Form N-4, Item 24(b)
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EXHIBIT 8.12
Form of Participation Agreement with
State Street Institutional Investment Trust
and American United Life Insurance Company
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PARTICIPATION AGREEMENT
Between
STATE STREET INSTITUTIONAL INVESTMENT TRUST
And
STATE STREET BANK AND TRUST COMPANY
And
ALPS MUTUAL FUNDS SERVICES, INC.
And
AMERICAN UNITED LIFE INSURANCE COMPANY
THIS AGREEMENT, made and entered into as of this 21st day of March, 2001 by and
between American United Life Insurance Company (hereinafter "AUL"), a legal
reserve life insurance company existing under the laws of the State of Indiana,
on its own behalf and on behalf of AUL American Unit Trust, a segregated asset
account of AUL (the "Account"); State Street Institutional Investment Trust, a
business trust organized under the laws of the Commonwealth of Massachusetts
(the "Fund"), on its own behalf and on behalf of its series State Street Equity
500 Index Fund (the "Portfolio"); ALPS Mutual Funds Services, Inc. (the
"Distributor"); and State Street Bank and Trust Company, on its own behalf and
on behalf of its affiliate serving as adviser to the Master Portfolio, as
defined below, or to the Portfolio ("State Street").
WHEREAS, the Fund is registered as an open-end management investment company
under the Investment Company Act of 1940 (the "1940 Act") and shares of the
Portfolio are registered under the Securities Act of 1933, as amended (the "1933
Act"); and
WHEREAS, the Portfolio intends to invest substantially all of its investable
assets in shares of beneficial interest in State Street Equity 500 Index
Portfolio (the "Master Portfolio"), a series of State Street Master Funds, a
trust organized under the laws of the Commonwealth of Massachusetts; and
WHEREAS, the Account is a duly organized, validly existing segregated asset
account, established by resolution of the Executive Committee of the Board of
Directors of AUL to set aside and invest assets attributable to certain annuity
contracts supported by the Account (the "Contracts"); and
WHEREAS, AUL has registered the Account as a unit investment trust under the
1940 Act; and
WHEREAS, the Distributor is a registered broker-dealer under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and a member of the National
Association of Securities Dealers ("NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and regulations,
AUL intends to purchase shares in the Portfolio on behalf of the Account to fund
the Contracts;
NOW, THEREFORE, in consideration of their mutual promises, AUL, the Distributor,
State Street and the Fund agree as follows:
ARTICLE I.
Sale of Fund Shares
1.1. The Distributor agrees to sell to AUL those shares of the Portfolio offered
and made available by the Fund that AUL orders, executing such orders on a daily
basis at the net asset value next computed after receipt by the Fund or its
designee of the order for the shares of the Portfolio. For purposes of this
Section 1.1, AUL shall be the designee of the Fund for receipt of such orders
and receipt by such designee shall constitute receipt by the Fund; provided that
AUL receives the order by the end of the Business Day, usually 4:00 p.m. Eastern
time, and that the Fund receives notice of such order by 9:45 a.m. Eastern time
on the next following Business Day. "Business Day" shall mean any day on which
AUL and the New York Stock Exchange is open for trading and on which the Fund
calculates its net asset value.
1.2. The Fund agrees to make shares of the Portfolio available for purchase at
the applicable net asset value per share by AUL on each Business Day. The Board
of Directors of the Fund (hereinafter the "Board") may refuse to sell shares of
the Portfolio to any person, or suspend or terminate the offering of shares of
the Portfolio 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 its fiduciary duties under federal and any applicable
state laws, necessary in the best interests of the shareholders of the
Portfolio.
1.3. The Fund agrees to redeem, at AUL's request, any full or fractional shares
of the Fund held by AUL, executing such requests on each Business Day at the net
asset value next computed after receipt by the Fund or its designee of the
request for redemption, except that the Fund reserves the right to suspend the
right of redemption or postpone the date of payment or satisfaction upon
redemption consistent with Section 22(e) of the 0000 Xxx. For purposes of this
Section 1.3, AUL shall be the designee of the Fund for receipt of requests for
redemption and receipt by such designee shall constitute receipt by the Fund,
provided that AUL receives the order by the end of the Business Day, usually
4:00 p.m. Eastern time, and that the Fund receives notice of such request for
redemption by 9:45 a.m. Eastern time on the next following Business Day.
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1.4. The Parties hereto acknowledge that the arrangement contemplated by this
Agreement is not exclusive; the Fund's shares may be sold to other investors and
the cash value of the Contracts may be invested in other investment companies.
AUL acknowledges that the Portfolio's shares may be sold to the general public.
1.5. AUL shall pay for Fund shares by 1:30 p.m. Eastern time on the next
Business Day after an order to purchase Fund shares is made in accordance with
the provisions of Section 1.1 hereof, except that with respect to shares of the
Portfolio ordered by AUL for a Separate Account or any subaccount thereof in
connection with an exchange or transfer from another Separate Account or another
subdivision of a Separate Account under the Contracts ("Exchange Shares"), AUL
shall pay for Exchange Shares on the latter of (1) the next business day after
an order to purchase the Exchange Shares is made in accordance with Section 1.1
hereof, or (2) on the same business day that the Separate Account or subdivision
from which the exchange or transfer is being made receives payment from the
investment company portfolio in which it invests. Payment shall be in federal
funds transmitted by wire, or by any other method mutually agreed upon by the
parties hereto, and/or by a credit for any shares redeemed the same day as the
purchase. Upon receipt by the Fund of the federal funds so wired, such funds
shall cease to be the responsibility of AUL and shall become the responsibility
of the Fund.
