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FORM N-6, ITEM 26(h)
PARTICIPATION AGREEMENTS
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FUND PARTICIPATION AGREEMENT
This AGREEMENT is made this day of , by and between American United Life
Insurance Company(R) (the "Company"), a life insurance Company domiciled in
Indiana, on its behalf and on behalf of the segregated asset accounts of the
Company listed on Exhibit: A to this Agreement (the "Separate Accounts"); the
Xxxxxxx Plan (the "Fund"), a Delaware business trust; and Xxxxxxx Partners, Ltd.
("Distributor"), a Florida limited partnership.
WITNESSETH
WHEREAS, the Fund is registered with the Securities and Exchange Commission
("SEC") as an open-end management investment company under the Investment
Company Act of 1940, as amended (" 1940 Act") and the Fund is authorized to
issue separate classes of shares of beneficial interests ("shares"), each
representing an interest in a separate portfolio of assets known as a "series"
and each series has its own investment objective, policies, and limitations; and
WHEREAS, the Fund is available to offer shares of one or more of its series to
separate accounts of insurance companies that fund variable life insurance
policies and variable annuity contracts ("Variable Contracts") and to serve as
an investment medium for Variable Contracts offered by insurance companies that
have entered into participation
agreements substantially similar to this agreement ("Participating Insurance
Companies"), and the Fund is currently comprised of separate series, and other
series may be established in the future; and
WHEREAS, the Fund has obtained an order from the SEC, granting Participating
Insurance Companies, separate accounts funding Variable Contracts of
Participating Insurance Companies, and the Fund exemptions from the provisions
of sections 9(a), 13(a), *15(a), and 15(b) of the 1940 Act and paragraph (b)(15)
of Rule 6e-3(T) under the 1940 Act, to the extent necessary to permit such
persons to rely on the exemptive relief provided under paragraph (b)(15) of Rule
6e-3(T), even though shares of the Fund may be offered to and held by separate
accounts funding variable annuity contracts or scheduled or flexible premium
variable life insurance contracts of both affiliated and unaffiliated life
insurance companies (the "Shared Funding Exemptive Order"); and
WHEREAS, the Distributor is registered as a broker-dealer with the SEC under the
Securities Exchange Act of 1934, asserted(" 1.34 Act"), and is a member in good
standing of the National Association of Securities Dealers, ("NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and regulations,
the Company wishes to purchase shares of one or more of the Fund's series on
behalf of its Separate Accounts to serve as an investment medium for Variable
Contracts funded by the Separate Accounts, and the Distributor is authorized to
sell shares of the Fund's series;
NOW, THEREFORE, in consideration of the foregoing and the mutual promises and
covenants hereinafter set forth, the parties hereby agree as follows:
ARTICLE I. Sale of Fund Shares
1.1. The Distributor agrees to sell to the Company those shares of the
series offered and made available by the Fund and identified on Exhibit E
("Series") that the Company orders on behalf of its Separate Accounts, and
agrees to execute such orders on each day on which the Fund calculates its net
asset value pursuant to rules of the SEC ("business day) at the net asset value
next computed after receipt and acceptance by the Fund or its agent of the order
for the shares of the Fund.
1.2. The Fund agrees to make available on each business day shares of the
Series for purchase at the applicable net asset value per share by the Company
on behalf of its Separate Accounts; provided, however, that the Trustees of the
Fund may refuse to sell shares of any Series to any person, or suspend or
terminate the offering of shares of any Series, if such action is required by
law or by regulatory authorities having jurisdiction or is, in the sole
discretion of the Trustees, acting in good faith and in light of the Trustees'
fiduciary duties under applicable law, necessary in the best interests of the
shareholders of any Series.
1.3. The Fund and the Distributor agree that shares of the Series of the
Fund will be sold only to Participating Insurance Companies, their separate
accounts, and other persons consistent with each Series being adequately
diversified pursuant to Section 817(h) of the Internal Revenue Code of 1986, as
amended ("Code") and the regulations thereunder. No shares of any Series will be
sold directly to the general public.
1.4. The Fund and the Distributor will not sell shares of the Series to any
insurance company or separate account unless an agreement containing provisions
substantially the same as this Agreement is in effect to govern such sales.
1.5. Upon receipt of a request for redemption in proper form from the
Company, the Fund agrees to redeem any full or fractional shares of the Series
held by the Company, ordinarily executing such requests on each business day at
the net asset value next computed after receipt and acceptance by the Fund or
its agent of the request for redemption, except that the Fund reserves the right
to suspend the right of redemption, consistent with Section 22(e) of the 1940
Act and any rules thereunder. Such redemption shall be paid consistent with
applicable rules of the SEC and procedures and policies of the Fund as described
in the current prospectus.
