FUND PARTICIPATION AGREEMENT
American United Life Insurance Company (hereinafter called "AUL"), for
itself and on behalf of one or more separate accounts of AUL (hereinafter called
"Separate Accounts"), INVESCO Funds Group, Inc. (hereinafter called
"Distributor") and INVESCO Dynamics Fund, Inc. (hereinafter called "Fund"), for
good and valuable consideration, hereby agree on this 14th day of March, 1995,
that shares of the Fund shall be made available to serve as an underlying
investment medium for Group Variable Annuity Contracts (hereinafter called
"Contract(s)") to be offered by AUL subject to the following provisions:
1. AUL represents and warrants that: (i) it has established the Separate
Accounts as separate accounts under Indiana law; (ii) AUL has registered
the Separate Accounts as unit investment trusts under the Investment
Company Act of 1940, as amended (the "1940 Act") to serve as an investment
vehicle for certain Contracts or, alternatively, has not registered one
or more of the Separate Accounts in proper reliance upon an exclusion from
registration under the 1940 Act; and (iii) the Contracts provide for the
allocation of net amounts received by AUL to separate subaccounts of the
Separate Accounts, for investment in the shares of specified investment
companies selected among those companies available through the Separate
Accounts to act as underlying investment media.
2. AUL agrees to make every reasonable effort to market its Contracts. In
marketing its Contracts, AUL will comply in all material respects with
applicable state insurance and federal and state securities laws.
3. Distributor represents that it is registered as a broker-dealer under the
Securities Exchange Act of 1934, and may properly cause Fund shares to be
made available for the purposes of this Agreement pursuant to a general
distribution agreement between the Fund and the Distributor.
4. The Fund, or any such other agency as specified by the Fund, will use its
best efforts to provide net asset value, dividend information and capital
gain information to AUL on each day on which the Fund is priced (the
"Price Date"). The Distributor appoints AUL as its agent for the limited
purpose of accepting orders for Fund shares. AUL agrees to notify
Distributor by 10:00 a.m., Eastern Time, on the next business day following
the Price Date of the net amount of orders that were placed by
Contractholders in each Separate Account by the close of the New York Stock
Exchange on the Price Date. Payment for net purchases will be wired to a
custodial account designated by the Fund by 12:00 noon, Eastern Time, on
the business day following the Price Date. Likewise, orders for
liquidation of shares of the Fund will be paid in cash and wired from the
Fund's custodial account to an account designated by AUL. Such orders shall
ordinarily be paid by 12:00 noon, Eastern Time, on the business day
following the Price Date. However, the Fund reserves the right to postpone
payment upon redemption consistent with Section 22(e) of the 1940 Act.
Subject to its receipt of orders and, in the case of purchase orders,
federal funds, prior to the foregoing deadlines, the Fund will execute
orders at the net asset value as determined as of the business day
following the Price Date. However, the Fund reserves the right to postpone
payment upon redemption consistent with Section 22(e) of the 1940 Act.
Subject to its receipt of orders and, in the case of purchase orders,
federal funds, prior to the foregoing deadlines, the Fund will execute
orders at the net asset value as determined as of the close of trading on
the Price Date, except that with respect to orders for redemption, the
Fund reserves the right to suspend the right of redemption, consistent
with Section 22(e) of the 1940 Act and any rules thereunder. Dividends and
capital gains distributions shall be reinvested in additional shares at the
ex-date net asset value.
If the Fund provides incorrect share net asset value information, AUL
shall be entitled to an adjustment to the number of shares purchased or
redeemed to reflect the correct net asset value per share (and, if and
to the extent necessary, AUL shall make adjustments to the number of units
credited and/or unit values for the Contracts for the periods affected).
Any error in the calculation or reporting of net asset value per share,
dividend or capital gains information greater than or equal to $.01 per
share shall be reported promptly to AUL. Any error of a lesser amount
shall be corrected in the next business day's net asset value per share.
