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FORM N-6, ITEM 26(h)
PARTICIPATION AGREEMENTS
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PARTICIPATION AGREEMENT
AMONG
AMERICAN UNITED LIFE INSURANCE COMPANY,
ONEAMERICA SECURITIES, INC.,
ALLIANCEBERNSTEIN L.P.
AND
ALLIANCEBERNSTEIN INVESTMENTS, INC.
DATED AS OF
MAY 1, 2008
PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into as of the 1st day of May, 2008
("Agreement"), by and among American United Life Insurance Company, an Indiana
life insurance company ("Insurer") (on behalf of itself and its "Separate
Account," defined below); OneAmerica Securities, Inc., an Indiana corporation
("Contracts Distributor"), the principal underwriter with respect to the
Contracts referred to below; AllianceBernstein L.P., a Delaware limited
partnership ("Adviser"), the investment adviser of the Fund referred to below;
and AllianceBernstein Investments, Inc., a Delaware corporation ("Distributor"),
the Fund's principal underwriter (collectively, the "Parties"),
WITNESSETH THAT:
WHEREAS Insurer, the Distributor, and AllianceBernstein Variable Products Series
Fund, Inc. (the "Fund") desire that Class A shares ("shares") of the Fund's
Portfolios listed on Schedule A (the "Portfolios"; reference herein to the
"Fund" includes reference to each Portfolio to the extent the context requires)
be made available by Distributor to serve as underlying investment media for
those combination fixed and variable annuity contracts of Insurer that are the
subject of Insurer's Form N-4 registration statement filed with the Securities
and Exchange Commission (the "SEC"), File No. 033-79562, 333-70049, 333-99191,
333-70065, 333-141415 (the "Contracts"), to be offered through Contracts
Distributor and other registered broker-dealer firms as agreed to by Insurer and
Contracts Distributor; and
WHEREAS the Contracts provide for the allocation of net amounts received by
Insurer to separate series (the "Divisions"; reference herein to the "Separate
Account" includes reference to each Division to the extent the context requires)
of the Separate Account for investment in the shares of corresponding Portfolios
of the Fund that are made available through the Separate Account to act as
underlying investment media,
NOW, THEREFORE, in consideration of the mutual benefits and promises contained
herein, the Fund and Distributor will make shares of the Portfolios available to
Insurer for this purpose at net asset value and with no sales charges, all
subject to the following provisions:
Section 1. Additional Portfolios
The Fund has and may, from time to time, add additional Portfolios, which will
become subject to this Agreement, if, upon the written consent of each of the
Parties hereto, they are made available as investment media for the Contracts.
Section 2. Processing Transactions
2.1 Timely Pricing and Orders. The Adviser or its designated agent will provide
closing net asset value, dividend and capital gain information for each
Portfolio to Insurer at the close of trading on each day (a "Business Day") on
which (a) the New York Stock Exchange is open for regular trading, (b) the Fund
calculates the Portfolio's net asset value and (c) Insurer is open for business.
The Fund or its designated agent will use its best efforts to provide this
information by 6:00 p.m., Eastern time. Insurer will use these data to calculate
unit values, which in turn will be used to process transactions that receive
that same Business Day's Separate Account Division's unit values. Such Separate
Account processing will be done the same evening, and corresponding orders with
respect to Fund shares will be placed the morning of the following Business Day.
Insurer will use its best efforts to place such orders with the Fund by 10:00
a.m., Eastern time.
2.2 Timely Payments. Insurer will transmit orders for purchases and redemptions
of Fund shares to Distributor, and will wire payment for net purchases to a
custodial account designated by the Fund on the day the order for Fund shares is
placed, to the extent practicable. Payment for net redemptions will be wired by
the Fund to an account designated by Insurer on the same day as the order is
placed, to the extent practicable, and in any event be made within six calendar
days after the date the order is placed in order to enable Insurer to pay
redemption proceeds within the time specified in Section 22(e) of the Investment
Company Act of 1940, as amended (the "1940 Act").
2.3 Redemption in Kind. The Fund reserves the right to pay any portion of a
redemption in kind of portfolio securities, if the Fund's board of directors
(the "Board of Directors") determines that it would be detrimental to the best
interests of shareholders to make a redemption wholly in cash.
2.4 Applicable Price. The Parties agree that Portfolio share purchase and
redemption orders resulting from Contract owner purchase payments, surrenders,
partial withdrawals, routine withdrawals of charges, or other transactions under
Contracts will be executed at the net asset values as determined as of the close
of regular trading on the New York Stock Exchange on the Business Day that
Insurer receives such orders and processes such transactions, which, Insurer
agrees shall occur not earlier than the Business Day prior to Distributor's
receipt of the corresponding orders for purchases and redemptions of Portfolio
shares. For the purposes of this section, Insurer shall be deemed to be the
agent of the Fund for receipt of such orders from holders or applicants of
contracts, and receipt by Insurer shall constitute receipt by the Fund. All
other purchases and redemptions of Portfolio shares by Insurer, will be effected
at the net asset values next computed after receipt by Distributor of the order
therefor, and such orders will be irrevocable. Insurer hereby elects to reinvest
all dividends and capital gains distributions in additional shares of the
corresponding Portfolio at the record-date net asset values until Insurer
otherwise notifies the Fund in writing, it being agreed by the Parties that the
record date and the payment date with respect to any dividend or distribution
will be the same Business Day.
