EXHIBIT 99.27(h)(10)(i)
PARTICIPATION AGREEMENT
BY AND AMONG
AIM VARIABLE INSURANCE FUNDS,
A I M DISTRIBUTORS, INC.,
MINNESOTA LIFE INSURANCE COMPANY ON BEHALF OF
ITSELF AND ITS SEPARATE ACCOUNTS
AND
SECURIAN FINANCIAL SERVICES, INC.
TABLE OF CONTENTS
Description Page
----------- ----
Section 1. Available Funds 4
1.1 Availability 4
1.2 Addition, Deletion or Modification of Funds 4
1.3 No Sales to the General Public 4
Section 2. Processing Transactions 5
2.1 Timely Pricing and Orders 5
2.2 Timely Payments 5
2.3 Applicable Price 6
2.4 Dividends and Distributions 6
2.5 Book Entry 6
Section 3. Costs and Expenses 6
3.1 General 6
3.2 Parties to Cooperate 7
Section 4. Legal Compliance 7
4.1 Tax Laws 7
4.3 Securities 9
4.4 Notice of Certain Proceedings and Other Circumstances 10
4.5 LIFE COMPANY to Provide Documents; Information about AVIF 11
4.6 AVIF To Provide Documents; Information About LIFE COMPANY 12
Section 5. Mixed and Shared Funding 14
5.1 General 14
5.2 Disinterested Trustees 14
5.3 Monitoring for Material Irreconcilable Conflicts 14
5.4 Conflict Remedies 15
5.5 Notice to LIFE COMPANY 16
5.6 Information Requested by Board of Trustees 16
5.7 Compliance with SEC Rules 17
5.8 Other Requirements 17
Section 6. Termination 17
6.1 Events of Termination 17
6.2 Notice Requirement for Termination 18
6.3 Funds to Remain Available 19
6.4 Survival of Warranties and Indemnifications 19
6.5 Continuance of Agreement for Certain Purposes 19
Description Page
----------- ----
Section 7. Parties to Cooperate Respecting Termination 19
Section 8. Assignment 19
Section 9. Notices 20
Section 10. Voting Procedures 20
Section 11. Foreign Tax Credits 21
Section 12. Indemnification 21
12.1 Of AVIF and AIM by LIFE COMPANY and UNDERWRITER 21
12.2 Of LIFE COMPANY and UDNERWRITER by AVIF and AIM 23
12.3 Effect of Notice 26
12.4 Successors 26
Section 13. Applicable Law 26
Section 14. Execution in Counterparts 26
Section 15. Severability 26
Section 16. Rights Cumulative 26
Section 17. Headings 27
Section 18. Confidentiality 27
Section 19. Trademarks and Fund Names 27
Section 20. Parties to Cooperate 28
PARTICIPATION AGREEMENT
THIS AGREEMENT, made and entered into as of the 4TH day of March, 2002
("Agreement"), by and among AIM Variable Insurance Funds, a Delaware Trust
("AVIF"), A I M Distributors, Inc., a Delaware corporation ("AIM") Minnesota
Life Insurance Company, a Minnesota life insurance company (" ALIFE COMPANY"),
on behalf of itself and each of its segregated asset accounts listed in Schedule
A hereto, as the parties hereto may amend from time to time (each, an "Account,"
and collectively, the "Accounts"); and Securian Financial Services, Inc. , an
affiliate of LIFE COMPANY and the principal underwriter of the Contracts
("UNDERWRITER") (collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, AVIF is registered with the Securities and Exchange Commission ("SEC")
as an open-end management investment company under the Investment Company Act of
1940, as amended (the "1940 Act"); and
WHEREAS, AVIF currently consists of eighteen separate series ("Series"), shares
("Shares") each of which are registered under the Securities Act of 1933, as
amended (the "1933 Act") and are currently sold to one or more separate accounts
of life insurance companies to fund benefits under variable annuity contracts
and variable life insurance contracts; and
WHEREAS, AVIF will make Shares of each Series listed on Schedule A hereto as the
Parties hereto may amend from time to time (each a "Fund"; reference herein to
"AVIF" includes reference to each Fund, to the extent the context requires)
available for purchase by the Accounts; and
WHEREAS, LIFE COMPANY will be the issuer of certain variable annuity contracts
and variable life insurance contracts ("Contracts") as set forth on Schedule A
hereto, as the Parties hereto may amend from time to time, which Contracts
(hereinafter collectively, the "Contracts"), if required by applicable law, will
