PARTICIPATION AGREEMENT
Among
XXXXX XXXXXXX INVESTMENT COMPANY,
XXXXXXX FUND DISTRIBUTORS, INC.
and
AMERICAN UNITED LIFE INSURANCE COMPANY
THIS AGREEMENT is made and entered into as of this 26th day of May, 2004, by and
among American United Life Insurance Company (hereinafter the "Company"), on its
own behalf and on behalf of each segregated asset account of the Company set
forth on Schedule A hereto as such schedule may be amended from time to time
(each such account hereinafter referred to as the "Account" and collectively as
the "Accounts"), and XXXXX XXXXXXX INVESTMENT COMPANY, a Massachusetts Business
Trust (hereinafter the "Investment Company"), and XXXXXXX FUND DISTRIBUTORS,
INC. a Washington corporation (hereinafter the "Underwriter").
WHEREAS, Investment Company engages in business as a diversified open-end
management investment company and is available to act as the investment vehicle
for certain separate accounts established for group annuity policies exempt from
the Securities Act of 1933 pursuant to Section 3(a)(2) thereof ("Exempt Group
Annuity Contracts"); and
WHEREAS, the beneficial interest in the Investment Company is divided into
several series of shares, referred to individually as "Funds" and representing
the interest in a particular managed portfolio of securities and other assets;
and
WHEREAS, Investment Company is registered as an open-end management
investment company under the Investment Company Act of 1940 (the "1940 Act"),
and its shares are registered under the Securities Act of 1933, as amended
(hereinafter the "1933 Act"); and
WHEREAS, Xxxxx Xxxxxxx Investment Management Company (the "Adviser") is
registered as an investment adviser under the federal Investment Advisers Act of
1940 and any applicable state securities law; and
WHEREAS, the Company offers or will offer, through agents of American
United Life Insurance Company, certain group annuity contracts exempt from
registration under the 1933 Act pursuant to section 3(a)(2) thereof; and
WHEREAS, each Account is a duly organized, validly existing, segregated
asset account, established by resolution of the Board of Directors of the
Company, on the date shown for such Account on Schedule A hereto, to set aside
and invest assets attributable to one or more group annuity contracts; and
1
WHEREAS, the Underwriter is registered as a broker/dealer with the SEC
under the Securities Exchange Act of 1934, as amended (hereinafter the "1934
Act") and is a member in good standing of the National Association of Securities
Dealers, Inc. (hereinafter the "NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Funds on behalf of
each Account to fund certain of the aforesaid group annuity contracts, and the
Underwriter is authorized to sell such shares to unit investment trusts such as
each Account at net asset value;
NOW THEREFORE, in consideration of the premises and of the mutual covenants
herein contained and other good and valuable consideration the receipt of which
is hereby acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:
ARTICLE I. SALE OF INVESTMENT COMPANY SHARES
1.1 The Underwriter agrees to sell to the Company those shares of
Investment Company (each a "share") which each Account orders, executing such
orders on a daily basis at the net asset value next computed after receipt by
the Investment Company or its designee of the order for the shares of the
Investment Company. For purposes of this Section 1.1, the Company shall be the
designee of the Investment Company for receipt of such orders from each Account
and receipt by such designee shall constitute receipt by the Investment Company;
provided that the Company receives such order by 4:00 p.m. Eastern time or the
close of the New York Stock Exchange, whichever is earlier, and that the
Investment Company receives notice of such order by 8:00 a.m. Pacific time on
the next following Business Day. "Business Day" shall mean any day on which the
New York Stock Exchange is open for trading and on which Investment Company
calculates its net asset value pursuant to its prospectus and the rules of the
Securities and Exchange Commission.
On each Business Day on which the Investment Company calculates the net
asset value per share for each Fund, the Company will aggregate and calculate
the net purchase or redemption orders for each Account in respect to the Funds
in which contract owner assets are invested. Net orders will only reflect orders
that the Company has received prior to 4:00 p.m. Eastern time or the close of
the NYSE, whichever is earlier, on that Business Day. Orders that the Company
has received after 4:00 p.m. Eastern time or the close of the NYSE, whichever is
earlier, will be treated as though received on the next Business Day. Each
communication of orders by the Company will constitute a representation that
such orders were received by it prior to 4:00 p.m. Eastern time or the close of
the NYSE, whichever is earlier, on the Business Day on which the purchase or
redemption order is priced in accordance with Rule 22c-1 under the 1940 Act.
Other procedures relating to the handling of orders will be in accordance with
the prospectus and statement of information of the relevant Fund or with oral or
written instructions that the Investment Company or the Underwriter will forward
to the Company from time to time.
2
1.2 The Investment Company agrees to make its shares available indefinitely
for purchase at the applicable net asset value per share by the Company and its
Accounts on those days on which the Investment Company calculates its net asset
value pursuant to its prospectus and the rules of the Securities and Exchange
Commission, and the Investment Company shall use reasonable efforts to calculate
such net asset value on each day which the New York Stock Exchange is open for
trading. Notwithstanding the foregoing, the Board of Trustees of the Investment
Company (hereinafter the "Board") may refuse to sell shares of any Fund, or
suspend or terminate the offering of shares of any Fund if such action is
required by law or by regulatory authorities having jurisdiction or is, in the
sole discretion of the Board acting in good faith and in light of their
fiduciary duties under federal and any applicable state laws, necessary in the
best interests of the shareholders of such Fund.
1.3 The Company understands that the Investment Company and the Underwriter
sell shares of the Funds to the general public.
1.4 The Investment Company agrees to redeem for cash, on the Company's
request, any full or fractional shares of the Investment Company held by the
Company, executing such requests on a daily basis at the net asset value next
computed after receipt by the Investment Company or its designee of the request
for redemption. For purposes of this Section 1.4, the Company shall be the
designee of the Investment Company for receipt of requests for redemption from
each Account, and receipt by such designee shall constitute receipt by the
Investment Company; provided that the Company receives such order prior to 4:00
p.m. Eastern time or the close of the New York Stock Exchange, whichever is
earlier, and the Investment Company receives notice of such request for
redemption by 8:00 a.m. Pacific time on the next following Business Day. The
Investment Company reserves the right to delay payment of redemption proceeds,
but in no event may such payment be delayed longer than the period permitted by
the 1940 Act. The Investment Company will not bear any responsibility whatsoever
for the proper disbursement or crediting of redemption proceeds; the Company
alone will be responsible for such action.
1.5 The Company agrees to purchase and redeem the shares of selected Funds
offered by the thencurrent prospectus of the Investment Company and in
accordance with the provisions of such prospectus. The Company agrees that any
net amounts available under the Exempt Group Annuity Contract(s) with the form
number(s) which are listed on Schedule B attached hereto and incorporated herein
by this reference, as such Schedule B may be amended from time to time hereafter
by mutual written agreement of all the parties hereto (the "Contracts"), may be
invested in the Investment Company, but only to the extent that such Contracts
are offered through agents of American United Life Insurance Company, or through
such other parties as Underwriter may approve of in writing from time to time.
3
1.6 The Company shall pay for Investment Company shares on the next
Business Day after an order to purchase Investment Company shares is made in
accordance with the provisions of Section 1.1 hereof. Payment shall be in
federal funds transmitted by wire.
1.7 Issuance and transfer of the Investment Company's shares will be by
book entry only. Stock certificates will not be issued to the Company or any
Account. Shares ordered from the Investment Company will be recorded in an
appropriate title for each Account.
1.8 The Investment Company shall furnish same day notice (by wire or
telephone, followed by written confirmation) to the Company of any income
dividends or capital gain distributions payable on the Investment Company's
shares. Upon request, the Investment Company shall furnish the Company with the
dates of its scheduled dividend and distribution payment schedule for each
calendar year. The Company hereby elects to receive all such income dividends
and capital gain distributions as are payable on the Fund shares in additional
shares of that Fund. The Company reserves the right to revoke this election and
to receive all such income dividends and capital gain distributions in cash.
Investment Company shall notify the Company of the number of shares so issued as
payment of such dividends and distributions. 1.9 The Investment Company shall
make the net asset value per share for each Fund available to the Company on a
daily basis as soon as reasonably practicable after the net asset value per
share is calculated.
ARTICLE II. REPRESENTATIONS AND WARRANTIES
2.1 The Company represents and warrants that the Contracts are exempt from
registration under the 1933 Act pursuant to Rule 3(a)(2) thereof; that the
Contracts will be issued and sold in compliance in all material respects with
all applicable Federal and State laws and that the sale of the Contracts shall
comply in all material respects with state insurance suitability requirements.
The Company further represents and warrants that it is an insurance company duly
organized and in good standing under applicable law and that it has legally and
validly established each Account prior to any issuance or sale thereof as a
segregated asset account under applicable state insurance law and that each
Account is or will be registered as a unit investment trust in accordance with
the provisions of the 1940 Act to serve as a segregated investment account for
the Contracts or is exempt from registration thereunder.
2.2 The Investment Company represents and warrants that Investment Company
shares sold pursuant to this greement shall be registered under the 1933 Act,
duly authorized for issuance and sold in compliance with all applicable federal
and state securities laws and that the Investment Company is and shall remain
registered under the 1940 Act. The Investment Company shall amend the
Registration Statement for its shares under the 1933 and the 1940 Act from time
to time as required in order to effect the continuous offering of its shares.
The Investment Company shall register and qualify the shares for
4
sale in accordance with the laws of the various states only if and to the extent
deemed advisable by the Investment Company or the Underwriter.
2.3 The Investment Company represents that it is currently qualified as a
Regulated Investment Company under Subchapter M of the Internal Revenue Code of
1986, as amended, (the "Code") and that it will make every effort to maintain
such qualification (under Subchapter M or any successor or similar provision)
and that it will notify the Company immediately upon having a reasonable basis
for believing that it has ceased to so qualify or that it might not so qualify
in the future.
2.4 The Investment Company represents and warrants that the prospectuses of
the Investment Company materially company with applicable federal securities
laws.
2.5 [Reserved]
2.6 The Investment Company makes no representation as to whether any aspect
of its operations (including, but not limited to, fees and expenses and
investment policies) complies with the insurance laws or regulations of the
various states.