1.6. The Fund shall pay and transmit the proceeds of redemptions of Fund shares
by 2:00 p.m. Eastern time on the next Business Day after a redemption order is
received by the Fund or its designee, subject to Section 1.3 hereof. Payment
shall be in federal funds transmitted by wire and/or a credit for any shares
purchased the same day as the redemption.
1.7. Issuance and transfer of the Fund's shares will be by book entry only.
Stock certificates will not be issued to AUL or the Account. Shares ordered from
the Fund will be recorded in an appropriate title for the Account or the
appropriate subaccount of the Account.
1.8. The Fund shall furnish same day notice (by wire or telephone, followed by
written confirmation) to AUL of any income dividends or capital gain
distributions payable on the Portfolio's shares. AUL hereby elects to reinvest
in the Portfolio all such dividends and distributions as are payable on the
Portfolio's shares and to receive all such income dividends and capital gain
distributions in additional shares of the Portfolio. AUL reserves the right to
revoke this election and to receive all such income dividends and capital gain
distributions in cash. The Fund shall notify AUL by the end of the next
following Business Day of the number of shares so issued as payment of such
dividends and distributions.
1.9. The Fund shall make the net asset value per share for the Portfolio
available to AUL on a daily basis as soon as reasonably practical after the net
asset value per share is calculated and shall use its best efforts to make such
net asset value per share available by 6:00 p.m. Eastern time. If the Fund
provides materially incorrect per share net asset value information, AUL shall
be entitled to an adjustment to the number of shares purchased or redeemed to
reflect the correct net asset value per share. The determination of the
materiality of any net asset value pricing error shall be based on the
Securities and Exchange Commission's ("SEC") recommended guidelines regarding
such material errors. The correction of any such material error and the
reimbursement to the Fund and/or AUL to the extent of any loss resulting
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from the error shall be made by State Street pursuant to the SEC's recommended
guidelines. State Street will also indemnify AUL to the extent of administrative
or other costs incurred by AUL in connection with such material errors. Any
error in the calculation or reporting of net asset value per share, dividend or
capital gains information shall be reported immediately upon discovery to AUL.
Notification can be made orally, but must be confirmed in writing as soon as
possible. In no event shall AUL be liable to the Fund for any such adjustments
or overpayment amounts.
1.10. The Distributor shall sell and distribute the shares of the Portfolio in
accordance with the applicable provisions of the 1933 Act, the 1934 Act, the
1940 Act, the NASD Conduct Rules, and state law.
1.11. Shares of the Fund will not be sold to any person or in any manner that
would require the Fund, AUL or the Account to obtain an order from the SEC
providing exemptions from the provisions of Sections 9(a), 13(a), 15(a) and
15(b) of the 1940 Act and paragraph (b)(15) of each of Rules 6e-2 and 6e-3(T)
under the 1940 Act in order to permit the Account to continue purchasing shares
of the Fund under the contract.
1.12. The Fund will not sell shares of the Portfolio to any insurance company or
insurance company separate account except pursuant to an agreement containing
provisions substantially the same as Section 1.11 of this Agreement.
ARTICLE II.
Representations and Warranties
2.1. AUL represents and warrants that it is an insurance company duly organized
and in good standing under Indiana law and that it is taxed as an insurance
company under Subchapter L of the Code.
2.2. AUL represents and warrants that it has legally and validly established the
Account as a segregated asset account under the Indiana Insurance Code, and that
the Account is a validly existing segregated asset account under Indiana law.
2.3. AUL represents and warrants that the Contracts issued by AUL or interests
in the Account under such Contracts (1) are or, prior to issuance, will be
registered as securities under the 1933 Act or, alternatively (2) are not
registered because they are properly exempt from registration under the 1933 Act
or will be offered exclusively in transactions that are properly exempt from
registration under the 1933 Act.
2.4. AUL represents and warrants that the Account (1) has been registered as a
unit investment trust in accordance with the provisions of the 1940 Act or,
alternatively (2) has not been registered in proper reliance upon an exclusion
from registration under the 0000 Xxx.
2.5. The Fund and State Street represent and warrant that Portfolio shares sold
pursuant to this Agreement shall be registered under the 1933 Act, duly
authorized for issuance and sold in compliance with the laws of Massachusetts
and all applicable federal and state
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securities laws including without limitation the 1933 Act, the 1934 Act, and the
1940 Act, and that the Fund is and shall remain registered as an open-end
management investment company under the 1940 Act.
2.6. The Fund, State Street, and the Distributor shall take all such actions as
are necessary to permit the sale of the shares of the Portfolio to the Account,
including maintaining the Fund's registration as an investment company under the
1940 Act, and registering the shares of the Portfolio sold to the Account under
the 1933 Act for so long as required by applicable law. The Fund and State
Street shall amend the Fund's registration statement filed with the SEC under
the 1933 Act and the 1940 Act from time to time as required in order to effect
the continuous offering of the shares of the Portfolio. The Fund and State
Street shall register and qualify the shares of the Fund for sale in accordance
with the laws of the various states to the extent deemed necessary by the Fund.