1.6. The Company agrees to purchase and redeem the shares of each Series in
accordance with the provisions of the current prospectus for the Fund. In the
event the Company trades through a clearing house, the Company warrants,
covenants and agrees that all trades received by the Fund's transfer agent prior
to 8:30 am (Eastern time) each day the NYSE is open for business have been
received by the Company prior to the close of the NYSE (4:00 pm Eastern time) on
the preceding day, and that the Company will indemnify the Trust, the Board of
Trustees, transfer agent, underwriter, and shareholders against any claim,
liability, expenses or losses incurred in the event any legal action is
initiated against any one of the indemnities or any combination of or all of
them, whether such action is civil, criminal, or administrative. Subject to the
conditions and covenants set forth herein, orders received by the transfer agent
prior to 8:30am each day the NYSE is open for business will be transacted at the
NAV established the preceding day.
1.7. The Company shall pay for shares of the Series on the same day that it
places an order to purchase shares of the Series. Payment shall be in federal
funds transmitted by wire or by any other method mutually agreed upon by the
Parties hereto.
1.8. Issuance and transfer of shares of the Series will be by book entry
only unless otherwise agreed by the Fund. Stock certificates will not be issued
to the Company or the Separate Accounts un less otherwise agreed by the Fund.
Shares ordered from the Fund will be recorded in an appropriate title for the
Separate Accounts or the appropriate subaccounts of the Separate Accounts.
1.9. The Fund shall use its best efforts to furnish notice (by wire or
telephone, followed by written confirmation) to the Company of any income
dividends or capital gain distributions to be paid on the shares of the Series
prior to actual payment, however, in the event the Fund is unable to provide
advance notice, the Fund shall provide notice immediately upon the event of the
payment of a dividend or capital gain or combination thereof. The Company hereby
elects to reinvest in the Series all such dividends and distributions as are
payable on a Series' shares and to receive such dividends and distributions in
additional shares of that Series. The Company reserves the right to revoke this
election in writing and to receive all such dividends and distributions in cash.
The Fund shall notify the Company of the number of shares so issued as payment
of such dividends and distributions.
1.10. The Fund shall instruct its recordkeeping agent to advise the Company
on each business day of the net asset value per share for each Series as soon as
reasonably practical after the net asset value per share is calculated.
ARTICLE 11. Representations and Warranties
2.1. The Company represents and warrants that it is an insurance company
duly organized and in good standing under applicable law and that it is taxed as
an insurance company under Subchapter L of the Code.
2.2. The Company represents and warrants that it has legally and validly
established each of the Separate Accounts as a segregated asset account under
the Indiana Insurance Code, and that each of the Separate Accounts is a validly
existing segregated asset account under applicable federal and state law.
2.3. The Company represents and warrants that the Variable Contracts issued
by the Company or interests in the Separate Accounts under such Variable
Contracts (1) are or, prior to issuance, will be registered as securities under
the Securities Act of 1933 (" 1933 Act") or, alternatively (2) are not
registered because they are properly exempt from registration under the 1933 Act
or will be offered exclusively in transactions that are properly exempt from
registration under the 0000 Xxx.
2.4. The Company represents and warrants that each of the Separate Accounts
(1) has been registered as a unit investment trust in accordance with the
provisions of the 1940 Act or, alternatively (2) has not been registered in
proper reliance upon an exclusion from registration under the 0000 Xxx.
2.5. The Company represents that it believes, in good faith, that the
Variable Contracts issued by the Company are currently treated as annuity
contracts or life insurance policies (which may include modified endowment
contracts), whichever is appropriate, under applicable provisions of the Code.
2.6. The Company represents and warrants that any of its Separate Accounts
that fund variable life insurance contracts and that are registered with the SEC
as investment companies, rely on the exemptions provided by Rule 6e-3(T), or any
successor thereto, and not on Rule 6e-2 under the 0000 Xxx.
2.7. The Fund represents and warrants that it is duly organized as a
business trust under the laws of the state of Delaware, and is in good standing
under applicable law.
2.8. The Fund represents and warrants that the shares of the Series are
duly authorized for issuance in accordance with applicable law and that the Fund
is registered as an open-end management investment company under the 0000 Xxx.
