DISTRIBUTION AND SERVICE AGREEMENT
AGREEMENT made as of the 21St day of February, 2003 by and between X. Xxxx
Price Investment Services, Inc. ("Distributor"), X. Xxxx Price Services, Inc.
("Transfer Agent") (collectively referred to as "X. Xxxx Price") and American
United Life Insurance Company ("Company").
WITNESSETH:
WHEREAS, the Distributor is the principal underwriter of the X. Xxxx Price
open-end investment companies ("Funds") registered under the Investment Company
Act of 1940, as amended (the "`40 Act") and certain of such Funds have issued
multiple classes (each a "Class"; collectively as "Classes") of shares;
WHEREAS, the Transfer Agent is the registered transfer agent of the Funds
and administers the program for the calculation of certain fees paid hereunder
to Company;
WHEREAS, the Company is registered as a broker-dealer under the Securities
Exchange Act of 1934 (the `34 Act") and with the National Association of
Securities Dealers, Inc. ("NASD") and wishes to offer its clients ("Clients")
one or more of the Classes, as mutually agreed upon by the parties;
WHEREAS, the Company has issued or will issue certain group annuity
contract (the "Contracts"); and
WHEREAS, X. Xxxx Price wishes to retain the Company to furnish certain
services with respect to distribution, shareholder servicing, maintenance of
shareholder accounts and other administrative services ("Services") for each
Class and the Company is willing to furnish such services.
NOW, THEREFORE, in consideration of the promises and mutual covenants
hereinafter contained, X. Xxxx Price and Company hereby agree, as follows:
1. Transactions in the Classes
a. Subject to the terms and conditions of this Agreement and those of the
applicable prospectus and statement of additional information ("SAI") for the
affected Class, Distributor will make shares of each Class available to be
purchased, exchanged or redeemed by Company on behalf of its Clients at the net
asset value applicable to each order, as determined in accordance with each
Class's then-effective prospectus and SAI. Distributor shall use its best
efforts to ensure that the Classes calculate such net asset value on each day on
which the New York Stock Exchange ("NYSE") is open for trading.
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b. Distributor shall notify Company immediately if any qualification of
shares of a Class for sale in any state or other jurisdiction within the United
States is terminated or if Distributor or a Class wishes to prevent Company from
placing or continuing to place purchase orders for shares of a Class on behalf
of its Clients who reside in a particular state or other jurisdiction. Company
agrees that it will offer or sell shares of the Classes only in compliance with
applicable federal and state securities laws.
c. Distributor hereby appoints Company as agent for the limited purpose of
receiving orders for the Classes from its Clients.
d. Company and X. Xxxx Price agree that, in connection with transactions in
Class shares, and except as otherwise agreed to by the parties, Company and X.
Xxxx Price will follow the procedures set forth in Article I - Sale of Fund
Shares and Schedule B of the Agreement between X. Xxxx Price Associates, Inc.,
X. Xxxx Price Investment Services, Inc. and American United Life Insurance
Company dated May 18, 2001. Said Article and Schedule are hereby incorporated by
reference.
2. Services
The Company agrees to provide, and incur all expenses incident to
providing, Services with respect to investment in the Classes by its Clients. It
is anticipated that such Services may include but shall not be limited to:
a. Distribution and Personal Services. Distribution Services include any
activities primarily intended to result in the sale of shares of one or more
Classes. Personal Services include shareholder liaison services and maintenance
of shareholder accounts. Such Services include but are not limited to:
(1) distributing prospectuses, SAI and shareholder reports for the
Class(es) for other than existing shareholders of such Class(es);
(2) distributing sales literature and advertising materials for the
Class(es);
(3) providing each Client access to one or more of Company's
representatives who will provide personal service and attention with
respect to the Classes;
(4) providing information to Clients regarding the Classes;
(5) providing shareholder support services with respect to the Clients'
accounts;
(6) telephonic support to respond to questions about the Clients'
investment in the Class and the Clients' accounts; and
(7) other distribution Services as mutually agreed upon by both parties.
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b. Administrative Services. Administrative Services include Services with
respect to a Class, its accounts and/or shareholders, which include but are not
limited to:
(1) transmitting net purchase or redemption orders to Transfer Agent;
(2) maintaining separate records for each Client reflecting, as to each
Class, shares purchased and redeemed and share balances;
(3) delivering periodic statements;
(4) processing dividend payments;
(5) providing services for Class shares held beneficially;
(6) working with X. Xxxx Price to deter excessive trading or market timing
activity, after evidence of such activity is provided to Company by X.
