Document:

Exhibit 4.1

                                  CULP, INC.

                      1997 PERFORMANCE-BASED OPTION PLAN

      1.     Purpose  of Plan.  The 1997  Performance-Based  Option  Plan (the
"Plan") is intended to increase the incentive for  participants  to contribute
to the success of Culp, Inc. and its subsidiaries  ("Culp") and to reward them
for their contribution to that success.

      2.     Shares Subject to Plan. The options  granted under this Plan will
be options  to  acquire  shares of Culp's  common  stock  $.05 par value.  The
maximum number of shares that may be issued pursuant to this Plan is 106,000.

      3.     Administration   of  Plan.   The   Compensation   Committee  (the
"Committee") of Culp's Board of Directors will administer the Plan.  Except to
the  extent  permitted  under  Rule  16b-3  promulgated  under the  Securities
Exchange Act of 1934,  during the year prior to commencement of service on the
Committee,  the Committee  members will not have  participated  in or received
securities  under,  and while  serving  and for one year after  serving on the
Committee,  such members shall not receive securities under or be eligible for
selection  as  persons  to whom  shares  may be  transferred  or to whom stock
options  may be granted  under,  the Plan or any other  discretionary  plan of
Culp (or an  affiliate  of Culp)  under  which  participants  are  entitled to
acquire  shares,  stock  options or stock  appreciation  rights of Culp (or an
affiliate of Culp).

      The Committee,  in addition to any other powers granted to it hereunder,
shall have the powers, subject to the expressed provisions of the Plan:

            (a)    in its discretion,  to determine the Employees  (defined in
      Section 4(a) hereof) to receive  options,  the times when options  shall
      be  granted,  the times when  options  may be  exercised,  the number of
      shares  to be  subject  to  each  option,  and any  restrictions  on the
      transfer or ownership of shares purchased pursuant to an option;

            (b)    to  prescribe,  amend and repeal rules and  regulations  of
      general application relating to the Plan;

            (c)    to construe and interpret the Plan;

            (d)    to  require  of any  person  exercising  an option  granted
      under the  Plan,  at the time of such  exercise,  the  execution  of any
      paper or    making  or  any   representation   or  the   giving  of  any
      commitment that the Committee  shall, in its discretion,  deem necessary
      or advisable by reason of the  securities  laws of the United  States or
      any State,  or the  execution  of any paper or the payment of any sum of
      money in  respect  of taxes or the  undertaking  to pay or have paid any
      such sum that the Committee shall, in its discretion,  deem necessary by
      reason  of  the  Internal   Revenue  Code  or  any  rule  or  regulation
      thereunder, or by reason of the tax laws of any State;

            (e)    to amend stock options  previously granted and outstanding,
      but no  amendment  to any  such  agreement  shall  be made  without  the
      consent of the optionee if such  amendment  would  adversely  affect the
      rights  of  the  optionee  under  his  stock  option  agreement;  and no
      amendment  shall be made to any stock option  agreement that would cause
      the  inclusion  therein of any term or provision  inconsistent  with the
      Plan; and

            (f)    to make all other  determinations  necessary  or  advisable
      for the  administration  of the Plan.  Determinations  of the  Committee
      with  respect  to the  matters  referred  to in this  section  shall  be
      conclusive and binding on all persons eligible to participate  under the
      Plan and their legal  representatives  and beneficiaries.  The Committee
      shall have full  authority to act with respect to the  participation  of
      any  Employee,  and  nothing  in the Plan  shall be  construed  to be in
      derogation of such authority.

      The Committee may designate  selected  Committee members or employees of
Culp to assist the Committee in the  administration  of the Plan and may grant
authority to such persons to execute documents,  including options,  on behalf
of the Committee,  subject in each such case to the requirements of Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended.

      Decisions and  determinations  of the Committee on all matters  relating
to the Plan  shall be in its  sole  discretion  and  shall be  conclusive.  No
member of the  Committee,  nor any person  authorized  to act on behalf of the
Committee,  shall be liable  for any  action  taken or  decision  made in good
faith relating to the Plan or any award thereunder.

      1.     Grant of Option to Employees.

            (a)    Employees  to Whom  Options May Be Granted.  The  Committee
      may grant an option to any  employee of Culp who is a corporate  officer
      or who is determined by the Committee to be a key manager  ("Employee").
      In determining which Employees will be granted an option,  the Committee
      shall consider the duties of the Employees,  their present and potential
      contributions  to the  success of Culp,  and such  other  factors as the
      Committee deems relevant in connection with  accomplishing  the purposes
      of the Plan.

            (b)    Number of Shares.  The  Committee  may grant to an Employee
      an option to purchase such number of shares as the Committee may chose.

            (c)    Exercise  Price.  The  exercise  price with respect to each
      option granted hereunder will be $1.00 per share.

            (d)    Date of Grants:  Term of  Options.  By April 1,  1997,  the
      Committee will grant to Employees  hereunder options to purchase 106,000
      shares,  all of which options will be on the terms specified on Schedule
      4(d) attached hereto.

      1.     Exercise.  An option  granted  hereunder  may be  exercised as to
part or all of the shares covered thereby.  During the participant's lifetime,
only the  participant  or his legal guardian may exercise an option granted to
the  participant.  If a participant  dies prior to the  expiration  date of an
option granted to him,  without  having  exercised his option as to all of the
shares covered thereby,  the option may be exercised by the estate or a person
who acquired the right to exercise the option by bequest or  inheritance or by
reason of the death of the Employee.

      2.     Payment of Exercise  Price.  The  exercise  price will be payable
upon exercise of the option to purchase shares.  Payment of the exercise price
shall be made in cash or, to the extent  permitted by the Committee and as set
forth in the  Memorandum of Option,  with shares of Culp common stock,  valued
at the fair market value on the date of exercise,  delivered to or withheld by
Culp at the time of exercise.

      3.     Transferability.  No option granted  hereunder may be transferred
by the participant  except by will or by the laws of descent and distribution,
upon the death of the participant.

      4.     Memorandum  of  Option.   The  Committee  will  deliver  to  each
participant  to whom an option is granted a Memorandum of Option,  stating the
terms of the option.

      5.     Capital  Adjustments.  The  number  of  shares  of  common  stock
covered by each  outstanding  option  granted  under the Plan,  and the option
price thereof, will be subject to an appropriate and equitable adjustment,  as
determined by the  Committee,  to reflect any stock  dividend,  stock split or
share  combination,  and will be subject to such  adjustment  as the Committee
may deem  appropriate  to reflect any  exchange  of shares,  recapitalization,
merger, consolidation,  separation,  reorganization,  liquidation or the like,
of or by Culp.

      6.     Amendment or Discontinuance.  The Plan may be amended, altered or
discontinued  by the Board of Directors of Culp. No  termination  or amendment
of the Plan shall  materially  and adversely  affect any rights or obligations
of the holder of an option  theretofore  granted  under the Plan  without  his
consent.

      7.     Effect of the Plan.  Neither  the  adoption  of this Plan nor any
action of the Board or the  Committee  shall be deemed to give any  person any
right to be granted an option to  purchase  common  stock of Culp or any other
rights  hereunder  except as may be  expressly  granted by the  Committee  and
evidenced by a Memorandum of Option described in Section 8.

