FUND PARTICIPATION AGREEMENT
THIS AGREEMENT is made this 11th day of June, 2002, 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"); and Pacific Investment Management Company LLC ("PIMCO").
WITNESSETH
WHEREAS, PIMCO provides investment advisory services to and administers all
of the operations of the PIMCO Funds: Pacific Investment Management Series (the
"Trust"), a Massachusetts business trust that is registered with the Securities
and Exchange Commission (the "SEC") as an open-end management investment company
under the Investment Company Act of 1940, as amended ("1940 Act"), pursuant to
an Administration Agreement between the Trust and PIMCO, and, on behalf of the
Trust at PIMCO's expense, procures or provides for procurement of certain
services, including among others, transfer agency and recordkeeping services,
and pursuant to such Administration Agreement, PIMCO agrees to provide or
procure the administrative, recordkeeping and shareholder services that are
reasonably required by shareholders of the Administrative Class shares of the
Trust; and
WHEREAS, the Trust is authorized to issue separate classes of shares of
beneficial interests, 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;
WHEREAS, PIMCO is registered as an investment adviser with the SEC under
the Investment Advisers Act of 1940, as amended ("Advisers Act");
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company wishes to purchase shares of one or more of the series
offered and made available by the Trust and identified on Exhibit A ("Series")
on behalf of its Separate Accounts to serve as an investment medium for variable
annuity contracts ("Variable Contracts") funded by the Separate Accounts.;
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 Shares
1.1. Offering of Shares. PIMCO agrees to cause the Trust to take all steps
necessary, which may include coordination of efforts of the Trust, the
Company, the transfer agent, and distributor, to facilitate the
offering to the Separate Accounts of Institutional or Administrative
Class shares ("Shares") of the Series, and agrees to take all steps
necessary so that orders for the purchase and redemption of such
Shares shall be effected as specified in this Agreement.
1.2. PIMCO agrees to cause the Trust to make available to the Company those
shares of the Series that the Company orders on its own behalf and on
behalf of its Separate Accounts. PIMCO agrees to cause the Trust to
make available shares of the Series for purchase at the applicable net
asset value per share by the Company on behalf of its Separate
Accounts, subject to the right of the Trustees of the Trust to 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 of the Trust, 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. PIMCO hereby appoints the Company as an agent of the Trust for the
limited purpose of receiving and accepting purchase and redemption
requests on behalf of the Separate Accounts (but not with respect to
any Trust shares that may be held in the general account of the
Company) for shares of those Series made available hereunder, based on
allocations of amounts to a Separate Account or subaccounts thereof
under the Variable Contracts and other transactions relating to the
Variable Contracts or the Separate Accounts. Receipt and acceptance of
any such request (or relevant transactional information therefor) by
the Company as such limited agent of the Trust on any day on which a
Series calculates its net asset value (a "Business Day") pursuant to
the rules of the SEC prior to the time that the Series ordinarily
calculates its net asset value as described from time to time in the
Trust's prospectus shall constitute receipt and acceptance by the
Trust on that same Business Day, provided that the Trust or its
designee receives notice of such request by 8:30 a.m. Eastern Time on
the next following Business Day.
1.4 The Company shall pay for shares of each Series on the same day that
it notifies the Trust or its designee of a purchase request for such
shares. Payment for Series shares shall be made in federal funds
transmitted to the Trust or its designee by wire to be received by
1:00 p.m. Eastern Time on the day the Trust or its designee is
notified of the purchase request for Series shares. Upon receipt of
federal funds so wired, such funds shall cease to be the
responsibility of the Company and shall become the responsibility of
the Trust or its designee.
1.5. Payment for Series shares redeemed by a Separate Account or the
Company shall be made in federal funds transmitted by wire to the
Company or any other designated person on the next Business Day after
the Trust is properly notified of the redemption order of such shares,
except that the Trust may 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 Trust as described in the current
prospectus and statement of additional information ("SAI"). Neither
the Trust nor its designee shall bear any responsibility whatsoever
for the proper disbursement or crediting of redemption proceeds by the
Company, the Company alone shall be responsible for such action.
1.6. Issuance and transfer of shares of the Series will be by book entry
only unless otherwise agreed by the Trust. Shares will be recorded in
an appropriate title for the Separate Accounts or the appropriate
subaccounts of the Separate Accounts.