The Distributor shall take all steps necessary to sell shares of the Fund in
compliance with all applicable federal and state securities laws or exemptions
therefrom.
2.7. The Fund and State Street represent and warrant that the Fund 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.
2.8. The Fund and State Street represent and warrant that all of the Fund's
directors, officers, employees, investment advisers, and other individuals or
entities dealing with the money and/or securities of the Fund are, and shall
continue to be at all times, covered by a blanket fidelity bond or similar
coverage for the benefit of the Fund in an amount not less than the minimal
coverage required by Section 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.
2.9. The Fund and State Street represent and warrant that each of the Fund and
the Portfolio is currently qualified as a Regulated Investment Company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code") and
that each will make every effort to maintain such qualification (under
Subchapter M or any successor or similar provision) and notify AUL immediately
upon having a reasonable basis for believing that the Fund or the Portfolio has
ceased to so qualify or that the Fund or the Portfolio might not so qualify in
the future.
2.10. The Fund and State Street agree that the Portfolio shall be managed
consistent with its investment objective or objectives, investment policies, and
investment restrictions as described in the Fund's prospectus and registration
statement, as amended, or modified from time to time.
2.11. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities having jurisdiction (including, without
limitation, the SEC, the NASD, and state insurance regulators) and shall permit
such authorities reasonable access to its books and records in connection with
any investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.
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2.12. State Street represents that currently it is not required to be registered
as an investment adviser under the Investment Advisers Act of 1940, and that it
or an affiliate will so register on or before May 12, 2001.
2.13. State Street represents and warrants that, for any fiscal quarter during
the twenty-four (24) months following the Substitution Date, as defined below,
the Portfolio's total annual operating expenses excluding extraordinary expenses
(taking into account expense waivers and reimbursements) will not be higher on
an annualized basis than 0.245% of net assets and the Portfolio's total annual
operating expenses including extraordinary expenses (taking into account expense
waivers and reimbursements) will not be higher on an annualized basis than 0.28%
of net assets. Total annual operating expenses shall include payments made to
AUL or to the distributor for the Contracts at the annual rate of 0.15% of the
average daily net asset value of shares of the Portfolio held under the
Contracts pursuant to the Fund's Rule 12b-1 Plan. The Substitution Date is the
date that AUL, on behalf of the Account, substitutes shares of the Portfolio for
shares of the Fidelity Index 500 Portfolio, a series of Variable Insurance
Products Fund II, previously held by the Account, to fund the Contracts. State
Street will reimburse the Portfolio to the extent necessary to comply with this
representation and warranty.
2.14. State Street represents and warrants that the annual advisory fee of
0.045% payable by the Master Portfolio to State Street pursuant to the
Investment Advisory Agreement between the Master Portfolio and State Street will
not be increased without the approval of the "vote of a majority of the
outstanding voting securities" (as that term is defined in the 0000 Xxx) of the
Master Portfolio.
2.15. State Street represents and warrants that the advisory fee of 0.045% of
the Portfolio's average daily net assets payable by the Portfolio to State
Street in certain circumstances set forth in the Investment Advisory Agreement
between the Fund and State Street will not be increased without the approval of
the "vote of a majority of the outstanding voting securities" (as that term is
defined in the 0000 Xxx) of the Fund.
2.16. State Street represents and warrants that the advisory fee of 0.045% is a
unitary fee including State Street's payment of all ordinary operating expenses
of the Master Portfolio.
2.17. The Distributor represents and warrants that it is a member in good
standing of the NASD and is registered as a broker-dealer with the SEC.
ARTICLE III.
Prospectuses and Proxy Statements; Voting
3.1. The Fund shall provide AUL or its designee with as many copies of the
Fund's current prospectuses for the Portfolio as AUL may reasonably request. In
any calendar year, State Street, at its expense, shall provide AUL or its
designee with the greater of 75,000 prospectuses (and each amendment or
supplement thereto) or one prospectus (and each amendment and supplement
thereto) for each $3,000 of Account assets invested in the Fund; State Street
shall also provide 110,000 prospectuses to be delivered in connection with the
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substitution described in Section 2.13 above, the expense of these prospectuses
to be shared equally by AUL and State Street; AUL shall be responsible for the
costs of printing any prospectuses exceeding these quantities. AUL acknowledges
that the format and style of printing shall be at State Street's discretion. If
requested by AUL in lieu thereof, the Fund shall provide such documentation
(including a final "camera ready" copy of the new prospectuses for the Portfolio
as set in type at State Street's expense or, at the request of AUL, as a
diskette or such other form as is required by the financial printer) and other
assistance as is reasonably necessary in order for AUL to have the prospectus
for the Contract and the Fund's prospectus for the Portfolio printed together in
one document (the cost of such printing to be borne by State Street and AUL in
proportion to the size of the prospectuses for the Fund and the Contracts).