      8.     Effectiveness of the Plan: Duration.  The Plan shall be effective
upon the approval of the Plan by the Board of Directors of Culp,  but the Plan
shall be subject to  approval  by the vote of the holders of a majority of the
shares of stock of Culp entitled to vote.  The  Committee  shall grant options
as  contemplated  in  Section  4(d)  before  submission  of  the  Plan  to the
shareholders  for their approval,  but if such approval is not obtained within
twelve months of the approval by the Board of  Directors,  then the Plan shall
terminate  and any options  theretofore  granted shall be void. No options may
be  granted  under this Plan  except the  initial  grants as  contemplated  in
Section 4(d).

<PAGE>
                                   Schedule 4(d)

      1.  Vesting  /Exercisability.  Except as  provided  below,  the  options
would not become exercisable until January 1 , 2006.

         (a)       Earnings.  If the Company's  reported  audited earnings for
   any fiscal  year 1997  through  1999 equal or exceed  $1.50 per share,  the
   options  would  become  exercisable  five  business  days after the Company
   makes a public  announcement  of such earnings.  (The Committee  would have
   the discretion to determine  appropriate treatment for extraordinary items,
   accounting  changes or substantial  changes  (including  additional  equity
   offerings) to the Company's capital structure.)

         (b)       Death,   Disability,    Retirement.   If   the   employee's
   employment  terminates on account of death,  disability or retirement after
   reaching age 65, his options will become immediately exercisable.

         (c)       Limitations  on  Exercise.  Before  the holder of an option
   granted  pursuant to this plan may exercise  such option,  such holder must
   first  provide  five  (5)  business  days  notice  to Culp of the  holder's
   intention  to make  such  exercise,  including  the  number of shares as to
   which the holder  intends to  exercise an option and the  proposed  date of
   the exercise.  Upon receiving such notice,  Culp will make a  determination
   of  the  amount  of  applicable   employee   remuneration   that  would  be
   attributable  to the holder  upon such  exercise  under the  provisions  of
   Section  162(m) of the Internal  Revenue  Code of 1986,  as amended (or any
   successor  provision)  ("Section  162(m)").  If the  amount  of  applicable
   employee remuneration  attributable to the holder under Section 162(m) upon
   the  proposed  exercise,   together  with  all  other  applicable  employee
   remuneration  attributable  to the  holder for Culp's tax year in which the
   exercise is proposed to be made, exceeds the amount of applicable  employee
   remuneration  attributable  to the holder that would be  deductible by Culp
   under the provisions of Section  162(m),  then Culp will notify the holder,
   on or before  the  proposed  date of  exercise  specified  in the  holder's
   notice,  of the  maximum  number  of  shares  as to which  the  holder  may
   exercise  an  option  and not  exceed  the  amount of  applicable  employee
   remuneration  that would be deductible by Culp under  Section  162(m),  and
   the holder's  exercise shall be limited to an exercise with respect to such
   maximum number of shares.  Further,  if after the exercise of options under
   the plan the maximum amount of deductible  applicable employee remuneration
   (as determined  under Section 162(m)) has been received by or attributed to
   the holder of such  options  for Culp's  current  tax year,  then any other
   applicable employee  remuneration payable or to be paid during the same tax
   year by Culp to such holder pursuant to any agreement,  plan or arrangement
   will not be paid to the holder  during such tax year,  but will be deferred
   and paid to such holder during the period  beginning three months after the
   beginning  of Culp's  following  tax year and ending four months  after the
   beginning  of such tax year.  It is the  intention of these  provisions  to
   limit the amount of shares as to which a holder of options  under this plan
   may  exercise  options in any tax year to an amount that,  when  considered
   together  with all other  compensation  received  by the  holder  from Culp
   during such year, will not cause any  compensation to be paid or attributed
   to such holder to be  nondeductible  to Culp  pursuant to the  provision of
   Section 162(m).

      1.  Duration  of  Options.  Once the options  become  exercisable,  they
remain  exercisable until December 31, 2006;  provided,  however,  that if the
holder of options  hereunder is prevented from  exercising  options because of
the provisions of paragraph  1(c) above,  the period during which such options
may be  exercised  shall be extended by such period of time as is necessary to
allow the holder to exercise all such  options in  compliance  with  paragraph
1(c),  except  that in no case  will  any  options  remain  exercisable  after
December 31, 2011.

      2.  Forfeiture/  Early   Termination  of  Options.   If  the  employee's
employment  is  terminated  for cause,  the option  expires upon  termination;
otherwise,   the  option  expires  three  (3)  months  after   termination  of
employment.EXHIBIT 10(q)

                   This Reinsurance Agreement ("Agreement")

                                 is made between

                         LONDON LIFE REINSURANCE COMPANY

                                 of Pennsylvania

                  (hereinafter referred to as the "Reinsurer")

                                       and

                  FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY

                                   of New York

                   (hereinafter referred to as "First Golden")

                      The following articles, including the

                              Schedules, will form

                              the entire Agreement

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                                TABLE OF CONTENTS

A.    RECITALS................................................................3
B.    REINSURANCE COVERAGE....................................................3
C.    PAYMENTS BY FIRST GOLDEN................................................4
D.    PAYMENTS BY REINSURER...................................................5
E.    TERMS OF REINSURANCE....................................................6
1        Amounts Due to First Golden or Reinsurer.............................6
2        Reports and Payment Dates............................................6
3        Offset...............................................................6
4        Liability and Payment................................................7
5        Contested Claims.....................................................7
6        Reinsurance Premium Rates............................................7
F.    UNUSUAL EXPENSES AND ADJUSTMENTS........................................8
G.    RESERVE CREDIT..........................................................8
H.    ERRORS AND OVERSIGHTS...................................................8
I.    AUDIT OF RECORDS AND PROCEDURES.........................................8
J.    ARBITRATION.............................................................8
K.    INSOLVENCY..............................................................9
L.    AGREEMENT...............................................................9
M.    ASSIGNMENT..............................................................10
N.    IMPROPER SOLICITATION OF CONTRACT OWNERS................................10
O.    DAC TAX - SECTION 1.848-2(G)(8) ELECTION................................10
P.    EFFECTIVE DATE..........................................................11
Q.    DURATION OF AGREEMENT...................................................11
R.    REPRESENTATIONS. WARRANTIES AND COVENANTS OF FIRST GOLDEN...............12
S.    REPRESENTATIONS. WARRANTIES AND COVENANTS OF THE REINSURER..............13
T.    MISCELLANEOUS...........................................................13
U.    EXECUTION...............................................................16
SCHEDULE I - PREMIUM RATES....................................................17
SCHEDULE II - THE CONTRACT....................................................18
SCHEDULE III - FUND PROSPECTUS................................................19
SCHEDULE IV - MONTHLY PERIODIC REPORTS........................................20
SCHEDULE V - ARBITRATION SCHEDULE.............................................21
SCHEDULE VI - LIST OF ELIGIBLE FUNDS..........................................23

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                               A. RECITALS
                               ===========

1.   First  Golden  has  issued  or will  issue  Group and  Individual  Deferred
     Variable Annuity Contracts (the "Contracts", and each a "Contract"), in the
     forms  attached  as Schedule  II. The  Contracts  provide for a  guaranteed
     minimum death  benefit in  accordance  with and subject to the terms of the
     Contracts  and the Fund  Prospectuses,  which are  attached as Schedule III
     (this benefit is hereafter referred to as the "GMDB").

2.   Capitalized  terms used but not  defined in this  Agreement  shall have the
     meanings as defined in the Contract.