Xxxx Price; and
(7) providing other administrative Service as shall be mutually agreed
upon from time to time by the parties.
a. As compensation for performing Services with respect to a Class, X. Xxxx
Price shall pay Company fees at the rates specified for that Class on Schedule A
and which fees shall be payable from and to the extent of the corresponding fee
paid by that Class pursuant to either its distribution and service plan under
Rule 12b-1 under the `40 Act or the Administrative Fee Program instituted by the
Classes. Fees will be calculated based on the average daily net asset value of
shares of the Classes held by the Company over the month. To calculate the fees,
the Company's aggregate investment in the Classes (net asset value per share of
each Class multiplied by total number of shares held by the Company in each
Class) will be calculated for each calendar day during the month, and divided by
the total number of calendar days during such month. Unless otherwise agreed,
payment of any amounts owed under this Agreement shall be made by check and
mailed to the following address of Company:
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Will
Xxxxxx
b. For purposes of calculating the fees described in Schedule A, the value
of Client assets invested in the Classes shall be determined in accordance with
the then-effective prospectus(es) and SAI(s) of the Classes.
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c. The 12b-1 fees payable hereunder are payable without regard to the
aggregate amount that may be paid over the years, provided that the amounts paid
hereunder shall not exceed any limitations, including permissible interest,
imposed by applicable NASD or SEC rules.
4. No Limitation
a. The provisions of this Agreement shall in no way limit the authority of
Distributor or any Fund to take such action as it or they may deem appropriate
or advisable in connection with all matters relating to the operations of a
Class and/or the sale of Class shares. Notwithstanding anything to the contrary
in this Agreement all purchases and sales are subject to the terms of the
Class's then-current prospectus. The Board of Directors/Trustees of the Fund
(hereinafter the "Board") may refuse to sell Fund shares to any person, or
suspend or terminate the offering of Fund shares 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.
b. Distributor agrees that, at the Company's request, any full or
fractional shares of the Funds held by the Company will be redeemed and such
request will ordinarily be executed on a daily basis at the net asset value next
computed after receipt by the Fund or its designee, except that Company
acknowledges 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 `40 Act and any rules thereunder, and in accordance with
the procedures and policies of the Fund as described in the then-current
prospectus.
5. Records and Reporting
Company will maintain and preserve all records as required by law in
connection with its provision of Services under this Agreement. Upon the
reasonable request of Distributor, a Fund or the Transfer Agent, Company will
provide timely copies of (a) historical records relating to Client transactions
involving the Class; (b) written communications regarding the Class to or from
Clients; and (c) other materials relating to the provision of Services by
Company under this Agreement.
6. Representations and Warranties of Distributor
X. Xxxx Price represents and warrants to the Company that:
a. Distributor and Transfer Agent are corporations duly organized,
existing in good standing under the laws of the State of
Maryland.
b. Distributor is a broker dealer registered under the x00 Xxx.
c. Transfer Agent is a transfer agent registered under the x00 Xxx.
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d. Shares of the Classes are registered and authorized for sale in
accordance with any and all applicable federal and state
securities laws. Specifically, X. Xxxx Price represents that each
Class is qualified as a Regulated Investment Company under
Subchapter M of the Internal Revenue Code of 1986, as amended,
and that each Class will make every effort to maintain such
qualification (under Subchapter M or any successor or similar
provisions) and that the Distributor and Transfer Agent will
notify the Company immediately upon having a reasonable basis for
believing that a Class has ceased to so qualify or that it might
not so qualify in the future.
e. It is authorized to enter into and perform this Agreement, and
the performance of its obligations hereunder does not and will
not violate or conflict with any governing documents or
agreements of or on behalf of the Classes.
f. It agrees to notify the Company promptly in the event that it is,
for any reason, unable to perform any of its obligations under
this Agreement.
7. Representation, Warranties and Covenants of Company
Company represents, warrants and covenants to Distributor that:
a. It is an insurance company duly organized, existing in good
standing under the laws of the State of Indiana.
b. It has full power and authority under applicabl law, and has
taken all action necessary, to enter into and perform this
Agreement, and the performance of its obligations hereunder does
not and will not violate or conflict with any governing documents
or agreements of Company.
c. It has all requisite licenses and authority to perform the
Services and receive the fees contemplated under this Agreement.
d. It has the necessary facilities, equipment and qualified
personnel to perform its duties and obligations hereunder in
accordance with (1) the terms of this Agreement, (2) all laws,
rules and regulations (3) the Funds' prospectuses and SAIs.
e. In case of any requests or demands for the inspection of Client
records of a Class by any governmental agency pertaining to any
aspect of the duties covered by this Agreement, it will promptly
notify Distributor in writing as to such inspection prior to
turning over such records.
f. It will disclose to Clients the arangements provided in this
Agreement.
g. It agrees to notify the Distributor promptly in the event that it
is, for any reason, unable to perform any of its obligations
under this Agreement.