2.7 The Underwriter represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the SEC. The
Underwriter further represents that it will sell and distribute the Investment
Company shares in accordance with any applicable state laws and federal
securities laws, including without limitation the 1933 Act, the 1934 Act, and
the 1940 Act.
2.8 The Investment Company represents that it is lawfully organized and
validly existing under the laws of the Commonwealth of Massachusetts and that it
does and will comply in all material respects with the 1940 Act.
2.9 The Underwriter represents and warrants that the Adviser is and shall
remain duly registered in all material respects under all applicable federal and
state securities laws and that the Adviser shall perform its obligations for the
Investment Company in compliance in all material respects any applicable state
laws and federal securities laws.
2.10 The Investment Company and Underwriter represent and warrant that all
of their directors, officers, employees, investment advisers, and other
individuals/entities dealing with the money or securities of the Investment
Company are and shall continue to be at all times covered by a blanket fidelity
bond or similar coverage for the benefit of the Investment Company in an amount
not less than the minimal coverage as required currently by Rule 17g-(1) of the
1940 Act or related provisions as may be promulgated from time to time. The
aforesaid Bond shall include coverage for larceny and embezzlement and shall be
issued by a reputable bonding company.
2.11 The Company represents and warrants that all of its directors,
officers, employees, investment advisers, and other entities dealing with the
money or securities of the Investment Company are and shall continue to be at
all times covered by a blanket fidelity bond or similar coverage in an amount
not less than five million dollars ($5 million). The aforesaid Bond shall
include coverage for larceny and embezzlement and shall be issued by a reputable
bonding company.
5
ARTICLE III. PROSPECTUSES AND PROXY STATEMENTS: VOTING
3.1 The Underwriter shall provide the Company with as many printed copies
of the Investment Company's current prospectus and Statement of Additional
Information as the Company may reasonably request. If requested by the Company
in lieu thereof, the Investment Company shall provide cameraready copies or
electronic copies of the Investment Company's prospectus and Statement of
Additional Information and such other assistance as is reasonably necessary in
order for the Company once each year (or more frequently if the prospectus
and/or Statement of Additional Information for the Investment Company is amended
during the year) to have the prospectus for the Contracts and the Investment
Company's prospectus printed together in one document or available in one
electronic file, and to have the Statement of Additional Information for the
Investment Company and the Statement of Additional Information for the Contracts
printed together in one document or available in one electronic file. The
Company understands that the Investment Company's fiscal year ends on October 31
and that its annual prospectus update therefore occurs on or before March 1 of
each year. All expenses of printing and distributing Investment Company
prospectuses and Statements of Additional Information shall be the expense of
the Company.
3.2 The Investment Company's prospectus shall state that the Statement of
Additional Information for the Investment Company is available from the
Investment Company.
3.3 The Investment Company, at its expense, shall provide the Company with
copies of its proxy statements, reports to shareholders, and other required
communications (except for prospectuses and Statement of Additional Information,
which are covered in Section 3.1) to shareholders in such quantity as the
Company shall reasonably require for distributing to Contract owners.
3.4 [Reserved]
3.5 If and to the extent required by law the Company will:
(a) solicit voting instructions from contractowners;
(b) vote the shares of the Funds held in the Accounts in accordance
with instructions received from contractowners; and
(c) vote shares of the Funds held in the Accounts for which no timely
instructions have been received, as well as shares it owns, in the
same proportion as shares of such Fund for which instructions have
been received from the Company's contractowners;
so long as and to the extent that the SEC continues to interpret the 1940 Act to
require passthrough voting privileges for variable contractowners. Except as set
forth above, the Company reserves the right to vote Fund shares held in any
segregated asset account in its own right, to the extent permitted by law. The
Company will be responsible for assuring that each of its separate
6
accounts participating in the Funds calculates voting privileges in a manner
consistent with all legal requirements.
3.6 The Investment Company will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular the Investment Company will
either provide for annual or special meetings or comply with the requirements of
Section 16(c) of the 1940 Act (although the Investment Company is not one of the
trusts described in Section 16(c) of that Act) as well as with Sections 16(a)
and, if and when applicable, 16(b). Further, the Investment Company will act in
accordance with the SEC's interpretation of the requirements of Section 16(a)
with respect to periodic elections of directors and with whatever rules the SEC
may promulgate with respect thereto.
ARTICLE IV. SALES MATERIAL AND INFORMATION
4.1 The Company shall furnish, or shall cause to be furnished, to the
Investment Company or its designee, each piece of sales literature or other
promotional material, or component thereof, in which the Investment Company, the
Adviser, or the Underwriter is named, at least fifteen Business Days prior to
its use. No such material shall be used if the Investment Company or its
designee object to such use within fifteen Business Days after receipt of such
material.
4.2 The Company shall not give any information or make any representations
or statements on behalf of the Investment Company or concerning the Investment
Company in connection with the sale of the Contracts other than the information
or representations contained in the registration statement or prospectus for the
Investment Company shares, as such registration statement and prospectus may be
amended or supplemented from time to time, or in reports or proxy statements for
the Investment Company, or in sales literature or other promotional material
approved by the Investment Company or its designee or by the Underwriter, except
with the permission of the Investment Company or the Underwriter or the designee
of either.
4.3 The Investment Company, the Underwriter, or their designees shall
furnish, or shall cause to be furnished, to the Company or its designee, each
piece of sales literature or other promotional material, or component thereof,
in which the Company or its separate Accounts are named at least fifteen
Business Days prior to its use. No such material shall be used if the Company or
its designee objects to such use within fifteen Business Days after receipt of
such material.
4.4 The Investment Company and the Underwriter shall not give any
information or make any representations on behalf of the Company or concerning
the Company, each Account, or the Contracts other than the information or
representations contained in a registration statement, prospectus or offering
materials for the Contracts, as such may be amended or supplemented from time to
time, or in published reports for each Account which are in the public domain or
approved by the Company for distribution to
7
Contract owners, or in sales literature or other promotional material approved
by the Company or its designee, except with the permission of the Company.
4.5 Upon request, the Investment Company will provide to the Company at
least one complete copy of all registration statements, prospectuses, Statements
of Additional Information, reports, proxy statements, sales literature and other
promotional materials, applications for exemptions, requests for noaction
letters, and all amendments to any of the above, that relate to the Investment
Company or its shares.
4.6 Upon request, the Company will provide to the Investment Company at
least one complete copy of all offering materials for the Contracts, reports,
solicitations for voting instructions, sales literature and other promotional
materials, applications for exemptions, requests for no-action letters, and all
amendments to any of the above, that relate to the Contracts or each Account. In
the case of unregistered Contracts, in lieu of providing prospectuses and
Statements of Additional Information, the Company shall provide the Investment
Company with one complete copy of the offering materials for the Contracts.
4.7 For purposes of this Article IV, 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, electronic 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, and registration statements,
prospectuses, Statements of Additional Information, shareholder reports, and
proxy materials.
ARTICLE V. [RESERVED]
ARTICLE VI. FEES AND EXPENSES
6.1 The Investment Company and the Underwriter shall pay no fee or other
compensation to the Company under this Agreement, except to the extent that,
with respect to the shares to be purchased by the Company under this Agreement,
the Investment Company or any Fund has adopted and implemented or later adopts
and implements a plan pursuant to Rule 12b-1 to finance distribution expenses or
a plan to finance shareholder servicing expenses or as otherwise agreed between
the Company and the Underwriter or an affiliate. In any such case, the
Underwriter or an affiliate may make payments to the Company or to the
underwriter for the Contracts if and in amounts agreed to by the Underwriter or
an affiliate pursuant to a written agreement(s), and such payments will be made
out of existing fees otherwise payable to the
7
Underwriter, past profits of the Underwriter or an affiliate, or other resources
available to the Underwriter or an affiliate. Additionally, the Underwriter or
an affiliate may pay the Company or the underwriter for the Contracts for
certain administrative services if and in amounts agreed to by the Underwriter
or an affiliate pursuant to a written agreement, and such payments will be made
out of existing fees otherwise payable to the Underwriter, past profits of the
Underwriter or an affiliate, or other resources available to the Underwriter or
an affiliate. None of the foregoing payments shall be made directly by the
Investment Company.
6.2 All expenses incident to performance by the Investment Company under
this Agreement shall be paid by the Investment Company. The Investment Company
shall ensure that all its shares are registered and authorized for issuance in
accordance with applicable federal law and, if and to the extent deemed
advisable by the Investment Company, in accordance with applicable state laws
prior to their sale. The Investment Company shall bear the expenses for the cost
of registration and qualification of the Investment Company's shares,
preparation and filing of the Investment Company's prospectus and registration
statement, proxy materials and reports, setting the prospectus in type, setting
in type and printing the proxy materials and reports to shareholders (including
the costs of printing a prospectus that constitutes an annual report), the
preparation of all statements and notices required by any federal or state law,
all taxes on the issuance or transfer of the Investment Company's shares.
6.3 The Company shall bear the expenses of distributing the Investment
Company's prospectus, proxy materials, and reports to owners of Contracts issued
by the Company.
ARTICLE VII. [RESERVED]
ARTICLE VIII. INDEMNIFICATION
8.1 INDEMNIFICATION BY THE COMPANY
8.1(a). The Company agrees to indemnify and hold harmless the Investment
Company and each member of the Board and officers and each person, if any, who
controls the Investment Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.1)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Company) or litigation (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 expenses (or action in respect thereof)
or settlements are related to the sale or acquisition of the Investment
Company's shares or the Contracts and:
(i) arise out of or are based upon any untrue statements of any material
fact contained in any Registration Statement, prospectus or other offering
materials for the Contracts or contained in the Contracts or sales
literature for the Contracts (or any amendment or supplement to any of the
9
foregoing), or arise out of or are based upon the 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 was made in reliance upon and in conformity with information
furnished to the Company by or on behalf of the Investment Company for use
in any Registration Statement or prospectus for the Contracts or in the
Contracts or sales literature (or any amendment or supplement) or otherwise
for use in connection with the sale of the Contracts or Investment
Company's shares; or
(ii) arise out of or as a result of statements or representations (other
than statements or representations contained in the Registration Statement,
prospectus or sales literature of the Investment Company not supplied by
the Company, or persons under its control) or wrongful conduct of the
Company or persons under its control, with respect to the sale or
distribution of the Contracts or Investment Company shares; or
(iii) arise out of any untrue statement of a material fact contained in a
Registration Statement, prospectus, or sales literature of the Investment
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 statements therein not misleading if such
a statement or omission was made in reliance upon information furnished to
the Investment Company by or on behalf of the Company; or
(iv) arise as a result of any failure by the Company to provide the
services and furnish the materials under the terms of this Agreement; or
(v) arise out of a result from any material breach of any representation 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, as limited
by and in accordance with the provisions of Sections 8.1 (b) and 8.1 (c)
hereof.