3.   The parties have agreed that First Golden will, on and subject to the terms
     and conditions  hereinafter  set out,  reinsure with the  Reinsurer,  on an
     indemnity coinsurance basis, a Quota Share of the Net Amount at Risk of the
     Contracts. For purposes of this Agreement, the Quota Share percentage shall
     be 100%.

                            B. REINSURANCE COVERAGE
                            =======================

1.   The Reinsured  Obligation of any given Contract shall be the Quota Share of
     the Net Amount at Risk (NARR) of that Contract upon First Golden's  receipt
     of due proof of death of the  Contractholder and shall be zero at any other
     time, except as outlined in part e. below.

     a.  Net Amount at Risk (NARr)
            NARr = Maximum [ 0, Guaranteed Death Benefit - Accumulation Value ]
                                + Termination Charge

     b.  Guaranteed Death Benefit

         The guaranteed  death benefit amount for the total contract  determined
         based  on the  death  benefit  option  as  defined  in  the  applicable
         contracts as outlined in Schedule II.

     c.  Accumulation Value

         The  accumulation  value  is equal to the  accumulation  value  for the
         entire  contract,  including both fixed and variable  separate  account
         funds.  The  accumulation  value for variable  funds is based on market
         value.  The  accumulation  value for the fixed funds is based on market
         value adjusted book value.

     d.  Termination Charge

         The  termination  charge  equals the total of the sum of any  surrender
         charge,  any  charge  for  premium  taxes,  and any  annual  per policy
         administrative charges incurred but not yet deducted, as defined in the
         applicable contracts included in Schedule II, which would be imposed at
         contract termination.

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     e.   Continuation

          1.)  Spousal

               Upon spousal  election of policy  continuation at  contractholder
               death, the contract  continues with the spouse becoming the owner
               and  measuring  life.  The  rates  to be  applied  following  the
               effective  date of  continuation  will be the rates  currently in
               effect for new business.  The Reinsurer will be  responsible  for
               both  the  Reinsured  Obligation,  if any,  upon  First  Golden's
               receipt  of due proof of death of the  contractholder  as well as
               the Reinsured Obligation, if any, due upon First Golden's receipt
               of due proof of death of the surviving spouse.

          2.)  Non-Spousal

               Upon  non-spousal   continuation  at  contractholder  death,  the
               Reinsurer will be responsible  for the Reinsured  Obligation,  if
               any,  upon  First  Golden's  receipt of due proof of death of the
               contractholder. The Reinsurer's liability will cease upon payment
               of this Reinsured Obligation.

2.   The   Reinsured   Obligations   will  be  reinsured   with  the   Reinsurer
     automatically. First Golden hereby cedes to the Reinsurer and the Reinsurer
     hereby accepts all Reinsured Obligations.

3.   Reinsurance  shall  not be in force and  binding  respecting  any  Contract
     unless the issuance and delivery of such Contract  constituted the doing of
     business lawfully  permitted in the state of New York in which First Golden
     was properly licensed and the Contract was issued on or after January 1st ,
     2000.

4.   The liability of the Reinsurer with respect to the Reinsured Obligations of
     each  Contract  shall  begin  simultaneously  with the  liability  of First
     Golden, but in no event prior to the effective date of this Agreement.  The
     Reinsurer's  liability for  reinsurance  will terminate when First Golden's
     liability  terminates  with the exception of non-spousal  continuation,  as
     outlined in B.1.e above.

5.   Annually,  within 30 days  following  the end of any calendar  year period,
     First  Golden  will  provide,  in  writing,  information  to the  Reinsurer
     regarding   changes  made  to  the  terms  of  the  Contract  Forms  and/or
     Prospectuses  covered  under  this  Agreement  including  any fund  related
     changes,  occurring  over the prior year.  At such time,  the Reinsurer may
     elect to change premium rates as outlined in Section E.6.

6.   This  Agreement  reinsures  First  Golden  only for  Reinsured  Obligations
     payable under the  Contracts  and in no event shall the Reinsurer  have any
     liability or make any payment hereunder on account of other amounts awarded
     to  Contractholders,  including  but not  limited to  punitive,  exemplary,
     aggravated, consequential and/or exemplary damages.

                          C. PAYMENTS BY FIRST GOLDEN
                          ===========================

Upon the execution of this Agreement, First Golden shall pay the Reinsurer fifty
percent (50%) of the reinsurance  premium due on reinsured business written from

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January 1st, 2000 to the effective  date of the  Agreement,  accumulated at 6.5%
per annum, payable fifteen (15) days after this Agreement has been duly executed
by both  parties.  The payment  will be  calculated  for each month prior to the
effective date of this Agreement per the calculation  specified  below.  Each so
calculated  prior monthly  premium  payment will be accumulated to the effective
date of this Agreement at the stated rate of interest.

Subject to the terms of this Agreement,  First Golden shall pay to the Reinsurer
the monthly reinsurance  premiums for the Reinsured  Contracts,  payable fifteen
(15) days after the end of each month  (i.e.  payable in  arrears).  The monthly
reinsurance premium for a Reinsured Contract shall be the Quota Share of the sum
of (i) the fixed portion of the monthly  reinsurance  premium ("Fixed  Portion")
plus (ii) the variable  portion of the monthly  reinsurance  premium  ("Variable
Portion").  The Fixed  Portion  shall be the Fixed  Reinsurance  Premium Rate in
effect for that Contract in accordance with Schedule I, or variation(s) thereof,
at the end of that month  times one half of the sum of (iii) the  portion of the
Account Value in the fixed  subaccounts of such Contract on the first day of the
month and (iv) the portion of the Account Value in the fixed subaccounts of such
Contract  on the  last  day of the  month.  The  Variable  Portion  shall be the
Variable Reinsurance Premium Rate in effect for that Contract in accordance with
Schedule I, or variation(s)  thereof, at the end of that month times one half of
the sum of (v) the portion of the Account Value in the variable  subaccounts  of
such  Contract on the first day of the month and (vi) the portion of the Account
Value in the variable subaccounts of such Contract on the last day of the month.

"Month" as used in this paragraph shall mean calendar month.

                            D. PAYMENTS BY REINSURER
                            ========================

1.   Subject to the terms of this  Agreement,  the Reinsurer  shall pay to First
     Golden, payable fifteen (15) days after the end of each calendar month, the
     claim amount equaling the Reinsured  Obligations  paid during that calendar
     month on the Reinsured Contracts, if any.

2.   The Reinsurer  shall not be responsible for claims incurred by First Golden
     prior to the effective date of this Agreement. For purposes of Section D.2,
     incurred  shall  mean the date of First  Golden's  receipt  of due proof of
     death of the contractholder and not the actual date of the contractholder's
     death.

3.   First Golden will  calculate  and report the claim amount to the  Reinsurer
     along with the monthly reports.  Upon the Reinsurer's  request, the Company
     shall provide to the Reinsurer any  information  for calculating the claims
     or any portion  thereof as the Reinsurer may  reasonably  require to assess
     and  satisfy  itself as to the  validity of such  claims.  In the event the
     Reinsurer  requests  such  information,   then  notwithstanding  any  other
     provision of this Agreement, the Reinsurer shall be entitled within 15 days
     from  the  date  of  the  provision  by  First  Golden  of  such  requested
     information to contest any such claim or portion thereof that the Reinsurer
     considers to be invalid or excessive.

4.   The amount  payable by the Reinsurer in the event of a reduced  settlement,
     if  the  Reinsurer  agrees  to  take  part  in  the  settlement,  shall  be
     proportional to the reinsured portion of the claim.