Section 3. Costs and Expenses
3.1 General. Except as otherwise specifically provided herein, each Party will
bear all expenses incident to its performance under this Agreement.
3.2 Registration. The Fund will bear the cost of its registering as a management
investment company under the 1940 Act and registering its shares under the
Securities Act of 1933, as amended (the "1933 Act"), and keeping such
registrations current and effective; including, without limitation, the
preparation of and filing with the SEC of Forms N-SAR and Rule 24f-2 Notices
respecting the Fund and its shares and payment of all applicable registration or
filing fees with respect to any of the foregoing. Insurer will bear the cost of
registering the Separate Account as a unit investment trust under the 1940 Act
and registering units of interest under the Contracts under the 1933 Act and
keeping such registrations current and effective; including, without limitation,
the preparation and filing with the SEC of Forms N-SAR and Rule 24f-2 Notices
respecting the Separate Account and its units of interest and payment of all
applicable registration or filing fees with respect to any of the foregoing.
3.3 Other (Non-Sales-Related) Expenses. The Fund will bear the costs of
preparing, filing with the SEC and setting for printing the Fund's prospectus,
statement of additional information and any amendments or supplements thereto
(collectively, the "Fund Prospectu"), periodic reports to shareholders, Fund
proxy material and other shareholder communications and any related requests for
voting instructions from Participants (as defined below). Insurer will bear the
costs of preparing, filing with the SEC and setting for printing, the Separate
Account's prospectus, statement of additional information and any amendments or
supplements thereto (collectively, the "Separate Account Prospectus"), any
periodic reports to owners, annuitants or participants under the Contracts
(collectively, "Participants"), and other Participant communications. The Fund
and Insurer each will bear the costs of printing in quantity and delivering to
existing Participants the documents as to which it bears the cost of preparation
as set forth above in this Section 3.3, it being understood that reasonable cost
allocations will be made in cases where any such Fund and Insurer documents are
printed or mailed on a combined or coordinated basis. If requested by Insurer,
the Fund will provide annual Prospectus text to Insurer on diskette for printing
and binding with the Separate Account Prospectus.
3.4 Other Sales-Related Expenses. Expenses of distributing the Portfolio's
shares and the Contracts will be paid by Contracts Distributor and other
parties, as they shall determine by separate agreement.
3.5 Parties to Cooperate. The Adviser, Insurer, Contracts Distributor, and
Distributor each agrees to cooperate with the others, as applicable, in
arranging to print, mail and/or deliver combined or coordinated prospectuses or
other materials of the Fund and Separate Account.
Section 4. Legal Compliance
4.1 Tax Laws.
(a) The Adviser will use its best efforts to qualify and to maintain
qualification of each Portfolio as a regulated investment company ("RIC") under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"), and
the Adviser or Distributor will notify Insurer immediately upon having a
reasonable basis for believing that a Portfolio has ceased to so qualify or that
it might not so qualify in the future.
(b) Insurer represents that it believes, in good faith, that the Contracts will
be treated as annuity contracts under applicable provisions of the Code and that
it will make every effort to maintain such treatment. Insurer will notify the
Fund and Distributor immediately upon having a reasonable basis for believing
that any of the Contracts have ceased to be so treated or that they might not be
so treated in the future.
(c) The Fund will use its best efforts to comply and to maintain each
Portfolio's compliance with the diversification requirements set forth in
Section 817(h) of the Code and Section 1.817-5(b) of the regulations under the
Code, and the Fund, Adviser or Distributor will notify Insurer immediately upon
having a reasonable basis for believing that a Portfolio has ceased to so comply
or that a Portfolio might not so comply in the future.
(d) Insurer represents that it believes, in good faith, that the Separate
Account is a "segregated asset account" and that interests in the Separate
Account are offered exclusively through the purchase of or transfer into a
"variable contract," within the meaning of such terms under Section 817(h) of
the Code and the regulations thereunder. Insurer will make every effort to
continue to meet such definitional requirements, and it will notify the Fund and
Distributor immediately upon having a reasonable basis for believing that such
requirements have ceased to be met or that they might not be met in the future.
(e) The Adviser will manage the Fund as a RIC in compliance with Subchapter M of
the Code and will use its best efforts to manage to be in compliance with
Section 817(h) of the Code and regulations thereunder. The Fund has adopted and
will maintain procedures for ensuring that the Fund is managed in compliance
with Subchapter M and Section 817(h) and regulations thereunder.
(f) Should the Distributor or Adviser become aware of a failure of Fund, or any
of its Portfolios, to be in compliance with Subchapter M of the Code or Section
817(h) of the Code and regulations thereunder, they represent and agree that
they will immediately notify Insurer of such in writing.
4.2 Insurance and Certain Other Laws. (a) The Adviser will use its best efforts
to cause the Fund to comply with any applicable state insurance laws or
regulations, to the extent specifically requested in writing by Insurer. If it
cannot comply, it will so notify Insurer in writing.
(b) Insurer represents and warrants that (i) it is an insurance company duly
organized, validly existing and in good standing under the laws of the State of
Indiana and has full corporate power, authority and legal right to execute,
deliver and perform its duties and comply with its obligations under this
Agreement, (ii) it has legally and validly established and maintains the
Separate Account as a segregated asset account under Indiana Law, and (iii) the
Contracts comply in all material respects with all other applicable federal and
state laws and regulations.