2.9. The Fund represents that it believes, in good faith, that the Series
currently comply with the diversification provisions of Section 817(h) of the
Code and the regulations issued thereunder relating to the diversification
requirements for variable life insurance, policies and variable annuity
contracts.
2.10. The Distributor represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the SEC.
ARTICLE III. General Duties
3.1. The Fund shall take all such actions as are necessary to permit the
sale of the shares of each Series to the Separate Accounts, including
maintaining its registration as an investment company under the 1940 Act, and
registering the shares of the Series sold to the Separate Accounts under the
1933 Act for so long as required by applicable law. The Fund shall amend its
Registration Statement filed with the SEC
under the 1933 Act and the 1940 Act from time to time as required in order to
effect the continuous offering of the shares of the Series. The Fund shall
register and qualify the shares for sale in accordance with the laws of the
various states to the extent deemed necessary by the Fund or the Distributor.
3.2. The Fund shall make every effort to maintain qualification of each Series
as a Regulated Investment Company under Subchapter M of the Code (or any
successor or similar provision) and shall notify the Company immediately upon
having a -reasonable basis for believing that a Series has ceased to so qualify
or that it might not so qualify in the future.
3.3. The Fund shall make every effort to enable each Series to comply with the
diversification provisions of Section 817(h) of the Code and the regulations
issued thereunder relating to the diversification requirements for variable life
insurance policies and variable annuity contracts and any prospective amendments
or other modifications to Section 817 or regulations thereunder, and shall
notify the Company immediately upon having a reasonable basis for believing that
any Series has ceased to comply.
3.4. The Fund shall be entitled to receive and act upon advice of its General
Counsel or its outside counsel in meeting the requirements specified in Sections
3.2 and 3.3 hereof.
3.5. The Company shall take all such actions as are necessary under applicable
federal and state law to permit the sale of the Variable Contracts issued by the
Company, including registering each Separate Account as an investment company to
the extent required under the 1940 Act, and registering the Variable Contracts
or interests in the Separate Accounts under the Variable Contracts to the extent
required under the 1933 Act, and obtaining all necessary approvals to offer the
Variable Contracts from state insurance commissioners.
3.6. The Company shall make every effort to maintain the treatment of the
Variable Contracts issued by the Company as annuity contracts or life insurance
policies, whichever is appropriate, under applicable provisions of the Code, and
shall notify the Fund and the Distributor immediately upon having a reasonable
basis for believing that such Variable Contracts have ceased to be so treated or
that they might not be so treated in the future.
3.7. The Company shall offer and sell the Variable Contracts issued by the
Company in accordance with applicable provisions of the 1933 Act, the 1934 Act,
the 1940 Act, the NASD Conduct Rules, and state law respecting the offering of
variable life insurance policies and variable annuity contracts.
3.8. The Distributor shall sell and distribute the shares of the Series of
the Fund in accordance with the applicable provisions of the 1933 Act, the 1934
Act, the 1940 Act, the NASD Conduct Rules, and state law.
3.9. The Fund affirms and agrees the Board of Trustees of the Fund shall be
comprised of persons who are not "interested persons" of the Fund
("disinterested Trustees"), as is required by the Securities and Exchange Act of
1940 and the regulations promulgated thereunder and such other Acts and
regulations as may regulate the composition of the Board. The Fund further
agrees that the addition or replacement of a Trustee or Trustees shall be
effected as set forth in the regulations and shall specifically be consummated
within the time allotted under the rules.
3.10. The Company agrees to provide, as promptly as possible, notice to the
Fund and to the Distributor if the Company has reason to know about a meeting of
some or all of the owners of the Variable Contracts or shareholders of the Fund,
where the agenda or purpose of the meeting relates, in whole or in part, to the
Fund, and that has not been called by the Fund's Board of Trustees (and which
shall not include a vote of Variable Contract Owners having an interest in a
Separate Account to substitute shares of another investment company for
corresponding shares of the Fund or a Series, as described in Section 9(e) and
to which the notice provision of Section 9.2 shall apply). In such an event, the
Company agrees to distribute proxy statements and any additional solicitation
materials upon the request of the Fund or the Distributor to the owners of the
Variable Contracts issued by the Company at least 30 days prior to the meeting.
The Company further agrees that it shall take no action, directly or indirectly,
in furtherance of shareholders of the Fund or Contract Owners taking any action
with respect to the Fund by written consent and without a meeting.
3.11. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities having jurisdiction (including, without
limitation, the SEC, the NASD, and state insurance, regulators) and shall permit
such authorities reasonable access to its books and records in connection with
any investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.
