SERVICE AGREEMENT
AGREEMENT dated as of April 11, 1999, between Xxxx Xxxxx Management,
Inc. ("Xxxxx"), a New York Corporation with its principal offices at 0 Xxxxx
Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX 00000, as Investment Adviser for The
Xxxxx American Fund (the "Fund"), and Columbus Life Insurance Company, on its
own behalf, and on behalf of its Separate Account 1 (the "Company"), an Ohio
corporation having its principal office and place of business at 000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx, XX 00000.
In consideration of the promises and mutual covenants set forth in this
Agreement, the Parties agree as follows:
1. SERVICES PROVIDED
The Company agrees to provide services to the Fund including the
following:
a) responding to inquiries from the Company Contract owners using
one or more Portfolios of the Fund as an investment vehicle
regarding the services performed by the Company as they relate
to the Fund;
b) providing information to Xxxxx and to Contract owners with
respect to shares attributable to Contract owner accounts;
c) printing and mailing of shareholder communications from the
Fund consistent with the Participation Agreement dated April
11, 1999 (such as proxies, shareholder reports, annual and
semi-annual financial statements and dividend, distribution
and tax notices) as may be required;
d) communication directly with Contract owners concerning the
Fund's operations;
e) providing such other similar services as Xxxxx may reasonably
request pursuant to the extent permitted or required under
applicable statutes, rules, and regulations.
2. EXPENSE ALLOCATION
Subject to Paragraph 3 hereof, the Company or its affiliates shall
initially bear the costs of the following:
a) printing and distributing the Fund's prospectus, statement of
additional information and any amendments or supplements
thereto, periodic reports to shareholders, Fund proxy material
and other shareholder communications (collectively, the "Fund
Materials") to be distributed to prospective Contract owners;
b) printing and distributing all sales literature or promotional
material developed by the Company or its affiliates and
relating to the contracts;
c) servicing Contract owners who have allocated Contract value to
a Portfolio, which servicing shall include, but is not limited
to, the items listed in Paragraph 1 of this Agreement.
3. PAYMENT OF EXPENSES
a) Xxxxx will pay the Company a quarterly fee equal to a
percentage of the average daily net assets of the Portfolios
attributable to Contracts, at the annual rate set forth in the
following schedule ("Portfolio Servicing Fee"), in connection
with the expenses incurred by the Company under Paragraph 2
hereof: 0.25% of all assets invested in any Portfolio of the
Fund.
b) From time to time, the Parties hereto shall review the
Portfolio Servicing Fee to determine whether it reasonably
approximates the incurred and anticipated costs, over time of
the Company in connection with its duties hereunder. The
Parties agree to negotiate in good faith any change to the
Portfolio Servicing Fee proposed by a Party in good faith.
4. TERM OF AGREEMENT
This Agreement shall continue in effect for so long as Xxxxx or its
successor(s) in interest, or any affiliate thereof, continues to
perform in a similar capacity for the Fund, and for so long as any
Contract value or any monies attributable to the Company is allocated
to a Portfolio, provided, however, that either party may Terminate this
Agreement upon a material breach of this Agreement by the other party
that remains uncured for 60 days after written notice by the
terminating party. However, Portfolio Servicing Fees shall in no event
be paid to the Company more than one year after the termination of this
Agreement.
5. INDEMNIFICATION
a) The Company agrees to indemnify and hold harmless Xxxxx and
its officers, directors, and affiliates from any and all loss,
liability and expense resulting from the gross negligence or
willful wrongful act of the Company under this Agreement,
except to the extent such loss, liability or expense is the
result of the willful misfeasance, bad faith or gross
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negligence of Xxxxx in the performance of its duties, or by
reason of the reckless disregard of its obligations and duties
under this Agreement.
b) Xxxxx agrees to indemnify and hold harmless the Company and
its officers, directors and affiliates from any and all loss,
liability and expense resulting from the gross negligence or
willful wrongful act of Xxxxx under this Agreement, except to
the extent such loss, liability or expense is the result of
the willful misfeasance, bad faith or gross negligence of the
Company in the performance of its duties, or by reason of the
reckless disregard of its obligations and duties under this
Agreement.
6. NOTICE
Notices and communications required or permitted hereby will be given
to the following persons at the following addresses and facsimile
numbers, or such other persons, addresses or facsimile numbers as the
Party receiving such notices or communications may subsequently direct
in writing:
Xxxx Xxxxx Management, Inc.
0 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxx
Fax: (000) 000-0000
Columbus Life Insurance Company
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxxx
Fax: (000) 000-0000
7. APPLICABLE LAW
Except insofar as the Investment Company Act of 1940 or other federal
laws and regulations may be controlling, this Agreement will be
construed and the provisions hereof interpreted under and in accordance
with New York law, without regard for that state's principles of
conflict of laws.
8. SEVERABILITY
If any provision of this Agreement is held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement
will not be affected thereby.
9. RIGHTS CUMULATIVE
The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, that the Parties are entitled to
under federal and state laws.
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10. ASSIGNMENT
Neither this Agreement nor any rights or obligations hereunder may be
assigned by either party without the prior written consent of the other
party thereto.
11. AMENDMENT
This Agreement may be amended or modified in whole or in part only by a
written agreement executed by both parties.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized officers signing below.
XXXX XXXXX MANAGEMENT, INC.
By: /S/ XXXXXXX X. XXXX
--------------------------
Xxxxxxx X. Xxxx
Executive Vice President
COLUMBUS LIFE INSURANCE COMPANY
By: /S/ XXXX X. XXXXXXXXX
--------------------------
Xxxx X. Xxxxxxxxx
Senior Vice President
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