(c) Insurer and Contracts Distributor represent and warrant that Contracts
Distributor is a business corporation duly organized, validly existing, and in
good standing under the laws of the State of Indiana and has full corporate
power, authority and legal right to execute, deliver, and perform its duties and
comply with its obligations under this Agreement.
(d) Distributor represents and warrants that it is a business corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware and has full corporate power, authority and legal right to execute,
deliver, and perform its duties and comply with its obligations under this
Agreement.
(e) Distributor represents and warrants that the Fund is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Maryland and has full power, authority, and legal right to execute, deliver, and
perform its duties and comply with its obligations under this Agreement.
(f) Adviser represents and warrants that it is a limited partnership, duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has full power, authority, and legal right to execute, deliver, and
perform its duties and comply with its obligations under this Agreement.
4.3 Securities Laws. (a) Insurer represents and warrants that (i) interests in
the Separate Account pursuant to the Contracts will be registered under the 1933
Act to the extent required by the 1933 Act and the Contracts will be duly
authorized for issuance and sold in compliance with [State] law applicable state
laws, (ii) the Separate Account is and will remain registered under the 1940 Act
to the extent required by the 1940 Act, (iii) the Separate Account does and will
comply in all material respects with the requirements of the 1940 Act and the
rules thereunder, (iv) the Separate Account's 1933 Act registration statement
relating to the Contracts, together with any amendments thereto, will, at all
times comply in all material respects with the requirements of the 1933 Act and
the rules thereunder, and (v) the Separate Account Prospectus will at all times
comply in all material respects with the requirements of the 1933 Act and the
rules thereunder.
(b) The Adviser and Distributor represent and warrant that (i) Fund shares sold
pursuant to this Agreement will be registered under the 1933 Act to the extent
required by the 1933 Act and duly authorized for issuance and sold in compliance
with Maryland law, (ii) the Fund is and will remain registered under the 1940
Act to the extent required by the 1940 Act, (iii) the Fund will amend the
registration statement for its shares under the 1933 Act and itself under the
1940 Act from time to time as required in order to effect the continuous
offering of its shares, (iv) the Fund does and will comply in all material
respects with the requirements of the 1940 Act and the rules thereunder, (v) the
Fund's 1933 Act registration statement, together with any amendments thereto,
will at all times comply in all material respects with the requirements of the
1933 Act and rules thereunder, and (vi) the Fund Prospectus will at all times
comply in all material respects with the requirements of the 1933 Act and the
rules thereunder.
(c) The Fund will register and qualify its shares for sale in accordance with
the laws of any state or other jurisdiction only if and to the extent reasonably
deemed advisable by the Fund, Insurer or any other life insurance company
utilizing the Fund.
(d) Distributor and Contracts Distributor each represents and warrants that it
is registered as a broker-dealer with the SEC under the Securities Exchange Act
of 1934, as amended, and is a member in good standing of the Financial Industry
Regulatory Authority (the "FINRA").
4.4 Notice of Certain Proceedings and Other Circumstances. (a) Distributor or
the Fund shall immediately notify Insurer of (i) the issuance by any court or
regulatory body of any stop order, cease and desist order, or other similar
order with respect to the Fund's registration statement under the 1933 Act or
the Fund Prospectus, (ii) any request by the SEC for any amendment to such
registration statement or Fund Prospectus, (iii) the initiation of any
proceedings for that purpose or for any other purpose relating to the
registration or offering of the Fund's shares, or (iv) any other action or
circumstances that may prevent the lawful offer or sale of Fund shares in any
state or jurisdiction, including, without limitation, any circumstances in which
(x) the Fund's shares are not registered and, in all material respects, issued
and sold in accordance with applicable state and federal law or (y) such law
precludes the use of such shares as an underlying investment medium of the
Contracts issued or to be issued by Insurer. Distributor and the Fund will make
every reasonable effort to prevent the issuance of any such stop order, cease
and desist order or similar order and, if any such order is issued, to obtain
the lifting thereof at the earliest possible time.
(b) Insurer and Contracts Distributor shall immediately notify the Fund of
(i)the issuance by any court or regulatory body of any stop order, cease and
desist order or similar order with respect to the Separate Account's
registration statement under the 1933 Act relating to the Contracts or the
Separate Account Prospectus, (ii) any request by the SEC for any amendment to
such registration statement or Separate Account Prospectus, (iii)the initiation
of any proceedings for that purpose or for any other purpose relating to the
registration or offering of the Separate Account interests pursuant to the
Contracts, or (iv) any other action or circumstances that may prevent the lawful
offer or sale of said interests in any state or jurisdiction, including, without
limitation, any circumstances in which said interests are not registered and, in
all material respects, issued and sold in accordance with applicable state and
federal law. Insurer and Contracts Distributor will make every reasonable effort
to prevent the issuance of any such stop order, cease and desist order or
similar order and, if any such order is issued, to obtain the lifting thereof at
the earliest possible time.
4.5 Insurer to Provide Documents. Upon request, Insurer will provide the Fund
and the Distributor one complete copy of SEC registration statements, Separate
Account Prospectuses, reports, any preliminary and final voting instruction
solicitation material, applications for exemptions, requests for no-action
letters, and amendments to any of the above, that relate to the Separate Account
or the Contracts, contemporaneously with the filing of such document with the
SEC or other regulatory authorities.