8.1(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party as such may arise from such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations or duties under this Agreement or to
the Investment Company, whichever is applicable.
8.1(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
10
any such claim shall not relieve the Company from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Company shall be entitled to participate,
at its own expense, in the defense of such action. The Company also shall be
entitled to assume the defense thereof, with counsel satisfactory to the party
named in the action. After notice from the Company to such party of the
Company's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Company will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in connection
with the defense thereof other than reasonable costs of investigation.
8.1(d). The Indemnified Parties will promptly notify the Company of the
commencement of any litigation or proceedings against them in connection with
the issuance or sale of the Investment Company shares or the Contracts or the
operation of the Investment Company.
8.1 INDEMNIFICATION BY THE UNDERWRITER
8.2(a). The Underwriter agrees to indemnify and hold harmless the Company
and each of its directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.2) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of the Underwriter) or litigation (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 expenses (or actions in respect thereof) or settlements are related to the
sale or acquisition of the Investment Company's shares or the Contracts and;
(i) arise out of or are based upon any untrue statement of any material
fact contained in the Registration Statement or prospectus or sales
literature of the Investment Company (or any amendment or supplement to any
of the foregoing), or arise out of or are based upon the 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 was made in reliance upon and in conformity with information
furnished to the Underwriter or Investment Company by or on behalf of the
Company for use in the Registration Statement or prospectus for the
Investment Company or in the sales literature (or any amendment or
supplement) or otherwise for use in connection with the sale of the
Contracts or Investment Company shares; or
(ii) arise out of or as a result of statements or representations (other
than statements or representations contained in any Registration Statement,
prospectus, other offering materials or
11
sales literature for the Contracts not supplied by the Underwriter or
persons under its control) or wrongful conduct of the Investment Company,
Adviser, or Underwriter or persons under their control, with respect to the
sale or distribution of the Contracts or Investment Company shares; or
(iii) arise out of any untrue statement of a material fact contained in any
Registration Statement, prospectus, other offering materials or sales
literature covering the Contracts, or any amendment thereof or supplement
thereto, or the omission to state therein a material fact required to be
stated therein or necessary to make the statement or statements therein not
misleading, if such statement or omission was made in reliance upon
information furnished to the Company by or on behalf of the Underwriter; or
(iv) arise as a result of any failure by the Underwriter to provide the
services and furnish the materials under the terms of this Agreement; or
(v) arise out of or result from any material breach of any representation
or warranty made by the Underwriter in this Agreement or arise out of or
result from any other material breach of this Agreement by the Underwriter;
as limited by and in accordance with the provisions of Sections 8.2(b) and
8.2(c) hereof.
8.2(b). The Underwriter shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
to which an Indemnified Party would otherwise be subject by reason of such
Indemnified Party's willful misfeasance, bad faith, or gross negligence in the
performance of such Indemnified Party's duties or by reason of such Indemnified
Party's reckless disregard of obligations and duties under this Agreement or to
the Company or each Account, whichever is applicable.
8.2(c). The Underwriter 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 Underwriter 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 Underwriter of
any such claim shall not relieve the Underwriter 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 Underwriter will be entitled to
participate, at its own expense, in the defense thereof. The Underwriter also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Underwriter to such party
of the Underwriter'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 Underwriter will not be liable to such party under this Agreement for
any legal or other expenses subsequently incurred by
12
such party independently in connection with the defense thereof other than
reasonable costs of investigation.
8.2(d). The Company agrees promptly to notify the Underwriter 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 Contracts or the
operation of any Account.
8.1 INDEMNIFICATION BY THE INVESTMENT COMPANY
8.3(a). The Investment Company agrees to indemnify and hold harmless the
Company and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.3)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Investment Company) or litigation
(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 expenses (or actions in respect thereof) or
settlements result from the gross negligence, bad faith or willful misconduct of
the Board or any member thereof, are related to the operations of the Investment
Company and:
(i) arise as a result of any failure by the Investment Company to provide
the services and furnish the materials under the terms of this Agreement;
or
(ii) arise out of or result from any material breach of any representation
or warranty made by the Investment Company in this Agreement or arise out
of or result from any other material breach of this Agreement by the
Investment Company, as limited by and in accordance with the provisions of
Sections 8.3(b) and 8.3(c) hereof.
8.3(b). The Investment Company shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation incurred or assessed against an Indemnified Party as
such may arise from such Indemnified Party's willful misfeasance, bad faith, or
gross negligence in the performance of such Indemnified Party's duties or by
reason of such Indemnified Party's reckless disregard of obligations and duties
under this Agreement or to the Company, the Investment Company, the Underwriter
or any Account, which ever is applicable.
8.3(c). The Investment 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 Investment 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
Investment Company of any such claim shall not relieve the Investment Company
from any
13
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 Investment Company
will be entitled to participate, at its own expense, in the defense thereof. The
Investment Company also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice from the
Investment Company to such party of the Investment 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 Investment 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.
8.3(d). The Company and the Underwriter agree promptly to notify the
Investment Company of the commencement of any litigation or proceeding against
it or any of its respective officers or directors in connection with this
Agreement, the issuance or sale of the Contracts, with respect to the operation
of any Account, or the sale or acquisition of shares of the Investment Company.
ARTICLE IX. APPLICABLE LAW
9.1 This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the State of New York.
9.2 To the extent they are applicable, this Agreement shall be subject to
the provisions of the 1933, 1934 and 1940 Acts, and the rules and regulations
and rulings thereunder, including such exemptions from those statutes, rules and
regulations as the Securities and Exchange Commission may grant, and any
applicable NASD regulations or interpretations, and the terms hereof shall be
interpreted and construed in accordance therewith.
ARTICLE X. TERMINATION OF AGREEMENT
10.1 This Agreement shall continue in full force and effect until the first
to occur of
(a) termination by any party for any reason by sixty (60) days advance
written notice delivered to the other parties; or
(b) termination by the Company by written notice to the Investment Company
and the Underwriter with respect to any fund based upon the Company's
determination that shares of such Fund are not reasonably available to meet
the requirements of the Contracts; or
(c) termination by the Company by written notice to the Investment Company
and the Underwriter with respect to any Fund in the event any of the Fund's
shares are not registered, issued, or sold materially in accordance with
applicable state or federal law or such law precludes the use of such
shares as the underlying investment media of the Contracts issued or to be
issued by the Company; or
(d) termination by the Company by written notice to the Investment Company
and the Underwriter with respect to any Fund in the event that such Fund
ceases to qualify as a Regulated
14
Investment Company under Subchapter M of the Code or under any successor or
similar provision, or if the Company reasonably believes that the
Investment Company may fail to so qualify; or
(e) [reserved]; or
(f) termination by either the Investment Company or the Underwriter by
written notice to the Company, if either one or both of the Investment
Company or the Underwriter respectively, shall determine, in their sole
judgment exercised in good faith, that the Company or its affiliated
companies has suffered a material adverse change in its business,
operations, financial condition, or prospects since the date of this
Agreement or is the subject of material adverse publicity; or
(g) termination by the Company by written notice to the Investment Company
and the Underwriter, if the Company shall determine, in its sole judgment
exercised in good faith, that either the Investment Company or the
Underwriter has suffered a material adverse change in its business,
operations, financial condition, or prospects since the date of this
Agreement or is the subject of material adverse publicity.
10.2 Notwithstanding any termination of this Agreement, the Investment
Company and the Underwriter shall at the option of the Company, continue to make
available additional shares of the Investment Company pursuant to the terms and
conditions of this Agreement, for all Contracts in effect on the effective date
of termination of this Agreement (hereinafter referred to as "Existing
Contracts"). Specifically, without limitation, the owners of the Existing
Contracts shall be permitted to reallocate investment in the Investment Company,
redeem investments in the Investment Company, or invest in the Investment
Company upon the making of additional purchase payments under the Existing
Contracts. Provided, however, that the preceding two sentences of this Section
10.2 shall not prevent the Investment Company or the Underwriter from enforcing
the Investment Company's current policy regarding frequent trading of shares of
the Investment Company (also known as market timing).
10.3 The Company shall not redeem Investment Company shares attributable to
the Contracts (as opposed to Investment Company shares attributable to the
Company's assets held in any of the Accounts) except (i) as necessary to
implement Contract owner initiated transactions, or (ii) as required by state or
federal laws or regulations or judicial or other legal precedent of general
application (hereinafter referred to as a "Legally Required Redemption"), or
(iii) upon termination of this Agreement by the Company, the Investment Company
or the Underwriter. Upon request, the Company will promptly furnish to the
Investment Company and the Underwriter the opinion of counsel for the Company
(which counsel shall be reasonably satisfactory to the Investment Company and
the Underwriter) to the effect that any redemption pursuant to clause (ii) above
is a Legally Required Redemption. Furthermore, except in cases where permitted
under the terms of the Contracts, the Company shall not prevent Contract owners
from
15
allocating payments to a Fund that was otherwise available under the Contracts
without first giving the Investment Company or the Underwriter ninety (90) days
notice of its intention to do so.
ARTICLE XI. NOTICES
Any notice shall be sufficiently given when sent by registered or certified
mail to the other party at the address of such party set forth below or at such
other address as such party may from time to time specify in writing to the
other party.