ARTICLE IV. Potential Conflicts
4.1. The Fund's Board of Trustees shall monitor the Fund for the existence
of any material irreconcilable conflict (1) between the interests of owners of
variable annuity contracts and variable life insurance policies, and (2) between
the interests of owners of Variable Contracts ("Variable Contract;
Owners") issued by different Participating Insurance Companies that invest in
the Fund. An irreconcilable material conflict may arise for a variety of
reasons, including: (a) an action by any state insurance regulatory authority;
(b) a change in applicable federal or state insurance, tax, or securities laws
or regulations, or a public ruling, private letter ruling, no-action or
interpretive letter, or any similar action by insurance, tax, or securities
regulatory authorities; (c) an administrative or judicial decision in any
relevant proceeding; (d) the manner in which the investments of the Fund or any
Series are being managed; or (e) a decision by a Participating Insurance Company
to disregard the voting instructions of Variable Contract Owners.
4.2. The Company agrees that it shall be responsible for reporting any
potential or existing conflicts to the Fund's Board of Trustees. The Company
will be responsible for assisting the Board of Trustees of the Fund in carrying
out its responsibilities under this Agreement, by providing the Board with all
information reasonably necessary for the Board to consider any issues raised.
This includes, but is not limited to, an obligation by the Company to inform the
Board whenever Variable Contract Owner voting instructions are disregarded. The
Company shall carry out its responsibility under this Section 4.2 with a view
only to the interests of the Variable Contract Owners.
4.3. The Company agrees that in the event that it is determined by a
majority of the Board of Trustees of the Fund that a material irreconcilable
conflict exists, the Company shall, to the extent reasonably practicable (as
determined by a majority of the Trustees of the Board of the Fund), take
whatever steps are necessary to eliminate the irreconcilable material conflict,
including: (1) withdrawing the assets allocable to some or all of the Separate
Accounts from the Fund or any Series and reinvesting such assets in a different
investment medium, which may include another series of the Fund, or submitting
the question of whether such segregation should be implemented to a vote of all
affected Variable
Contract Owners and, as appropriate, segregating the assets of any appropriate
group (i.e., Contract Owners of Variable Contracts issued by one or more
Participating' Insurance Companies) that votes in favor of such segregation, or
offering to the affected Variable Contract Owners the option of making such a
change; and (2) establishing a new registered management investment company or
managed separate account. If a material irreconcilable conflict arises because
of the Company's decision to disregard Variable Contract Owners' voting
instructions and that decision represents a minority position or would preclude
a majority vote, the Company shall be required, at the Fund's election, to
withdraw the Separate Accounts' investment in the Fund, and no charge or penalty
will be imposed as a result of such withdrawal. The Fund shall neither be
required to bear the costs of remedial actions taken to remedy a material
irreconcilable conflict nor shall it be requested to pay a higher investment
advisory fee for the sole purpose of covering such costs. In addition, no
Variable Contract Owner shall be required directly or indirectly to bear the
direct or indirect costs of remedial actions taken to remedy a material
irreconcilable conflict. A new funding medium for any Variable Contract need not
be established pursuant to this Section 4.3, if an offer to do so has been
declined by vote of a majority of Variable Contract Owners who would be
materially and adversely affected by the irreconcilable material conflict. The
Company and the Fund shall carry out their responsibilities under this Section
4.3 with a view only to the interests of the Variable Contract Owners.
4.4. The Board of Trustees of the Fund shall promptly notify the Company in
writing of its determination of the existence of an irreconcilable material
conflict and its implications.
ARTICLE V. Prospectuses and Proxy Statements: Voting
5.1. The Company shall distribute such prospectuses, proxy statements and
periodic reports of the Fund to the owners of Variable Contracts issued by the
Company as required to be distributed to such Variable Contract Owners under
applicable federal or state law.
5.2. The Distributor shall provide the Company a final copy of the Fund's
prospectus in cameraready electronic format, and other assistance as is
reasonably necessary in order for the Company to print together in one document
the current prospectus for the Variable Contracts issued by the Company and the
current prospectus for the Fund. The Fund shall reimburse the Company its share
of the printing expense incurred in printing the prospectus to be distributed,
as required under the regulations, to existing Variable Contract Owners. The
Fund's share shall be calculated by adding the total number of pages dedicated
to the Fund, divided by the total number of pages in the prospectus containing
all the portfolios offered in the separate account, multiplied times the cost
per printed prospectus multiplied times the number of prospectuses sent to
existing Variable Contract Owners. The Company shall bear the expense of
printing copies of the Fund's prospectus that are used in connection with
offering the Variable Contracts issued by the Company.