In the event adjustments are required to correct any error in the
computation of the Fund's net asset value per share, or dividend or capital
gain distribution, the Distributor or the Fund shall notify AUL promptly
after discovering the need for such adjustments. If an adjustment is
necessary to correct an error which has caused Contractholders to receive
less than the amount to which they are entitled, the Fund shall make
all necessary adjustments to the number of shares owned by the Separate
Accounts and distribute to the Separate Accounts the amount of the
underpayment. AUL will adjust the number of shares of the applicable sub-
account of each Contractholder and credit the appropriate amount of such
payment to each Contractholder. In no event shall AUL be liable to
Contractholders for any such adjustments or underpayment amounts. If
Contractholders have received amounts in excess of the amounts to which
they otherwise would have been entitled prior to an adjustment for an
error, the parties agree to discuss the situation and, where it is
mutually agreed that it would be reasonable to attempt to collect such
excess amounts from the Contractholders, AUL will make a good faith
attempt to collect such excess amounts. In no event shall AUL be
liable to the Fund or the Distributor for any such adjustments or
overpayment amounts, provided that the overpayment was not caused by AUL.
5. All expenses incident to the performance by Distributor or the Fund under
this Agreement shall be paid by Distributor or the Fund. The Fund shall pay
the cost of registration of its shares with the Securities and Exchange
Commission (the "SEC"). The Fund shall distribute to the Separate
Accounts its proxy material , periodic Fund reports to shareholders and
other material the Fund may require to be sent to participants. The Fund
shall pay the cost of qualifying Fund shares in states where required. The
Distributor shall provide the Separate Accounts with a reasonable quantity
of the Fund's prospectuses and sales literature upon request to be
used in connection with the transactions contemplated by this Agreement.
6. AUL and its agents shall make no representations concerning the Fund or
Fund shares except those contained in the then current registration
statement or prospectus of the Fund, in periodic reports or proxy
statements for the Fund, or in current printed sales literature prepared or
approved by Distributor, except with the prior permission of the
Distributor or its designee. The parties agree that total return
information of the Fund derived from net asset values and dividend
information provided by the Fund, from the prospectus or registration
statement of the Fund or from reports provided by the Fund or the
Distributor to AUL may be used by AUL in connection with the sale of the
Contracts without prior approval of the Distributor; however, AUL shall
be responsible for using such information in conformity with all
applicable laws and regulations including, without limitation,
disclosing that such total return information does not include charges and
expenses attributable to the Contracts and/or restating such information to
give effect to such charges and expenses on a pro forma basis.
7. a. Administrative services to participants shall be the responsibility of
AUL and shall not be the responsibility of Distributor or the Fund.
The Fund recognizes that AUL will be the sole shareholder of shares
of the Fund issued pursuant to the Contracts. Such arrangement will
result in aggregated share orders. Distributor recognizes that it
will derive a savings of administrative expense by virtue of having
a sole shareholder rather than multiple shareholders. In consideration
of the administrative savings resulting from such arrangement, wherein
AUL keeps deferred compensation plan participant records under the
Contracts, the Distributor agrees to pay to AUL such fees as are set
forth in Exhibit A attached hereto and hereby incorporated herein by
reference. AUL understands that the Fund and the Distributor have
entered into an agreement under a plan (the "Plan") pursuant to Rule
12b-1 under the 1940 Act for making payments to certain persons for
distribution assistance and shareholder servicing. AUL further
understands that the payment of the fees set forth in Exhibit A has
been authorized pursuant to the Plan, that the Plan has been
approved by the board of directors and shareholders of the Fund, and
that such fees will be paid out of the fees paid to Distributor as the
Fund's investment advisor or distributor, the Distributor's past
profits, or any other such source available to Distributor, and
shall be paid only so long as the Plan is in effect. Distributor
agrees to notify AUL promptly in the event that the Plan is
terminated or amended in a fashion that would impact Distributor's
obligations under this provision.