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h. It covenants and agrees that it will not make any representations
about a Class except to the extent such representations: (i) are
contained in the Class's current prospectus, SAI, as amended from
time to time, or sales literature approved by Distributor; (ii)
are consistent with information contained in such materials; or
(iii) are otherwise authorized by or on behalf of the applicable
Fund.
i. Its acceptance of the fee is in compliance with all applicable
rules and regulations and will not constitute a non-exempt
"prohibited transaction," as defined in Section 406 of ERISA and
Section 4975 of the Code.
8. Use of Names
a. Company shall furnish, or shall cause to be furnished, to the
Distributor or its designee, each piece of sales literature or other promotional
material that the Company develops or uses and in which a Class, Distributor, or
a Fund's investment adviser is named, at least fifteen calendar days prior to
its use. No such material shall be used if Distributor or its designee
reasonably object to such use within fifteen calendar days after receipt of such
material. The Distributor or its designee reserves the right to reasonably
object to the continued use of such material, and no such material shall be used
if the affected Fund or its designee so object.
b. Company acknowledges and agrees that neither Distributor nor its
affiliates are responsible for any information contained in any advertising or
marketing materials prepared by Company, except for information provided by
Distributor or contained in any Class then-current prospectus, SAI, registration
statement, annual report, proxy statement, or item of advertising or marketing
material prepared by Distributor.
9. Provision of Materials
a. Distributor, at its expense, shall furnish Company with as many printed
copies of the current prospectuses, current SAI, supplements, proxy statements,
and annual or semi-annual reports of each Class as Company reasonably request to
deliver to current or prospective Clients. The Distributor will pay or cause to
be paid the expenses and postage associated with providing such documentation to
the Company.
b. Company, at its expense, will send prospectuses and SAIs to Clients and
prospective Clients requesting them through Company. Except in those instances
in which an exemption applies under applicable securities law, Company will send
a Class prospectus with the trade confirmation or before the purchase trade
confirmation is received by Client, for the initial purchase of the Class, and
will send an updated prospectus annually to shareholders in the Class.
c. The Distributor will provide to the Company, at the Company's request,
at least one complete copy of all registration statements, prospectuses, SAIs,
reports, proxy statements, sales literature and other promotional materials sent
to all shareholders, and all amendments to any of the above, that relate to the
Classes or their shares, promptly after filing of such document(s) with the SEC
or other regulatory authorities. The Distributor will promptly notify the
Company
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of any applications for exemptions and requests for no-action letters (to the
extent such requests and applications have been made public) filed with the SEC
or other regulatory authorities that relate to the Classes or their shares. This
provision shall in no way limit the obligations of the Distributor under Section
9(a) of this Agreement.
10. Liability and Indemnification
a. Distributor shall indemnify, defend and protect Company, its employees,
officers and directors, and hold each of them harmless from and against any and
all claims, demands, actions, losses, damages, liabilities, costs, charges,
reasonable counsel fees, and expenses of any nature it or they incur ("Losses")
arising out of or from, with respect to each Class: (i) any material
misstatement or omission of a material fact from the Class's then-current
prospectus, registration statement, SAI, annual report or proxy statement or any
advertising or promotional material generated by Distributor; (ii) any failure
of Distributor or the Class for the Class's shares to be properly registered or
qualified for sale and available for sale to the public under any applicable
federal law and regulation or the applicable laws and regulations of any state,
any US territory or the District of Columbia unless Distributor has notified
Company in writing that the Class and its shares are not qualified for sale in a
particular jurisdiction and Company sells shares of the Class in such
jurisdiction after such notification; (iii) any material breach by Distributor
of any representation or warranty contained in this Agreement; and (iv) the
actions of Distributor relating to the processing of purchase, exchange, and
redemption orders and the servicing of shareholder accounts to the extent such
actions constitute willful misfeasance, bad faith or negligence by Distributor;
provided, Company has not acted with willful misfeasance, bad faith or
negligence.
b. Company shall indemnify, defend and protect Distributor its employees,
officers, directors, each Fund's officers and directors/trustees, and their
respective affiliates and agents, free and harmless from and against any and all
Losses arising out of or from, with respect to each Class: (i) any material
misstatements or omissions of material facts that Company or its agent makes
concerning the Class that are inconsistent with either the Class's then-current
prospectus, SAI, periodic reports to shareholders, proxy statements or any other
material Distributor has provided in writing to Company; (ii) any sale of shares
of the Class by Company or its agent where the Class or its shares are not
properly registered or qualified for sale in any state, any US territory or the
District of Columbia after Distributor has notified Company in writing that the
Class and its shares are not qualified for sale in such jurisdiction; (iii) any
material breach by Company or its agent of any representation or warranty
contained in this Agreement; and (iv) any actions of Company or its agent in
connection with the performance of its obligations under this Agreement to the
extent such actions constitute willful misfeasance, bad faith or negligence by
Company or its agent; provided, Distributor has not acted with bad faith,
willful misfeasance or negligence.