5.   Expenses  incurred  by the  full-time  employees  of First  Golden  and any
     routine  investigation  costs are borne entirely by First Golden.  Expenses
     incurred by the full-time  employees of the Reinsurer are borne entirely by

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     the Reinsurer.  Extraordinary  costs incurred by First Golden in respect of
     any  claim  shall be  charged  to the  Reinsurer  and  First  Golden in the
     respective  proportions  that the  portion  of the claim  payable  by First
     Golden is of the total of such  portion plus the  Obligation  in respect of
     the claim that is reinsured hereunder, provided, in the case of a contested
     claim,  that the Reinsurer  has agreed  previously  to  participate  in the
     settlement  of the claim in  accordance  with the  procedure  described  in
     Paragraph E.5.

6.   Subject to the receipt by the Reinsurer of reasonable advance (fifteen (15)
     days)  written  notice  from First  Golden of  estimated  claims  under the
     Contract,  the Reinsurer will take such steps as are reasonably required to
     fund the immediate payment of such claims.

                            E. TERMS OF REINSURANCE
                            =======================

1 AMOUNTS DUE TO FIRST GOLDEN OR REINSURER
------------------------------------------

         Except as otherwise specifically provided herein, all payments to/or by
         the  Reinsurer or First Golden shall be determined on a net basis as of
         the  last  day  of  the   calendar   month  to  which  such  amount  is
         attributable. All amounts shall be due and accrued as of such date. The
         payment of such  amounts  shall be  submitted  in  accordance  with the
         provisions of Paragraph  E.2. All  settlements  of account  between the
         Reinsurer and First Golden shall be made in cash or its equivalent.

2 REPORTS AND PAYMENT DATES
---------------------------

     a)   Not later than fifteen (15) days after the end of each calendar month,
          First Golden  shall  submit  Monthly  Reports by  electronic  or other
          suitable means in accord with Schedule IV to the Reinsurer.

     b)   Not  later  than  fifteen  (15) days  after  the end of each  calendar
          quarter,  First Golden shall submit Quarterly Reports by electronic or
          other suitable means in accord with Schedule IV to the Reinsurer.

     c)   Not later  than  fifteen  (15) days after the  receipt of any  Monthly
          Report,  any net amounts indicated in such Monthly Report as being due
          to First  Golden  shall be paid by the  Reinsurer  and any net amounts
          indicated as being due to the Reinsurer shall be paid by First Golden.

     d)   Not later than thirty (30) days after the end of each  calendar  year,
          First Golden shall  provide to the Reinsurer a listing of changes made
          to the contract forms and/or funds  (including  additions,  deletions,
          revisions, and manager changes) over the past year.

          In the  event  that  actual  numbers  are  not  available,  reasonable
          estimates will be used and appropriate adjustments will be made within
          30 days or on the  next  report  and  payment  date set  forth  above,
          whichever is sooner.

3 OFFSET
--------

         Any debts or credits, matured or unmatured, liquidated or unliquidated,
         regardless of when they arose or were incurred,  in favor of or against
         either First Golden or the Reinsurer with respect to this Agreement are

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         deemed  mutual  debts or credits,  as the case may be, and shall be set
         off,  and only  the  balance  shall be  allowed  or paid.  This  offset
         provision,  to the extent  permitted  by law,  shall not be modified or
         reconstrued  due  to  the  insolvency,   liquidation,   rehabilitation,
         conservatorship, or receivership of either party.

4 LIABILITY AND PAYMENT
-----------------------

         Unless the Reinsurer has made the election provided in Paragraph E.5 to
         participate  in the contest,  compromise or litigation of a claim,  and
         subject to  Paragraph  D.2, the  Reinsurer  will accept the decision of
         First Golden on payment of any claim.  The Reinsurer will pay Reinsured
         Obligations attributable to the Contract.

5 CONTESTED CLAIMS
------------------

         First Golden will provide  notice to the  Reinsurer of its intention to
         contest,  compromise,  or  litigate  a  claim  (including  interpleader
         actions) under the Contract.  Within fifteen (15) days after receipt of
         such notice,  the Reinsurer may elect to  participate in contesting the
         claim by  submitting  a notice of such  election to First  Golden.  The
         Reinsurer  shall be deemed to have elected to not  participate  in such
         contest if it fails to make such election  within fifteen (15) business
         days after delivery by First Golden of notice.  If the Reinsurer elects
         not to participate  in such contest,  it may discharge its liability by
         payment to First Golden of the  Reinsured  Obligation  relating to such
         claim.  First  Golden  and the  Reinsurer  agree  to  cooperate  in the
         prosecution  of any  claim  contest  in which the  Reinsurer  elects to
         participate.  If the  Reinsurer  agrees with First Golden to dispute or
         compromise a claim, First Golden agrees to give copies to the Reinsurer
         of all other pertinent  documents  received later so that the Reinsurer
         may follow up on the contestation.

6 REINSURANCE PREMIUM RATES
---------------------------

         The  reinsurance  premium  rates  applicable to any Contract or deposit
         shall  remain in force  from the date such  Contract  is issued or such
         deposit is made until Contract  termination by maturity,  death (except
         in the case of  spousal  continuation),  surrender,  annuitization,  or
         termination  of  reinsurance   coverage  in  the  case  of  non-spousal
         continuation.  In the  event  that  First  Golden  makes  changes  that
         materially  affect the risks  underlying  the  Contracts,  First Golden
         shall notify the Reinsurer in writing  within 30 days of the end of the
         calendar year in which the change  occurred.  The Reinsurer  then shall
         notify First Golden of any change in reinsurance  premium rate no later
         than 30 days after receipt of such notice. The new reinsurance  premium
         rates, effective on the date of the premium rate change, may be applied
         to subsequent new issues and to any inforce  contracts  effected by the
         material change. The revised premium rates shall reasonably reflect the
         increase or decrease in risk attributable to the material changes.

         For new business,  the Reinsurer  reserves the right to change  premium
         rates upon one hundred eighty (180) days notice to First Golden.

                                                                         7 of 23

<PAGE>

                      F. UNUSUAL EXPENSES AND ADJUSTMENTS
                      ===================================

The  Reinsurer  shall  not  participate  in any  expenses,  usual or  otherwise,
incurred by First Golden in  administering,  defending or  investigating a claim
except as otherwise specifically provided by this Agreement.

                               G. RESERVE CREDIT
                               =================

The Reinsurer shall establish adequate net reinsurance  reserves pursuant to the
requirements of any regulatory  authority having  jurisdiction over First Golden
and comply with any other statutory  requirements  necessary for First Golden to
take full  statutory  credit for  reinsurance  ceded up to the full  amount that
First  Golden  would  have  established  for  the  risks  reinsured  under  this
Agreement.

                            H. ERRORS AND OVERSIGHTS
                            ========================

If either  First  Golden or the  Reinsurer  shall fail to perform an  obligation
under  this  Agreement  and  such  failure  shall  be the  result  of an  error,
oversight, delay, omission or misunderstanding (collectively, an "error") on the
part of  First  Golden  or the  Reinsurer,  such  error  shall be  corrected  by
restoring  both First Golden and the Reinsurer to the positions  they would have
occupied had no such error occurred and the reinsurance provided hereunder shall
not be invalidated. The party first discovering such error or act resulting from
the error  will  notify  the other  party in  writing  promptly  upon  discovery
thereof, and the parties shall act to correct such error within thirty (30) days
of receipt of such notice.  This Section,  however,  shall not be construed as a
waiver by either  party of its right to enforce the terms of this  Agreement  in
the event the failure to perform an obligation is determined to be the result of
something other than an "error".