3.2. The Fund's prospectus shall state that the Statement of Additional
Information ("SAI") for the Fund is available from the Fund (or a specified
affiliate). The Fund, or an affiliate, at its expense, shall print and provide
the SAI free of charge to AUL and to any owner of a Contract or participant
under the Contract (hereinafter an "owner" or "Contract owner") who requests
such SAI. The Fund, at State Street's expense, shall provide such additional
copies of the SAI as AUL shall reasonably request and that AUL shall require in
accordance with applicable laws in connection with offering the Contracts.
3.3. The Fund, at its expense, shall provide AUL with copies of its proxy
material, reports to shareholders and other communications to shareholders in
such quantity as AUL shall reasonably require for distribution to existing
Contract owners. The Fund, at AUL's expense, shall provide AUL with copies of
its periodic reports to shareholders and other communications to shareholders in
such quantity as AUL shall reasonably request for use in connection with the
sale of new Contracts by AUL. If requested by AUL in lieu thereof, the Fund
shall provide such documentation (including a final copy of the Fund's proxy
materials, periodic reports to shareholders and other communications to
shareholders, as set in type or in camera-ready copy) and other assistance as
reasonably necessary in order for AUL to print such shareholder communications
for distribution to owners of Contracts issued by AUL.
3.4. It is understood and agreed that, except with respect to information
regarding AUL provided in writing by AUL, AUL shall not be responsible for the
content of the prospectus or SAI for the Portfolio. It is also understood and
agreed that, except with respect to information regarding the Fund and provided
in writing by the Fund, the Fund shall not be responsible for the content of the
prospectus or SAI for the Contracts.
3.5. For so long as the SEC interprets the 1940 Act to require pass-through
voting by participating insurance companies whose Separate Accounts are
registered as investment companies under the 1940 Act ("Registered Separate
Accounts"), AUL (i) shall vote shares of the Portfolio held in Registered
Separate Accounts or subaccounts thereof, at regular and special meetings of the
Fund in accordance with instructions timely received by AUL (or its designated
agent) from owners of Contracts funded by such Registered Separate Accounts or
subaccounts thereof having a voting interest in the Portfolio; and (ii) shall
vote shares of the Portfolio held in Registered Separate Accounts or subaccounts
thereof that are attributable to the Contracts as to which no timely
instructions are received, as well as shares held in such Registered Separate
Accounts or subaccounts thereof that are not attributable to the Contracts and
owned beneficially
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by AUL (resulting from charges against the Contracts or otherwise), in the same
proportion as the votes cast by owners of the Contracts funded by that Separate
Account or subaccount thereof having a voting interest in the Portfolio from
whom instructions have been timely received. AUL shall vote shares of the
Portfolio held in its general account or in any Separate Account that is not
registered under the 1940 Act, if any, in its discretion or in the same
proportion as the votes cast with respect to shares of the Portfolio held in all
Registered Separate Accounts of AUL or subaccounts thereof, in the aggregate.
AUL reserves the right to vote Fund shares held in any segregated asset account
in its own right, to the extent permitted by the law.
ARTICLE IV.
Sales Material and Information
4.1. AUL shall furnish, or shall cause to be furnished, to the Fund or its
designee, each piece of sales literature and other promotional material that AUL
develops or uses and in which the Fund, the Portfolio or its investment adviser
is named in connection with the Contracts, at least five (5) Business Days prior
to its use. No such material shall be used if the Fund or its designee objects
to such use within five (5) Business Days after receipt of such material. AUL
may use such material within the five day period if the Fund or its designee
grants permission to AUL for such use by telephone, e-mail, or facsimile.
4.2. AUL shall not give any information or make any representations or
statements on behalf of the Fund or concerning the Fund in connection with the
sale of the Contracts inconsistent with the information or representations
contained in the registration statement or prospectus for the Fund shares, as
such registration statement and prospectus may be amended or supplemented from
time to time, or in reports or proxy statements for the Fund, or in sales
literature or other promotional material approved by the Fund or its designee,
except with the permission of the Fund. The Parties agree that total return
information of the Fund and the Portfolio derived from the prospectus or
registration statement of the Fund or from information provided by the Fund or
the Distributor to AUL may be used by AUL in connection with the sale of the
Contracts without prior approval of the Fund or the Distributor, or their
designees, and AUL shall be responsible for using such information in conformity
with the information it is provided.
4.3. The Fund or the Distributor, or the designee of either, shall furnish, or
shall cause to be furnished, to AUL, each piece of sales literature and other
promotional material in which AUL and/or the Account is named at least five (5)
Business Days prior to its use. No such material shall be used if AUL objects to
such use within five (5) Business Days after receipt of such material. The Fund
or the Distributor or the designee of either may use such material within the
five day period if AUL grants permission to the Fund or the Distributor or the
designee of either for such use by telephone, e-mail, or facsimile.
Notwithstanding the fact that AUL or its designee may initially grant the use of
or may not initially object to a piece of sales literature or other promotional
material, AUL reserves the right to object at a later date to the continued use
of any such sales literature or promotional material in which AUL is named, and
no such material shall be used thereafter if AUL or its designee so objects.
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4.4. The Fund, the Distributor, and State Street agree that each and the
affiliates of each shall not give any information or make any representations on
behalf of AUL or concerning AUL, the Account, or the Contracts other than the
information or representations contained in a registration statement or
prospectus for the Contracts, as such registration statement and prospectus may
be amended or supplemented from time to time, or in reports for the Account or
prepared for distribution to owners of such Contracts, or in sales literature or
other promotional material approved by AUL or its designee, except with the
prior permission of AUL.