4.6 Fund to Provide Documents. Upon request, the Fund will provide to Insurer
one complete copy of SEC registration statements, Fund Prospectuses, reports,
any preliminary and final proxy material, applications for exemptions, requests
for no-action letters, and all amendments to any of the above, that relate to
the Fund or its shares, contemporaneously with the filing of such document with
the SEC or other regulatory authorities.
4.7 Shareholder Information
(a) Agreement to Provide Information. The Insurer agrees to provide the
Distributor upon written request, the taxpayer identification number ("TIN"), if
known, of any or all Shareholder(s) of the account and the amount, date, name or
other identifier of any investment professional(s) associated with the
Shareholder(s) or account (if known), and transaction type (purchase,
redemption, transfer, or exchange) of every purchase, redemption, transfer, or
exchange of Shares held through an account maintained by the Insurer during the
period covered by the request.
(1) Period Covered by Request. Requests must set forth a specific period, not to
exceed 120 days from the date of the request, for which transaction information
is sought. The Distributor may request transaction information older than 120
days from the date of the request as it deems necessary to investigate
compliance with policies established by the Fund for purpose of eliminating or
reducing any dilution of the value of the outstanding shares issued by the Fund.
(2) Form and Timing of Response. The Insurer agrees to transmit the requested
information that is on its books and records to the Distributor or their
designee promptly, but in any event not later than 10 business days, after
receipt of a request. If the requested information is not on the Insurer's books
and records, the Insurer agrees to use reasonable efforts to: (i) provide or
arrange to provide to the Distributor the requested information regarding
Shareholders who hold an account with an indirect intermediary; or (ii) if
directed by the Distributor, block further purchase of Fund Shares from such
indirect intermediary. In such instance, the Insurer agrees to inform the
Distributor whether it plans to perform (i) or (ii). Responses required by this
paragraph must be communicated in writing and in a format mutually agreed upon
by the parties. To the extent practicable, the format for any transaction
information provided to the Distributor should be consistent with the NSCC
Standardized Data Reporting Format. For purposes of this provision "indirect
intermediary" has the same meaning as in SEC Rule 22c-2 under the Investment
Company Act of 1940.
(3) Limitations on Use of Information. The Distributor agrees not to use the
information received for marketing or any other similar purpose without prior
written consent of the Insurer.
(b) Agreement to Restrict Trading. The Insurer agrees to execute written
instructions from the Distributor to restrict or prohibit further purchase or
exchanges of Shares by a Shareholder that has been identified by the Distributor
as having engaged in transactions of the Fund's Shares (directly or indirectly
through the Insurer's account) that violate policies established by the
Distributor for the purpose of eliminating or reducing any dilution of the value
of the outstanding Shares issued by the Fund.
(1) Form of Instructions. Instructions must include the TIN, if known, and the
specific restriction(s) to be executed. If the TIN is not known, the
instructions must include an equivalent identifying number of the Shareholder(s)
or account(s) or other agreed upon information to which the instruction relates.
(2) Timing of Response. The Insurer agrees to execute instructions as soon as
reasonably practicable, but not later than five business days after receipt of
the instructions by the Insurer.
(3) Confirmation by the Insurer. The Insurer must provide written confirmation
to the Distributor that instructions have been executed. The Insurer agrees to
provide confirmation as soon as reasonably practicable, but no later than ten
business days after the instructions have been executed.
(c) Definitions. For purposes of this Section:
(1) The term "Shares" means the interests of the Shareholders corresponding to
the redeemable securities of record issued by the Fund under the Investment
Company Act of 1940 that are held by the Insurer.
(2) The term "Shareholder" means the holder of interests in a variable annuity
or a variable life insurance contract issued by the Insurer.
(3) The term "written" includes electronic writings and facsimile transmissions.
Section 5. Mixed and Shared Funding
5.1 General. The Fund has obtained an order exempting it from certain provisions
of the 1940 Act and rules thereunder so that the Fund is available for
investment by certain other entities, including, without limitation, separate
accounts funding variable life insurance policies and separate accounts of
insurance companies unaffiliated with Insurer ("Mixed and Shared Funding
Order"). The Parties recognize that the SEC has imposed terms and conditions for
such orders that are substantially identical to many of the provisions of this
Section 5.
5.2 Disinterested Directors. The Fund agrees that its Board of Directors shall
at all times consist of directors a majority of whom (the "Disinterested
Directors") are not interested persons of Adviser or Distributor within the
meaning of Section 2(a)(19) of the 1940 Act.
5.3 Monitoring for Material Irreconcilable Conflicts. The Fund agrees that its
Board of Directors will monitor for the existence of any material irreconcilable
conflict between the interests of the participants in all separate accounts of
life insurance companies utilizing the Fund, including the Separate Account.
Insurer agrees to inform the Board of Directors of the Fund of the existence of
or any potential for any such material irreconcilable conflict of which it is
aware. The concept of a "material irreconcilable conflict" is not defined by the
1940 Act or the rules thereunder, but the Parties recognize that such a conflict
may arise for a variety of reasons, including, without limitation:
(a) an action by any state insurance or other 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
interpretative 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 any Portfolio are being managed;
(e) a difference in voting instructions given by variable annuity contract and
variable life insurance contract participants or by participants of different
life insurance companies utilizing the Fund; or
(f) a decision by a life insurance company utilizing the Fund to disregard the
voting instructions of participants.