5.3. The Fund and the Distributor shall provide in electronic, camera ready
format (1) at the Fund's expense, the Fund's current Statement of Additional
Information ("SAP) to the Company, (2) at the Company's expense, the Company may
print such number of copies of the Fund's current SAI as the Company shall
reasonably require in accordance with applicable law in connection with offering
the Variable Contracts issued by the Company.
5.4. The Fund, at its expense, shall provide the Company with copies of its
proxy material, in such quantity as the Company shall reasonably require for
purposes of distributing to owners of Variable Contracts issued by the Company.
The Fund, shall provide in electronic, camera ready format, periodic reports and
other communications to shareholders to the Company, and shall reimburse the
Company its share of the cost in producing the reports, calculated in the same
manner as set forth for the calculation of
the Fund's share of the cost for prospectuses for existing Variable Contract
Owners as set forth above,. The Fund shall provide a final copy of the Fund's
proxy materials, periodic reports to shareholders and other communications to
shareholders, in camera-ready copy and provide other assistance as reasonably
necessary in order for the Company to print such shareholder communications for
distribution to owners of Variable Contracts issued by the Company.
5.5. For so long as the SEC interprets the 1940 Act to require pass-through
voting by Participating Insurance Companies whose Separate Accounts are
registered as investment companies under the 1940 Act, the Company shall vote
shares of each Series of the Fund held in a Separate Account or a subaccount
thereof, whether or not registered under the 1940 Act, at regular and special
meetings of the Fund in accordance with instructions timely received by the
Company (or its designated agent) from owners of Variable Contracts funded by
such Separate Account or subaccount thereof having a voting interest in the
Series. The Company shall vote shares of a Series of the Fund held in a Separate
Account or a subaccount thereof that are attributable to the Variable Contracts
as to which no timely instructions are received, as well as shares held in such
Separate Account or subaccount thereof that are not attributable to the Variable
Contracts and owned beneficially by the Company (resulting from charges against
the Variable Contracts or otherwise), in the same proportion as the votes cast
by owners of the Variable Contracts funded by that Separate Account or
subaccount thereof having a voting interest in the Series from whom instructions
have been timely received. The Company shall vote shares of each Series of the
Fund held in its general account, if any, in the same proportion as the votes
cast with respect to shares of the Series held in all Separate Accounts of the
Company or subaccounts thereof, in the aggregate.
5.6. The Fund shall disclose in its prospectus that (1) shares of the
Series of the Fund are offered to affiliated or unaffiliated insurance company
separate accounts which fund both annuity and life insurance
contracts, (2) due to differences in tax treatment or other considerations, the
interests of various Variable Contract Owners participating in the Fund or a
Series might at some time be in conflict, and (3) the Board of Trustees of the
Fund will monitor for any material conflicts and determine what action, if any,
should be taken. The Fund hereby notifies the Company that prospectus disclosure
may be appropriate regarding potential risks of offering shares of the Fund to
separate accounts funding both variable annuity contracts and variable life
insurance policies and to separate accounts funding Variable Contracts of
unaffiliated life insurance companies.
ARTICLE VI. Sales Material and Information
6.1. The Company shall furnish, or shall cause to be furnished, to the Fund
or its designee, each piece of sales literature or other promotional material in
which the Fund (or any Series thereof) or its investment adviser or the
Distributor is named, and no such sales literature or other promotional material
shall be used without the approval of the Fund and the Distributor or the
designee of either.
6.2. The Company agrees that neither it nor any of its affiliates or agents
shall give any information or make any representations or statements on behalf
of the Fund or concerning the Fund other than the information or representations
contained in the Registration Statement or prospectus for the Fund shares, as
such registration statement and prospectus may be amended or supplemented from
time to time, or in reports or proxy statements for the Fund, or in sales
literature or other promotional material approved by the Fund or its designee
and by the Distributor or its designee, except with the permission of the Fund'
or its designee and the Distributor or its designee.
6.3. The Fund or the Distributor or the designee of either shall furnish to
the Company or its designee, each piece of sales literature or other promotional
material in which the Company or its Separate Accounts are named, and no such
material shall be used without the approval of the Company or its designee.
6.4. The Fund and the Distributor agree that each and the affiliates and
agents of each shall not give any information or make any representations on
behalf of the Company or concerning the Company, the Separate Accounts, or the
Variable Contracts issued by the Company, other than the information or
representations contained in a registration statement or prospectus for such
Variable Contracts, as such registration statement and prospectus may be amended
or supplemented from time to time, or in reports for the Separate Accounts or
prepared for distribution to owners of such Variable Contracts, or in sales
literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.