4.5. The Fund will provide to AUL at least one complete copy of all registration
statements, prospectuses, SAIs, reports, proxy statements, sales literature and
other promotional materials, applications for exemptions, requests for no-action
letters, and all amendments and supplements to any of the above, that relate to
the Portfolio, contemporaneously with the filing of such document(s) with the
SEC, NASD or other regulatory authorities.
4.6. AUL will provide to the Fund at least one complete copy of all registration
statements, prospectuses (which shall include an offering memorandum if the
Contracts issued by AUL or interests therein are not registered under the 1933
Act), SAIs, reports, solicitations for voting instructions, sales literature and
other promotional materials, applications for exemptions, requests for no-action
letters, and all amendments and supplements to any of the above, that relate to
the Contracts or the Account, contemporaneously with the filing of such
document(s) with the SEC, NASD, or other regulatory authority. AUL shall be
relieved of the requirement to provide to the Fund any such document or
documents under this Section 4.6 to the extent that AUL provides the document or
documents on a website to which the Fund has access.
4.7. For purposes of this Article IV, the phrase "sales literature and other
promotional material" includes, but is not limited to, advertisements (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, telephone directories (other than routine
listings), electronic or other public media), sales literature (i.e., any
written or electronic communication distributed or made generally available to
customers or the public, including brochures, circulars, research reports,
market letters, performance reports or summaries, form letters, telemarketing
scripts, 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, SAIs, supplements thereto,
shareholder reports, and proxy materials.
ARTICLE V.
Fees and Expenses
5.1(a). The Fund shall pay no fee or other compensation to AUL under this
Agreement, except that payments shall be made to AUL, the distributor for the
Contracts, or any person designated by AUL at the annual rate of 0.15% of the
average daily net asset value of shares of the Portfolio held under the
Contracts pursuant to the Fund's Rule 12b-1 Plan ("Rule 12b-1 Payment") for
certain shareholder services provided by AUL. No such payments shall be made
directly by the Fund. Nothing herein shall prevent the parties hereto from
otherwise agreeing to perform, and arrange for appropriate compensation for,
other services relating to the Fund and/or
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the Account. AUL shall pay no fee or other compensation to the Fund under this
Agreement, although the parties hereto will bear certain expenses in accordance
with Article III and this Article V and other provisions of this Agreement.
5.1(b). AUL shall be responsible for providing services to Contract owners,
which shall include, but not be limited to (i) providing information
periodically to Contract owners showing their interests in the Account or
subaccount thereof that invests in the Portfolio; (ii) addressing inquiries from
Contract owners relating to investing, exchanging or transferring, or redeeming
interests under the Contracts and the Account or subaccount or any Portfolio
thereof funding such Contracts, which inquiries may relate to the Fund or the
Portfolio; (iii) providing explanations to Contract owners regarding Fund
investment objectives and policies and other information about the Fund and the
Portfolio, including the performance of the Portfolio; (iv) forwarding
shareholder communications from the Fund, including but not limited to
shareholder reports containing annual and semi-annual financial statements of
the Fund to Contract owners; (v) delivering the Fund prospectus and supplements
thereto to Contract owners whenever necessary under the 1933 Act; and (vi)
delivering any notices of shareholder meetings and proxy statements accompanying
such notices in connection with general and special meetings of shareholders of
the Fund under which Contract owners may have voting rights, and helping
tabulate the voting of Contract owners tendering voting instructions to AUL. In
consideration of the provision of these services during any period for which AUL
does not receive the full Rule 12b-1 Payment described in Section 5.1(a) above,
State Street shall compensate AUL in the amount of 0.15% of the average daily
net asset value of shares of the Portfolio held under the Contracts.
5.2. All expenses incident to performance by the Fund under this Agreement shall
be paid by the Fund or State Street, as provided in this Agreement. The Fund
shall see to it that all shares of the Portfolio are registered and authorized
for issuance in accordance with applicable federal law and, if and to the extent
required, in accordance with applicable state laws prior to their sale. The Fund
shall bear the expenses for the cost of registration and qualification of the
Fund's shares, preparation and filing of the Fund's prospectus and registration
statement, supplements thereto, proxy materials and reports, setting the
prospectus in type, printing prospectuses for distribution to Contract owners,
setting in type, printing and filing 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 Fund's
shares, and the costs of distributing the Fund's prospectuses and proxy
materials to such Contract owners and any expenses permitted to be paid or
assumed by the Fund pursuant to the Fund's Rule 12b-1 under the 1940 Act. All
expenses of the Fund under this Agreement shall, to the extent incurred by the
Portfolio, be considered ordinary expenses of the Portfolio and shall be
included in the total operating expenses for the Portfolio and subject to the
expense limitation set forth in Section 2.13 hereof, and any other expense
limitations relating to the Portfolio that are in place from time to time.
5.3. AUL shall bear the mailing expenses of routine annual distribution of the
Fund's prospectus to owners of Contracts issued by AUL and of distributing the
Fund's proxy materials and reports to such Contract owners. AUL shall bear all
expenses associated with the registration, qualification, and filing of the
Contracts under applicable federal securities and state
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insurance laws; the cost of preparing, printing, and distributing the Contract
prospectus and SAI; and the cost of preparing, printing and distributing annual
individual account statements to Contract owners as required by state insurance
laws.