                       I. AUDIT OF RECORDS AND PROCEDURES
                       ==================================

Upon 7 days written  notice,  the Reinsurer and First Golden each shall have the
right to examine,  at the office of the other,  during the normal business hours
of the party being audited,  all records and procedures  relating to reinsurance
under this Agreement.  The expenses of any such audit shall be born by the party
initiating the audit.  The  information  obtained by the auditing party shall be
treated as confidential material and proprietary to the other party and shall be
used only for purposes  relating to the reinsurance  under this  Agreement.  The
terms of this Section shall survive termination of this Agreement.

                                 J. ARBITRATION
                                 ==============

If First Golden and the Reinsurer  cannot mutually resolve a dispute that arises
out of or relates  to this  Agreement,  the  dispute  shall be  decided  through
arbitration as set forth in Schedule V. The  arbitrators  shall be impartial and
shall base their decision on the terms and conditions of this Agreement.  In the
event that an  interpretation of the terms and conditions of this Agreement does
not  explicitly  or by  reasonable  implication  dispose  of an issue in dispute
between the parties, then the arbitrators may base their decision on the customs
and practices of the insurance and reinsurance  industry rather than solely on a
strict  interpretation  of  applicable  law.  There  shall be no appeal from the

                                                                         8 of 23

<PAGE>

arbitrators' decision. Any court having jurisdiction over the subject matter and
the parties may reduce the arbitrators' decision to judgment.

The obligations of the parties to arbitrate  disputes hereunder pursuant to this
Section shall survive the termination of this Agreement.

                                 K. INSOLVENCY
                                 =============

1.   The portion of any risk or  obligation  assumed by the  Reinsurer  shall be
     payable by the  Reinsurer  on the basis of the  liability  of First  Golden
     without  diminution because of the insolvency of First Golden. In the event
     of  insolvency  and  the  appointment  of  a  conservator,  liquidator,  or
     statutory  successor of First Golden, such portion shall be payable to such
     conservator,  liquidator,  or statutory successor  immediately upon demand,
     with reasonable provision for verification,  on the basis of claims allowed
     against  First  Golden by any  court of  competent  jurisdiction  or by any
     conservator,  liquidator,  or statutory  successor  of First Golden  having
     authority  to  allow  such  claims,  without  diminution  because  of  such
     insolvency or because such conservator,  liquidator, or statutory successor
     has failed to pay all or a portion of any claims.

2.   First Golden's conservator,  liquidator,  or statutory successor shall give
     the  Reinsurer  written  notice of the  pendency of a claim  against  First
     Golden,  within a reasonable time after such claim is filed.  The Reinsurer
     may interpose, at its own expense, in the proceeding where such claim is to
     be  adjudicated,  any defense or defenses that Reinsurer may deem available
     to First Golden, or its conservator, liquidator, or statutory successor.

3.   Any expense  incurred by the Reinsurer  pursuant to paragraph  K.2,  above,
     shall be  payable  subject  to court  approval  out of the  estate of First
     Golden as part of the expense of  conservation or liquidation to the extent
     of the  Reinsurer's  quota  share of the  benefit  that may accrue to First
     Golden in conservation  or  liquidation,  solely as a result of the defense
     undertaken by the Reinsurer. Where two or more Reinsurers are participating
     in the same claim and a majority  interest  elects to interpose  defense to
     such claim,  the expense shall be apportioned in accordance  with the terms
     of this Agreement as though such expense had been incurred by First Golden.

4.   This reinsurance shall be payable directly by the Reinsurer to First Golden
     or First Golden's conservator,  liquidator, or statutory successor,  except
     as expressly required otherwise by applicable insurance law.

                                  L. AGREEMENT
                                  ============

1.   This Agreement  constitutes the entire  agreement  between First Golden and
     the Reinsurer with respect to the business being  reinsured  hereunder;  it
     supersedes  any  prior  oral or  written  agreements  with  respect  to the
     business  being  reinsured  hereunder  other  than  as  expressed  in  this
     Agreement.  Any change or  modification to this Agreement shall be null and
     void unless made by amendment to the Agreement  signed by both First Golden
     and the Reinsurer.

                                                                         9 of 23

<PAGE>

2.   This is an agreement for indemnity  reinsurance solely between First Golden
     and the Reinsurer. No third party may benefit from any right of any kind in
     respect of this  agreement.  The acceptance of reinsurance  hereunder shall
     not create any right or legal  relationship  whatever between the Reinsurer
     and the  Contractholder  or any  beneficiary  under any Contract  reinsured
     hereunder,  and First  Golden  shall be and  remain  solely  liable to such
     Contractholder or beneficiary under any such Contract.

                                 M. ASSIGNMENT
                                 =============

Rights or obligations arising under this Agreement may not be assigned by either
First Golden or the  Reinsurer,  without the prior written  consent of the other
party. Such consent will not be withheld unreasonably.

                  N. IMPROPER SOLICITATION OF CONTRACT OWNERS
                  ===========================================

The parties  agree not to contact the owners of the Contracts for the purpose of
soliciting  surrender  of the  Contracts.  However,  First  Golden  specifically
reserves the right to allow  conversion  of the Contracts  reinsured  under this
Agreement  to  other  programs  to  meet  the  changing  business  needs  in the
marketplace of First Golden. To the extent First Golden offers such a conversion
program,  First Golden will offer to the Reinsurer the  opportunity  to reinsure
the death benefits of the new program.

                   O. DAC TAX - SECTION 1.848-2(G)(8) ELECTION
                   ===========================================

First Golden and the Reinsurer hereby agree to the following pursuant to Section
1.848-2(g)(8) of the Income Tax Regulations  issued December 1992, under Section
848 of the Internal  Revenue Code of 1986, as amended.  This  election  shall be
effective for all subsequent  taxable years for which this Agreement  remains in
effect.

1.   The term  "party"  will refer to either  First  Golden or the  Reinsurer as
     appropriate.

2.   The terms used in this  Article  are  defined by  reference  to  Regulation
     Section 1.848-2(g)(8) in effect December 1992.

3.   The party with the net positive  consideration  for this Agreement for each
     taxable year will capitalize  specified Contract  acquisition expenses with
     respect  to  this  Agreement  without  regard  to  the  general  deductions
     limitation of Section 848(c)(1).

4.   Both parties agree to exchange information  pertaining to the amount of net
     consideration  under this Agreement  each year to ensure  consistency or as
     otherwise required by the Internal Revenue Service.

5.   The Reinsurer  will submit a schedule to First Golden by May 1 of each year
     of its  calculation  of the net  consideration  for the preceding  calendar
     year.  This schedule of  calculations  will be  accompanied  by a statement
     signed by an officer of the Reinsurer  stating that  Reinsurer  will report
     such net consideration in its tax return for the preceding calendar year.

                                                                        10 of 23

<PAGE>

6.   First Golden may contest  such  calculation  by  providing  an  alternative
     calculation  to the  Reinsurer in writing  within thirty (30) days of First
     Golden's receipt of the Reinsurer's  calculation.  If First Golden does not
     so notify the Reinsurer,  First Golden will report the net consideration as
     determined  by the  Reinsurer in First  Golden's tax return of the previous
     calendar year.