If to the Investment Company:
000 X Xxxxxx Xxxxxx,
Xxxxxxxxxx 00000
Attention: General Counsel
If to the Company:
American United Life Insurance Company
Xxx Xxxxxxxx Xxxxxx,
X.X. Xxx 000
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxx Xxxxxx
If to the Underwriter:
000 X Xxxxxx Xxxxxx,
Xxxxxxxxxx 00000
Attention: General Counsel
ARTICLE XII. MISCELLANEOUS
12.1 All persons dealing with the Investment Company must look solely to
the property of the Investment Company for the enforcement of any claims against
the Investment Company as neither the Board, officers, agents nor shareholders
assume any personal liability for obligations entered into on behalf of the
Investment Company.
12.2 Subject to the requirements of legal process and regulatory authority,
each party hereto shall treat as confidential the names and addresses of the
owners of the Contracts and all information reasonably identified as
confidential in writing by any other party hereto and, except as permitted by
this Agreement, shall not disclose, disseminate or utilize such names and
addresses and other confidential information until such time as it may come into
the public domain without the express written consent of the affected party.
12.3 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.
16
12.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.5 If any provisions 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.
12.6 Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
NASD and state insurance regulators) and shall permit such parties and
authorities reasonable access to its books and records in connection with any
investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.
12.7 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, which the parties hereto are entitled to under state and
federal laws.
12.8 This Agreements or any of the rights and obligations hereunder may not
be assigned by any party without the prior written consent of all parties
hereto; provided, however, that the Underwriter may assign this Agreement or any
rights or obligations hereunder to any affiliate of or company under common
control with the Underwriter, if such assignee is duly licensed and registered
to perform the obligations of the Underwriter under this Agreement.
12.9 Upon the request of the Investment Company, the Company shall furnish,
or shall cause to be furnished, to the Investment Company or its designee copies
of the following reports:
(a) the Company's annual statement prepared under statutory accounting
principles, as soon as practical and in any event within 90 days after the
end of each fiscal year;
(b) the Company's quarterly statement (statutory), as soon as practical and
in any event within 45 days after the end of each quarterly period; or
(b) any financial statement, proxy statement, notice or report of the
Company sent to stockholders or policyholders, as soon as practical after
the delivery thereof.
12.10 The Amended and Restated Master Trust Agreement dated August 19,
2002, as amended from time to time, establishing the Investment Company, which
is hereby referred to and a copy of which is on file with the Secretary of The
Commonwealth of Massachusetts, provides that the name Xxxxx Xxxxxxx Investment
Company means the Trustees from time to time serving (as Trustees but not
personally) under said Master Trust Agreement. It is expressly acknowledged and
agreed that the obligations of the Investment Company hereunder shall not be
binding upon any of the shareholders, Trustees, officers, employees or agents of
the Investment Company, personally, but shall bind only the trust property of
the Investment Company as provided in its Master Trust Agreement. The execution
and delivery of this Agreement have been authorized by the Trustees of the
Investment Company and signed by the President
17
to impose any liability on any of them personally, but shall bind only the trust
property of the Investment Company as provided in its Master Trust Agreement.
IN WITNESS WHEREOF, each of the parties hereto have caused this Agreement
to be executed in its name and on behalf by its duly authorized representative
and its seal to be hereunder affixed hereto as of the date first written above.
AMERICAN UNITED LIFE INSURANCE COMPANY
ATTEST: By:
/S/ Xxxxxx X. Xxxxx /S/ Xxxx X. Xxxxxx
XXXXX XXXXXXX INVESTMENT COMPANY
ATTEST: By:
/S/ May Bashbrod Assistant Secretary /S/ Xxxxxxx X. Xxxxxxx, President
XXXXXXX FUND DISTRIBUTORS, INC.
ATTEST: By:
/S/ Xxxx Bashbrod Assistant Secretary /S/ Xxxxxxx X. Xxxxxxx, President
18
SCHEDULE A
ACCOUNTS
Name of Account and Date of Resolution of Company's Board which established the
Account
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)
19
SCHEDULE B
CONTRACTS
1. Contract Form Numbers:
GB 1 O.OM-K
GB8.OM-K(II)
GB 8.OM-K(II)AMNRDCP
GB8.OM-K(II)NRCDP
GBErTDA.OM-K
GBIA2.OM-K NRDCP.OM-K
GB8.OM-K (Unallocated)
GB 10. OM-K (Unallocated)
ROTHIRA.OM-K TDA.
GMDB.OM-K XXX/GBSEP/GBSIMPLE.OM-K
GB9.OM-K
GB 11 .OM-K
NRDCP.OM-K (Unallocated)
VEBA.OM-K (Unallocated.
2. Xxxxx Xxxxxxx Investment Company Funds currently available to act as
investment vehicles for certain of the above-listed contracts:
All FRIC Funds in accordance with the terms and conditions of FRIC's
registration statement.
20
American United Life Insurance Company
SALES SUPPORT SERVICES
SUB-AGREEMENT
APPOINTMENT OF CLIENT AS SELLING AGENT
XXXXX XXXXXXX INVESTMENT COMPANY
CLASS D SHARES ("CLASS SHARES")
This agreement ("Sub-Agreement") between Xxxxx Xxxxxxx Investment
Management Company, ("FRIMCo") and OneAmerica Securities, Inc. ("Client") is an
auxiliary agreement to the Participation Agreement (the " Participation
Agreement") previously or contemporaneously entered into between American United
Life Insurance Company ("Insurance Company"), an affiliate of Client, Xxxxx
Xxxxxxx Investment Company ("Investment Company") and Xxxxxxx Fund Distributors,
Inc. ("RFD"), an affiliate of FRIMCo, and it is solely for the purpose of
furthering the business contemplated in the Participation Agreement. The terms
and conditions of the Participation Agreement are incorporated herein by
reference, and any inconsistency between provisions of the Participation
Agreement and this Sub-Agreement, shall be resolved by reference to the
provisions of this Sub-Agreement, which shall govern. Capitalized terms not
defined herein shall have the meanings set forth in the Participation Agreement,
The terms and conditions set forth in this Sub-Agreement, together with those of
the Participation Agreement are referred to collectively in this Sub-Agreement
as the "Agreement."
The terms and conditions of this Sub-Agreement are as follows:
Pursuant to this Sub-Agreement FRIMCo, on behalf of its subsidiary, RFD,
appoints Client to provide RFD with sales support assistance relating to the
Class D Shares of the investment portfolios (the "Funds") of Investment Company
for which RFD is the principal underwriter as defined in the Investment Company
Act of 1940 (the "1940 Act") for the continuous distribution of said Class
Shares. All sales of Shares shall be made in conformity with the Participation
Agreement.
1. Client agrees to provide reasonable sales support assistance in
connection with the sale of Class Shares to its customers ("Customers").
Client assistance may include, but neither is required to include nor is
limited to, the following: (1) providing facilities to answer questions
from prospective investors about the Investment Company; (2) receiving and
answering correspondence, including requests for prospectuses and
statements of additional information; (3) preparing, printing and
delivering prospectuses and shareholder reports to prospective investors;
(4) complying with federal and state securities laws pertaining to the sale
of Class Shares; (5) preparing advertising and promotional materials; (6)
assisting investors in Class Shares in completing application forms and
selecting dividend and other account options; and (7) forwarding sales
literature and advertising provided by or on behalf of the Investment
Company to Customers and providing such other sales support assistance as
may be requested by RFD or the Investment Company from time to time. In
addition, Client may provide its endorsement of the Class Shares to its
Customers as an inducement to invest in the Class Shares. All services
rendered hereunder by Client shall be performed in a professional,
competent and timely manner.
2. FRIMCo and RFD recognize that Client may be subject to the provisions of
the Investment Advisers Act of 1940, the GlassSteagall Act, and other laws
governing, among other things, the conduct of activities by investment
advisers, federally chartered and supervised banks, and other banking
organizations. As such, Client may be restricted in the activities Client
may undertake and for which Client may be paid. Client will perform only
those activities which are consistent with statutes and regulations Client.
Client will act solely for the account of its Customers.
3. Client will provide such office space and equipment, telephone
facilities and personnel (which may be any part of the space, equipment and
facilities currently used in Client's business, or any personnel employed
by Client) as may be reasonably necessary or beneficial in order to provide
the sales support services contemplated hereby.
4. Neither Client nor any of its officers, employees or agents are
authorized to make any representations concerning RFD, the Investment
Company or the Class Shares, except those contained in the Investment
Company's applicable then current prospectuses and statements of additional
information, as amended or supplemented from time to time, a copy of each
of which will be supplied by RFD or the Investment Company or on its behalf
to Client, or in such supplemental literature or advertising as may be
authorized by RFD on behalf of the Investment Company in writing.
5. For all purposes of this Agreement Client will be deemed to be an
independent contractor, and will have no authority to act as agent for RFD
or the Investment Company in any matter or in any respect, except as
expressly authorized. By Client's acceptance of this Sub-Agreement, Client
agrees to and does release, indemnify and hold RFD and the Investment
Company harmless from and against any and all direct or indirect
liabilities or losses resulting from requests, directions, actions or
inactions of or by Client or its officers, employees or agents regarding
Client's responsibilities hereunder or the purchase, redemption, transfer
or registration of Class Shares (or orders relating to the same) by or on
behalf of Customers. Client and its employees will, upon request, be
available during normal business hours to consult with
1
RFD or the Investment Company or their respective designees concerning the
performance of Client's responsibilities under this Agreement.
6. In consideration of the services and facilities provided by Client
hereunder, RFD, acting on behalf of the Investment Company, will pay to
Client, and Client will accept as full payment therefor, a quarterly fee as
set forth in Appendix A hereto. The fee rate payable to Client may be
prospectively increased or decreased by RFD or the Investment Company or
their respective designees, in its or their sole discretion, at any time
upon notice to Client. Further, RFD, the Investment Company or their
respective designees may, in its or their discretion and without notice,
suspend or withdraw the sale of Class Shares of any or all Funds, including
the sale of Class Shares for the account of any Customer or Customers and
require that Class Shares be redeemed if any condition of investment in
Class Shares, as described in the applicable then-current prospectuses, are
not met.