6.5. The Fund will provide to the Company at least one complete copy of all
prospectuses, Statements of Additional Information in electronic format, and
reports, proxy statements and other voting solicitation materials, and all
amendments and supplements to any of the above in such format as the Fund deems
most appropriate, that relate to the Fund or its shares, promptly after the
filing of such document with the SEC or other regulatory authorities.
6.6. The Company will provide to the Fund at least one complete copy of all
prospectuses (which shall include an offering memorandum if the Variable
Contracts issued by the Company or interests therein are not registered under
the 1933 Act), Statements of Additional Information, reports, solicitations for
voting instructions, and all amendments or supplements to any of the above, that
relate to the Variable
Contracts issued by the Company or the Separate Accounts promptly after the
filing of such document with the SEC or other regulatory authority.
6.7. For purposes of this Article VI, the phrase "sales literature or other
promotional material" includes, but is not limited to, advertisements (such as
material published, or designed for use in, a newspaper, magazine, or other
periodical, radio, television, telephone or tape recording, videotape display,
signs or billboards, motion pictures, computerized media, or other public
media), sales literature i.e. any written communication distributed or made
generally available to customers or the public, including brochures, circulars,
research reports, market letters, form letters, seminar texts, reprints or
excerpts of any other advertisement, sales literature, or published article),
educational or training materials or other communications distributed or made
generally available to some or all agents or employees.
ARTICLE VII. Indemnification,
7.1. Indemnification By The Company
7.1(a). The Company agrees to indemnify and hold harmless the Fund,
each of its Trustees and officers, any affiliated person of the Fund within
the meaning of Section 2(a)(3) of the 1940 Act, and the Distributor
(collectively, the "Indemnified Parties" for purposes of this Section 7.1)
against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Company) or litigation
expenses (including legal and other expenses), to which the Indemnified
Parties may become subject under any statute, regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or
litigation expenses are related to the sale or acquisition of the Fund's
shares or the Variable Contracts issued by the Company and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the registration
statement or prospectus (which shall include an offering memorandum) for
the Variable Contracts issued by the Company or sales literature for such
Variable Contracts (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided that this
agreement to indemnify shall not apply as to any Indemnified Party if such
statement or omission or such alleged statement or omission was made in
reliance upon and in conformity with information furnished to the Company
by or on behalf of the Fund for use in the registration statement or
prospectus for the Variable Contracts issued by the Company or sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of such Variable Contracts or Fund shares; or
(ii) arise out of or as a result of any statement or representation
(other than statements or representations contained in the registration
statement, prospectus or sales literature of the Fund not supplied by the
Company or persons under its control) or wrongful conduct of the Company or
any of its affiliates, employees or agents with respect to the sale or
distribution of the Variable Contracts issued by the Company or the Fund
shares; or
(iii) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a registration statement, prospectus, or sales
literature of the Fund or any amendment thereof or supplement thereto or
the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading if such a statement or omission was made in reliance upon
information furnished to the Fund by or on behalf of the Company;
except to the extent provided in Sections 7.1 (b) and 7.1 (c) hereof.
7.1(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
expenses to which an Indemnified Party would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance of his or
her duties or by reason of his or her reckless disregard of obligations or
duties under this Agreement or to the Fund.
7.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Party shall have notified the Company in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon such Indemnified Party (or after such
Party shall have received notice of such service on any designated agent), but
failure to notify the Company of any such claim shall not relieve the Company
from any liability which it may have to the Indemnified Party against whom such
action is brought otherwise than on account of this indemnification provision.
In case any such action is brought against the Indemnified Parties, the Company
shall be entitled to participate, at its own expense, in the defense of such
action. The Company also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice from the
Company to such party of the Company's election to assume the defense thereof,
the Indemnified Party shall bear the fees and expenses of any additional counsel
retained by it, and the Company will not be liable to such party under this
Agreement for any legal or other expenses .subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
7.1(d). The Indemnified Parties shall promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Fund shares or the Variable Contracts issued by the
Company or the operation of the Fund.
