Exhibit 10 (ap)
FINANCE SHARED SERVICES CENTER SERVICES AGREEMENT
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This Finance Shared Services Center Services Agreement ("Agreement") is
made this 1ST day of SEPTEMBER, 2000, by and among ING North America Insurance
Corporation, a Delaware corporation ("Service Provider") and Ameribest Life
Insurance Company, a Georgia corporation; Equitable Life Insurance Company of
Iowa, an Iowa corporation; USG Annuity & Life Company, an Oklahoma corporation;
Golden American Life Insurance Company, a Delaware corporation; First Columbine
Life Insurance Company, a Colorado corporation; Life Insurance Company of
Georgia, a Georgia corporation; Southland Life Insurance Company, a Texas
corporation; Security Life of Denver Insurance Company, a Colorado corporation;
Midwestern United Life Insurance Company, an Indiana corporation; and United
Life & Annuity Insurance Company, a Texas corporation (referred to herein
individually as the "Company" or collectively as the "Companies").
RECITALS
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WHEREAS, the Service Provider possesses certain unique resources,
including experienced personnel and specialized computer hardware and software,
to enable the Service Provider to establish a Finance Shared Services Center to
provide certain accounting, finance and treasury services to support the
financial operations of the Companies; and
WHEREAS, the Companies desire to engage the Service Provider to provide
certain accounting, finance and treasury services , and thereby achieve certain
operating economies and improved service to the benefit of the all of the
parties.
NOW, THEREFORE, in consideration of the premises and of the mutual
promises set forth herein, and intending to be legally bound hereby, the parties
agree as follows:
1. SERVICES.
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(a) Subject to the terms, conditions, and limitations of this Agreement,
the Service Provider will perform accounting, finance and treasury services for
each Company. The services that the Service Provider shall provide to each
Company include, but are not limited to, the following:
(i) Accounts Payable: Making vendor payments, monitoring
recurring payments, processing stop payments, preparation and filing sales and
use tax reports and returns, responding to questions from vendors, rocessing
travel and expense reports, maintaining check stock and providing copies of
check images to the Companies.
(ii) Fixed Assets: Accounting for real estate transactions,
maintaining the fixed asset records and processing payments for property taxes.
(iii) General Ledger: Processing journal entries, processing
expense allocations, establishing and maintaining accounts and cost centers,
processing intercompany transactions and processing the monthly closing.
(iv) Financial Reporting:Generating applicable monthly, quarterly
and annual financial statements on statutory, US GAAP, tax and ING (Dutch) GAAP
bases; monitoring changes to statutory, US GAAP, tax and ING GAAP accounting
standards; corresponding and coordinating reporting to regulatory agencies;
coordinating the external audit with the external auditors; coordinating
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external examinations with state insurance departments; preparing and filing RBC
calculations, preparing and filing escheat reports, preparing and filing benefit
plan reports, and preparing other required regulatory filings.
(v) Treasury/Cash Management: Maintaining banking relationships,
performing cash management procedures and short-term investment of cash
balances, and processing of wire transfers.
(vi) Other: Preparing budget and planning reports for finance
shared services, monitoring suspense account reports and other matters as
requested by each Company.
(b) The Service Provider shall employ all operating and management
personnel necessary to provide the services required by this Agreement. The
Service Provider shall also maintain such facilities and equipment as it deems
reasonably necessary in order to provide the services required by the Agreement,
including data processing equipment and communications equipment. Subject to the
terms (including any limitations and restrictions) of any applicable software or
hardware licensing agreement then in effect between the Service Provider and any
licensor, the Service Provider shall, upon termination of this Agreement, grant
to each Company a perpetual license, without payment of any fee, in any
electronic data processing software developed or used by the Service Provider in
connection with the services provided to that Company, if such software is not
commercially available and is necessary, in the Company's reasonable judgment,
for that Company to perform the functions provided by the Service Provider
hereunder after termination of this Agreement.
(c) The parties agree that all documents, reports, records, books, files
and other materials relative to the services performed for a given Company under
this Agreement shall be the sole property of that Company.
(d) The Service Provider shall perform any services hereunder in
accordance with any reasonable standards, guidelines and service level
agreements that the Service Provider and the Companies develop, and the Service
Provider shall at all times act in a manner reasonably calculated to be in the
best interests of the Companies.
3. CHARGES FOR SERVICES.
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(a) It is the intention of the parties that the charges for the services
provided under this Agreement be determined in accordance with fair and
reasonable standards and that no party realize a profit nor incur a loss as a
result of the services rendered pursuant to this Agreement.