The fees payable under this Section 6 shall be used for sales support
services provided, and related expenses incurred, by Client. Payments may
be applied to commissions, incentive compensation or other compensation to,
and expenses of, Client's account executives or other employees; overhead
and other office expenses attributable to sales support activities;
preparation, printing and distribution of sales literature and advertising
materials attributable to sales support activities; and opportunity costs
relating to the foregoing (which may be calculated as a carrying charge on
Client's unreimbursed expenses incurred in connection with its sales
support services). The overhead and other office expenses referenced in
this Section 6 may include, without limitation, (i) the expenses of
operating Client's offices in connection with the sale of Class Shares,
including lease costs, the salaries and employee benefits of
administrative, operations and support personnel, utility costs,
communication costs and the costs of stationery and supplies, (ii) the
costs of client sales seminars and travel related to the provision of sales
support services and (iii) other expenses relating to the provision of
sales support services.
7. Client agrees to furnish RFD or the Investment Company or their
respective designees with such information as RFD, it or they may
reasonably request (including, without limitation, periodic certifications
confirming the provision to Customers of the services described herein),
and will otherwise cooperate with RFD, the Investment Company and their
respective designees (including, without limitation, any auditors or legal
counsel designated by RFD, the Investment Company or their agents), in
connection with the preparation of reports to the Investment Company's
Board of Trustees concerning this Agreement and the monies paid or payable
pursuant hereto, as well as any other reports or filings that may be
required by law.
8. RFD may enter into other agreements that are similar to this Agreement
with any other person or persons without Client's consent.
9. By Client's acceptance of this Sub-Agreement, Client represents,
warrants and agrees that the compensation payable to Client hereunder,
together with any other compensation Client receives in connection with the
investment of Client's Customers' assets in Class Shares of the Funds, will
be disclosed by Client to its Customers to the extent required by
applicable laws or regulations, will be authorized by Client's Customers
and will not be excessive or unreasonable under the laws and instruments
governing Client's relationships with Customers. By Client's acceptance of
this Sub-Agreement, Client represents and warrants that: (i) in the event
an issue pertaining to this Agreement or the Class Shares Distribution Plan
related hereto is submitted for shareholder approval, and Client has the
authority to do so, Client will vote any Class Shares held for its own
account in the same proportion as the vote of the Class Shares held for
Client's Customers' benefit; and (ii) Client will not engage in activities
pursuant to this Agreement which constitute acting as a broker or dealer
under state law unless Client has obtained any licenses required by such
law. In addition, Client understands that this Agreement has been entered
into pursuant to Rule 12b-1 under the 1940 Act, and is subject to the
provisions of said Rule, as well as any other applicable rules or
regulations promulgated by the Securities and Exchange Commission.
10. Client agrees to conform to any compliance standards adopted by RFD or
the Investment Company as to when Class Shares in a Fund may be
appropriately sold to or retained by particular investors.
11. This Agreement will become effective on the date a fully executed copy
of this Agreement and of the Participation Agreement have been received by
FRIMCo, on behalf of RFD or its designees, and the Agreement will continue
in effect until terminated. This Agreement is terminable with respect to
any Class Shares of any Fund, without penalty, at any time by the
Investment Company (which termination may be by a vote of a majority of the
disinterested Trustees of the Investment Company or by vote of the holders
of a majority of such outstanding Class Shares of such Fund) or by FRIMCo
on behalf of RFD or Client upon written notice to the other party.
12. This Sub-Agreement, together with the Participation Agreement and any
other Sub-Agreements, constitutes the entire agreement between the parties
with respect to the subject matter hereof and merges all prior and
contemporaneous communications.
13. The parties executing this Sub-Agreement represent that they have full
authority to bind their respective firms thereby, and that all appropriate
and necessary corporate action has been taken to authorize this Agreement.
2
IN WITNESS WHEREOF, the parties have executed this Sub-Agreement as of the
later date set forth below. All signed copies of this Sub-Agreement shall be
deemed to be originals.
XXXXX XXXXXXX INVESTMENT
MANAGEMENT COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: President
Date:
CLIENT
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Secretary
Date: 5/26/04
ACCEPTED AND AGREED TO:
XXXXXXX FUND DISTRIBUTORS, INC>
By: /s/ Xxxxxxx X. Xxxxxxx
Name Xxxxxxx X. Xxxxxxx
Title: President
Date:
ACCEPTED AND AGREED TO:
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Assistant General Counsel
Date: 5/26/04
3
APPENDIX A
FEE SCHEDULE
Class Shares Sales Support Fee*
D 0.25%
* Fees are expressed as an annualized percentage of the average net asset
value of Class Shares held by Client's Customers during the preceding calendar
quarter.
4
American United Life Insurance Company
SHAREHOLDER SERVICES SUB-AGREEMENT
APPOINTMENT OF CLIENT AS SERVICING AGENT
XXXXX XXXXXXX INVESTMENT COMPANY
CLASS D and E SHARES ("CLASS SHARES")
This agreement ("Sub-Agreement") between Xxxxx Xxxxxxx Investment
Management Company, ("FRIMCo") and American United Life Insurance Company
("Client") is an auxiliary agreement to the Participation Agreement (the
"Participation Agreement") previously or contemporaneously entered into between
Client, Xxxxx Xxxxxxx Investment Company ("Investment Company") and Xxxxxxx Fund
Distributors, Inc. ("RFD"), an affiliate of FRIMCo, and it is solely for the
purpose of furthering the business contemplated in the Participation Agreement.
The terms and conditions of the Participation Agreement are incorporated herein
by reference, and any inconsistency between provisions of the Participation
Agreement and this Sub-Agreement, shall be resolved by reference to the
provisions of this Sub-Agreement, which shall govern. Capitalized terms not
defined herein shall have the meanings set forth in the Participation Agreement.
The terms and conditions set forth in this Sub-Agreement, together with those of
the Participation Agreement are referred to collectively in this Sub-Agreement
as the "Agreement."
The terms and conditions of this Sub-Agreement are as follows:
Pursuant to this Sub-Agreement, FRIMCo, on behalf of its subsidiary, RFD,
appoints Client to provide RFD with shareholder assistance, support, and
administrative services to Client's Customers ("Customers") who may from time to
time hold or beneficially own or hold as shareholders of record of Class D or E
Shares in one or more of the portfolios (the "Funds") of Investment Company for
which RFD is the principal underwriter as defined in the Investment Company Act
of 1940 (the "1940 Act").
1. Client agrees to provide administrative support services to its
Customers who may from time to time beneficially own Class Shares ("Class
Shareholders"). Such services may include, but neither are required to
include nor are limited to the following (1) acting as the sole shareholder
of record and nominee for Class Shareholders; (2) maintaining account
records for Class Shareholders; (3) receiving, aggregating and processing
Class Shareholder purchase, exchange, and redemption orders from Class
Shareholders and placing net purchase, exchange, and redemption requests
for shares of the Funds; (4) issuing confirmations to Class Shareholders;
(5) providing and maintaining elective services for Class Shareholders; (6)
providing Class Shareholder sub-accounting; (7) communicating periodically
with Class Shareholders; (8) answering questions and handling
correspondence from Class Shareholders about their accounts; (9) providing
sweep program servicing; selecting, providing, and maintaining
pre-authorized investment allocation plans; and (10) providing such other
similar services as RFD or the Investment Company may reasonably require to
the extent Client is permitted to do so under applicable statutes, rules or
regulations. All services rendered hereunder by Client shall be performed
in a professional, competent and timely manner.
2. Client will perform only those activities which are consistent with
statutes and regulations applicable to it.
3. Client will provide such office space and equipment, telephone
facilities and personnel (which may be any part of the space, equipment and
facilities currently used in Client's business, or any personnel employed
by Client) as may be reasonably necessary or beneficial in order to provide
the shareholder investment support services contemplated hereby.
4. Neither Client nor any of its officers, employees or agents are
authorized to make any representations concerning RFD, the Investment
Company or the Class Shares except those contained in the Investment
Company's then current prospectuses and statements of additional
information, as amended or supplemented from time to time, a copy of each
of which will be supplied by RFD to Client, or in such supplemental
literature or advertising as may be authorized by RFD or the Investment
Company in writing.
5. For all purposes of this Agreement Client will be deemed to be an
independent contractor, and will have no authority to act as agent for RFD
or the Investment Company in any matter or in any respect, except as
expressly authorized. By Client's acceptance of this Agreement, Client
agrees to and does release, indemnify and hold RFD and the Investment
Company harmless from and against any and all direct or indirect
liabilities or losses resulting from requests, directions, actions or
inactions of or by Client or its officers, employees or agents regarding
Client's responsibilities hereunder or the purchase,
1
redemption, transfer or registration of Class Shares (or orders relating to
the same) by or on behalf of Customers. Client and its employees will, upon
request, be available during normal business hours to consult with RFD and
the Investment Company and their respective designees concerning the
performance of Client's responsibilities under this Agreement.
3. In consideration of the services and facilities provided by Client
hereunder, RFD, acting on behalf of the Investment Company, will pay to
Client quarterly, and Client will accept as full payment therefor, a fee
equal to the percentage of the average net asset value of Class Shares held
by Client's Customers as set forth on Appendix A hereto. The fee rate
payable to Client may be prospectively increased or decreased by RFD or the
Investment Company, in RFD's or the Investment Company's sole discretion,
at any time upon notice to Client. Further, RFD or the Investment Company
may, in their discretion and without notice, suspend or withdraw the sale
of Class Shares of any and all Funds, including the sale of Class Shares to
Client for the account of any Customer or Customers and require that Class
Shares be redeemed if any conditions of investment in Class Shares, as
described in the applicable then current prospectuses, are not met.
Compensation payable under this Agreement is subject to, among other
things, National Association of Securities Dealers, Inc. ("NASD") rules
governing receipt by NASD members of shareholder investment services plan
fees from registered investment companies (the "NASD Rules"). Such
compensation shall only be paid for services determined to be permissible
under the NASD Rules, and Client agrees that any compensation paid under
this Agreement is not for activities designed primarily to result in sales
of Class Shares.