x. XXX shall, for all purposes herein, be deemed to be an independent
contractor and shall have, unless otherwise expressly provided or
authorized, no authority to act for or represent the Distributor
or the Fund in any way or otherwise be deemed an agent of the
Distributor or the Fund. The services to be provided by AUL to its
Separate Account customers include mailing and otherwise making
available to AUL's customers, shareholder communications including,
without limitation, prospectuses, proxy materials, shareholder
reports, unaudited semi-annual and audited annual financial
statements, and other notices; handling general shareholder relations
between the Fund and Separate Account customers; including, without
limitation, advising as to performance, yield being earned, dividends
declared, and providing assistance with other questions concerning the
Fund; and such other services and assistance to the Distributor with
respect to AUL's customers as the Distributor shall reasonably request
including, without limitation, assistance in maintaining shareholder
accounts and records.
8. This Agreement shall terminate as to the sale and issuance of Contracts:
a. at the option of AUL, Distributor or the Fund upon three months'
advance written notice to the other parties;
b. at the option of AUL, Distributor or the Fund, upon institution
of formal proceedings relating to (i) the marketing of the
Contracts, (ii) the Separate Accounts, (iii) AUL, (iv)
Distributor or (v) the Fund by the National Association of
Securities Dealers ("NASD"), the SEC or any other regulatory
body; provided, however, that the terminating party determines
in good faith that such proceedings will have a material adverse
effect upon the ability of the party which is the subject of such
proceedings to perform its obligations under this Agreement;
c. at the option of the Fund, the Distributor, or AUL, upon
termination of Distributor's general distribution agreement
with the Fund or upon termination of the Plan. Notice of such
termination shall be promptly furnished. This paragraph (c) shall
not be deemed to apply if, contemporaneously with such
termination, a new contract of substantially similar terms is
entered into between Distributor and the Fund or a new Plan
having substantially similar terms is approved;
d. upon assignment of this Agreement, at the option of any party not
making the assignment, unless made with the written consent of
the other parties; or
e. in the event interests in the Separate Accounts, the Contracts,
or Fund shares are not registered, issued or sold in conformity
with federal law or such law precludes the use of Fund shares as
an underlying investment medium of Contracts issued or to be
issued by AUL. Prompt notice shall be given by the terminating
party to the other parties in the event the conditions of this
provision occur.
9. Further, this Agreement may terminate upon a decision by AUL, in accordance
with regulations of the SEC, to substitute Fund shares with the shares of
another investment company for Contracts for which the Fund shares have
been selected to serve as the underlying investment medium. AUL will give
60 days' written notice to the Fund and the Distributor upon the
occurrence of the earlier of the following actions taken for the purpose
of substituting shares of the Fund: (1) an application made to the SEC,
(2) a proposed Contractowner vote, or (3) AUL's determination to substitute
Fund shares with the shares of another investment company.
10. Each notice required by this Agreement shall be given in writing and
delivered via overnight courier, facsimile transmission or certified
mail, return receipt requested, as follows:
If to AUL:
American United Life Insurance Company
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Associate General Counsel
If to the Distributor or to the Fund:
INVESCO Funds Group, Inc.
0000 Xxxx Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
or to such other address as may be specified in a written notice given to
the other parties. The date of service of any notice shall be the
date it is received by the recipient.
11. The Fund shall send to AUL, within ten days after the end of each month, a
monthly statement confirming all transactions made by the Fund on behalf of
the Separate Accounts.
12. AUL will distribute all proxy material furnished by the Fund to the extent
required by applicable law. For so long as the SEC interprets the 1940 Act
to require pass-through voting by insurance companies whose separate
accounts are registered as investment companies under the 1940 Act
("Registered Separate Accounts"), AUL shall vote shares of the Fund
held in Registered Separate Accounts at shareholder meetings of the Fund
in accordance with instructions timely received by AUL (or its designated
agent) from owners of Contracts funded by such Registered Separate
Accounts having a voting interest in the Fund. AUL shall vote shares of the
Fund held in Registered Separate Accounts that are attributable to the
Contracts as to which no timely instructions are received, as well as
shares held in such Registered Separate Account that are not
attributable to the Contracts and owned beneficially by AUL (resulting
from charges against the Contracts or otherwise), in the same proportion as
the votes cast by owners of the Contracts funded by the Separate Account
having a voting interest in the Fund from. whom instructions have been
timely received. AUL shall vote shares of the Fund held in its general
account or in any Separate Account that is not registered under the 1940
Act, if any, in its discretion or in the same proportion as the votes cast
with respect to shares of the Fund held in all Registered Separate Accounts
of AUL, in the aggregate. AUL will in no way recommend action in connection
with or oppose or interfere with the solicitation of proxies for the Fund
shares held for such Contractowners.