7.2. Indemnification By the Distributor
7.2(a). The Distributor agrees to indemnify and hold harmless the Company
and each of its directors and officers and each person, if any, who is an
affiliated person of the Company within the meaning of Section 2(a)(3) the 1940
Act (collectively, the "Indemnified Parties" for purposes of this Section 7.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Distributor) or litigation
expenses (including legal and other expenses) to which the Indemnified Parties
may become subject under any statute, at common law or otherwise, insofar as
such losses, claims, damages, liabilities or litigation expenses are related to
the sale or acquisition of the Fund's shares or the Variable Contracts issued by
the Company and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the registration
statement or prospectus or sales literature of the Fund (or any amendment
or supplement to any of the foregoing), or arise out of or are based upon
the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, provided that this agreement to indemnify shall not apply
as to any Indemnified Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in conformity with
information furnished to the Distributor or the Fund or the designee of
either by or on behalf of the Company for use in the registration statement
or prospectus
for the Fund or in sales literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the Variable Contracts
issued by the Company or Fund shares; or
(ii) arise out of or as a result of any statement or representation (other
than statements or representations contained in the registration statement,
prospectus or sales literature for the Variable Contracts not supplied by
the Distributor or any employees or agents thereof) or wrongful conduct of
the Fund or Distributor, or the affiliates, employees, or agents of the
Fund or the Distributor with respect to the sale or distribution of the
Variable Contracts issued by the Company or Fund shares; or
(iii) arise out of any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, or sales
literature covering the Variable Contracts issued by the Company, or any
amendment thereof or supplement thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statement or statements therein not misleading, if
such statement or omission was made in reliance upon information furnished
to the Company by or on behalf of the Fund; except to the extent provided
in Sections 7.2(b) and 7.2(c) hereof.
7.2(b) The Distributor or Fund shall severally indemnify and hold the
company harmless against any and all liability, loss, damages, costs, or
expenses which the Company may incur, suffer or be required to pay due to the
indemnifying party's (i) the incorrect calculation or reporting, or the both of
them, of the daily net asset value; and (ii) the untimely reporting of the net
asset value; provided that the indemnifying party shall have no obligation to
indemnify and hold harmless the Company if the incorrect calculation or
incorrect or untimely reporting was the result of incorrect information
furnished by the
Company or information furnished untimely by the Company or otherwise as a
result of or relating to a breach of this Agreement by the Company.
7.2(c). The Distributor shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
expenses to which an Indemnified Party would otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the performance of his or
her duties or by reason of his or her reckless disregard of obligations and
duties under this Agreement or to the Company or the Separate Accounts.
7.2(d). The Distributor shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Party shall have notified the Distributor in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or after
such Party shall have received notice of such service on any designated agent),
but failure to notify the Distributor of any such claim shall not relieve the
Distributor from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
Indemnification Provision. In case any such action is brought against the
Indemnified Parties, the Distributor will be entitled to participate, at its own
expense, in the defense thereof. The Distributor also shall be entitled to
assume the defense thereof, with counsel satisfactory to the party named in the
action. After notice from the Distributor to such party of the Distributor's
election to assume the defense thereof, the Indemnified Party shall bear the
fees and expenses of any additional counsel retained by it, and the Distributor
will not be liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation.
7.2(e). The Company shall promptly notify the Distributor of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of the Variable Contracts
issued by the Company or the operation of the Separate Accounts.
ARTICLE VIII. Applicable Law
8.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Indiana,
except that any conflict of law rule of that jurisdiction that may require
reference to the laws of some other jurisdiction shall be disregarded.
8.2. This Agreement shall be subject to the provisions of the 1933, 1934,
and 1940 Acts, and the rules and regulations and rulings thereunder, including
such exemptions from those statutes, rules and regulations as the SEC may grant
(including, but not limited to, the Shared Funding Exemptive Order) and the
terms hereof shall be interpreted and construed in accordance therewith.
ARTICLE IX. Termination
9.1. This Agreement shall terminate:
(a) at the option of the Fund or the Distributor upon 180 days advance
written notice to the other parties; or
(b) at the option of the Company, at its discretion, upon prompt notice by
the Company to the other parties, notwithstanding, however, that the then
current investors shall be allowed to continue to invest new monies into the
Fund they then hold in their accounts; or
(c) at the option of the Fund or the Distributor upon institution of formal
proceedings against the Company or its agent by the NASD, the SEC, or any state
securities or insurance department or any other regulatory body regarding the
Company's duties under this Agreement or related to the sale of the Variable
Contracts issued by the Company, the operation of the Separate Accounts, or the
purchase of the Fund shares; or
(d) at the option of the Company upon institution of formal proceedings
against the Fund or the Distributor by the NASD, the SEC, or any state
securities or insurance department or any other regulatory body; or
(e) upon requisite vote of the Variable Contract Owners having an interest
in the Separate Accounts (or any subaccounts thereof) to substitute the shares
of another investment company for the corresponding shares of the Fund or a
Series in accordance with the terms of the Variable Contracts for which those
shares had been selected to serve as the underlying investment media; or
(f) in the event any of the shares of a Series are not registered, issued
or sold in accordance with applicable state and/or federal law, or such law
precludes the use of such shares as the underlying investment media of the
Variable Contracts issued or to be issued by the Company; or
(g) by any party to the Agreement upon a determination by a majority of the
Trustees of the Fund that an irreconcilable conflict exists; or
(h) at the option of the Company if the Fund or a Series fails to meet the
diversification requirements specified in Section 3.3 hereof.