11. Term and Termination of Agreement
a. This Agreement may be terminated by either party hereto at any time upon
at least ninety (90) days' advance written notice by either party.
Notwithstanding the foregoing, this
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Agreement is terminable (i) upon less than ninety (90) day's notice if required
by law, rule, regulation, order or instruction by a court of competent
jurisdiction or a regulatory body or self regulatory organization with
jurisdiction over the terminating party and (ii) by any party at any time by
giving 30 day's written notice to the other party(ies) in the event of a
material breach of this Agreement by the other party or parties that is not
cured during such 30-day period. Furthermore, this Agreement shall terminate at
the option of the Company to the extent that shares of the Classes are not
reasonably available to meet the requirements of the Contracts as determined by
Company in its sole discretion. Pursuant to the terms of this Section 11, this
Agreement may also be terminated with respect to one or more of the Classes and
such termination will not affect the continuation of this Agreement with respect
to the other Classes.
b. Notwithstanding any termination of this Agreement, the Distributor
shall, at the option of the Company, continue to make available additional
shares of the Classes pursuant to the terms and conditions of this Agreement,
for all Contracts in existence on the effective date of termination of the
Agreement (hereinafter referred to as "Existing Contracts"). Specifically, the
owners of the Existing Contracts may be permitted to reallocate investments in
the Classes, redeem investments in the Classes, and/or invest in the Classes
upon the making of additional purchase payments under the Existing Contracts.
12. Notices
All notices and other communications hereunder shall be given or made in
writing and shall be delivered personally, or sent by facsimile, express
delivery or registered or certified mail, return receipt requested, to the party
or parties to whom they are directed at the following addresses, or at such
other addresses as may be designated by notice from such party to the other
party.
Company: American United Life Insurance Company
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Will Xxxxxx
Distributor: X. Xxxx Price Investment Services, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX. 00000
Attn: Xxxx Xxxxxx
cc: Xxxxx Xxxxxxx, Esq.
Any notice, demand or other communication given in a manner prescribed in this
Section 12 shall be deemed to have been delivered on receipt.
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13. Non-Exclusivity
Each party to this Agreement acknowledges that the other party hereto may
enter into similar agreements with third parties.
14. Miscellaneous
a. This Agreement represents the entire agreement between the parties with
regard to the matters described herein, and may not be modified or amended
except by written instrument executed by both parties. This Agreement may not be
assigned by either party hereto without the prior written consent of the other
party. This Agreement is made and shall be construed under the laws of the State
of Maryland without giving effect to principles of conflict of laws. This
Agreement supersedes all previous agreements and understandings between the
parties with respect to its subject matter. If any provision of the Agreement
shall be held or made invalid by a statute, rule, regulation, decision of a
tribunal or otherwise, the remainder of the Agreement shall not be affected
thereby. This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, any party hereto may
execute this Agreement by signing any such counterpart.
b. The provisions of Section 10 shall survive the termination of this
Agreement.
c. All Exhibits and Schedules, as they may be amended from time to time,
are incorporated herein by reference and made part of this Agreement.
IN WITNESS HEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
X. XXXX PRICE INVESTMENT X. XXXX PRICE SERVICES, INC.
SERVICES, INC.
BY: /s/ Xxxxx Xxxxxxx BY: Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx Name: Xxxxx Xxxxxxx
Title. Vic President Title: Vice President
Date: 2/12/03 Date: 2/12/03
COMPANY
BY: /s/ Xxxxxxx X. Xxxxxx
Title: V.P. Marketing
Date: 2/24/03
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SCHEDULE A
Fees
1. 12b-1 Fees
In accordance with the Class's plan pursuant to Rule 12b-1 under the `40 Act,
the Distributor shall pay to Company for the Services performed in Section 2. a.
of this Agreement, a fee with respect to each Class equal to 0.50 % per annum of
the average daily net asset value of all Client assets invested in such Class
(including assets invested through reinvestment of dividends and distributions),
payable monthly. Distributor agrees to pay all fees within thirty (30) calendar
days from the last day of the month to which the fees relate.
2. Administrative Service Fees
In consideration of the Company providing the Services outlined in Section 2.b.
of this Agreement, pursuant to the Administrative Fee Program instituted by the
Classes, the Transfer Agent, on behalf of each Class, shall pay Company a fee
equal to 0.10% per annum of the average daily net asset value of all Client
assets invested in such Class (including assets invested through reinvestment of
dividends and distributions), payable monthly. Distributor agrees to pay all
fees within thirty (30) calendar days from the last day of the month to which
the fees relate. The fee is the responsibility of the applicable Class, not the
X. Xxxx Price or its affiliates and the obligations of each Class is several and
not joint; no Class is responsible for the fee of any other Class.
