursuant to the Participation
Agreement;
j) responding to inquiries from Contract owners concerning the Trust and
its operations;
k) providing such similar services as Adviser or Trust may reasonably
request to the extent permitted or required under applicable
statutes, rules and regulations.
II. Payment of Expenses:
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a) In consideration of the services listed in Section I, the Adviser
shall pay to Insurer a quarterly fee equal to a percentage of the
average daily net assets of each Portfolio attributable to the
Variable Contracts, at the annual rate of 0.25% of such assets.
b) For purposes of calculating the amount of the expense reimbursement,
described in (a) above, the "average daily net assets" of all
Portfolios for any calendar month shall be equal to the quotient
produced by dividing (i) the sum of the net assets of such Portfolios
determined in accordance with procedures established from time to
time by or under the direction of the Trusts' Board of Trustees for
each business day of such quarter, by (ii) the number of such
business days; and
c) The Adviser or Trust will calculate the payment contemplated by this
Section at the end of each calendar quarter and will make such
payment to Insurer within thirty (30) days thereafter. Each payment
will be accompanied by a statement showing the calculation of the
quarterly amounts payable by the Adviser or Trust and such other
supporting data as may be reasonably requested by Insurer.
d) From time to time, the Parties hereto shall review the quarterly fee
to determine whether it reasonably approximates the incurred and
anticipated costs, over time, of Insurer in connection with its
duties hereunder. The Parties agree to negotiate in good faith any
change to the quarterly fee proposed by a Party in good faith.
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e) This Agreement shall not modify any of the provisions of the
Participation Agreement, but shall supplement those provisions.
III. Term of Agreement:
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This Agreement shall continue in effect for so long as the Adviser is
the adviser to the Trust and Insurer or its successor(s) in interest,
or any affiliate thereof, continues to hold shares of the Trust or
its portfolios, and continues to perform services in a similar
capacity for the Company and Trust.
IV. Indemnification:
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a) Insurer agrees to indemnify and hold harmless the Adviser and its
officers and directors, from any and all loss, liability and expense
resulting from the negligence or willful wrongful act of Southland
Life under this Agreement, or by reason of the reckless disregard of
its obligations and duties under this Agreement.
b) Adviser agrees to indemnify and hold harmless Insurer and its
officers and directors from any and all loss, liability and expense
resulting from the negligence or willful wrongful act of Adviser
under this Agreement, or by reason of the reckless disregard of its
obligations and duties under this Agreement.
c) No party will be entitled to indemnification under Sections V(a) or
V(b) to the extent such loss, liability or expense is the result of
the willful misfeasance, bad faith or negligence in the performance
of such party's duties under this Agreement.
V. Amendment
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This Agreement may be amended only upon mutual agreement of the
Parties hereto in writing.
VI. Notices:
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Notices and communications required or permitted hereby will be given
to the following persons at the following addresses and facsimile
numbers, or such other persons, addresses or facsimile numbers as the
Party receiving such notices or communications may subsequently direct
in writing:
Directed Services, Inc.
1475 Dunwoody Drive
West Chester, PA 19380-1479
Attention: Myles Tashman
Fax: (610) 425-3520
Southland Life Insurance Company
1290 Broadway
Denver, Colorado 80203-5699
Attention: Variable Attorney
Fax: (303) 860-2134
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VII. Applicable Law:
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Except insofar as the Investment Company Act of 1940 or other federal
laws and regulations may be controlling, this Agreement will be
construed and the provisions hereof interpreted under and in accordance
with Colorado law, without regard for that state's principles of
conflict of laws.
VIII. Execution in Counterparts:
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This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together will constitute one and the
same instrument.
IX. Severability:
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If any provision of this Agreement is held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement
will not be affected thereby.
X. Rights Cumulative:
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The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, that the Parties are entitled to
under federal and state laws.
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XI. Headings
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The headings used in this Agreement are for purposes of reference only and
shall not limit or define, the meaning of the provisions of this Agreement.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized officers
signing below.
DIRECTED SERVICES, INC. SOUTHLAND LIFE INSURANCE COMPANY
By: /s/ David L. Jacobson By: /s/ James L. Livingston, Jr.
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Name: David L. Jacobson Name: James L. Livingston, Jr.
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Title: Senior Vice President Title: Executive Vice President
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