be registered under the 1933 Act; and
WHEREAS LIFE COMPANY will fund the Contracts through the Accounts, each of which
may be divided into two or more subaccounts ("Subaccounts"; reference herein to
an "Account" includes reference to each Subaccount thereof to the extent the
context requires); and
WHEREAS, LIFE COMPANY will serve as the depositor of the Accounts, each of which
is registered as a unit investment trust investment company under the 1940 Act
(or exempt therefrom), and the security interests deemed to be issued by the
Accounts under the Contracts will be registered as securities under the 1933 Act
(or exempt therefrom); and
3
WHEREAS, to the extent permitted by applicable insurance laws and regulations,
LIFE COMPANY intends to purchase Shares in one or more of the Funds on behalf of
the Accounts to fund the Contracts; and
WHEREAS, AIM is a broker-dealer registered with the SEC under the Securities
Exchange Act of 1934 (" 1934 Act") and a member in good standing of the National
Association of Securities Dealers, Inc. ("NASD");
NOW, THEREFORE, in consideration of the mutual benefits and promises contained
herein, the Parties hereto agree as follows:
Section 1. Available Funds
1.1 Availability.
AVIF will make Shares of each Fund available to LIFE COMPANY for purchase and
redemption at net asset value and with no sales charges, subject to the terms
and conditions of this Agreement. The Board of Trustees of AVIF may refuse to
sell Shares of any Fund to any person, 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 if, in the sole discretion of the Trustees
acting in good faith and in light of their fiduciary duties under federal and
any applicable state laws, such action is deemed in the best interests of the
shareholders of such Fund.
1.2 Addition. Deletion or Modification of Funds or Contracts.
The Parties hereto may agree, from time to time, to add other Funds to provide
additional funding media for the Contracts, or to delete, combine, or modify
existing Funds, by amending Schedule A hereto. In addition the parties may also
agree, to add other Contracts, by amending Schedule A. Upon such amendment to
Schedule A, any applicable reference to a Fund, AVIF, or its Shares herein shall
include a reference to any such additional Fund. Schedule A, as amended from
time to time, is incorporated herein by reference and is a part hereof.
1.3 No Sales to the General Public.
AVIF represents and warrants that no Shares of any Fund have been or will be
sold to the general public.
4
Section 2. Processing Transactions
2.1 Timely Pricing and Orders.
(a) AVIF or its-designated agent will use its best efforts to provide LIFE
COMPANY with the net asset value per Share for each Fund by 6:00 p.m. Central
Time on each Business Day. As used herein, "Business Day" shall mean any day on
which (i) the New York Stock Exchange is open for regular trading, (ii) AVIF
calculates the Fund's net asset value, and (iii) LIFE COMPANY is open for
business.
(b) LIFE COMPANY will use the data provided by AVIF each Business Day pursuant
to paragraph (a) immediately above to calculate Account unit values and to
process transactions that receive that same Business Day's Account unit values.
LIFE COMPANY will perform such Account processing the same Business Day, and
will place corresponding orders to purchase or redeem Shares with AVIF by 9:00
a.m. Central Time the following Business Day; provided, however, that AVIF shall
provide additional time to LIFE COMPANY in the event that AVIF is unable to meet
the 6:00 p.m. time stated in paragraph (a) immediately above. Such additional
time shall be equal to the additional time that AVIF takes to make the net asset
values available to LIFE COMPANY.
(c) With respect to payment of the purchase price by LIFE COMPANY and of
redemption proceeds by AVIF, LIFE COMPANY and AVIF shall net purchase and
redemption orders with respect to each Fund and shall transmit one net payment
per Fund in accordance with Section 2.2, below.
