Exhibit 1.A(8)(l)
SERVICE AGREEMENT
This Agreement is made as of the 1st day of September, 2000 by and
between Southland Life Insurance Company ("Southland") and Xxxx Xxxxx
Management, Inc., a New York corporation ("Adviser") (collectively, the
"Parties").
W I T N E S S E T H:
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WHEREAS, the Adviser serves as the investment adviser of The Xxxxx
American Fund, a Massachusetts business trust (the "Fund"), which currently
consists of six separate series (each, a "Portfolio"); and
WHEREAS, Southland has entered into an agreement, dated August 22,
1995, with the Fund and Adviser (the "Participation Agreement") pursuant to
which the Fund will make shares of each Portfolio listed on Schedule A thereto
available to certain variable life insurance and variable annuity contracts
offered by Southland through certain separate accounts (the "Separate Accounts")
at net asset value and with no sales charges, subject to the terms of the
Participation Agreement; and
WHEREAS, the Participation Agreement provides that the Fund will bear
the costs of preparing, filing with the Securities and Exchange Commission,
printing or duplicating and mailing the Fund's prospectus, statement of
additional information and any amendments or supplements thereto, periodic
reports to shareholders, Fund proxy material and other shareholder
communications (collectively, the "Fund Materials") required by law to be sent
to owners of Contracts ("Contract owners") who have allocated any Contract value
to a Portfolio; and
WHEREAS, the Participation Agreement provides that the Adviser, at its
expense, will provide Southland with camera ready copies or copies suitable for
duplication of all Fund Materials with respect to prospective Variable Contract
owners of Southland; and
WHEREAS, the Participation Agreement makes no provision for which party
shall incur various administrative expenses in connection with the servicing of
Contract owners who have allocated Contract value to a portfolio, including, but
not limited to, responding to various Contract owner inquiries regarding a
Portfolio; and
WHEREAS, the Parties hereto wish to allocate the expenses in a manner
that is fair and equitable, and consistent with the best interests of Contract
owners; and
WHEREAS, the Parties hereto wish to establish a means for allocating
the expenses that does not entail the expense and inconvenience of separately
identifying and accounting for each item of Fund expense;
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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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Southland agrees to provide services to the Adviser including the
following:
a) responding to inquiries from Southland Contract owners using one
or more of the Portfolios as an investment vehicle regarding the services
performed by Southland as they relate to the Fund or its Portfolios;
b) providing information to the Adviser and to Contract owners with
respect to shares attributable to Contract owner accounts;
c) printing and mailing of shareholder communications from the Fund
as may be required pursuant to Paragraph 4 of the Participation Agreement;
d) communication directly with Contract owners concerning the Fund's
operations;
e) providing such similar services as Adviser may reasonably request
to the extent permitted or required under applicable statutes, rules and
regulations.
II. EXPENSE ALLOCATIONS:
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Subject to Section III hereof, Southland or its affiliates shall
initially bear the costs of the following:
a) printing and distributing all Fund Materials to be distributed to
prospective Contract owners;
b) printing and distributing all sales literature or promotional
material developed by Southland or its affiliates and relating to the Contracts;
c) servicing Contract owners who have allocated Contract value to a
Portfolio, which servicing shall include, but is not limited to, the items
listed in Paragraph I of this Agreement. 2
III. PAYMENT OF EXPENSES:
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a) The Adviser shall pay to Southland a quarterly fee equal to a
percentage of the average daily net assets of the Portfolio attributable to
Contracts, at the annual rate of .10% (hereinafter, the "Quarterly Fee"), in
connection with the expenses incurred by Southland under Section II hereof. The
payment of the Quarterly Fee shall commence at the end of the first calendar
quarter in which Contract value has been allocated to a Portfolio.
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b) 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 Southland 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.
c) This Agreement shall not modify any of the provisions of
Paragraph 4 of the Participation Agreement, but shall supplement those
provisions.
IV. TERM OF AGREEMENT:
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Any Party may terminate this Agreement, without penalty, on 60 days' written
notice to the other Parties. Unless so terminated, this Agreement shall continue
in effect for so long as the Adviser or its successor(s) in interest, or any
affiliate thereof, continues to perform in a similar capacity for the Fund, and
for so long as any Contract value or any monies attributable to Southland is
allocated to a Portfolio.
V. INDEMNIFICATION:
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a) Southland agrees to indemnify and hold harmless the Adviser and
its officers and directors, from any and all loss, liability and expense
resulting from the gross negligence or willful wrongful act of Southland under
this Agreement, except to the extent such loss, liability or expense is the
result of the willful misfeasance, bad faith or gross negligence of the Adviser
in the performance of its duties, or by reason of the reckless disregard of its
obligations and duties under this Agreement.
b) Adviser agrees to indemnify and hold harmless Southland and its
officers and directors from any and all loss, liability and expense resulting
from the gross negligence or willful wrongful act of Adviser under this
Agreement, except to the extent such loss, liability or expense is the result of
the willful misfeasance, bad faith or gross negligence of Southland in the
performance of its duties, or by reason of the reckless disregard of its
obligations and duties under this Agreement
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:
Xxxx Xxxxx Management, Inc.
00 Xxxxxx Xxxx
Xxx Xxxx, X.X. 00000
Attn: Xxxxxxx X. Xxxx
FAX: (000) 000-0000
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Southland Life Insurance Company
0000 Xxxxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attn: Variable Attorney, Legal Department
FAX: (000) 000-0000
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 New York 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.
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.
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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.
XXXX XXXXX MANAGEMENT, INC. SOUTHLAND INSURANCE COMPANY
By: /s/ Xxxxxxx X. Xxxx By: /s/ Xxxxx X. Xxxxxxxxx, Xx.
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Name: Xxxxxxx X. Xxxx Name: Xxxxx X. Xxxxxxxxx, Xx.
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Title: Executive Vice President Title: Executive Vice President
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