9.2. Each party to this Agreement shall promptly notify the other parties
to the Agreement of the institution against such party of any such formal
proceedings as described in Sections 9.1 (c) and (d) hereof. The Company shall
give 60 day's prior written notice to the Fund of the date of any proposed vote
of Variable Contract Owners to replace the Fund's shares as described in Section
9.1 (e) hereof.
9.3. Except as necessary to implement Variable Contract Owner initiated
transactions, or as required by state insurance laws or regulations, the Company
shall not redeem Fund shares attributable to the Variable Contracts issued by
the Company (as opposed to Fund shares attributable to the Company's assets held
in the Separate Accounts), and the Company shall not prevent Variable Contract
Owners from allocating payments to a Series, until 60 days after the Company
shall have notified the Fund or Distributor of its intention to do so.
9.4. If this Agreement terminates, any provision of this Agreement
necessary to the orderly windup of business under it will remain in effect as to
that business, after termination.
ARTICLE X. Notices
Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at such
other address as such party may from time to time specify in writing to the
other party.
If to the Fund: Xx. Xxxxxx Ally
Xxxxxxx Plan
0000 X. Xxxxxxxxx Xxx.
Xxxxxx Xxxx,XX 00000
If to the Distributor: Xx. Xxxxxx Ally
Xxxxxxx Partners, Ltd.
0000 X. Xxxxxxxxx Xxx.
Xxxxxx Xxxx, XX 00000
If to the Company:
ARTICLE XI. Miscellaneous
11.1. The Fund and the Company agree that if and to the extent Rule 6e-3(T)
under the 1940 Act is amended or if Rule 6e-3 is adopted in final form, to the
extent applicable, the Fund and the Company shall each take such steps as may be
necessary to comply with the Rule as amended or adopted in final form.
11.2. For Massachusetts business trusts: A copy of the Fund's Agreement and
Declaration of Trust is on file with the Secretary of the Commonwealth of
Massachusetts and notice is hereby given that the Agreement has been executed on
behalf of the Fund by a Trustee of the Fund in his or her capacity as Trustee
and not individually. The obligations of this Agreement shall only be binding
upon the assets and property of the Fund and shall not be binding upon any
Trustee, officer or shareholder of the Fund individually.
11.3. Nothing in this Agreement shall impede the Fund's Trustees or
shareholders of the shares of the Fund's Series from exercising any of the
rights provided to such Trustees or shareholders in the Fund's Articles of
Incorporation/Agreement and Declaration of Trust, as amended, a copy of which
will be provided to the Company upon request.
11.4. It is understood that the names "Xxxxxxx Plan", and "Xxxxxxx
Partners, Ltd.",
or any derivative thereof or logo associated with that name is the valuable
property of the Fund and the Distributor and its affiliates, and that the
Company has the right to use such name (or derivative or logo) only so long as
this Agreement is in effect. Upon termination of this Agreement the Company
shall forthwith cease to use such name (or derivative or logo).
11.5. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
11.6. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
11.7. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
11.8. This Agreement may not be assigned by any party to the Agreement
except with the written consent of the other parties to the Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
Xxxxxxx Plan
ATTEST: /s/Xxxxx Gvent By: /s/ Xxxxxx X. Ally
Name: Xxxxx Gvent Name: Xxxxxx X. Ally
Title: General Counsel Title: President
ATTEST: /s/ Xxxxx Gvent By: /s/ Xxxxxx X. Ally
Name: Xxxxx Gvent Name: Xxxxxx X. Ally
Title: General Counsel Title: General Partner
American United Life Insurance Company(R)
ATTEST: By: /s/ Xxxxxx Xxxxxx
Name: /s/ Xxxx Xxxxxx Name: Xxxxxx Xxxxxx
Title: Assistant General Counsel Title: Vice Presient, Ind Mktng
