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FORM OF
SERVICE AGREEMENT
THIS AGREEMENT Is made and entered into by and between FFP Advisory Services,
Inc., a Missouri corporation, and First Variable Life Insurance Company, a
----------- corporation, effective as of the --- day of ----------, 1999.
WHEREAS, FFP Advisory Services Inc. has entered into an investment ADVISORY
agreement with FFP New Horizons Fund, Inc., appointing FFP Advisory as the
investment adviser of FFP New Horizons Fund, Inc.; and
WHEREAS, FFP Advisory Services, Inc. is obligated to provide certain
administrative services to shareholders of the FFP New Horizons Fund, Inc.
under the terms of the Advisory agreement; and
WHEREAS, First Variable Life Insurance Company has entered into a
Participation Agreement with FFP New Horizons Fund, Inc. and FFP Advisory
Services, Inc. to offer shares of the FFP New Horizons Fund, Inc. as
investments under a variable annuity contract and a variable life insurance
policy to be offered by First Variable Life Insurance Company; and
WHEREAS, First Variable Life Insurance Company is willing to provide certain
administrative services in connection with the FFP New Horizons Fund, Inc.;
NOW THEREFORE, in consideration of the mutual agreements and promises
contained in this Agreement and other valuable consideration, FFP Advisory
Services, Inc. and First Variable Life Insurance Company, mutually, agree as
follows:
I. SERVICES
First Variable Life Insurance Company (First Variable) agrees to
provide the following services for FFP Advisory Services, Inc. (FFP
Advisory) with respect to FFP New Horizons Fund, Inc. (Fund) and its
portfolios (Portfolios):
1. responding to inquiries from persons (Contract Holders) who have
premiums invested in the Fund through a variable annuity contract or
variable life insurance policy issued by First Variable, including,
but not limited to, the amount of their respective interests in each
of the Portfolios, the performance of the Portfolios through their
variable annuity contract or variable life insurance policy; any
annual or periodic reports concerning the Fund, proxy statements
sent to Contract Holders for the Fund and any other information
Contract Holders may receive concerning the Fund;
2. providing any other ongoing customer service to Contract Holders
concerning their interests in the Fund;
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3. mailing quarterly reports, annual reports, proxy statements, or
other notices prepared by the Fund or FFP Advisory concerning the
Fund to Contract Holders;
4. mailing prospectuses and other information concerning the Fund,
which may be necessary or appropriate for Contract Holders to have;
5. providing such other similar services as FFP Advisory may reasonably
request in connection with providing information or services to
Contract Holders.
II. COMPENSATION AND REIMBURSEMENT.
A. AMOUNT OF FEE
As full consideration and reimbursement for the cost of providing the
above services, FFP Advisory agrees to pay to First Variable a fee
equal to an annual rate of .25% of the average daily net assets of each
Portfolio held in the name of First Variable on behalf of Contract
Holders. The parties agree that the fee payable under this Article II
is for administrative services only and does not constitute payment in
any manner for investment Advisory services or for distribution costs.
B. CALCULATION OF FEE
The fee payable under this Agreement shall be calculated and shall
accrue quarterly based on the average assets held in the Portfolios
during the preceding calendar quarter. The average aggregate amount
held by First Variable during quarter shall be computed by totaling
First Variable's aggregate investment (share net asset value multiplied
by total number of shares held by First Variable) on each business day
during the quarter and dividing by the total number of business days
during each quarter.
C. PRORATION OF FEE
If this Agreement becomes effective subsequent to the first day of a
calendar quarter or terminates before the last day of a calendar
quarter, compensation shall only accrue and be paid for that part of
the quarter during which this Agreement is in effect.
D. PAYMENT OF FEE
The fee shall be paid within 30 days following the end of each calendar
quarter. The reimbursement payment will be accompanied by a statement
showing the calculation of the monthly amounts payable by FFP Advisory
and such other supporting data as may be reasonably requested by First
Variable.
III. REPRESENTATIONS AND WARRANTIES
A. REPRESENTATIONS AND WARRANTIES OF FFP ADVISORY
FFP Advisory hereby represents and warrants to First Variable as
follows:
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1. DUE INCORPORATION AND ORGANIZATION. FFP Advisory is duly organized
and is in good standing under the laws of the State of Missouri and
is fully authorized to enter into this Agreement and carry out its
duties and obligations hereunder.
2. FUND INCORPORATION. The Fund has been duly incorporated under the
laws of the state of Maryland and is authorized to enter into this
Agreement and carry out its obligations hereunder.