(d) If AVIF provides materially incorrect Share net asset value information (as
determined under SEC guidelines), LIFE COMPANY shall be entitled to an
adjustment to the number of Shares purchased or redeemed to reflect the correct
net asset value per Share. Any material error in the calculation or reporting of
net asset value per Share, dividend or capital gain information shall be
reported promptly upon discovery to LIFE COMPANY. Materiality and reprocessing
cost reimbursement shall be determined in accordance with standards established
by the Parties as provided in Schedule B, attached hereto and incorporated
herein.
2.2 Timely Payments.
LIFE COMPANY will wire payment for net purchases to a custodial account
designated by AVIF by 1:00 p.m. Central Time on the same day as the order for
Shares is placed, in accordance with Section 2.3(a), to the extent practicable.
AVIF will wire payment for net redemptions to an account designated by LIFE
COMPANY by 1:00 p.m. Central Time on the same day as the Order is placed, to the
extent practicable, but in any event within five (5) calendar days after the
date the order is placed in order to enable LIFE COMPANY to pay redemption
proceeds within the time specified in Section 22(e) of the 1940 Act or such
shorter period of time as may be required by law.
5
2.3 Applicable Price.
(a) Share purchase payments and redemption orders that result from purchase
payments, premium payments, surrenders and other transactions under Contracts
(collectively, "Contract transactions") and that LIFE COMPANY receives prior to
the close of regular trading on the New York Stock Exchange on a Business Day
will be executed at the net asset values of the appropriate Funds next computed
after receipt by AVIF or its designated agent of the orders. For purposes of
this Section 2.3(a), LIFE COMPANY shall be the designated agent of AVIF for
receipt of orders relating to Contract transactions on each Business Day and
receipt by such designated agent shall constitute receipt by AVIF; provided that
AVIF receives notice of such orders by 9:00 a.m. Central Time on the next
following Business Day or such later time as computed in accordance with Section
2.1(b) hereof.
(b) All other Share purchases and redemptions by LIFE COMPANY will be effected
at the net asset values of the appropriate Funds next computed after receipt by
AVIF or its designated agent of the order therefor, and such orders will be
irrevocable.
2.4 Dividends and Distributions.
AVIF will furnish notice by wire or telephone (followed by written confirmation)
on or prior to the payment date to LIFE COMPANY of any income dividends or
capital gain distributions payable on the Shares of any Fund. LIFE COMPANY
hereby elects to reinvest all dividends and capital gains distributions in
additional Shares of the corresponding Fund at the ex-dividend date net asset
values until LIFE COMPANY otherwise notifies AVIF in writing, it being agreed by
the Parties that the ex-dividend date and the payment date with respect to any
dividend or distribution will be the same Business Day. LIFE COMPANY reserves
the right to revoke this election and to receive all such income dividends and
capital gain distributions in cash.
2.5 Book Entry.
Issuance and transfer of AVIF Shares will be by book entry only. Stock
certificates will not be issued to LIFE COMPANY. Shares ordered from AVIF will
be recorded in an appropriate title for LIFE COMPANY, on behalf of its Account.
Section 3. Costs and Expenses
3.1 General.
Except as otherwise specifically provided in Schedule C, attached hereto and
made a part hereof, each Party will bear, or arrange for others to bear, all
expenses incident to its performance under this Agreement.
6
3.2 Parties To Cooperate.
Each Party agrees to cooperate with the others, as applicable, in arranging to
print, mail and/or deliver, in a timely manner, combined or coordinated
prospectuses or other materials of AVIF and the Accounts.
Section 4. Legal Compliance
4.1 Tax Laws.
(a) AVIF represents and warrants that each Fund is currently qualified as a
regulated investment company ("RIC") under Subchapter M of the Internal Revenue
Code of 1986, as amended (the "Code"), and represents that it will use its best
efforts to qualify and to maintain qualification of each Fund as a RIC. AVIF
will notify LIFE COMPANY immediately upon having a reasonable basis for
believing that a Fund has ceased to so qualify or that it might not so qualify
in the future.