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1.7. PIMCO shall promptly furnish notice (by wire or telephone, followed by
written confirmation) to the Company of any income dividends or
capital gains distributions payable on the shares of the Series. 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. PIMCO shall
notify the Company of the number of shares so issued as payment of
such dividends and distributions.
1.8. PIMCO shall instruct the Trust's 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 II. 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 Sub-chapter L of the Internal
Revenue Code of 1986, as amended (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 1940 Act.
2.5. PIMCO represents and warrants that the Trust is duly organized as a
business trust under the laws of the Commonwealth of Massachusetts,
and is in good standing under applicable law.
2.6. PIMCO represents and warrants that the shares of the Series are duly
authorized for issuance in accordance with applicable law and that the
Trust is registered as an open-end management investment company under
the 1940 Act.
2.7. PIMCO represents and warrants that the Series currently comply, and at
all times since inception have complied, with the qualification
requirements, of Subchapter M of the Code and the regulations issued
thereunder relating to investment companies that elect to be taxed as
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Regulated Investment Companies.
2.8. PIMCO represents and warrants that the Trust's distributor is a member
in good standing of the National Association of Securities Dealers,
Inc. ("NASD") and is registered as a broker-dealer with the SEC.
2.9. PIMCO represents and warrants that it is registered as an investment
adviser with the SEC.
ARTICLE III. General Duties
3.1. PIMCO shall cause the Trust to 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. PIMCO shall cause the Trust to 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. PIMCO shall cause the
Trust to register and qualify the shares for sale in accordance with
the laws of the various states to the extent required by applicable
laws or regulations.
3.2. PIMCO shall make every effort to maintain the 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 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.
3.4. The Company shall offer and sell the Variable Contracts issued by the
Company in accordance with applicable provisions of the 1933 Act, the
Securities Exchange Act of 1934, as amended ("1934 Act"), the 1940
Act, the NASD Conduct Rules, and state law respecting the offering of
the Variable Contracts.
3.5. PIMCO shall cause the Trust to make available the shares of the Series
of the Trust in accordance with the applicable provisions of the 1933
Act, the 1934 Act, the 1940 Act, the NASD Conduct Rules, and state
law.
3.6 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.
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ARTICLE IV. Prospectuses and Proxy Statements: Voting
4.1. The Company shall distribute such prospectuses, proxy statements and
periodic reports of the Trust 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.
4.2. PIMCO shall provide the Company with as many copies of the current
prospectus of the Trust as the Company may reasonably request. If
requested by the Company in lieu thereof, PIMCO shall provide such
documentation (including a final copy of the Trust's prospectus as set
in type or in camera-ready copy) and other assistance as is reasonably
necessary in order for the Company to print together in one document
the current prospectus or offering document for the Variable Contracts
issued by the Company and the current prospectus for the Trust. PIMCO
shall bear the expense of printing copies of the Trust's current
prospectus that will be distributed to Variable Contract owners.
4.3. PIMCO shall provide (1) without expense to the Company, one copy of
the Trust's current SAI to the Company and to any owner of a Variable
Contract issued by the Company who requests such SAI, and (2) at the
Company's expense, such additional copies of the Trust's current SAI
as the Company shall reasonably request and that the Company shall
require in accordance with applicable law in connection with offering
the Variable Contracts issued by the Company.
4.4. As required by applicable law, PIMCO, without expense to the Company,
shall provide the Company with copies of the Trust's proxy materials,
periodic reports to shareholders and other communications to
shareholders in such quantity as the Company shall reasonably require
for purposes of distributing to owners of Variable Contracts issued by
the Company and for use in connection with offering the Variable
Contracts issued by the Company. If requested by the Company in lieu
thereof, PIMCO shall provide such documentation (including a final
copy of the Trust's proxy materials, periodic reports to shareholders
and other communications to shareholders, as set in type or in
camera-ready copy) and 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,
such printing and distribution to be at the expense of the Company.
4.5. The Company shall vote shares of each Series of the Trust held in a
Separate Account or a subaccount thereof at regular and special
meetings of the Trust 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, to the extent required by applicable
law. In that event, the Company shall vote shares of a Series of the
Trust 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 subaccounts 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 Trust
held in its general account, if any, in the same proportion as the
votes cast with respect to shares
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of the Series held in all Separate Accounts of the Company or
subaccounts thereof, in the aggregate, to the extent required by
applicable law.