7. Client agrees to furnish RFD, the Investment Company or their respective
designees with such information as any of them may reasonably request
(including, without limitation, periodic certifications confirming the
provision to Customers of the services described herein), and will
otherwise cooperate with RFD, the Investment Company and their respective
designees (including, without limitation, any auditors or legal counsel
designated by RFD or the Investment Company), in connection with the
preparation of reports to the Investment Company's Board of Trustees
concerning this Agreement and the monies paid or payable by RFD pursuant
hereto, as well as any other reports or filings that may be required by
law.
8. RFD may enter into other agreements that are similar to this Agreement
with any other person or persons without Client's consent.
9. By Client's written acceptance of this Agreement, Client represents,
warrants and agrees that: (i) in no event will any of the services provided
by Client hereunder be primarily intended to result in the sale of any
shares issued by the Investment Company; (ii) the compensation payable to
Client hereunder, together with any other compensation Client receives in
connection with the investment of its Customers' assets in Class Shares of
the Funds, will be disclosed by Client to its Customers to the extent
required by applicable laws or regulations, will be authorized by Client's
Customers and will not result in an excessive or unreasonable fee to
Client, and (iii) in the event an issue pertaining to this Agreement is
submitted for shareholder approval, and Client has the authority for its
Customer to do so, Client will vote any Class Shares held for its own
account in the same proportion as the vote of the Class Shares held for its
Customers' benefit.
10. Client agrees to conform to compliance standards adopted by RFD or the
Investment Company as to when Class Shares in a Fund may be appropriately
sold to or retained by particular investors.
11. This Agreement will become effective on the date a fully executed copy
of this Sub-Agreement and the Participation Agreement are received by
FRIMCo or its designee and continue in effect until terminated. This
SubAgreement is terminable with respect to any Class Shares of any Fund,
without penalty, at any time by FRIMCo, on behalf of RFD (which termination
may be by a vote of a majority of our disinterested trustees) or by Client
upon written notice to the other party.
12. This Sub-Agreement, together with the Participation Agreement and any
other Sub-Agreements, constitutes the entire agreement between the parties
with respect to the subject matter hereof and merges all prior and
contemporaneous communications.
13. The parties executing this Sub-Agreement represent that they have full
authority to bind their respective firms thereby, and that all appropriate
and necessary corporate action has been taken to authorize this
Sub-Agreement.
2
IN WITNESS WHEREOF, the parties have executed this Sub-Agreement as of the
later date set forth below. All signed copies of this Sub-Agreement shall be
deemed to be originals.
XXXXX XXXXXXX INVESTMENT
MANAGEMENT COMPANY
On behalf of the subsidiary
XXXXXXX FUND DISTRIBUTORS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: President
Date:
CLIENT
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Assistant General Counsel
Date: 5/26/04
ACCEPTED AND AGREED TO:
XXXXXXX FUND DISTRIBUTORS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: President
Date:
3
APPENDIX A
Fee Schedule
Class Shareholder Services Fee*
D 0.25%
E 0.25%
*Fees are expressed as an annualized percentage of the average net asset
value of Class Shares held by Client's Customers during the preceding calendar
quarter.
4
American United Life Insurance Company
LIMITED SELLING SUB-AGREEMENT
for Class D Shares ("Shares") of
XXXXX XXXXXXX INVESTMENT COMPANY
This agreement ("Sub-Agreement") between Xxxxx Xxxxxxx Investment
Management Company, ("FRIMCo") and OneAmerica Securities, Inc. ("Client") is an
auxiliary agreement to the Participation Agreement (the "Participation
Agreement") previously or contemporaneously entered into between American United
Life Insurance Company ("Insurance Company"), an affiliate of Client, Xxxxx
Xxxxxxx Investment Company ("Investment Company") and Xxxxxxx Fund Distributors,
Inc. ("RFD"), an affiliate of FRIMCo, and it is solely for the purpose of
furthering the business contemplated in the Participation Agreement. The terms
and conditions of the Participation Agreement are incorporated herein by
reference, and any inconsistency between provisions of the Participation
Agreement and this Sub-Agreement, shall be resolved by reference to the
provisions of this Sub-Agreement, which shall govern. Capitalized terms not
defined herein shall have the meanings set forth in the Participation Agreement.
The terms and conditions set forth in this Sub-Agreement, together with those of
the Participation Agreement are referred to collectively in this Sub-Agreement
as the "Agreement."
FRIMCo's subsidiary, RFD is the principal underwriter for the
aforementioned Shares of Investment Company, an investment company registered
under the Investment Company Act of 1940 (the "Act"). The Investment Company is
comprised of multiple portfolios (portfolios are referred to individually as a
"Fund" and collectively as the "Funds").
The terms and conditions of this Sub-Agreement are as follows:
Subject to the terms of this Agreement, FRIMCo, on behalf of RFD, appoints
Client as a non-exclusive distributor for the sale of Shares of the Funds for
which RFD is principal underwriter in the jurisdictions, in compliance with the
applicable laws, in which Client is registered as a dealer, subject in all cases
to the delivery preceding or accompanying such sales of the applicable
then-current prospectus(es) for the Shares. All sales of Shares shall be made in
conformity with the Participation Agreement.
1. Sale of Shares. Subject to applicable legal restrictions, Client agrees
to use reasonable efforts to solicit investors for orders to purchase the
Shares. In all sales of Shares made by Client, Client shall act as dealer with
respect to investors and in no transactions shall Client have any authority to
act as agent for any of the Funds or for RFD, and nothing in this Agreement
shall constitute either Client or RFD the agent of the other or shall constitute
Client or any of the Funds the agent of the other. It is agreed and understood
that, whether Shares are registered in the purchaser's name, in Client's name,
or in the name of Client's nominee, the Client's customer ("Customer") will have
full beneficial ownership of the Shares.
Client is not authorized to, and Client will not, permit any of Client's
representatives, other than those specifically authorized by RFD in Exhibit A
hereto, as amended from time to time, to offer or sell Shares of the Funds.
No person is authorized to make any representation concerning any of the
Funds or the Shares except those contained in the applicable then-current
prospectus(es) and statements of additional information ("Prospectuses"). In
purchasing Shares from RFD, Client shall rely solely on the representations
contained inthe Prospectuses. RFD shall provide Client with copies of
Prospectuses, reports to shareholders and available printed information in
reasonable quantities upon request. Client may solicit orders for Shares only at
prices calculated as described in the Prospectuses. Client agrees that Client
will not offer Shares in any state or other jurisdiction where they have not
been qualified for sale or if RFD has not advised Client in advance that such
sale is exempt from such qualification requirements. Client is responsible under
this Agreement for inquiring of RFD as to the jurisdictions in which Shares have
been qualified for sale.
With respect to Shares which are sold with an initial sales charge, the
Client will retain such concessions from the public offering price as are
specified in the Prospectus. With respect to Shares which are not sold with an
initial sales charge, RFD will pay commissions to the Client at such rates as
RFD and the Client may determine from time to time, consistent with the
Prospectus and this Agreement. Consistent with the Prospectus and applicable law
and regulation, from time to time, RFD and the Client may determine that the
Client will retain the full amount of initial sales charges and/or that RFD will
pay the Client additional compensation in connection with the Client's Shares.
The discounts or other concessions to which a customer of the Client may be
entitled in connection with sales to Customers pursuant to any special features
of the Funds (such as cumulative discounts, letters of intent, etc., the terms
of which shall be as described in the Prospectuses and related forms) shall be
in accordance with the terms of such features. To obtain the benefit of any such
reductions, RFD must be notified at the time the sale takes place that such sale
qualifies for the reduced charge . There currently is no sales charge or selling
concession on purchases of Shares by the reinvestment of dividends or capital
gains distributions.
The public offering price of certain Shares may reflect scheduled
variations in or the elimination of sales charges on sales of Shares either
generally to the public or in connection with special purchase plans, as
described in the Prospectus. Client agrees to apply any such scheduled variation
in or waivers of sales charges uniformly to all customers meeting the
qualifications therefor as specified in the Prospectus.
With respect to shares which are sold with contingent deferred sales
charges ("CDSCs"), Client acknowledges and agrees that, except as otherwise
described in Section 3 of this
1
Sub-Agreement, Client shall not have any right, title or interest in any
portion of the distribution fees referred to in Section 3 hereof or CDSCs
payable in respect of any class of Shares of the Funds, and Client shall not
have any claim against the Funds for any compensation, expenses or liabilities
relating to any class of Shares of the Funds.
RFD shall be entitled to any CDSCs on any applicable class of Shares sold.
If, for any Shares, any CDSC is waived for a partial or complete redemption as
described in the Prospectus, then in such case Client shall remit to RFD
promptly an amount equal to the commission or distribution fee paid by RFD to
Client on such Shares when initially sold less any adjustment equal to the sum
of any payments received by RFD on such Shares pursuant to any distribution
plans referred to in Section 3 hereof.
Client agrees that it and its employees and agents will use only such
marketing, advertising, or other promotional materials (including, without means
of limitation, materials available on the Internet) that refer to FRIMCo, its
affiliates, or investment products (including, without means of limitation, the
Investment Company, and the Funds) as may be furnished or approved by RFD. RFD
may, in its sole discretion, deem any materials which RFD prepares or assists in
preparing as "sales literature" subject to the rules and regulations of the
National Association of Securities Dealers, Inc. ("NASD"), including
requirements to file the materials as mutual funds sales literature with the
NASD by RFD. In no event shall RFD be responsible for filing any such materials
as sales literature on Client's behalf with any state. Client agrees that all
such materials shall be used in a manner consistent with applicable laws and
regulations and with any guidelines and standards provided to Client by RFD or
on its behalf from time to time.
If a Customer's account with a Fund is established without the Customer
signing the application form, Client represents that the instructions relating
to the registration and options selected which are furnished to such Fund
(whether on the application form, in some other document, electronically, or
orally) are duly authorized in accordance with the Customer's instructions, and
Client agrees to indemnify the Investment Company, the Funds, their investment
advisers, the Funds' transfer agent, RFD, its affiliates and their respective
representatives and agents for any loss, liability, and expenses resulting from
acting upon such instructions.