(b) AVIF represents and warrants that it will comply and maintain each Fund's
compliance with the diversification requirements set forth in Section 8 I 7 (h)
of the Code and Section 1.817-5(b) of the regulations under the Code. AVIF will
notify LIFE COMPANY immediately upon having a reasonable basis for believing
that a Fund has ceased to so comply or that a Fund might not so comply in the
future. In the event of a breach of this Section 4.1 (b) by AVIF, it will take
all reasonable steps to adequately diversify the Fund so as to achieve
compliance within the grace period afforded by Section 1.817-5 of the
regulations under the Code.
(c) Notwithstanding any other provision of this Agreement, LIFE COMPANY agrees
that if the Internal Revenue Service ("IRS") asserts in writing in connection
with any governmental audit or review of LIFE COMPANY or, to LIFE COMPANY's
knowledge, of any Contract owners, annuitants, insureds or participants (as
appropriate) under the Contracts (collectively, "Participants"), that any Fund
has failed to comply with the diversification requirements of Section 817(h) of
the Code or LIFE COMPANY otherwise becomes aware of any facts that could give
rise to any claim against AVIF or its affiliates as a result of such a failure
or alleged failure:
(i) LIFE COMPANY shall promptly notify AVIF of such assertion or potential claim
(subject to the Confidentiality provisions of Section 18 as to any Participant);
(ii) LIFE COMPANY shall consult with AVIF as to how to minimize any liability
that may arise as a result of such failure or alleged failure;
(iii) LIFE COMPANY shall use its best efforts to minimize any liability of AVIF
or its affiliates resulting from such failure, including, without limitation,
demonstrating, pursuant to Treasury Regulations Section 1.817-5(a)(2), to the
Commissioner of the IRS that such failure was inadvertent;
7
(iv) LIFE COMPANY shall permit AVIF, its affiliates and their legal and
accounting advisors to participate in any conferences, settlement discussions or
other administrative or judicial proceeding or contests (including judicial
appeals thereof) with the IRS, any Participant or any other claimant regarding
any claims that could give rise to liability to AVIF or its affiliates as a
result of such a failure or alleged failure; provided, however, that LIFE
COMPANY will retain control of the conduct of such conferences discussions,
proceedings, contests or appeals;
(v) any written materials to be submitted by LIFE COMPANY to the IRS, any
Participant or any other claimant in connection with any of the foregoing
proceedings or contests (including, without limitation, any such materials to be
submitted to the IRS pursuant to Treasury Regulations Section 1.817-5(a)(2),
(a) shall be provided by LIFE COMPANY to AVIF (together with any supporting
information or analysis); subject to the confidentiality provisions of Section
18, at least ten (10) business days or such shorter period to which the Parties
hereto agree prior to the day on which such proposed materials are to be
submitted, and (b) shall not be submitted by LIFE COMPANY to any such person
without the express written consent of AVIF which shall not be unreasonably
withheld;
(vi) LIFE COMPANY shall provide AVIF or its affiliates and their accounting and
legal advisors with such cooperation as AVIF shall reasonably request
(including, without limitation, by permitting AVIF and its accounting and legal
advisors to review the relevant books and records of LIFE COMPANY) in order to
facilitate review by AVIF or its advisors of any written submissions provided to
it pursuant to the preceding clause or its assessment of the validity or amount
of any claim against its arising from such a failure or alleged failure; and
(vii) LIFE COMPANY shall not with respect to any claim of the IRS or any
Participant that would give rise to a claim against AVIF or its affiliates (a)
compromise or settle any claim, (b) accept any adjustment on audit, or (c)
forego any allowable administrative or judicial appeals, without the express
written consent of AVIF or its affiliates, which shall not be unreasonably
withheld, provided that LIFE COMPANY shall not be required, after exhausting all
administrative remedies, to appeal any adverse judicial decision unless AVIF or
its affiliates shall have provided an opinion of independent counsel to the
effect that a reasonable basis exists for taking such appeal; and provided
further that the costs of any such appeal shall be borne equally by the Parties
hereto.