Insurer will assist the Board of Directors in carrying out its responsibilities
by providing the Board of Directors with all information reasonably necessary
for the Board of Directors to consider any issue raised, including information
as to a decision by Insurer to disregard voting instructions of Participants.
5.4 Conflict Remedies. (a) It is agreed that if it is determined by a majority
of the members of the Board of Directors or a majority of the Disinterested
Directors that a material irreconcilable conflict exists, Insurer and the other
life insurance companies utilizing the Fund will, at their own expense and to
the extent reasonably practicable (as determined by a majority of the
Disinterested Directors), take whatever steps are necessary to remedy or
eliminate the material irreconcilable conflict, which steps may include, but are
not limited to:
(i) withdrawing the assets allocable to some or all of the separate accounts
from the Fund or any Portfolio and reinvesting such assets in a different
investment medium, including another Portfolio of the Fund, or submitting the
question whether such segregation should be implemented to a vote of all
affected participants and, as appropriate, segregating the assets of any
particular group (e.g., annuity contract owners or participants, life insurance
contract owners or all contract owners and participants of one or more life
insurance companies utilizing the Fund) that votes in favor of such segregation,
or offering to the affected contract owners or participants the option of making
such a change; and
(ii) establishing a new registered investment company of the type defined as a
"Management Company" in Section 4(3) of the 1940 Act or a new separate account
that is operated as a Management Company.
(b) If the material irreconcilable conflict arises because of Insurer's decision
to disregard Participant voting instructions and that decision represents a
minority position or would preclude a majority vote, Insurer may be required, at
the Fund's election, to withdraw the Separate Account's investment in the Fund.
No charge or penalty will be imposed as a result of such withdrawal. Any such
withdrawal must take place within six months after the Fund gives notice to
Insurer that this provision is being implemented, and until such withdrawal
Distributor and the Fund shall continue to accept and implement orders by
Insurer for the purchase and redemption of shares of the Fund.
(c) If a material irreconcilable conflict arises because a particular state
insurance regulator's decision applicable to Insurer conflicts with the majority
of other state regulators, then Insurer will withdraw the Separate Account's
investment in the Fund within six months after the Fund's Board of Directors
informs Insurer that it has determined that such decision has created a material
irreconcilable conflict, and until such withdrawal Distributor and Fund shall
continue to accept and implement orders by Insurer for the purchase and
redemption of shares of the Fund.
(d) Insurer agrees that any remedial action taken by it in resolving any
material irreconcilable conflict will be carried out at its expense and with a
view only to the interests of Participants.
(e) For purposes hereof, a majority of the Disinterested Directors will
determine whether or not any proposed action adequately remedies any material
irreconcilable conflict. In no event, however, will the Fund or Distributor be
required to establish a new funding medium for any Contracts. Insurer will not
be required by the terms hereof to establish a new funding medium for any
Contracts if an offer to do so has been declined by vote of a majority of
Participants materially adversely affected by the material irreconcilable
conflict.
5.5 Notice to Insurer. The Fund will promptly make known in writing to Insurer
the Board of Directors' determination of the existence of a material
irreconcilable conflict, a description of the facts that give rise to such
conflict and the implications of such conflict.
5.6 Information Requested by Board of Directors. Insurer and the Fund will at
least annually submit to the Board of Directors of the Fund such reports,
materials or data as the Board of Directors may reasonably request so that the
Board of Directors may fully carry out the obligations imposed upon it by the
provisions hereof, and said reports, materials and data will be submitted at any
reasonable time deemed appropriate by the Board of Directors. All reports
received by the Board of Directors of potential or existing conflicts, and all
Board of Directors actions with regard to determining the existence of a
conflict, notifying life insurance companies utilizing the Fund of a conflict,
and determining whether any proposed action adequately remedies a conflict, will
be properly recorded in the minutes of the Board of Directors or other
appropriate records, and such minutes or other records will be made available to
the SEC upon request.
5.7 Compliance with SEC Rules. If, at any time during which the Fund is serving
an investment medium for variable life insurance policies, 1940 Act Rules
6e-3(T) or, if applicable, 6e-2 are amended or Rule 6e-3 is adopted to provide
exemptive relief with respect to mixed and shared funding, the Parties agree
that they will comply with the terms and conditions thereof and that the terms
of this Section 5 shall be deemed modified if and only to the extent required in
order also to comply with the terms and conditions of such exemptive relief that
is afforded by any of said rules that are applicable.
Section 6. Termination
6.1 Events of Termination. Subject to Section 6.4 below, this Agreement will
terminate as to a Portfolio:
(a) at the option of Insurer or Distributor upon at least six months advance
written notice to the other Parties, or
(b) at the option of the Fund upon (i) at least sixty days advance written
notice to the other parties, and (ii) approval by (x) a majority of the
disinterested Directors upon a finding that a continuation of this Contract is
contrary to the best interests of the Fund, or (y) a majority vote of the shares
of the affected Portfolio in the corresponding Division of the Separate Account
(pursuant to the procedures set forth in Section 10 of this Agreement for voting
Trust shares in accordance with Participant instructions).