ARTICLE V. Sales Material and Information
5.1. The Company shall furnish, or shall cause to be furnished, to PIMCO or
its designee, each piece of sales literature or other promotional
material in which the Trust (or any Series thereof) or PIMCO is named,
and no such sales literature or other promotional material shall be
used without the approval of PIMCO or its designee.
5.2. 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 Trust or concerning the Trust other than the
information or representations contained in the registration statement
or prospectus for the Trust shares, as such registration statement and
prospectus may be amended or supplemented from time to time, or in
reports or proxy statements for the Trust, or in sales literature or
other promotional material approved by PIMCO or its designee, except
with the permission of PIMCO or its designee.
5.3. PIMCO, or its designee, shall furnish to the Company or its designee
each piece of sales literature or other promotional material in which
the Company, the Variable Contract or the Separate Accounts are named,
and no such material shall be used without the approval of the Company
or its designee.
5.4. PIMCO agrees that it and its affiliates and agents, 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, prospectus or
other offering document for such Variable Contracts, as such
registration statement, prospectus or other offering document 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 or its designee.
5.5. PIMCO will provide to the Company at least one complete copy of all
prospectuses, SAIs, reports, proxy statements and other voting
solicitation materials, and all amendments and supplements to any of
the above, that relate to the Trust or its shares, promptly after the
filing of such document with the SEC or other regulatory authorities.
Such documentation may be distributed in electronic format.
5.6. The Company will provide to PIMCO 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.
Such documentation may be distributed in electronic format.
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5.7. For purposes of this Article V, 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 VI. Administration of Accounts
6.1. Services to owners of Variable Contracts ("Contract Owners") shall be
the responsibility of the Company. These services may include, but are
not limited to:
(a) providing information periodically to Contract Owners showing
their interests in the Separate Accounts or subaccounts thereof
that invest in the Trust or in any Series thereof;
(b) addressing inquiries from Contract Owners relating to investing,
exchanging or transferring, or redeeming interests under the
Variable Contracts and the Separate Accounts or subaccounts
funding such Variable Contracts, which inquiries may relate to
the Trust or a Series thereof;
(c) providing explanations to Contract Owners regarding investment
objectives and policies and other information about the Series,
including the performance of the Series;
(d) forwarding shareholder communications from the Trust, including
but not limited to shareholder reports containing annual and
semi-annual financial statements of the Series, to Contract
Owners;
(e) delivering the Series' prospectus and supplements thereto
whenever necessary under the Securities Act of 1933;
(f) delivering any notices of shareholder meetings and proxy
statements accompanying such notices in connection with general
and special meetings of shareholders of the Series under which
Contract Owners may have voting rights, and helping tabulate the
voting of Contract Owners tendering voting instructions to the
Company.
6.2 The Company shall be the sole shareholder of Shares issued pursuant to
this Agreement, and the parties recognize that the Trust's
distributor, PIMCO, and/or the Trust will derive a substantial savings
in shareholder servicing and other expenses because the Company will
provide the services described above. In consideration of the savings
resulting from such arrangement, the Company shall be paid an amount
in the manner described in Exhibit B, which is attached hereto.
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ARTICLE VII. Indemnification
7.1. Indemnification By The Company
7.1(a). The Company agrees to indemnify and hold harmless the Trust,
each of its Trustees and officers, any affiliated person of the
Trust within the meaning of Section 2(a)(3) of the 1940 Act, and
PIMCO (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 Trust'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 Trust or PIMCO 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 Trust 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 Trust 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 Trust 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 Trust 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 Trust or its designee by or on behalf of the Company; or
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(iv) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach of this Agreement by 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 PIMCO.
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 Indemnified 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 Indemnified 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 reasonably 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 Trust shares or the
Variable Contracts issued by the Company or the operation of the
Trust.
7.2. Indemnification By PIMCO
7.2(a). PIMCO agrees to indemnify and hold harmless the Company, the
Separate Accounts, each of the Company's 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 PIMCO) 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 Trust's shares or
the Variable Contracts issued by the Company and:
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(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 Trust (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 PIMCO, the Trust or
the designee of any if them by or on behalf of the Company
for use in the registration statement or prospectus for the
Trust 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 Trust
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 an
Indemnitor or any employees or agents thereof) or wrongful
conduct of PIMCO, or the affiliates, employees, or agents of
PIMCO with respect to the sale or distribution of the
Variable Contracts issued by the Company or Trust 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 PIMCO or the Trust; or
(iv) arise out of or result from any material breach of any
representation and/or warranty made by PIMCO in this
Agreement or arise out of or result from any other material
breach of this Agreement by PIMCO;
except to the extent provided in Sections 7.2(b) and 7.2(c) hereof.