Should AVIF or any of its affiliates refuse to give its written consent to any
compromise or settlement of any claim or liability hereunder, LIFE COMPANY may,
in its discretion, authorize AVIF or its affiliates to act in the name of LIFE
COMPANY in, and to control the conduct of, such
8
conferences, discussions, proceedings, contests or appeals and all
administrative or judicial appeals thereof, and in that event AVIF or its
affiliates shall bear the fees and expenses associated with the conduct of the
proceedings that it is so authorized to control; provided, that in no event
shall LIFE COMPANY have any liability resulting from AVIF's refusal to accept
the proposed settlement or compromise with respect to any failure caused by
AVIF. As used in this Agreement, the term "affiliates" shall have the same
meaning as "affiliated person" as defined in Section 2(a)(3) of the 1940 Act.
(d) LIFE COMPANY represents and warrants that the Contracts currently are and
will be treated as annuity contracts or life insurance contracts under
applicable provisions of the Code and that it will use its best efforts to
maintain such treatment; LIFE COMPANY will notify AVIF immediately upon having a
reasonable basis for believing that any of the Contracts have ceased to be so
treated or that they might not be so treated in the future.
(e) LIFE COMPANY represents and warrants that each Account is a "segregated
asset account" and that interests in each Account are offered exclusively
through the purchase of or transfer into a "variable contract," within the
meaning of such terms under Section 817 of the Code and the regulations
thereunder. LIFE COMPANY will use its best efforts to continue to meet such
definitional requirements, and it will notify AVIF immediately upon having a
reasonable basis for believing that such requirements have ceased to be met or
that they might not be met in the future.
4.2 Insurance and Certain Other Laws.
(a) AVIF will use its best efforts to comply with any applicable state insurance
laws or regulations. where required. including. the furnishing of information
not otherwise available to LIFE COMPANY which is required by state insurance law
to enable LIFE COMPANY to obtain die authority needed to issue the Contracts in
any applicable state.
(b) LIFE COMPANY represents and warrants that (i) it is an insurance company
duly organized, validly existing and in good standing under the laws of the
State of Minnesota and bas full corporate power, authority and legal right to
execute, deliver and perform its duties and comply with its obligations under
this Agreement, (ii) it has legally and validly established and maintains each
Account as a segregated asset account under Chapter 61 A of the Minnesota
Insurance Law and the regulations thereunder, and (iii) the Contracts comply in
all material respects with all other applicable federal and state laws and
regulations.
(c) AVIF represents and warrants that it is lawfully organized, validly
existing, and in good standing under the laws of the State of Delaware and has
full power, authority, and legal right to execute, deliver, and perform its
duties and comply with its obligations under this Agreement.
4.3 Securities Laws.
(a) LIFE CO MP ANY represents and warrants that (i) interests in each Account
pursuant to the Contracts will be registered under the 1933 Act, to the extent
required by the 1933 Act, (ii) the Contracts will be duly authorized for
issuance and sold in compliance with all applicable federal and
9
state law including without limitation the 1933 Act, the 1934 Act, the 1940 Act
and the law(s) of LIFE COMPANY's state(s) of organization and domicile (iii)
each Account is and will remain registered under the 1940 Act, to the extent
required by the 1940 Act, (iv) each Account does and will comply in all material
respects with the requirements of the 1940 Act and the rules thereunder to the
extent required, (v) each Account's 1933 Act registration statement relating to
the Contract together with any amendments thereto, will at all times comply in
all material respects with the requirements of the 1933 Act and the rules
thereunder, (vi) LIFE COMPANY will amend the registration statement for its
Contracts under the 1933 Act and for its Accounts under the 1940 Act from time
to time as required in order to effect the continuous offering of its Contracts
or as may otherwise be required by applicable law t and (vii) each Account
Prospectus will at all times comply in all material respects with the
requirements of the 1933 Act and the rules thereunder.
(b) AVIF represents and warrants that (i) Shares sold pursuant to this Agreement
will be registered under the 1933 Act to the extent required by the 1933 Act and
duly authorized for issuance and sold in compliance with Delaware law, (ii) AVIF
is and will remain registered under the 1940 Act to the extent required by the
1940 Act, (iii) AVIF will amend the registration statement for its Shares under
the 1933 Act and itself under the 1940 Act from time to time as required in
order to effect the continuous offering of its Shares, (iv) AVIF does and will
comply in all material respects with the requirements of the 1940 Act and the
rules thereunder, (v) AVIF's 1933 Act registration statement, together with any
amendments thereto, does and will at all times comply in all material respects
with the requirements of the 1933 Act and rules thereunder, and (vi) AVIF's
Prospectus does and will at all times comply in all material respects with the
requirements of the 1933 Act and the rules thereunder.