(c) at the option of the Fund upon institution of formal proceedings against
Insurer or Contracts Distributor by the FINRA, the SEC, any state insurance
regulator or any other regulatory body regarding Insurer's obligations under
this Agreement or related to the sale of the Contracts, the operation of the
Separate Account, or the purchase of the Fund shares, if, in each case, the Fund
reasonably determines that such proceedings, or the facts on which such
proceedings would be based, have a material likelihood of imposing material
adverse consequences on the Portfolio to be terminated; or
(d) at the option of Insurer upon institution of formal proceedings against the
Fund, Adviser, or Distributor by the FINRA, the SEC, or any state insurance
regulator or any other regulatory body regarding the Fund's, Adviser's or
Distributor's obligations under this Agreement or related to the operation or
management of the Fund or the purchase of Fund shares, if, in each case, Insurer
reasonably determines that such proceedings, or the facts on which such
proceedings would be based, have a material likelihood of imposing material
adverse consequences on Insurer, Contracts Distributor or the Division
corresponding to the Portfolio to be terminated; or
(e) at the option of any Party in the event that (i) the Portfolio's shares are
not registered and, in all material respects, issued and sold in accordance with
any applicable state and federal law or (ii) such law precludes the use of such
shares as an underlying investment medium of the Contracts issued or to be
issued by Insurer; or
(f) upon termination of the corresponding Division's investment in the Portfolio
pursuant to Section 5 hereof; or
(g) at the option of Insurer if the Portfolio ceases to qualify as a RIC under
Subchapter M of the Code or under successor or similar provisions; or
(h) at the option of Insurer if the Portfolio fails to comply with Section
817(h) of the Code or with successor or similar provisions; or
(i) at the option of Insurer if Insurer reasonably believes that any change in a
Fund's investment adviser or investment practices will materially increase the
risks incurred by Insurer.
6.2 Funds to Remain Available. Except (i) as necessary to implement
Participant-initiated transactions, (ii) as required by state insurance laws or
regulations, (iii) as required pursuant to Section 5 of this Agreement, or (iv)
with respect to any Portfolio as to which this Agreement has terminated, Insurer
shall not (x) redeem Fund shares attributable to the Contracts, or (y) prevent
Participants from allocating payments to or transferring amounts from a
Portfolio that was otherwise available under the Contracts, until, in either
case, 90 calendar days after Insurer shall have notified the Fund or Distributor
of its intention to do so.
6.3 Survival of Warranties and Indemnifications. All warranties and
indemnifications will survive the termination of this Agreement.
6.4 Continuance of Agreement for Certain Purposes. Notwithstanding any
termination of this Agreement, the Distributor shall continue to make available
shares of the Portfolios pursuant to the terms and conditions of this Agreement,
for all Contracts in effect on the effective date of termination of this
Agreement (the "Existing Contracts"), except as otherwise provided under
Section 5 of this Agreement. Specifically, and without limitation, the
Distributor shall facilitate the sale and purchase of shares of the Portfolios
as necessary in order to process premium payments, surrenders and other
withdrawals, and transfers or reallocations of values under Existing Contracts.
Section 7. Parties to Cooperate Respecting Termination
The other Parties hereto agree to cooperate with and give reasonable assistance
to Insurer in taking all necessary and appropriate steps for the purpose of
ensuring that the Separate Account owns no shares of a Portfolio after the Final
Termination Date with respect thereto.
Section 8. Assignment
This Agreement may not be assigned by any Party, except with the written consent
of each other Party.
Section 9. Notices
Notices and communications required or permitted by Section 2 hereof will be
given by means mutually acceptable to the Parties concerned. Each other notice
or communication required or permitted by this Agreement 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:
American United Life Insurance Company
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx
FAX: 000-000-0000
OneAmerica Securities, Inc.
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Nick Filing
FAX: 000-000-0000
AllianceBernstein Investments, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx XX 00000
Attn.: Xxxxxx X. Xxxxxxx
FAX: (000) 000-0000
AllianceBernstein L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx XX 00000
Attn: Xxxxxx X. Xxxxxxx
FAX: (000) 000-0000
Section 10. Voting Procedures
Subject to the cost allocation procedures set forth in Section 3 hereof, Insurer
will distribute all proxy material furnished by the Fund to Participants and
will vote Fund shares in accordance with instructions received from
Participants. Insurer will vote Fund shares that are (a) not attributable to
Participants or (b) attributable to Participants, but for which no instructions
have been received, in the same proportion as Fund shares for which said
instructions have been received from Participants. Insurer agrees that it will
disregard Participant voting instructions only to the extent it would be
permitted to do so pursuant to Rule 6e-3 (T)(b)(15)(iii) under the 1940 Act if
the Contracts were variable life insurance policies subject to that rule. Other
participating life insurance companies utilizing the Fund will be responsible
for calculating voting privileges in a manner consistent with that of Insurer,
as prescribed by this Section 10.
Section 11. Foreign Tax Credits
The Adviser agrees to consult in advance with Insurer concerning any decision to
elect or not to elect pursuant to Section 853 of the Code to pass through the
benefit of any foreign tax credits to the Fund's shareholders.