(b) Each Company agrees to reimburse the Service Provider for all direct
costs incurred on behalf of each Company and for all indirect costs which may be
charged to each Company as follows:
(i) "Direct Costs" include costs incurred by the Service Provider
for services provided directly to the Companies, including but not limited to:
(a) All costs incident to any employee or employees who are employed in
rendering services to the Companies, such as salary, payroll taxes, and
benefits; (b) the cost of other reasonable and necessary business expenses
incurred by employees who are employed in rendering services to the Companies
such as training, travel and lodging. Direct Costs shall be charged in
accordance with reasonable functional cost studies and information used by the
Service Provider for internal cost distribution including, where appropriate, an
analysis of time spent by each employee providing services to each Company
and/or the percentage of administrative systems utilized. Data for this analysis
will be collected through tracking of unit costs of services or through time
studies conducted periodically. Annually, the bases for determining direct costs
shall be modified and adjusted by mutual agreement of the Service Provider and
each Company where necessary or appropriate to reflect fairly and equitably the
actual incidence of cost incurred by the Service Provider on behalf of each
Company.
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(ii) "Indirect Costs" include all other costs incurred by the
Service Provider in rendering services to each Company, including but not
limited to the cost of rent or depreciation of office space, utilities, office
equipment, and supplies utilized by employees who are employed in rendering
services to each Company. Indirect costs shall be charged to each Company based
on the proportion of total direct costs chargeable to each Company under
subparagraph (i), herein. In other words, if the direct costs chargeable to a
Company represents 20% of the Service Provider's total direct costs, then 20% of
the Service Provider's indirect costs will be charged to the Company.
(c) The charges for Direct Costs and Indirect Costs referred to above
shall be made by the Service Provider on a monthly basis.
(d) In the event the Service Provider or a Company should discover upon
review of its accounting by its internal auditors, independent auditor, any
state insurance department, or other regulatory agency, that an amount charged
for services provided hereunder was erroneous, the party discovering the error
will give prompt notice of such error to the affected party under this
Agreement. Such notice shall contain a description of the accounting error,
corrective action and supporting documentation. Any amounts owing as a result of
the correction shall be paid within sixty (60) days after notice has been given.
(e) Each Company shall have the right to inspect, upon reasonable notice
to the Service Provider, all books and records of the Service Provider related
to the provision of services so as to verify the accuracy of all expenses
reimbursed under this Agreement.
4. TERM.
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This Agreement shall be effective on the first day of September, 2000,
and shall end on the 31st day of December, 2001. This Agreement shall be
automatically renewed on the first day of each calendar year thereafter for a
twelve-month period under the same terms and conditions, subject to the
provisions for termination set forth herein.
5. TERMINATION.
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This Agreement may be terminated by the Service Provider or by any
Company (a) at the end of any term, upon written notice not later than the first
day of October of the expiring term, (b) at any time upon ninety (90) days
written notice or (c) at any time upon the mutual consent of the Service
Provider and a Company, as to the services provided to that Company.
6. STANDARD OF SERVICE.
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The Service Provider shall perform the services in a competent and
professional manner according to the standards agreed upon by the Service
Provider and the Companies. The Service Provider agrees that it will exercise
due diligence to abide by and comply with all laws, statutes, rules,
regulations, and orders of any governmental authority in the performance of its
services under this Agreement. The Service Provider will conduct its business
and perform its obligations in a manner which will not cause the possible
revocation or suspension of any Company's Certificate(s) of Authority or cause
any Company to sustain any fines, penalties, or other disciplinary action of any
nature whatsoever.
7. LIMITATION OF AUTHORITY.
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Each Company shall retain ultimate control and responsibility for all
services that it has delegated to the Service Provider under this Agreement. The
Service Provider shall provide services hereunder as an independent contractor,
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and shall act hereunder so as to assure the separate operating identity of each
Company. While rendering services to each Company pursuant to this Agreement,
the Service Provider, its officers and employees shall not at any time or for
any purpose be considered agents of a Company unless otherwise expressly agreed
to by those parties. Under no circumstances shall the services provided pursuant
to this Agreement be deemed to be those of a third party administrator pursuant
to any applicable state statutes.
8. INDEMNIFICATION.
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(a) Each Company hereby agrees to indemnify, defend and hold
harmless the Service Provider, its officers, directors and employees, from and
against any and all claims, demands, losses, liabilities, actions, lawsuits and
other proceedings, judgements and awards, and costs and expenses (including
reasonable attorneys' fees), arising directly or indirectly, in whole or in part
out of any action taken by the Service Provider within the scope of its duties
or authority hereunder, excluding only such of the foregoing as result from the
negligence or willful acts or omissions of the Service Provider, its officers,
directors, agents and employees. The provisions of this section shall survive
termination of this Agreement.
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(b) The Service Provider hereby agrees to indemnify, defend and hold
harmless each Company and its officers, directors and employees from and against
any and all claims, demands, losses, liabilities, action, lawsuits and other
proceedings, judgments and awards, fines and penalties, and costs and expenses
(including reasonable attorneys' fees), arising directly or indirectly, in whole
or in part, out of the negligence or any willful act or omission of the Service
Provider or of any of its officers, directors, agents or employees, in
connection with this Agreement or the performance of the Service Provider's
services hereunder, or out of any action taken by the Service Provider beyond
the scope of the Service Provider's duties or authority hereunder. The
provisions of this section shall survive termination of this Agreement.