7.   If  First  Golden   contests  the   Reinsurer's   calculation  of  the  net
     consideration,  the parties will act in good faith to reach an agreement as
     to the correct  amount  within  thirty  (30) days of the date First  Golden
     submits its  alternative  calculation.  If First  Golden and the  Reinsurer
     reach agreement on an amount of net consideration,  each party shall report
     such amount in their respective tax returns for the previous calendar year.

                               P. EFFECTIVE DATE
                               =================

The effective date of this Agreement is November 1, 2000.

                            Q. DURATION OF AGREEMENT
                            ========================

1.   Except as otherwise  provided herein,  this Agreement shall be unlimited in
     duration.

2.   This Agreement may be terminated  with respect to new Contracts at any time
     by either  company by giving one hundred  eighty (180) days' written notice
     of termination to the other company. The day the notice is deemed given per
     Section  T.2 will be the  first  day of the one  hundred  eighty  (180) day
     period.

3.   First Golden shall have the right to terminate this Agreement and recapture
     all  reinsurance  hereunder if the  Reinsurer  fails to pay,  when due, any
     amounts due under this  Agreement,  provided that First Golden has given at
     least sixty (60) days prior  written  notice of its intent to terminate for
     that reason. The Reinsurer may avoid termination pursuant to this Paragraph
     Q.3 by paying all amounts that are delinquent  and then due,  including any
     interest owing thereon on or before the  termination  date specified in the
     written  notice.  In the  event  First  Golden  terminates  and  recaptures
     reinsurance  pursuant to this Paragraph Q.3, the Reinsurer  shall pay First
     Golden cash or cash  equivalent  equaling  the  statutory  liability of the
     business reinsured hereunder at the time of recapture.

4.   First Golden shall have the right to terminate this Agreement and recapture
     existing  inforce business after fifteen (15) years from the effective date
     of this Agreement.  If First Golden  terminates and recaptures  reinsurance
     pursuant to this  Paragraph  Q.4, the  Reinsurer  and First Golden agree to
     negotiate  the terms of the  recapture of eligible  reinsured  Contracts in
     good  faith  recognizing  both  parties'  business   interests.   Under  no
     circumstance, under this paragraph Q.4, will the Reinsurer pay an amount to
     First Golden.

5.   The  Reinsurer  shall have the right to terminate  this  Agreement if First
     Golden  fails  to pay,  when  due,  reinsurance  premiums  due  under  this
     Agreement,  provided  that the Reinsurer has given at least sixty (60) days
     prior  written  notice of its intent to terminate  for that  reason.  First
     Golden may avoid  termination  pursuant to this Paragraph Q.5 by paying all

                                                                        11 of 23

<PAGE>

     reinsurance  premiums  that are  delinquent  and then  due,  including  any
     interest owing thereon on or before the  termination  date specified in the
     written notice. In the event Reinsurer  terminates this Agreement  pursuant
     to this Paragraphs  Q.5, the Reinsurer shall  thereafter be relieved of all
     liability  under this  Agreement,  including  any and all liability for any
     Reinsured  Obligation that as of such  termination date was not yet due and
     payable under the terms of this Agreement.

6.   Except  as  specifically  provided  otherwise,   the  termination  of  this
     Agreement or of the  reinsurance in effect under this  Agreement  shall not
     extend to or affect any of the rights or  obligations  of First  Golden and
     the Reinsurer  applicable to any period prior to the effective date of such
     termination.  In the event  that,  subsequent  to the  termination  of this
     Agreement,  an  adjustment  is made that is  necessary  with respect to any
     accounting  hereunder,  a supplementary  accounting  shall take place.  Any
     amount  owed to either  party by reason  of such  supplementary  accounting
     shall be paid promptly upon the completion thereof.

7.   This  Agreement  shall  automatically  terminate  if,  at  the  end  of any
     accounting period contemplated under this Agreement, all coverage under the
     Contracts has terminated.

          R. REPRESENTATIONS. WARRANTIES AND COVENANTS OF FIRST GOLDEN
          ============================================================

1.   First Golden is a life insurance  company duly organized,  validly existing
     and in good standing under the laws of the state of New York.

2.   First Golden has all requisite  corporate power and authority to enter into
     this Agreement and to perform its obligations hereunder.  The execution and
     delivery by First Golden of this  Agreement,  and the  performance by First
     Golden of its obligations  under this Agreement,  have been duly authorized
     by all necessary corporate action.  This Agreement,  when duly executed and
     delivered by First Golden, subject to the due execution and delivery by the
     Reinsurer,  will  be a  valid  and  binding  obligation  of  First  Golden,
     enforceable against First Golden in accordance with its terms.

3.   The  execution,   delivery  and  performance  of  this  Agreement  and  the
     consummation of the transactions contemplated hereby in accordance with the
     respective  terms and conditions  hereof will not (a) violate any provision
     of the Articles of Incorporation or Bylaws of First Golden,  or (b) violate
     any order, judgment,  injunction,  award or decree of any court, arbitrator
     or  governmental  or  regulatory  body  against,  or binding  upon,  or any
     agreement  with, or condition  imposed by, any  governmental  or regulatory
     body, foreign or domestic, binding upon First Golden.

4.   No  consent,  waiver,  license,  approval,  order or  authorization  of, or
     registration, filing or declaration with, or notices to, any person, entity
     or governmental  authority is required to be obtained,  made or given by or
     with  respect to First  Golden in  connection  with (i) the  execution  and
     delivery of this  Agreement by First Golden,  or (ii) the  consummation  by
     First Golden of the transactions contemplated hereby.

5.   To the  best of First  Golden's  knowledge,  the  Contracts  comply  in all
     material  respects with all laws and regulations that are applicable in the
     relevant jurisdictions governing the Contracts, and benefits thereunder are
     payable in accordance with the terms of such Contracts.

                                                                        12 of 23

<PAGE>

         S. REPRESENTATIONS. WARRANTIES AND COVENANTS OF THE REINSURER
         =============================================================

1.   The Reinsurer is a life insurance company duly organized,  validly existing
     and in good standing under the laws of the Commonwealth of Pennsylvania.

2.   The Reinsurer has all requisite corporate power and authority to enter into
     this Agreement and to perform its obligations hereunder.  The execution and
     delivery by the Reinsurer of this  Agreement,  and the  performance  by the
     Reinsurer  of  its  obligations  under  this  Agreement,   have  been  duly
     authorized by all necessary  corporate  action.  This Agreement,  when duly
     executed and delivered by the  Reinsurer,  subject to the due execution and
     delivery by First  Golden,  will be a valid and binding  obligation  of the
     Reinsurer, enforceable against the Reinsurer in accordance with its terms.

3.   The  execution,   delivery  and  performance  of  this  Agreement  and  the
     consummation of the transactions  contemplated  hereby will not (a) violate
     any provision of the Articles of Incorporation,  Bylaws or other charter or
     organizational  document  of the  Reinsurer,  or  (b)  violate  any  order,
     judgment,   injunction,  award  or  decree  of  any  court,  arbitrator  or
     governmental or regulatory body against,  or binding upon, or any agreement
     with, or condition imposed by, any governmental or regulatory body, foreign
     or domestic, binding upon the Reinsurer.

4.   No  consent,  waiver,  license,  approval,  order or  authorization  of, or
     registration, filing or declaration with, or notices to, any person, entity
     or governmental  authority is required to be obtained,  made or given by or
     with respect to the  Reinsurer in  connection  with (i) the  execution  and
     delivery of this Agreement by the Reinsurer,  or (ii) the  consummation  by
     the Reinsurer of the transactions contemplated hereby.