2. Orders, Confirmations and Payment for Shares. Orders submitted by Client
shall be accepted by RFD at the public offering price applicable to each order
determined as described in the applicable Prospectuses, subject to any discount,
commission or concession described therein. The minimum dollar purchase of
Shares of each Fund (including Shares being acquired by Client's Customers
pursuant to any exchange privilege described in the Prospectuses) shall be the
applicable minimum amounts, if any, described in the applicable Prospectuses and
no order for less than such amounts will be accepted. All orders are subject to
acceptance by RFD, and RFD reserves the right in its sole discretion to reject
any order. The Investment Company, RFD or their respective designees reserves
the right, at its or their discretion and without notice, to suspend the sale of
any class of Shares or withdraw entirely the sale of any class of Shares,
including the sale of Shares for the account of any Customer or Customers and
require that any class of Shares be redeemed if any condition of investment in
such Shares, as described in the Prospectus is not met. Client agrees that (i)
Client will order Shares of the Funds for Client's Customers from RFD only to
cover orders already received from Client's Customers or with respect to
accounts over which Client or Client's authorized registered representatives
have discretionary investment authority, (ii) Client will order Shares of the
Funds for Client's Customers only from or through RFD or its designee or through
a clearing organization with which RFD has a trading relationship ("Clearing
Organization"), and (iii) Client will not withhold placing orders received from
Client's Customers so as to profit itself as a result of such withholding, and
Client will place orders for purchases and redemptions promptly upon receipt
from Client's Customers. Neither RFD nor the Funds' transfer agent will accept
any conditional orders for Shares.
Client may place orders by transmitting them either directly to RFD or its
designee or through a Clearing Organization, as described in the applicable
Prospectuses. The procedures for handling orders shall be subject to the
instructions that RFD shall forward to Client from time to time, and RFD
reserves the right to direct Client to place orders directly with the Funds'
transfer agent. If Client transmits orders directly to RFD or its designee, RFD
will transmit to Client a confirmation for each order placed. Payment to the
Funds' custodian, RFD or its designee of the purchase price must be made within
one (1) business day of placing the order, or such longer time as may be agreed
to by RFD in writing with Client or, if applicable, with a Clearing
Organization. If such payment is not received, RFD reserves the right, without
notice, to cancel the sale or, at RFD's option, to sell the shares ordered back
to the issuer, and RFD may hold Client responsible for any loss, including loss
of profit, and any cost, damage or expense, including reasonable attorney's fees
and expenses suffered by the Investment Company, the Funds, their investment
advisers, the Funds' transfer agent, RFD or its affiliates and their respective
representatives and agents resulting from Client's failure to make such payment.
In the event RFD permits Client to effect a telephonic exchange of Fund
Shares for Shares of another Fund or for any other shares of the Investment
Company on behalf of Client's Customers, Client agrees to indemnify RFD, its
affiliates, the Investment Company, the Funds and the Funds' transfer agent for
any loss, injury, damage, expense or liability as a result of acting or relying
upon Client's or its representative's telephone instructions and information.
To the extent that Client places orders directly with RFD or its designee,
if Client is a registered owner of Shares held in "street name," Client agrees
to provide beneficial owners of such Shares with transaction confirmations and
regulatorily required notices and reports with respect to the Shares.
3. Distribution and Shareholder Services. Certain of the Funds (or certain
classes thereof) have adopted distribution and shareholder services plans
pursuant to which RFD, on behalf of each such Fund, may, pursuant to one or more
separate SubAgreements, provide compensation to dealers, financial institutions
and other entities for distribution activities and for shareholder servicing
activities in accordance with the provisions of such Funds' distribution and
shareholder services plans. The
2
provisions and terms of the Funds' distribution and shareholder services plans
are described in their Prospectuses, and Client hereby agrees that neither RFD
nor FRIMCo has made any representations to Client with respect to the
distribution and shareholder services plans of such Funds in addition to or
conflicting with the description set forth in their Prospectuses.
The terms by which RFD may provide ongoing compensation to Client for any
such distribution activities or shareholder servicing activities pursuant to
such plans shall be as set forth in any such separate Sub-Agreement to which
Client is a party. The provisions of such Sub-Agreements may be terminated with
respect to the distribution plan of any Fund in accordance with the provisions
of Rule 12b-1 under the Act and/or under the shareholder services plan of any
Fund, and thereafter no such fee will be paid to Client.
4. Applicable Laws and Procedures. This Agreement is conditioned upon
Client's representation and warranty that it is a member of the NASD, that such
membership has not been suspended, and that Client agrees to maintain membership
in the NASD. Client agrees to abide by the rules and regulations of the NASD,
including Section 2830 of its Conduct Rules, and all applicable state and
Federal laws, rules and regulations, as well as the rules and regulations of the
governments and all authorized agencies having jurisdiction over the sales of
Shares made by Client.
Client agrees to provide all necessary information to comply properly with
all federal, state and local reporting and backup withholding requirements for
Client's Customer accounts including, without limitation, those requirements
that apply to treating Shares issued by Funds as readily tradable instruments.
Client represents and agrees that all Taxpayer Identification Numbers ('TINS")
provided are certified, and that no account which requires a certified TIN will
be established without such certified TIN.
If Client causes accounts over which it has discretionary authority to
acquire shares of the Funds, Client shall do so in a manner that comports with
Rule 3a-4 under the Act. Client shall establish and follow guidelines reasonably
designed to assure that any discretionary asset allocation services provided by
Client to its Customers are sufficiently individualized to reasonably ensure
that such services do not constitute a registered investment company.
The Funds generally maintain effective registrations in all of the United
States. If it is necessary to register or qualify for Shares in other
jurisdictions in which Client intends to offer the Shares, it will be Client's
responsibility to arrange for and to pay the cost of such registration or
qualification; prior to any such registration or qualification, Client will
notify RFD of its intent and of any limitations that might be imposed on the
Funds, and Client agrees not to proceed with the registration or qualification
without the written consent of the Funds and of RFD.
Client agrees to release, indemnify and hold harmless the Funds, their
investment advisers, the Funds' transfer agent, RFD and its affiliates and their
respective representatives and agents from any and all direct or indirect
damages, liabilities or losses resulting from (i) requests, directions, actions
or inactions of or by Client, its officers, employees or agents regarding the
purchase, redemption or transfer of registration of shares of the funds for
accounts of Client, its customers and other shareholders, (ii) any unauthorized
or improper use of any on-line computer facilities, or (iii) any failure on
Client's part to comply with (a) any applicable laws, rules or regulations or
(b) any provisions of this Agreement.
5. Tax Reporting. RFD and the Funds' transfer agent, on behalf of the
Funds, will be responsible for reporting dividends and distributions to
registered owners of Shares. If Client is a registered owner of Shares held in
"street name," Client will be required, and Client agrees, to prepare and send
to such beneficial owner of such Shares dividend and distribution reports
relating to the Shares owned by such beneficial owner.
6. Records and Compliance. Client agrees to maintain records of all sales
of Shares made through Client and to furnish RFD with copies of each record on
request. In accordance with the requirements of federal and state laws and rules
of applicable self regulatory organizations as defined in the Securities
Exchange Act of 1934, as amended, including but not limited to the rules and
regulations of the NASD, Client shall maintain complete records concerning the
sale of Shares, information regarding Customers relating to the sale and or
servicing of Shares, including the manner and extent of distribution of any
sales and marketing or other solicitation material. Client shall make such
records and files available to staff of FRIMCo and RFD at such times as FRIMCo
or RFD may reasonably request and shall make such material available to
personnel of the NASD, Securities and Exchange Commission ("SEC") or other
regulatory agency that has regulatory authority over FRIMCo, RFD or the
Investment Company.
Client agrees to conform to compliance standards adopted by RFD or the
Investment Company as to when a class of Shares in a Fund may be appropriately
sold to or retained by particular investors. Client acknowledges that it may be
subject to the provisions of the Xxxxx-Xxxxx Xxxxxx Act, the United and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001, and regulations promulgated under each of those
Acts, and Client represents that it has compliance procedures in place which are
reasonably designed to ensure compliance with all applicable requirements
related thereto.
7. Termination. This Agreement may be terminated, at any time, upon written
notice. Client agrees (notwithstanding the provisions of the prior sentence
hereof) that this Agreement shall automatically terminate without notice upon
Client's: (i) filing of a petition in bankruptcy, reorganization, insolvency or
similar statute, law or regulation; or (ii) seeking the appointment of any
trustee, conservator, receiver, custodian or liquidator for Client or for all or
substantially all of Client's properties. Likewise, Client agrees
(notwithstanding the first sentence of this Termination section) that: (i) if a
proceeding is commenced against Client seeking relief or an appointment of a
type described in the immediately preceding two sentences; or (ii) if a trustee,
conservator, receiver, custodian or liquidator is appointed for Client or for
all or substantially all of Client's properties; or (iii) if an application for
a protective decree under the provisions of the Securities Investor Protection
Act of 1970 shall have been filed against Client; or (iv) if (a) the Securities
and Exchange Commission shall revoke or suspend Client's registration as a
3
broker-dealer, or (b) any national securities exchange or national securities
association shall revoke or suspend Client's membership, this Agreement shall
automatically terminate. Client agrees that it will immediately advise RFD of
any such proceeding, appointment, application, revocation or suspension. FRIMCo,
on RFD's behalf, reserves the right, without notice, to amend or modify this
Agreement.
8. Notice and Communications. All communications to FRIMCo or RFD shall be
sent to the address listed on this document. Any notices to Client shall be duly
given if mailed or telegraphed to Client at the address set forth in the
Participation Agreement (or such other addresses of which Client shall notify
FRIMCo and RFD in writing).
9. Effectiveness. This Agreement will become effective on the date after a
fully executed copy of the Participation Agreement has been received by FRIMCo
and either a fully executed copy of this Agreement has been received by FRIMCo
or upon Client's first placement of an order for the purchase of Shares in
accordance with Section 2 of this Agreement, and this Agreement will continue in
effect until terminated.
10. Integration. This Sub-Agreement, together with the Participation
Agreement and any other Sub-Agreements, constitutes the entire agreement between
the parties with respect to the subject matter hereof and merges all prior and
contemporaneous communications. Client's first order placed for the purchase of
Shares will represent Client's acceptance of this Agreement.