9. NOTICES.
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All notices, requests, and communications required or permitted under
this Agreement shall be in writing and deemed given when addressed to the
applicable address set forth in Exhibit A attached hereto and (i) delivered by
hand to an officer of the other party, (ii) deposited with the U.S. Postal
Service, as first-class certified or registered mail, postage prepaid, or (iii)
deposited with an overnight courier. Any notice of a change of address shall be
given in the same manner.
10. COOPERATION.
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Each party hereto shall cooperate with each other, and with appropriate
governmental authorities (including, without limitation, the Securities and
Exchange Commission, the National Association of Securities Dealers and state
insurance regulators) and shall permit such authorities reasonable access to its
books and records in connection with any investigation or inquiry relating to
this Agreement or the transactions contemplated hereby.
11. ARBITRATION.
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Any controversy or claim arising out of or relating to this Agreement, or
the breach thereof, shall be settled by arbitration in accordance with the Rules
of the American Arbitration Association, and judgment upon the award may be
entered in any Court having jurisdiction thereof.
12. WAIVER.
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No waiver of any provision of this Agreement shall be deemed, or shall
constitute, waiver of any other provision, whether or not similar, nor shall any
waiver constitute a continuing waiver. No waiver shall be binding unless
executed in writing by the party making the waiver. Failure of any party to
exercise or delay in exercising any right or power granted under this Agreement
shall not operate as a waiver of any such right or power.
13. MISCELLANEOUS.
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This Agreement may not be assigned by the Service Provider without the
prior written consent of the Companies and may not be assigned by any Company
without the prior written consent of the Service Provider. This Agreement
constitutes the entire agreement of the parties hereto. This Agreement may be
amended only by a written instrument executed by all parties, except for the
addition of an affiliate entity as a future participant as set forth in Section
14 below. If any portion of this Agreement is invalid under any applicable
statute or rule of law, it shall not affect the remainder of this Agreement
which shall remain valid and binding. This Agreement shall be binding on the
parties, their legal representatives and successors. This Agreement shall be
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construed in accordance with and governed by the laws of the State of Georgia,
the state in which the services are provided, without regard to principles of
conflict of laws.
14. FUTURE PARTICIPANTS.
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The parties to this Agreement acknowledge that other entities which are
affiliates of the parties to this Agreement may in the future desire to utilize
the services provided by the Service Provider under this Agreement. Upon such an
entity executing an amendment to this Agreement in which the entity agrees to be
bound by all of the terms and provisions of this Agreement, such entity will be
deemed to be a party to this Agreement for all purposes.
15. COUNTERPARTS.
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This Agreement may be executed in separate counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
ING NORTH AMERICA INSURANCE
CORPORATION
By:___________________________
Name:_________________________
Title:__________________________
AMERIBEST LIFE INSURANCE COMPANY
By:___________________________
Name:_________________________
Title:__________________________
EQUITABLE LIFE INSURANCE COMPANY
OF IOWA
By:___________________________
Name:_________________________
Title:__________________________
USG ANNUITY & LIFE INSURANCE COMPANY
By:___________________________
Name:_________________________
Title:__________________________
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GOLDEN AMERICAN LIFE INSURANCE
COMPANY
By:___________________________
Name:_________________________
Title:__________________________
FIRST COLUMBINE LIFE INSURANCE
COMPANY
By:___________________________
Name:_________________________
Title:__________________________
LIFE INSURANCE COMPANY OF GEORGIA
By:___________________________
Name:_________________________
Title:__________________________
SOUTHLAND LIFE INSURANCE COMPANY
By:___________________________
Name:_________________________
Title:__________________________
SECURITY LIFE OF DENVER INSURANCE
COMPANY
By:___________________________
Name:_________________________
Title:__________________________
MIDWESTERN UNITED LIFE INSURANCE
COMPANY
By:___________________________
Name:_________________________
Title:__________________________
UNITED LIFE & ANNUITY INSURANCE
COMPANY
By:___________________________
Name:_________________________
Title:__________________________
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EXHIBIT A
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ADDRESSES FOR NOTICE
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ING North America Insurance Corporation
Attention: President
5780 Powers Ferry Road, NW
Atlanta, Georgia 30327
Ameribest Life Insurance Company
Attention: President
909 Locust Street
Des Moines, Iowa 50309
Equitable Life Insurance Company of Iowa
Attention: President
909 Locust Street
Des Moines, Iowa 50309
USG Annuity & Life Company
Attention: President
909 Locust Street
Des Moines, Iowa 50309
Golden American Life Insurance Company
Attention: President
1475 Dunwoody Drive
West Chester, Pennsylvania 19380
First Columbine Life Insurance Company
Attention: President
1290 Broadway
Denver, Colorado 80203
Life Insurance Company of Georgia
Attention: President
5780 Powers Ferry Road, NW
Atlanta, Georgia 30327
Southland Life Insurance Company
Attention: President
5780 Powers Ferry Road, NW
Atlanta, Georgia 30327
Security Life of Denver Insurance Company
Attention: President
1290 Broadway
Denver, Colorado 80203
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Midwestern United Life Insurance Company
Attention: President
1290 Broadway
Denver, Colorado 80203
United Life & Annuity Insurance Company
Attention: President
909 Locust Street
Des Moines, Iowa 50309
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