(c) AVIF will at its expense register and qualify its Shares for sale in
accordance with the laws of any state or other jurisdiction if and to the extent
required by State law.
(d) AVIF represents and warrants that all of its trustees, officers, employees,
investment advisers, and other individuals/entities having access to the funds
and/or securities of the Fund are and 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 as required currently by Rule 17 g-(
1) of the 1940 Act or related provisions as may be promulgated from time to
time. The aforesaid bond includes coverage for larceny and embezzlement and is
issued by a reputable bonding company.
4.4 Notice of Certain Proceedings and Other Circumstances.
(a) AVIF or AIM will immediately notify LIFE COMPANY of (i) the issuance by any
court or regulatory body of any stop order, cease and desist order, or other
similar order with respect to AVIFs registration statement under the 1933 Act or
AVIF Prospectus, (ii) any request by the SEC for any amendment to such
registration statement or AVIF Prospectus that may affect the offering of Shares
of AVIF, (iii) the initiation of any proceedings for that purpose or for any
other purpose relating to the registration or offering of AVIFs Shares, or (iv)
any other action or circumstances that may prevent the lawful offer or sale of
Shares of any Fund in any state or jurisdiction, including, without limitation,
any circumstances in which (a) such Shares are not registered and, in all
material respects, issued and sold in accordance with applicable state and
federal law, or (b) such law
10
precludes the use of such Shares as an underlying investment medium of the
Contracts issued or to be issued by LIFE COMPANY. AVIF and AIM will make every
reasonable effort to prevent the issuance, with respect to any Fund, of any such
stop order, cease and desist order or similar order and, if any such order is
issued, to obtain the lifting thereof at the earliest possible time.
(b) LIFE COMPANY or UNDERWRITER will immediately notify AVIF of (i) the issuance
by any court or regulatory body of any stop order, cease and desist order, or
other similar order with respect to each Account's registration statement under
the 1933 Act relating to the Contracts or each Account Prospectus, (ii) any
request by the SEC for any amendment to such registration statement or Account
Prospectus that may affect the offering of Shares of AVIF, (iii) the initiation
of any proceedings for that purpose or for any other purpose relating to the
registration or offering of each Account's interests pursuant to the Contracts,
or (iv) any other action or circumstances that may prevent the lawful offer or
sale of said interests in any state or jurisdiction, including, without
limitation, any circumstances in which said interests are not registered and, in
all material respects, issued and sold in accordance with applicable state and
federal law. LIFE COMPANY and UNDERWRITER will make every reasonable effort to
prevent the issuance of any such stop order, cease and desist order or similar
order and, if any such order is issued, to obtain the lifting thereof at the
earliest possible time.
4.5 LIFE COMPANY To Provide Documents: Information About AVIF.
(a) LIFE COMPANY will provide to AVIF or its designated agent at least one (1)
complete copy of all SEC registration statements, Account Prospectuses, reports,
any preliminary and final voting instruction solicitation material, applications
for exemptions, requests for no-action letters, and all amendments to any of the
above, that relate to each Account or the Contracts, contemporaneously with the
filing of such document with the SEC or other regulatory authorities.
(b) LIFE COMPANY will provide to AVIF or its designated agent at least one (1)
complete copy of each piece of sales literature or other promotional material in
which AVIF or any of its affiliates is named, at least five (5) Business Days
prior to its use or such shorter period as the Parties hereto may, from time to
time, agree upon. No such material shall be used if AVIF or its designated agent
objects to such use within five (5) Business Days after receipt of such material
or such shorter period as the Parties hereto may, from time to time, agree upon.
AVIF hereby designates AIM as the entity to receive such sales literature, until
such time as AVIF appoints another designated agent by giving notice to LIFE
COMPANY in the manner required by Section 9 hereof.