ARTICLE VI.
Indemnification
6.1. Indemnification By AUL
6.1(a). AUL agrees to indemnify and hold harmless State Street and its officers
and each member of its Board and the Fund and its officers and each member of
its Board (collectively, the "Indemnified Parties" for purposes of this Section
6.1) against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of AUL) or litigation (including
legal and other expenses), to which the Indemnified Parties may become subject
under any statute or regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
or settlements:
(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in the
registration statement or prospectus (which shall include an
offering memorandum) or SAI for the Contracts or contained in the
Contracts (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, provided that this Agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission
or such alleged statement or omission was made in reliance upon
and in conformity with information furnished in writing to AUL by
or on behalf of the Fund, State Street, or the Distributor: (1)
for use in the registration statement or prospectus for the
Contracts or in the Contracts or sales literature (or any
amendment or supplement to any of the foregoing) or otherwise;
(2) that was contained in sales literature or other promotional
material that has been approved by the Fund, State Street, or the
Distributor or their designee for use in connection with the sale
of such Contracts or Fund shares; or (3) otherwise for use in
connection with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations (1) contained in the
registration statement, prospectus or sales literature of the
Fund not supplied by AUL or persons under its control; (2)
contained in the registration statement, prospectus, SAI, or
sales literature for the Contracts made in reliance upon and in
conformity with information furnished to AUL by or on behalf of
the Fund; or (3) in sales literature or other promotional
material that has been approved by the Fund, State Street, or the
Distributor or their designee) or
11
wrongful conduct of AUL or persons under its control, with
respect to the sale or distribution of the Contracts or Fund
shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, or sales literature of the Fund or any
amendment thereof or supplement thereto or the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading if such a statement or omission was made in reliance
upon information furnished in writing to the Fund by or on behalf
of AUL; or
(iv) arise out of or result from any material breach of any
representation and/or warranty made by AUL in this Agreement or
arise out of or result from any other material breach of this
Agreement by AUL;
as limited by and in accordance with the provisions of Sections 6.1(b) and
6.1(c) hereof.
6.1(b). AUL shall not be liable under this indemnification provision with
respect to any losses, claims, damages, liabilities or litigation expenses to
which an Indemnified Party would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of 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 Fund or the
Account.
6.1(c). AUL 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 AUL 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 AUL of any such claim shall not relieve AUL 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, AUL shall be
entitled to participate, at its own expense, in the defense of such action. AUL
also shall be entitled to assume the defense thereof, with counsel satisfactory
to the party named in the action. After notice from AUL to such party of AUL's
election to assume the defense thereof, the Indemnified Party shall bear the
fees and expenses of any additional counsel retained by it, and AUL 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.
6.1(d). The Indemnified Parties will promptly notify AUL of the commencement of
any litigation or proceedings against them in connection with the issuance or
sale of the Fund Shares or the Contracts or the operation of the Fund.
12
6.2. Indemnification by Xxxxx Xxxxxx
0.0(x). Xxxxx Xxxxxx agrees to indemnify and hold harmless AUL and each of its
directors and officers and the Account and each person, if any, who controls AUL
or the Account within the meaning of Section 15 of the 1933 Act (collectively,
the "Indemnified Parties" for purposes of this Section 6.2) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement with
the written consent of State Street) or litigation (including legal and other
expenses) to which the Indemnified Parties may become subject under any statute
or regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) or settlements:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
registration statement or prospectus or SAI or sales literature
of the Fund (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, provided that this Agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission
or such alleged statement or omission was made in reliance upon
and in conformity with information furnished in writing to State
Street or the Fund by or on behalf of AUL: (1) for use in the
registration statement or prospectus for the Fund or in sales
literature (or any amendment or supplement to any of the
foregoing) or otherwise; (2) that was contained in sales
literature or other promotional material that has been approved
by AUL or its designee as to information relating to AUL for use
in connection with the sale of the Contracts or Fund shares; or
(3) or otherwise for use in connection with the sale of the
Contracts or Fund shares; or
(ii) arise out of or as a result of statements or representations
(other than statements or representations (1) contained in the
registration statement, prospectus or sales literature for the
Contracts not supplied by the Fund or State Street or persons
under their control; (2) contained in the registration statement,
prospectus, SAI, or sales literature for the Fund made in
reliance upon and in conformity with information furnished to the
Fund by or on behalf of AUL, or (3) in sales literature or other
promotional material that has been approved by AUL or its
designee as to information relating to AUL) or wrongful conduct
of the Fund or State Street or persons under their control with
respect to the sale or distribution of the Contracts or the Fund
shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus or sales literature covering the Contracts,
or any amendment thereof or supplement thereto, or the omission
or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statement or
13
statements therein not misleading, if such statement or omission
was made in reliance upon information furnished in writing to AUL
by State Street, or by or on behalf of the Fund; or
(iv) arise out of or result from any material breach of any
representation and/or warranty made by State Street or the Fund
in this Agreement or arise out of or result from any other
material breach (which shall include, but shall not be limited
to, any breach of Sections 2.13 through 2.16) of this Agreement
by State Street or the Fund; or
(v) arise out of or result from the materially incorrect or
untimely calculation or reporting of the daily net asset value
per share or dividend or capital gains information;
as limited by and in accordance with the provisions of Sections 6.2(b) and
6.2(c) hereof.