7.2(b). PIMCO 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(c). PIMCO shall not be liable under this indemnification provision
with respect to any claim made against an Indemnified Party
unless such Indemnified Party shall have notified
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PIMCO 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 Indemnified Party shall have received notice of such
service on any designated agent), but failure to notify PIMCO of
any such claim shall not relieve the Indemnitor 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, PIMCO will be entitled to
participate, at its own expense, in the defense thereof. PIMCO
also shall be entitled to assume the defense thereof, with
counsel reasonably satisfactory to the party named in the action.
After notice from PIMCO to such party of PIMCO's election to
assume the defense thereof, the Indemnified Party shall bear the
fees and expenses of any additional counsel retained by it, and
PIMCO 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(d). The Company shall promptly notify each Indemnitor 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.
8.2. This Agreement shall be subject to the provisions of the 1933 Act,
1934 Act, 1940 Act, and Advisers Act, and the rules and regulations
and rulings thereunder, including such exemptions from those statutes,
rules and regulations as the SEC may grant, 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 a party upon 90 days advance written notice to
the other parties; or
(b) at the option of PIMCO upon institution of formal proceedings
against the Company 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 Trust shares; or
(c) at the option of the Company upon institution of formal
proceedings against the Trust or PIMCO by the NASD, the SEC, or
any state securities or insurance department or any other
regulatory body; or
(d) 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 Trust or a Series in accordance with
the terms of the Variable Contracts for which those shares had
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been selected to serve as the underlying investment media; or
(e) 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 (f) at the option of the Company
if the Trust or a Series fails to maintain the qualification
specified in Section 3.2 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(b) and (c) hereof. The
Company shall give 60 day's prior written notice to PIMCO of the date
of any proposed vote of Variable Contract owners to replace the
Trust's shares as described in Section 9.1(d) hereof.
9.3 Notwithstanding any termination of this Agreement, PIMCO shall, at the
option of the Company, continue to make available additional shares of
the Series pursuant to the terms and conditions of this Agreement, for
all Variable Contracts in effect on the effective date of termination
of this Agreement (hereinafter referred to as "Existing Contracts").
Specifically, the owners of the Existing Contracts may be permitted to
reallocate investments in the Series, redeem investments in the Series
and/or invest in the Series upon the making of additional purchase
payments under the Existing Contracts.
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 PIMCO: Pacific Investment Management Company LLC
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxxx X.Xxxxxxx
If to the Company: American United Life Insurance Company
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx,
Associate General Counsel
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ARTICLE XI. Miscellaneous
11.1.Nothing in this Agreement shall impede the Trust's Trustees or
shareholders of the shares of the Series from exercising any of the
rights provided to such Trustees or shareholders in the Trust's
Declaration of Trust, as amended, a copy of which will be provided to
the Company upon request.
11.2.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.
11.3.This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and
the same instrument.
11.4.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.
11.5.This Agreement may not be assigned by any party to the Agreement
except with the written consent of the other parties to the Agreement.
13
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
Pacific Investment Management Company LLC
By: /s/ Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Senior Vice President
American United Life Insurance Company(R)
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Associate General Counsel
14
EXHIBIT A
Separate Account (dated established) Series
------------------------------------ ------
AUL American Unit Trust (8/17/89)
Group Retirement Annuity Separate Account
I for Qualified 401 Contracts (8/17/89)
Group Retirement Annuity Separate Account
II for Qualified 401 Contracts (8/17/89)
Group Retirement Annuity Separate Account
III for Qualified 401 Contracts (3/31/00)
SCHEDULE B
Payments to the Company under the Agreement will be calculated and paid
according to the following schedule:
Annual rate of 0.25%, payable monthly, of average of aggregate net asset
value of outstanding Administrative Class Shares of the Series listed on
Schedule A held by Contract Owners (or their participants) receiving services
described in the Agreement from the Company, measured on each business day
during each month, the applicable portion of which is payable within 20 days
following the end of each month.