                                T. MISCELLANEOUS
                                ================

1.   HEADINGS  AND  SCHEDULES.  Headings  used  herein  are  not a part  of this
     Agreement and shall not affect the terms. The attached Schedules are a part
     of this Agreement.

2.   NOTICES.  All notices and communications  hereunder shall be in writing and
     shall be delivered by either certified or registered  mail,  return receipt
     requested,  or overnight  delivery service (providing for delivery receipt)
     or delivered by hand (or by email in the case of the monthly and  quarterly
     reports).  Such notices and communications  shall be deemed given three (3)
     days after mailing, or if sent by telefax or delivered by hand (or by email
     in the case of the monthly and quarterly reports), when received, and if by
     overnight mail, on the next day.

     All notices or communications with the Reinsurer under this Agreement shall
     be addressed as follows:

                                                                        13 of 23

<PAGE>

     London Life Reinsurance Company
     1787 Sentry Parkway West, Suite 420
     Blue Bell, PA 19422
     Attention:   Senior Vice President, Life & Annuity

     Fax:         (215)-542-1295
     Email:       jeff.poulin@lrgus.com

     All notices and communications with First Golden under this Agreement shall
     be addressed as follows:

     First Golden American Life Insurance Company
     1475 Dunwoody Drive
     West Chester, PA 19380
     Attention:   Dave Jacobson, Senior Vice President

     Fax:         (610) 425-3404
     Email:       djacobson@ingva.com

     Changes in notice  addresses or recipients  may be made by the Reinsurer or
     First Golden, by following the procedure specified in this section.

3.   SEVERABILITY;  GOVERNING  LAW. If any term or provision  of this  Agreement
     shall  be  held  void,  illegal,  or  unenforceable,  the  validity  of the
     remaining  portions  or  provisions  shall not be  affected  thereby.  This
     Agreement  shall  be  governed  by the laws of the the  State of New  York,
     without giving effect to principles of conflicts of law thereof.

4.   EXECUTION IN  COUNTERPARTS.  This  Agreement may be executed by the parties
     hereto in any number of counterparts,  and by each of the parties hereto in
     separate  counterparts,  each of which  counterparts,  when so executed and
     delivered,  shall be deemed to be an  original,  but all such  counterparts
     shall together constitute but one and the same instrument.

5.   CURRENCY  AND  INTEREST.  All  payments  and  accounts  shall be made in US
     Dollars,  and all fractional  amounts shall be rounded to the nearest whole
     dollar. Any payment not made when due and payable hereunder, shall from the
     date such  payment was due bear  interest at a rate equal to the 3 month US
     Treasury rate in effect on such date plus 100 bps. In the event any payment
     due  hereunder  is not made within  three  months of the date it is due and
     payable,  the rate will be reset every 3 months to the US Treasury  rate in
     effect on each 3 month  anniversary of the date such payment was due, until
     such payment is made.

6.   INTERPRETATION.  For  purposes  of  this  Agreement,  the  words  "hereof",
     "herein",  "hereby",  and  other  words  of  similar  import  refer to this
     Agreement  as a  whole  unless  otherwise  indicated.  Whenever  the  words
     "include",  "includes",  or "including"  are used in this  Agreement,  they
     shall be deemed to be followed by the words "without limitation".  Whenever
     the  singular  is used  herein,  the same shall  include  the  plural,  and
     whenever the plural is used herein,  the same shall  include the  singular,
     where appropriate.

7.   SURVIVAL OF  REPRESENTATIONS.  WARRANTIES AND AGREEMENTS.  The Reinsurer or
     First  Golden,  as the case may be,  has the right to rely  fully  upon the
     representations,  warranties,  covenants and  agreements of First Golden or

                                                                        14 of 23

<PAGE>

     the  Reinsurer,  as the  case  may be,  contained  in this  Agreement.  All
     representations  and  warranties  made by First Golden or the  Reinsurer in
     this Agreement shall survive the execution and delivery hereof.

                                                                        15 of 23

<PAGE>

                                  U. EXECUTION
                                  ============

                           IN WITNESS WHEREOF THE SAID
                           ===========================

            FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
            ========================================================

                                       and

                LONDON LIFE REINSURANCE COMPANY OF PENNSYLVANIA,
                ================================================

have by their  respective  officers  executed this Agreement in duplicate on the
dates shown below.

FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY

By:    Frank Scott Rocco                   By:      David L. Jacobson
       ----------------------------                 --------------------------

Title: Assistant Vice President            Title:   Senior Vice President
       ----------------------------                 --------------------------

Date:  December 21, 2000                   Date:    December 21, 2000
       ----------------------------                 --------------------------

LONDON LIFE REINSURANCE COMPANY

By:    Jean-Francois Poulin                 Witness: Duc Xuan Ho
       ----------------------------                  -------------------------

Title: Senior Vice President                Title:   Director ALM
       ----------------------------                  -------------------------

Date:  December 29, 2000                    Date:    December 29, 2000
       ----------------------------                  -------------------------

                                                                        16 of 23

<PAGE>

                           SCHEDULE I - PREMIUM RATES
                           ==========================

The Reinsurance Premium Rate, expressed in basis points per annum and applied at
a rate of 1/12th per month to the Quota Share of the Accumulation  Value,  shall
vary  depending on the  investment  type  (variable or fixed) and death  benefit
option as follows:

-------------------------------------------------------
|                                | Variable | Fixed   |
|--------------------------------|----------|---------|
| Annual Ratchet Enhanced Death  |  29 bps  | 11 bps  |
| Benefit Option                 |          |         |
|--------------------------------|----------|---------|
| Standard Death Benefit Option  |  19 bps  | 7 bps    |
-------------------------------------------------------

                                                                        17 of 23

<PAGE>

                           SCHEDULE II - THE CONTRACT
                           ==========================

FORM NAME AND TYPE                                              FORM NUMBER
------------------                                              -----------
Deferred Combination Variable and Fixed Annuity Contract        FG-IA-1000-12/95
Deferred Combination Variable and Fixed Annuity Certificate     FG-CA-1000-08/97

NOTE:
     The attached forms are the most recent specimen forms available.  The forms
     do not reflect the  addition of several new funds added with the October 2,
     2000  Prospectus  (Schedule  III - DVA Plus).  The funds are  reflected  in
     Schedule VI.

                                                                        18 of 23

<PAGE>

                         SCHEDULE III - FUND PROSPECTUS
                         ===============================

Incorporated  by reference to the  prospectus  for The GCG Trust last updated on
Form N-1 and filed with the Securitites  and Exchange  Commission on December 1,
2000 (File Numbers: 33-23512, 811-5629) .

                                                                        19 of 23

<PAGE>

                     SCHEDULE IV - MONTHLY PERIODIC REPORTS
                     ======================================

                            MONTHLY PERIODIC REPORTS

Monthly reports to be sent  electronically  or by other suitable means within 15
days following each month end:

(a)  Inventory and Transaction  Report in an electronic format to be provided on
     a seriatim basis for each contract:

     1.  Contract Number
     2.  Issue Date
     3.  Sex
     4.  Date of Birth
     5.  Beginning Account Value
     6.  Beginning Death Benefit
     7.  Premium Production
     8.  Amount purchased for each Contract
     9.  Terminations for each Contract - Death and Total Withdrawals
     10. Ending Account Value
     11. Ending Death Benefit
     12. Reinsurance Premium Rate
     13. Reinsurance Premium Amount
     14. Net Asset Value of each fund (Beginning and End of Month)

(b)  Claim Report which includes information for each death:

     1.  Contract Number
     2.  Contract Issue Date
     3.  Date of Birth
     4.  Death Benefit
     5.  Account Value
     6.  Claim Amount
     7.  Copy of the death certificate

(c) Reinsurance premium report showing, for each reinsurance premium rate group,
(i) total beginning  reinsured account value (ii) ending reinsured account value
(iii) reinsurance premium rate (iv) reinsurance premium due.