6.2(b). State Street shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation expenses
to which an Indemnified Party would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of such
Indemnified Party's duties or by reason of such Indemnified Party's reckless
disregard of obligations and duties under this Agreement or to AUL or the
Account.
6.2(c). State Street 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 State Street 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 State Street of any
such claim shall not relieve State Street 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, State Street will be entitled to participate,
at its own expense, in the defense thereof. State Street also shall be entitled
to assume the defense thereof, with counsel satisfactory to the party named in
the action. After notice from State Street to such party of State Street's
election to assume the defense thereof, the Indemnified Party shall bear the
fees and expenses of any additional counsel retained by it, and State Street
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.
6.2(d). AUL agrees promptly to notify State Street 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 the
Account provided that such litigation or proceedings materially relate to or
materially affect the interests of State Street.
14
6.3. Indemnification by the Distributor
6.3(a). The Distributor agrees to indemnify and hold harmless AUL and each of
its directors and officers and the Account and each person, if any, who controls
AUL or the Account within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 6.3)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of State Street) or litigation (including
legal and other expenses) to which the Indemnified Parties may become subject
under any statute or regulation, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
or settlements:
(i) arise out of or as a result of statements or representations
made by the Distributor (other than statements or representations
(1) contained in the registration statement, prospectus or sales
literature for the Contracts; (2) contained in the registration
statement, prospectus, SAI, or sales literature for the Fund, or
(3) in sales literature or other promotional material that has
been approved by AUL or its designee as to information relating
to AUL) or wrongful conduct of the Distributor or persons under
its control with respect to the sale or distribution of the
Contracts or the Fund shares; or
(ii) arise out of or result from any material breach of any
representation and/or warranty made by the Distributor in this
Agreement or arise out of or result from any other material
breach of this Agreement by the Distributor;
as limited by and in accordance with the provisions of Sections 6.3(b) and
6.3(c) hereof.
6.3(b). The Distributor shall not be liable under this indemnification provision
with respect to any losses, claims, damages, liabilities or litigation expenses
to which an Indemnified Party would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of 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 Fund or AUL
or the Account.
6.3(c). The Distributor 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 Distributor in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), but failure to notify the Distributor of
any such claim shall not relieve the Distributor from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Distributor will be entitled to
participate, at its own expense, in the defense thereof. The Distributor also
shall be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the
15
Distributor to such party of the Distributor's election to assume the defense
thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Distributor will not be liable to
such party under this Agreement for any legal or other expenses subsequently
incurred by such party independently in connection with the defense thereof
other than reasonable costs of investigation.
6.3(d). AUL agrees promptly to notify the Distributor of the commencement of any
litigation or proceedings against it or any of its officers or directors in
connection with the issuance or sale of the Contracts or the operation of the
Account provided that such litigation or proceedings materially relate to or
materially affect the interests of the Distributor.
ARTICLE VII.
Applicable Law
7.1. This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the Commonwealth of Massachusetts.
7.2. This Agreement shall be subject to the provisions of the 1933 Act, the 1934
Act and the 1940 Act, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as the SEC
may grant and the terms hereof shall be interpreted and construed in accordance
therewith.
ARTICLE VIII.
Termination
8.1. This Agreement shall terminate:
(a) at the option of any party, with or without cause, upon ninety (90)
days advance written notice delivered to the other party, unless a shorter
time is agreed to by the parties; or
(b) at the option of AUL by written notice to the other parties based upon
AUL's determination that shares of the Portfolio are not reasonably
available to meet the requirements of the Contracts; or
(c) at the option of the Fund or State Street upon institution of formal
proceedings against AUL by the NASD, the SEC, or any state securities or
insurance department or any other regulatory body if the Fund or State
Street shall determine, in its sole judgment exercised in good faith, that
AUL 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
(d) at the option of AUL upon institution of formal proceedings against the
Fund, the Distributor or State Street by the NASD, the SEC, or any state
securities or insurance department or any other regulatory body if AUL
shall determine, in its
16
sole judgment exercised in good faith, that the Fund, the Distributor or
State Street 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, provided that
the Agreement shall not terminate under this Section 8.1(d) with respect to
State Street if the proceeding is against the Distributor and State Street
makes available another distributor that is reasonably acceptable to AUL
and such distributor agrees to become a party to this Agreement; or
(e) upon requisite vote of the Contract owners having an interest in the
Account (or any subaccounts thereof) to substitute the shares of another
investment company or series thereof for the corresponding shares of the
Fund or Portfolio in accordance with the terms of the Contracts for which
those shares had been selected to serve as the underlying investment media;
or
(f) in the event the Portfolio's shares are not registered, issued or sold
in accordance with applicable state and/or federal law, or such law
precludes the use of such shares as the underlying investment media of the
Contracts issued or to be issued by AUL; or
(g) at the option of AUL if the Portfolio fails to meet the Subchapter M
qualifications specified in Article II, Section 2.9, hereof; or
(h) at the option of AUL upon any substitution of the shares of another
investment company or series thereof for shares of the Fund or Portfolio in
accordance with the terms of the Contracts, provided that AUL has given at
least thirty (30) days prior written notice to the Fund or State Street of
the date of the substitution; or
(i) at the option of any party to this Agreement, upon any other party's
material breach of any provision of this Agreement, provided that the
Agreement shall not terminate under this Section 8.1(i) with respect to
State Street upon a material breach by the Distributor so long as State
Street makes available another distributor that is reasonably acceptable to
AUL and such distributor agrees to become a party to this Agreement; or
(j) upon assignment of this Agreement, as defined in the 1940 Act and the
rules thereunder, unless made with the written consent of the other party
hereto.