3. FUND REGISTRATION. The Fund is or will be registered as an
investment company with the Securities and Exchange Commission under
the Investment Company Act of 1940 (1940 Act) and shares of each
Portfolio are or will be registered or qualified for offer and sale
to the public under the Securities Act of 1933, as amended (1933
Act) and under the securities laws of all states where such
registration is required. Such registrations or qualifications will
be kept in effect during the term of this Agreement.
B. REPRESENTATIONS AND WARRANTIES OF FIRST VARIABLE
First Variable hereby represents and warrants to FFP Advisory as
follows:
DUE INCORPORATION AND ORGANIZATION. First Variable is duly organized
and is in good standing under the laws of the State of -----, is
qualified to do business in all states in which its activities
require it to be so registered and is fully authorized to enter into
this Agreement and carry out its duties and obligations hereunder.
IV. INDEMNIFICATION
A. INDEMNIFICATION BY FIRST VARIABLE
First Variable agrees to indemnify and hold harmless FFP Advisory and
its directors, officers, and employees from any and all loss, liability
and expense resulting from any gross negligence or willful wrongful act
of First Variable under this Agreement or a breach of a material
provision of this Agreement, except to the extent such loss, liability
or expense is the result of FFP Advisory's own willful misfeasance, bad
faith or gross negligence in the performance of its duties.
B. INDEMNIFICATION BY FFP ADVISORY
FFP Advisory agrees to indemnify and hold harmless First Variable and
its directors, officers, and employees from any and all loss, liability
and expense resulting from any gross negligence or willful wrongful act
of FFP Advisory under this Agreement or a breach of a material
provision under this Agreement, except to the extent such loss,
liability or expense is the result of First Variable's own willful
misfeasance, bad faith or gross negligence in the performance of its
duties.
V. TERMINATION
Either party may terminate this Agreement, without penalty, (i) on sixty (60)
days written notice to the other party, for any cause or without cause, or
(ii) on reasonable notice to the other party,
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if it is not permissible to continue the arrangement described herein under
laws, rules or regulations applicable to either party or the Fund. This
Agreement will terminate immediately upon the termination of the Participation
Agreement among FFP Advisory Services, Inc., First Variable and the Fund.
VI. CONFIDENTIALITY
The terms of this arrangement will be held confidential by each party except
to the extent that either party or its counsel may deem it necessary to
disclose this arrangement.
VII. CONSTRUCTION AND AMENDMENT
This Agreement represents the entire Agreement of the parties on the subject
matter hereof and it cannot be amended or modified except in writing, signed
by the parties. This Agreement may be executed in one or more separate
counterparts, all of which, when taken together, shall constitute one and the
same Agreement.
VIII. AMENDMENT
This Agreement may be amended by a writing approved by both parties to this
Agreement.
IX. NOTICES
Any notices under this Agreement shall be in writing, addressed and
delivered, mailed postage paid, or sent by other delivery service, or by
facsimile transmission or e-mail to each party at such address as each party
may designate for the receipt of notice. Until further notice, such
addresses shall be:
FFP ADVISORY:
FFP Advisory Services, Inc.
00000 Xxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Telephone: 000-000-0000
Fax: 000-000-0000
FIRST VARIABLE:
First Variable Life Insurance Company
00000 Xxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxx 00000
Attn:
(000) 000-0000
Fax:
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X. INTERPRETATION
This Agreement shall be governed by the laws of the State of Missouri. Any
term or provision of this Agreement which is the same as or derived from a
term or provision included in the 1940 Act shall be interpreted by referring
to the 1940 Act and to interpretations of such Act by the United States
Courts or by rules, regulations or orders of the Securities and Exchange
Commission. In addition, any provision of this Agreement that is included
based on or as a result of a requirement of the 1940 Act, shall be deemed
amended or deleted to the extent that the requirement on which the provision
is based is amended or rescinded in the future by rule, regulation or order
of the Securities and Exchange Commission.
IN WITNESS WHEREOF, the undersigned hereby execute this Agreement as of the
date written in the first paragraph of this Agreement.
FFP ADVISORY SERVICES, INC.:
By: ---------------------------------------
Xxx X. Xxxxx, President
ATTEST:--------------------------------------
Xxxxxx X. Xxxxxxxxx, Xx., Secretary SEAL
FIRST VARIABLE LIFE INSURANCE COMPANY:
By: ---------------------------------------
Xxxx Xxxxxx, President
ATTEST:--------------------------------------
Secretary SEAL
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