11. Authority. The parties executing this Sub-Agreement represent that they
have full authority to bind their respective firms thereby, and that all
appropriate and necessary corporate action has been taken to authorize this
Sub-Agreement.
IN WITNESS WHEREOF, the parties have executed this Sub-Agreement as of the
later date set forth below. All signed copies of this Sub-Agreement shall be
deemed to be originals.
XXXXX XXXXXXX INVESTMENT
MANAGEMENT COMPANY
On behalf of the subsidiary XXXXXXX FUND DISTRIBUTORS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: President
Date:
CLIENT
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Secretary
Date: 5/26/04
ACCEPTED AND AGREED TO:
XXXXXXX FUND DISTRIBUTORS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: President
Date:
ACCEPTED AND AGREED TO:
AMERICAN UNITED LIFE INSURANCE COMPANY
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Swearh
Title: Assistant General Counsel
Date: 5/26/04
4
EXHIBIT A
AUTHORIZED REPRESENTATIVES
All Client representatives
5
American United Life Insurance Company
DC PLAN
ADMNISTRATIVE SERVICES AGREEMENT
XXXXX XXXXXXX INVESTMENT MANAGEMENT COMPANY
AGREEMENT dated as of May 26, 2004 by and between American United Life Insurance
Company, an insurance company organized in the State of Indiana with its
principal office at Xxx Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000 ("Service
Provider"), and Xxxxx Xxxxxxx Investment Management Company, a Washington
corporation with its principal office at 000 X Xxxxxx, Xxxxxx, Xxxxxxxxxx 00000
("FRIMCo").
FRIMCo is registered as a transfer agent under the Securities Exchange Act
of 1934, as amended. FRIMCo provides administrative, shareholder servicing and
transfer agency services to Xxxxx Xxxxxxx Investment Company ("FRIC"), a
Massachusetts business trust registered as an open-end management investment
company under the Investment Company Act of 1940.
Service Provider is a regulated entity registered as an insurance company,
bank, investment advisor, broker-dealer, transfer agent, or other entity engaged
in a securities related business. Service Provider proposes to assist FRIMCo in
providing certain administrative, shareholder servicing, or transfer agency
services with respect to accounts of certain defined contribution retirement
plans clients of Service Provider that are FRIC shareholders, and FRIMCo wishes
to engage the Service Provider to do so.
Therefore, this Agreement contains the terms and conditions that govem the
services to be provided by Service Provider.
1. FRIMCo hereby retains Service Provider with respect to the categories of
its DC Plan clients that are identified on Appendix A hereto ("DC Plans"),
to the extent that they are holders of the FRIC shares identified on
Appendix A ("Shares"), to provide or arrange for the provision of certain
administrative services with respect to participants in such DC Plans. Such
services may include, but neither are required to include nor are limited
to the following; (1) acting as the sole shareholder of record and nominee
for DC Plans; (2) maintaining account records for DC Plans and their
participants; (3) receiving, aggregating and processing purchase, exchange,
and redemption orders from DC Plan participants and placing net purchase,
exchange, and redemption requests for shares of the Funds; (4) preparing
and issuing confirmations or account statements to DC Plan participants;
(5) providing and maintaining elective services for DC Plan participants;
(6) providing DC Plan sub-accounting services; (7) communicating
periodically with DC Plan participants; (8) answering questions and
handling correspondence from DC Plan participants about their DC Plan
accounts; (9) providing sweep program servicing; selecting, providing, and
maintaining pre-authorized investment allocation plans; and (10) providing
such other similar services as FRIMCo may reasonably require or permit to
the extent Service Provider is permitted to do so under applicable
statutes, rules or regulations. All services rendered hereunder by Service
Provider shall be performed in a professional, competent and timely manner.
2. Service Provider will perform only those activities that are consistent
with statutes and regulations applicable to it.
3. Service Provider will provide or arrange for such office space and
equipment, telephone facilities and personnel (which may be any part of the
space, equipment and facilities currently used in Service Provider's
business, or any personnel employed by Service Provider) as may be
reasonably necessary or beneficial in order to provide the services
contemplated hereby.
4. Neither Service Provider nor any of its officers, employees or agents
are authorized to make any representations about FRIC or the Shares except
those contained in FRIC's then current prospectuses and statements of
additional information, as amended or supplemented from time to time,
copies of which will be supplied by FRIMCo to Service Provider, or in such
supplemental sales literature or advertising as may be authorized by FRIMCo
in writing.
5. For all purposes of this Agreement, Service Provider will be deemed to
be an independent contractor, and will have no authority to act as agent
for FRIMCo or FRIC in any matter or in any respect, except as expressly
authorized. By Service Provider's acceptance of this Agreement, Service
Provider agrees to and does release, indemnify and hold FRIMCo and FRIC
harmless from and against any and all direct or indirect liabilities or
losses resulting from requests, directions, actions or inactions of or by
Service Provider or its officers, employees or agents regarding Service
Provider's responsibilities hereunder or the purchase, redemption, transfer
or registration of Shares (or orders relating to the same) by or on behalf
of the Service Provider's DC Plan clients. Service Provider and its
employees will, upon request, be available during normal business hours to
consult with FRIMCo and its designees concerning the performance of Service
Provider's responsibilities under this Agreement.
6. In consideration of the services and facilities provided by Service
Provider hereunder, FRIMCo will pay to Service Provider quarterly, and
Service Provider will accept as full payment therefore, a fee equal to the
percentage of the average net asset value of Shares held by Service
Provider's DC Plan clients as set forth on Appendix A hereto. The fee rate
payable to Service Provider may be prospectively increased or decreased by
FRIMCo in its sole discretion, at any time upon notice to Service Provider.
Further, Service Provider understands that FRIC may, in its discretion and
without notice, suspend or withdraw the sale of Shares of any and all
Funds, including the sale of Shares to Service Provider for the account of
any DC Plan client and require that Shares be redeemed if any conditions of
investment in Shares, as described in the applicable then current
prospectuses, are not met. If Service Provider is a member of the National
Association of Securities Dealers, Inc. ("NASD"), compensation payable
under this Agreement may be subject to, among other things, NASD rules
governing receipt by NASD members of administrative or shareholder services
fees in connection with investment companies (the "NASD Rules"). Such
compensation shall only be paid for services determined to be permissible
under the NASD Rules, and Service Provider agrees that any compensation
paid under this Agreement is not for activities designed primarily to
result in sales of Shares.
1
American United Life Insurance Company
7. Service Provider agrees to furnish FRIMCo or its designees with such
information as any of them may reasonably request (including, without
limitation, periodic certifications confirming the provision to DC Plan
clients of the services described herein), and will otherwise cooperate
with FRIMCo and its designees (including, without limitation, any auditors
or legal counsel designated by FRIMCo), in connection with the preparation
of reports, if any, to FRIC's Board of Trustees concerning this Agreement
and the monies paid or payable by FRIMCo pursuant hereto, as well as any
other reports or filings that may be required by law.
8. FRIMCo may enter into other agreements that are similar to this
Agreement with any other person or persons without Service Provider's
consent.
9. By Service Provider's written acceptance of this Agreement, Service
Provider represents, warrants and agrees that: (i) in no event will any of
the services provided by Service Provider hereunder be primarily intended
to result in the sale of any shares issued by FRIO and (ii) the
compensation payable to Service Provider hereunder, together with any other
compensation Service Provider receives in connection with the investment of
its DC Plan clients' assets in Shares of the Funds, will be disclosed by
Service Provider to its DC Plan clients, will be authorized by Service
Provider's DC Plan clients and will not result in an excessive or
unreasonable fee to Service Provider, all to the extent required by
applicable laws or regulations.
10. Service Provider agrees to conform to compliance standards adopted by
FRIO as to when Shares in a Fund may be appropriately sold to or retained
by particular investors.
11. This Agreement will become effective on the date a fully executed copy
of this Agreement is received by FRIMCo or its designee and continue in
effect until terminated. This Agreement is terminable with respect to any
Shares of any Fund, without penalty, at any time by FRIMCo or by Service
Provider upon written notice to the other party.
12. This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof and merges all prior and
contemporaneous communications.
13. The parties executing this Agreement represent that they have full
authority to bind their respective firms thereby, and that all appropriate
and necessary corporate action has been taken to authorize this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as the later
date forth below. All signed copies of this Agreement sha .be deemed to be
originals.
XXXXX XXXXXXX INVESTMENT
MANAGEMENT COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: President
Date: May 25 / 04
SERVICE PROVIDER
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Assistant General Counsel
Date:5/26/04
2
American United Life Insurance Company
APPENDIX A
Categories of Investors for which Administrative Services Fees will be paid:
FRIMCo will pay Administrative Services fees with respect to Class C, D, E or S
shares of Xxxxx Xxxxxxx Investment Company Funds, other than Institutional Funds
or money market funds ("Shares"), that are held by 401 (k) plans, 403(b) plans,
profit sharing plans, money purchase plans, thrift plans and 457 plans ("DC
Plans").
Amount and Calculation of Administrative Services Fees
Administrative Services fees will be calculated as an amount equal, on an
annualized basis, to 10 basis points (0.10 of 1%) of the "average assets" (as
defined below) held in Shares by each DC Plan.
"Average assets" shall be determined by computing the sum of the daily market
value of the Shares attributable to the applicable DC Plans for each day of the
calendar quarter divided by the number of days in the calendar quarter,
provided, however, if daily information is not reasonably available to FRIMCo,
then "average assets shall be determined in a reasonably similar manner, as
determined by FRIMCo in its sole discretion, Service Provider shall provide
FRIMCo with such evidence as FRIMCo may require that any assets used in that
calculation represent Shares held by DC Plans that meet the conditions set forth
above, before FRIMCo shall be required to make any payment with respect thereto.
Payment Schedule
Pro-rated administrative services fees will be paid by FRIMCo on a quarterly
basis at the annualized rate set forth above.
Manner of Payment
FRIMCo will generally make payment directly to Service Provider or, at Service
Providers request, to an appropriate supervising broker/dealer.
3
3