13. Each party hereto shall cooperate with the other parties and all
appropriate governmental authorities and shall permit authorities access
to its books and records in connection with any investigation or inquiry
relating to this Agreement or the transactions contemplated hereby.
14. x. XXX agrees to indemnify and hold harmless the Fund, Distributor and
each of their respective trustees, directors, officers, employees,
and each person, if any, who controls the Fund or the Distributor
within the meaning of the Securities Act of 1933 (the "1933 Act")
against any losses, claims, damages or liabilities to which the Fund,
Distributor or any such director, officer, employee or controlling
person may become subject under the 1933 Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon: (i) any wrongful
act or omission of AUL; (ii) any untrue statement or alleged untrue
statement of any material fact contained in the registration
statement, prospectus or sales literature of the Contracts, or 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 however, that AUL will not be liable
in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or
omission or alleged untrue statement or omission made in such
registration statement, prospectus or sales literature in conformity
with written information furnished to AUL by the Distributor or
the Fund specifically for use therein relating to the Distributor
or the Fund; (iii) any material breach of any representation,
warranty or covenant made by AUL in this Agreement; (iv) any untrue
statement or alleged untrue statement of any material fact contained
in information furnished in writing by AUL specifically for use in
the Registration Statement or prospectus of the Fund, or the omission
or the alleged omission to state therein a material fact relating to
AUL or its Separate Accounts required to be stated therein or
necessary to make the statements therein not misleading; or (v)
any conduct, statements or representations (other than statements
or representations contained in the prospectus, registration
statement, proxy, or periodic reports of the Fund or other information
provided by the Fund or the Distributor or the designee of either, or
in sales literature of the Fund or sales literature that has been
approved by the Distributor or its designee) of AUL or its agents,
with respect to the sale and distribution of the Separate Accounts
for which Fund shares are an underlying investment; and AUL will
reimburse any legal or other expenses reasonably incurred by the Fund,
the Distributor or any such director, officer, employee, or
controlling person in connection with investigating or defending any
such loss, claim, damage, liability or action. This indemnity
agreement will be in addition to any liability which AUL may otherwise
have.
b. The Fund, to the extent provided below, and the Distributor agree
to indemnify and hold harmless AUL, the Separate Accounts, and
each of AUL's directors, officers, employees, and each person, if any,
who controls AUL within the meaning of the 1933 Act against any
losses, claims, damages or liabilities to which AUL or any such
director, officer, employee, or controlling person may become subject
under the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or
are based upon: (i) any wrongful act or omission of Distributor or
the Fund; (ii) 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 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, however, that the Fund and the Distributor
will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or omission or alleged untrue statement or omission made
in such Registration Statement, prospectus or sales literature in
conformity with written information furnished to the Fund or
Distributor by AUL specifically for use therein relating to AUL or its
Separate Accounts; (iii) any material breach of any representation,
warranty or covenant made by the Fund or Distributor in this
Agreement; (iv) any untrue statement or alleged untrue statement of
any material fact contained in information furnished in writing by
the Fund or the Distributor specifically for use in the
registration statement or prospectus for the Contracts, or the
omission or the alleged omission to state therein a material fact
relating to the Fund or the Distributor required to be stated
therein or necessary to make the statements therein not misleading;
or (v) the Fund's failure to maintain its qualification as a regulated
investment company as required by the applicable provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), the 1940 Act,
and any other law or regulation; and the Fund or Distributor will
reimburse any legal or other expenses reasonably incurred by AUL
or any such director, officer, employee, or controlling person in
connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Fund and the
Distributor shall have no obligations under this Section 14.b. for
any loss, liability, claim, damage or expense to the extent arising
out of any untrue statement or omission or alleged untrue statement or
omission made in a prospectus of the Fund but eliminated or remedied
in a subsequent Fund prospectus if (i) such subsequent Fund prospectus
was not delivered at or prior to the time required by the 1933 Act or
the regulations thereunder or the 1940 Act or the regulations
thereunder; (ii) AUL had an obligation to deliver such subsequent
prospectus; and (iii) the acquisition of the Contracts or interest
thereunder arose after the time that the subsequent prospectus could
reasonably have been delivered. The Fund shall not have any
indemnification obligation pursuant to this Section 14.b. unless the
loss, claim, damage or liability results from the gross negligence,
bad faith, willful misconduct or reckless disregard of duty of the
Board of Directors of the Fund or any member thereof. This
indemnity agreement will be in addition to any liability which the
Fund or Distributor may otherwise have.