Section 12. Indemnification
12.1 Of Fund, Distributor and Adviser by Insurer.
(a) Except to the extent provided in Sections 12.1(b) and 12.1(c), below,
Insurer agrees to indemnify and hold harmless the Fund, Distributor and Adviser,
each of their directors and officers, and each person, if any, who controls the
Fund, Distributor or Adviser within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 12. 1)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of Insurer) or actions in respect thereof
(including, to the extent reasonable, 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
actions are related to the sale, acquisition, or holding of the Fund's shares
and:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Separate Account's 1933 Act
registration statement, the Separate Account Prospectus, the Contracts or, to
the extent prepared by Insurer or Contracts Distributor, sales literature or
advertising for the 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 Insurer or Contracts
Distributor by or on behalf of the Fund, Distributor or Adviser for use in the
Separate Account's 1933 Act registration statement, the Separate Account
Prospectus, the Contracts, or sales literature or advertising (or any amendment
or supplement to any of the foregoing); or
(ii) arise out of or as a result of any other statements or representations
(other than statements or representations contained in the Fund's 1933 Act
registration statement, Fund Prospectus, sales literature or advertising of the
Fund, or any amendment or supplement to any of the foregoing, not supplied for
use therein by or on behalf of Insurer or Contracts Distributor) or the
negligent, illegal or fraudulent conduct of Insurer or Contracts Distributor or
persons under their control (including, without limitation, their employees and
"Associated Persons," as that term is defined in paragraph (m) of Article I of
the FINRA's By-Laws), in connection with the sale or distribution of the
Contracts or Fund shares; or
(iii) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Fund's 1933 Act registration
statement, Fund Prospectus, sales literature or advertising of the Fund, or any
amendment or supplement to any of the foregoing, 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 and in conformity with information furnished
to the Fund, Adviser or Distributor by or on behalf of Insurer or Contracts
Distributor for use in the Fund's 1933 Act registration statement, Fund
Prospectus, sales literature or advertising of the Fund, or any amendment or
supplement to any of the foregoing; or
(iv) arise as a result of any failure by Insurer or Contracts Distributor to
perform the obligations, provide the services and furnish the materials required
of them under the terms of this Agreement.
(b) Insurer shall not be liable under this Section 12.1 with respect to any
losses, claims, damages, liabilities or actions to which an Indemnified Party
would otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance by that Indemnified Party of its duties or by
reason of that Indemnified Party's reckless disregard of obligations or duties
under this Agreement or to Distributor or to the Fund.
(c) Insurer shall not be liable under this Section 12.1 with respect to any
action against an Indemnified Party unless the Fund, Distributor or Adviser
shall have notified Insurer in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
action shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify Insurer of any such action shall not relieve
Insurer from any liability which it may have to the Indemnified Party against
whom such action is brought otherwise than on account of this Section 12. 1. In
case any such action is brought against an Indemnified Party, Insurer shall be
entitled to participate, at its own expense, in the defense of such action.
Insurer also shall be entitled to assume the defense thereof, with counsel
approved by the Indemnified Party named in the action, which approval shall not
be unreasonably withheld. After notice from Insurer to such Indemnified Party of
Insurer's election to assume the defense thereof, the Indemnified Party will
cooperate fully with Insurer and shall bear the fees and expenses of any
additional counsel retained by it, and Insurer will not be liable to such
Indemnified Party under this Agreement for any legal or other expenses
subsequently incurred by such Indemnified Party independently in connection with
the defense thereof, other than reasonable costs of investigation.
12.2 Indemnification of Insurer and Contracts Distributor by Adviser.
(a) Except to the extent provided in Sections 12.2(d) and 12.2(e), below,
Adviser agrees to indemnify and hold harmless Insurer and Contracts Distributor,
each of their directors and officers, and each person, if any, who controls
Insurer or Contracts Distributor within the meaning of Section 15 of the 1933
Act (collectively, the "Indemnified Parties" for purposes of this Section 12.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of Adviser) or actions in respect thereof
(including, to the extent reasonable, 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 actions are
related to the sale, acquisition, or holding of the Fund's shares and:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Fund's 1933 Act registration
statement, Fund Prospectus, sales literature or advertising of the Fund or, to
the extent not prepared by Insurer or Contracts Distributor, sales literature or
advertising for the 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 Distributor, Adviser or the
Fund by or on behalf of Insurer or Contracts Distributor for use in the Fund's
1933 Act registration statement, Fund Prospectus, or in sales literature or
advertising (or any amendment or supplement to any of the foregoing); or
(ii) arise out of or as a result of any other statements or representations
(other than statements or representations contained in the Separate Account's
1933 Act registration statement, Separate Account Prospectus, sales literature
or advertising for the Contracts, or any amendment or supplement to any of the
foregoing, not supplied for use therein by or on behalf of Distributor, Adviser,
or the Fund) or the negligent, illegal or fraudulent conduct of the Fund,
Distributor, Adviser or persons under their control (including, without
limitation, their employees and Associated Persons), in connection with the sale
or distribution of the Contracts or Fund shares; or
(iii) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Separate Account's 1933 Act
registration statement, Separate Account Prospectus, sales literature or
advertising covering the Contracts, or any amendment or supplement to any of the
foregoing, 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 statement or omission was made in reliance upon and in
conformity with information furnished to Insurer or Contracts Distributor by or
on behalf of the Fund, Distributor or Adviser for use in the Separate Account's
1933 Act registration statement, Separate Account Prospectus, sales literature
or advertising covering the Contracts, or any amendment or supplement to any of
the foregoing; or
(iv) arise as a result of any failure by the Fund, Adviser or Distributor to
perform the obligations, provide the services and furnish the materials required
of them under the terms of this Agreement;
(b) Except to the extent provided in Sections 12.2(d) and 12.2(e) hereof,
Adviser agrees to indemnify and hold harmless the Indemnified Parties from and
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement thereof with, except as set forth in Section 12.2(c) below, the
written consent of Adviser) or actions in respect thereof (including, to the
extent reasonable, legal and other expenses) to which the Indemnified Parties
may become subject directly or indirectly under any statute, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or actions
directly or indirectly result from or arise out of the failure of any Portfolio
to operate as a regulated investment company in compliance with (i) Subchapter M
of the Code and regulations thereunder and (ii) Section 817(h) of the Code and
regulations thereunder (except to the extent that such failure is caused by
Insurer), including, without limitation, any income taxes and related penalties,
rescission charges, liability under state law to Contract owners or Participants
asserting liability against Insurer or Contracts Distributor pursuant to the
Contracts, the costs of any ruling and closing agreement or other settlement
with the Internal Revenue Service, and the cost of any substitution by Insurer
of shares of another investment company or portfolio for those of any adversely
affected Portfolio as a funding medium for the Separate Account that Insurer
deems necessary or appropriate as a result of the noncompliance.