8.2. Each party to this Agreement shall promptly notify the other parties to the
Agreement of the institution against such party of any such formal proceedings
as described in Sections 8.1(c) and (d) hereof. AUL shall give thirty (30) days
prior written notice to the Fund of the date of any proposed vote of Contract
owners to replace the Fund's shares as described in Section 8.1(e) hereof.
8.3. Under the terms of the Contracts, AUL reserves the right, subject to
compliance with the law as then in effect, to make substitutions for the
securities that are held by a Separate
17
Account of AUL under certain circumstances. The parties acknowledge that AUL has
the right to substitute other securities for the shares of the Portfolio thereof
already purchased or to be purchased in the future if the shares of the
Portfolio should no longer be available for investment, or if, in the judgment
of AUL management, further investment in shares of the Portfolio should become
inappropriate in view of the purposes of the Contracts. AUL will provide thirty
(30) days written notice to the Fund or to State Street prior to effecting any
such substitution.
8.4. No termination of this Agreement shall be effective unless and until the
party terminating this Agreement gives prior written notice to the other party
of its intent to terminate, which notice shall set forth the basis for the
termination.
8.5. Notwithstanding any termination of this Agreement, each party's obligations
under Article VI to indemnify other parties and State Street's obligation under
Section 5.1(b) shall survive and not be affected by any termination of this
Agreement.
8.6. If this Agreement terminates, any provision of this Agreement reasonably
necessary to the orderly windup of business under it will remain in effect as to
that business, after termination.
ARTICLE IX.
Notices
Any notice shall be sufficiently given when sent by registered or certified mail
or by overnight mail sent through a nationally-recognized delivery service to
the other party at the address of such party set forth below or at such other
address as such party may from time to time specify in writing to the other
party.
If to the Fund:
State Street Institutional Investment Trust
c/o State Street Bank and Trust Company
Xxx Xxxxxx xx Xxxxxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
If to State Street:
State Street Bank and Trust Company
Xxx Xxxxxx xx Xxxxxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
If to the Distributor:
ALPS Mutual Funds Services, Inc.
000 00xx Xxxxxx, Xxxxx 0000
18
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxx
If to AUL:
American United Life Insurance Company
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
ARTICLE X.
Miscellaneous
10.1. It is understood that the name "American United Life Insurance Company",
"AUL", or any derivative thereof or logo associated with that name is the
valuable property of AUL and its affiliates, and that the Fund and State Street
have the right to use such name (or derivative or logo) only so long as this
Agreement is in effect. Upon termination of this Agreement the Fund and State
Street shall forthwith cease to use such name (or derivative or logo).
10.2. The parties agree that the names, addresses, and other information
relating to the owners of the Contracts or prospects for the sale of the
Contracts are the exclusive property of AUL and may not be used by the Fund or
State Street without the written consent of AUL.
10.3. 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.
10.4. This Agreement may be executed simultaneously in two or more counterparts,
each of which taken together shall constitute one and the same instrument.
10.5. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Agreement shall
not be affected thereby.
10.6. Each party hereto shall cooperate with the other party and all appropriate
governmental authorities (including without limitation the SEC, the NASD and
state insurance regulators) and shall permit such authorities reasonable access
to its books and records in connection with any investigation or inquiry
relating to this Agreement or the transactions contemplated hereby.
10.7. 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.
19
10.8. This Agreement or any of the rights and obligations hereunder may not be
assigned by any party without the prior written consent of the other party
hereto. For purposes of this provision, assignment shall be as defined in the
1940 Act and the rules thereunder.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed in its name and on its behalf by its duly authorized representative as
of the date specified below.
AMERICAN UNITED LIFE INSURANCE
COMPANY
By its authorized officer
/s/ Xxxxxxx X. Xxxxxx
____________________________________
By: Xxxxxxx X. Xxxxxx
Title: Associate General Counsel
Date: March 21, 0000
XXXXX XXXXXX INSTITUTIONAL
INVESTMENT TRUST
By its authorized officer,
/s/ Xxxxx X. Xxxxxx
____________________________________
By: Xxxxx X. Xxxxxx
Title:
Date:
STATE STREET BANK AND TRUST COMPANY
By its authorized officer,
/s/ Xxxxxxxx X. Awcoli
________________________________________
By: Xxxxxxxx X. Awcoli
Title:
Date:
20
ALPS MUTUAL FUNDS SERVICES, INC.
By its authorized officer,
/s/ Xxxxxx X. Xxxxxx
______________________________________
By: Xxxxxx X. Xxxxxx
Title: CFO
Date: 3/16/2001