c. Promptly after receipt by an indemnified party under this paragraph of
notice of the commencement of an action, such indemnified party will,
if a claim in respect thereof is to be made against the
indemnifying party under this paragraph, notify the indemnifying
party of the commencement thereof, but the omission so to notify
the indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise than under this
paragraph. In case any such action is brought against any indemnified
party, and it notified the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, assume the defense
thereof, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such
indemnified party of its election to assume the defense thereof,
the indemnifying party will not be liable to such indemnified party
under this paragraph for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof.
15. Except as provided elsewhere in this Agreement, advertising and sales
literature with respect to the Fund prepared by AUL or its agents for
use in marketing its Contracts will be submitted to Distributor for review
before such material is either used or submitted to the SEC or NASD for
review.
16. This Agreement shall be construed in accordance with the laws of the State
of Indiana.
17. The Fund shall comply with Subchapter M of the Code and the regulations
thereunder and shall qualify as a regulated investment company thereunder,
and shall comply with the applicable provisions of the 1940 Act. The
Distributor shall provide AUL each quarter with a letter from the
appropriate Fund officer certifying the Fund compliance as a regulated
investment company. The Distributor agrees that the Fund shall be managed
consistent in all material respects with its investment objective or
objectives, investment policies, and investment restrictions as described
in the Fund's prospectus and registration statement, as amended or
modified from time to time.
18. This Agreement and the Fund account application completed by AUL contain
the entire understanding and agreement among the parties with respect to
the subject matter of this Agreement and may not be amended except by
written agreement of the parties hereto.
19. This Agreement shall extend to and be binding upon AUL, the Distributor and
the Fund and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable by any party without the prior
written consent of the other parties. For purposes of this provision,
"assignable" shall be defined with reference to the definition and
description of "assignment" in the 1940 Act and the regulations
thereunder.
20. The Distributor and the Fund agree that the names, addresses, and other
information relating to the owners of the Contracts or participants or
prospects for the sale of the Contracts are the exclusive property of AUL
and may not be used by Distributor or the Fund without the written consent
of AUL.
21. 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
AMERICAN UNITED LIFE INSURANCE COMPANY, for
itself and on behalf of the Separate Accounts
By: \s\ Xxxxx X. Xxxxx Xx.
----------------------------
Title: Vice President Pension Contracts
& Compliance
INVESCO FUNDS GROUP, INC.
By: \s\ Xxx Xxxxxx
--------------------------
Title: President and CEO
INVESCO DYNAMICS FUND, INC.
By: \s\ Xxx Xxxxxx
------------------------
Title: President
EXHIBIT A
Effective March 14, 1995, payments to AUL will be made according to the
following schedule:
Annual rate of 0.25% of average of aggregate net asset value of
outstanding shares of the Fund held by AUL, measured on each calendar day
during each calendar quarter, the applicable portion of which is payable
within 10 business days following the end of each calendar quarter,
provided that no payments shall be made in an amount less than $25.00.
