SERVICE AGREEMENT
AGREEMENT dated as of March 31, 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 Western-Southern Life Assurance Company,
on its own behalf, and on behalf of its Separate Account 1 and Separate Account
2 (the "Company"), an Ohio corporation having its principal office and place of
business at 000 Xxxxxxxx, 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 March 31, 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 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:
0
Xxxx Xxxxx Management, Inc.
0 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxx
Fax: (000) 000-0000
Western-Southern Life Assurance Company
000 Xxxxxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: Xxxx X. XxXxxxxx
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.
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.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized officers signing below.
XXXX XXXXX MANAGEMENT, INC,
By: ____________________________
Xxxxxxx X. Xxxx
Executive Vice President
WESTERN-SOUTHERN LIFE
ASSURANCE COMPANY
By: ____________________________
Name: Xxxx X. XxXxxxxx
Title: Senior Vice President
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