(c) Neither LIFE COMPANY nor any of its affiliates, will give any information or
make any representations or statements on behalf of or concerning AVIF or its
affiliates in connection with the sale of the Contracts other than (i) the
information or representations contained in the registration statement,
including the AVIF Prospectus contained therein, relating to Shares, as such
registration statement and AVIF Prospectus may be amended from time to time; or
(ii) in reports or proxy materials for AVIF; or (iii) in published reports for
AVIF that are in the public domain and approved by AVIF for distribution; or
(iv) in sales literature or other promotional material approved by AVIF, except
with the express written permission of AVIF .
11
(d) LIFE COMPANY shall adopt and implement procedures reasonably designed to
ensure that infom1ation concerning AVIF and its affiliates that is intended for
use only by brokers or agents selling the Contracts (i.e., information that is
not intended for distribution to Participants) ("broker only materials") is so
used, and neither AVIF nor any of its affiliates shall be liable for any losses,
damages or expenses relating to the improper use of such broker only materials.
(e) For the purposes of this Section 4.5, 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, or other public media, (e.g., on-line
networks such as the Internet or other electronic messages), 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, registration statements, prospectuses,
statements of additional information, shareholder reports, and proxy materials
and any other material constituting sales literature or advertising under the
NASD rules, the 1933 Act or the 0000 Xxx.
4.6 AVIF To Provide Documents: Information About LIFE COMPANY.
(a) AVIF will provide to LIFE COMPANY at least one (1) complete copy of all SEC
registration statements, AVIF Prospectuses, reports, any preliminary and final
proxy material, applications for exemptions, requests for no-action letters, and
all amendments to any of the above, that relate to AVIF or the Shares of a Fund,
contemporaneously with the filing of such document with the SEC or other
regulatory authorities.
(b) AVIF will provide to LIFE COMPANY a camera ready copy of all AVIF
prospectuses and printed copies, in an amount specified by LIFE COMPANY, of AVIF
statements of additional information, proxy materials, periodic reports to
shareholders and other materials required by law to be sent to Participants who
have allocated any Contract value to a Fund. AVIF will provide such copies to
LIFE COMPANY in a timely manner so as to enable LIFE COMPANY, as the case may
be, to print and distribute such materials within the time required by law to be
furnished to Participants. If the LIFE COMPANY elects to include any materials
provided by AVIF, specifically prospectuses, SAIs, shareholder reports and proxy
materials, on its web site or in any other computer or electronic format, the
LIFE COMPANY assumes sole responsibility for maintaining such materials in the
form provided by AVIF and for promptly replacing such materials with all updates
provided by AVIF. AVIF agrees to provide all such materials requested by the
LIFE COMPANY in enhanced Portable Document Format (PDF) in a timely fashion at
no additional cost.
(c) AVIF will provide to LIFE COMPANY or its designated agent at least one (I)
complete copy of each piece of sales literature or other promotional material in
which LIFE COMPANY, or any of its respective affiliates is named, or that refers
to the Contracts, at least five (5) Business Days prior to its use or such
shorter period as the Parties hereto may, from time to time,
12
agree upon. No such material shall be used if LIFE COMPANY or its designated
agent objects to such use within five (5) Business Days after receipt of such
material or such shorter period as the Parties hereto may, from time to time,
agree upon. LIFE COMPANY shall receive all such sales literature until such time
as it appoints a designated agent by giving notice to AVIF in the manner
required by Section 9 hereof.
(d) Neither AVIF nor any of its affiliates will give any information or make any
representations or statements on behalf of or concerning LIFE COMPANY, each
Account, or the Contracts other than (i) the information or representations
contained in the registration statement, including each Account Prospectus
contained therein, relating to the Contracts, as such registration statement and
Account Prospectus may be amended from time to time; or (ii) in published
reports for the Account or the Contracts that are in the public domain and
approved by LIFE COMPANY for distribution; or (iii) in sales literature or other
promotional material approved by LIFE COMPANY or its affiliates, except with the
express written permission of LIFE COMPANY.