Quarterly Reports to be sent electronically or by other suitable means within 15
days following each quarter end:

(a)  Statutory  Reserve Report which includes  account value,  death benefit and
     reserve level information grouped by year of birth, sex and month of issue.

                                                                        20 of 23

<PAGE>

                        SCHEDULE V - ARBITRATION SCHEDULE
                        =================================

To initiate  arbitration,  either First Golden or the Reinsurer shall notify the
other  party in writing of its desire to  arbitrate,  stating  the nature of its
dispute  and the  remedy  sought.  The party to which the  notice is sent  shall
respond to the notification in writing within ten (10) days of its receipt.

The arbitration  hearing shall be before a panel of three  arbitrators,  each of
whom must be a present or former officer of an insurance or reinsurance company.
An arbitrator may not be a present or former officer, attorney, or consultant of
First Golden or the Reinsurer or either's affiliates.

First Golden and the Reinsurer  shall each name five (5)  candidates to serve as
an  arbitrator.  First Golden and the Reinsurer  shall each choose one candidate
from the other party's list, and these two  candidates  shall serve as the first
two  arbitrators.  If one or more candidates so chosen shall decline to serve as
an  arbitrator,  the party  that named such  candidate  shall add an  additional
candidate to its list, and the other party shall again choose one candidate from
the list. This process shall continue until two arbitrators have been chosen and
have accepted.  First Golden and the Reinsurer  shall each present their initial
lists of five (5) candidates by written  notification  to the other party within
twenty-five (25) days of the date of the mailing of the notification  initiating
the arbitration. Any subsequent additions to the list that are required shall be
presented within ten (10) days of the date the naming party receives notice that
a candidate that has been chosen declines to serve.

The two  arbitrators  shall then select the third  arbitrator from the eight (8)
candidates  remaining  on the lists of First  Golden  and the  Reinsurer  within
fourteen (14) days of the acceptance of their positions as  arbitrators.  If the
two arbitrators cannot agree on the choice of a third, then this choice shall be
referred back to First Golden and the Reinsurer.  First Golden and the Reinsurer
shall take turns striking the name of one of the remaining  candidates  from the
initial eight (8) candidates until only one candidate remains.  If the candidate
so chosen shall decline to serve as the third  arbitrator,  the candidate  whose
name was stricken last shall be nominated as the third arbitrator.  This process
shall  continue  until a  candidate  has  been  chosen  and has  accepted.  This
candidate  shall serve as the third  arbitrator.  The first turn at striking the
name of a candidate  shall belong to the party that is  responding  to the other
party's  initiation  of  the  arbitration.  Once  chosen,  the  arbitrators  are
empowered  to decide all  substantive  and  procedural  issues by a majority  of
votes.

It is agreed that each of the three  arbitrators  should be impartial  regarding
the  dispute  and  should  resolve  the  dispute on the basis  described  in the
"ARBITRATION" section of this Agreement. Therefore, at no time will either First
Golden or the Reinsurer contact or otherwise  communicate with any person who is
to be or has been designated as a candidate to serve as an arbitrator concerning
the dispute, except upon the basis of jointly drafted communications provided by
both First Golden and the Reinsurer to inform those  candidates  actually chosen
as arbitrators of the nature and facts of the dispute.  Likewise, any written or
oral  arguments  provided to the  arbitrators  concerning  the dispute  shall be
coordinated  with the other  party and shall be provided  simultaneously  to the
other party or shall take place in the presence of the other party.  Further, at
no time shall any  arbitrator be informed that the  arbitrator has been named or
chosen by one party or the other.

The arbitration  hearing shall be held on the date fixed by the arbitrators.  In
no event shall this date be later than six (6) months after the  appointment  of
the third  arbitrator.  As soon as possible,  the  arbitrators  shall  establish
prearbitration procedures as warranted by the facts and issues of the particular
case. In establishing  such procedures the arbitrators  shall make provision for
reasonable  pre-hearing  examinations  of  officers,  employees or agents of the
parties and for the production of relevant documentation. At least ten (10) days
prior to the arbitration  hearing,  each party shall provide the other party and
the  arbitrators  with a detailed  statement of the facts and  arguments it will
present at the  arbitration  hearing.  The arbitrators may consider any relevant
evidence;  they shall give the evidence  such weight as they deem it entitled to
after consideration of any objections raised concerning it. The party initiating

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<PAGE>

the arbitration  shall have the burden of proving its case by a preponderance of
the  evidence.  Each party shall be entitled to call as witnesses  any officers,
employees or agents of the other party and such other party shall do  everything
reasonable to ensure the  attendance and  cooperation of any such witness.  Each
party may examine any witnesses who testify at the arbitration  hearing.  Within
twenty (20) days after the end of the arbitration hearing, the arbitrators shall
issue a written decision that sets forth their findings and any award to be paid
as a result  of the  arbitration,  except  that the  arbitrators  may not  award
punitive or exemplary  damages.  In their decision,  the arbitrators  shall also
apportion the costs of arbitration,  which shall include, but not be limited to,
their own fees and expenses,  on such basis as they consider  appropriate having
regard  to  the  relative  merits  of  the  positions  of  the  parties  to  the
arbitration, the conduct of the parties and the reasonableness of any settlement
offers  put  forward  in  writing  by either  party to the other in an effort to
resolve  such  dispute  and any  other  factors  that the  arbitrators  consider
appropriate.

                                                                        22 of 23

<PAGE>

                      SCHEDULE VI - LIST OF ELIGIBLE FUNDS
                      ====================================

         THE GCG TRUST                      THE PIMCO VARIABLE INSURANCE TRUST
         -------------                      ----------------------------------
         Liquid Asset Series                PIMCO High Yield Bond Fund
         Limited Maturity Bond Series       PIMCO StocksPLUS Growth and Income
         Global Fixed Income Series
         Fully Managed Series               ING VARIABLE INSURANCE TRUST
         Total Return Series                ----------------------------
         Asset Allocation Growth            ING Global Brand Names Fund
         Equity Income Series
         Investors Series                   THE PRUDENTIAL SERIES FUND INC.
         Value Equity Series                -------------------------------
         Rising Dividends Series            Prudential Jennison
         Diversified Mid-Cap                SP Jennison International Growth
         Managed Global Series
         Large Cap Value Series             THE GALAXY VIP FUND
         All Cap Series                     -------------------
         Research Series                    Equity
         Capital Appreciation Series        Growth and Income
         Growth and Income                  Small Company Growth
         Capital Growth Series              Asset Allocation
         Strategic Equity Series            High Quality Bond
         Special Situations
         Mid-Cap Growth Series              FIXED INTEREST ALLOCATIONS
         Small Cap Series                   --------------------------
         Growth Series                      One Year Guarantee w/ MVA
         Real Estate Series                 Three Year Guarantee w/ MVA
         Hard Assets Series                 Five Year Guarantee w/ MVA
         Developing World Series            Seven Year Guarantee w/ MVA
         Emerging Markets Series            Ten Year Guarantee w/ MVA

                                                                        23 of 23

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