(c) The written consent of Adviser referred to in Section 12.2(b) above shall
not be required with respect to amounts paid in connection with any ruling and
closing agreement or other settlement with the Internal Revenue Service.
(d) Adviser shall not be liable under this Section 12.2 with respect to any
losses, claims; damages, liabilities or actions to which an Indemnified Party
would otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance by that Indemnified Party of its duties or by
reason of such Indemnified Party's reckless disregard of its obligations and
duties under this Agreement or to Insurer, Contracts Distributor or the Separate
Account.
(e) Adviser shall not be liable under this Section 12.2 with respect to any
action against an Indemnified Party unless Insurer or Contracts Distributor
shall have notified Adviser in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
action shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify Adviser of any such action shall not relieve
Adviser from any liability which it may have to the Indemnified Party against
whom such action is brought otherwise than on account of this Section 12.2. In
case any such action is brought against an Indemnified Party, Adviser will be
entitled to participate, at its own expense, in the defense of such action.
Adviser also shall be entitled to assume the defense thereof (which shall
include, without limitation, the conduct of any ruling request and closing
agreement or other settlement proceeding with the Internal Revenue Service),
with counsel approved by the Indemnified Party named in the action, which
approval shall not be unreasonably withheld. After notice from Adviser to such
Indemnified Party of Adviser's election to assume the defense thereof, the
Indemnified Party will cooperate fully with Adviser and shall bear the fees and
expenses of any additional counsel retained by it, and Adviser will not be
liable to such Indemnified Party under this Agreement for any legal or other
expenses subsequently incurred by such Indemnified Party independently in
connection with the defense thereof, other than reasonable costs of
investigation.
12.3 Effect of Notice. Any notice given by the indemnifying Party to an
Indemnified Party referred to in Section 12.1(c) or 12.2(e) above of
participation in or control of any action by the indemnifying Party will in no
event be deemed to be an admission by the indemnifying Party of liability,
culpability or responsibility, and the indemnifying Party will remain free to
contest liability with respect to the claim among the Parties or otherwise.
Section 13. Applicable Law
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.
Section 14. Execution in Counterparts
This Agreement may be executed simultaneously in two or more counterparts, each
of which taken together will constitute one and the same instrument.
Section 15. 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.
Section 16. 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.
Section 17. Restrictions on Sales of Fund Shares
Insurer agrees that the Fund will be permitted (subject to the other terms of
this
Agreement) to make its shares available to separate accounts of other life
insurance companies.
Section 18. Headings
The Table of Contents and headings used in this Agreement are for purposes of
reference only and shall not limit or define the meaning of the provisions of
this Agreement.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in
their names and on their behalf by and through their duly authorized officers
signing below.
AMERICAN UNITED LIFE INSURANCE COMPANY
By:
Name:
Title:
ONEAMERICA SECURITIES, INC.
By:
Name:
Title:
ALLIANCEBERNSTEIN L.P.
By:
Name:
Title:
ALLIANCEBERNSTEIN INVESTMENTS, INC.
By:
Name:
Title:
SCHEDULE A
American United Life Contracts
Voyage Protector - Individual Flexible Premium Deferred Variable Annuity
StarPoint - Individual Flexible Premium Deferred Variable Annuity
DirectPoint -Individual Flexible Premium Deferred Variable Annuity
SelectPoint - Individual Flexible Premium Deferred Variable Annuity
IVA - AUL American Individual Unit Trust Individual Variable Annuity Contracts
FPVUL -Flexible Premium Adjustable Variable Life
SPVUL - Modified Single Premium Variable Life
Fund Name Class
AllianceBernstein VPS International Growth Portfolio A
AllianceBernstein VPS International Value Portfolio A
AllianceBernstein VPS Small/Mid Cap Value Portfolio A
One America Class A Part Agr 5 1 2008 FINAL
1172815v1