(e) AVIF shall cause its principal underwriter to adopt and implement procedures
reasonably designed to ensure that information concerning LIFE COMPANY, and its
respective affiliates that is intended for use only by brokers or agents selling
the Contracts (i. e., information that is not intended for distribution to
Participants) ("broker only materials") is so used, and neither LIFE COMPANY,
nor any of its respective affiliates shall be liable for any losses, damages or
expenses relating to the improper use of such broker only materials.
(f) For purposes of this Section 4.6, 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, or other public media, (e.g., on-line
networks such as the Internet or other electronic messages), 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, registration statements, prospectuses,
statements of additional information, shareholder reports, and proxy materials
and any other material constituting sales literature or advertising under the
NASD rules, the 1933 Act or the 1940 Act.
13
Section 5. Mixed and Shared Funding
5.1 General.
The SEC has granted an order to AVIF exempting it from certain provisions of the
1940 Act and rules thereunder so that AVIF may be available for investment by
certain other entities, including, without limitation, separate accounts funding
variable annuity contracts or variable life insurance contracts, separate
accounts of insurance companies unaffiliated with LIFE COMPANY, and trustees of
qualified pension and retirement plans (collectively, "Mixed and Shared
Funding"). The Parties recognize that the SEC has imposed terms and conditions
for such orders that are substantially identical to many of the provisions of
this Section 5. Sections 5.2 through 5.8 below shall apply pursuant to such an
exemptive order granted to AVIF. AVIF hereby notifies LIFE COMPANY that, in the
event that AVIF implements Mixed and Shared Funding, it may be appropriate to
include in the prospectus pursuant to which a Contract is offered disclosure
regarding the potential risks of Mixed and Shared Funding. AVIF will notify Life
Company of any amendments to the order.
5.2 Disinterested Trustees.
AVIF agrees that its Board of Trustees shall at all times consist of trustees a
majority of whom (the "Disinterested Trustees") are not interested persons of
AVIF within the meaning of Section 2( a)( 19) of the 1940 Act and the rules
thereunder and as modified by any applicable orders of the SEC, except that if
this condition is not met by reason of the death, disqualification, or bona fide
resignation of any director, then the operation of this condition shall be
suspended (a) for a period of forty-five (45) days if the vacancy or vacancies
may be filled by the Board;{b) for a period of sixty (60) days if a vote of
shareholders is required to fill the vacancy or vacancies; or (c) for such
longer period as the SEC may prescribe by order upon application.
5.3 Monitoring for Material Irreconcilable Conflicts.
AVIF agrees that its Board of Trustees will monitor for the existence of any
material irreconcilable conflict between the interests of the Participants in
all separate accounts of life insurance companies utilizing AVIF ("Participating
Insurance Companies") including each Account and participants in all qualified
retirement and pension plans investing in AVIF ("Participating Plans"). LIFE
COMPANY agrees to inform the Board of Trustees of AVIF of the existence of or
any potential for any such material irreconcilable conflict of which it is
aware. The concept of a "material irreconcilable conflict" is not defined by the
1940 Act or the rules thereunder but the Parties recognize that such a conflict
may arise for a variety of reasons including without limitation:
(a) an action by any state insurance or other regulatory authority;
(b) a change in applicable federal or state insurance, tax or securities laws or
regulations, or a public ruling, private letter ruling, no-action or
interpretative letter, or any similar action by insurance, tax or securities
regulatory authorities;
14
(c) an administrative or judicial decision in any relevant proceeding;
(d) the manner in which the investments of any Fund are being managed;
(e) a difference in voting instructions given by variable annuity contract and
variable life insurance contract Participants or by Participants of different
Participating Insurance Companies;
(f) a decision by a Participating Insurance Company to disregard the voting
instructions of Participants; or
(g) a decision by a Participating Plan to disregard the voting instructions of
Plan participants.
Consistent with the SEC's requirements in connection with exemptive orders of
the type referred to in Section 5.1 hereof, LIFE COMPANY will assist the Board
of Trustees in carrying out its responsibilities by providing the Board of
Trustees with all information reasonably necessary for the Board of Trustees to
consider any issue raised, including information as to a decision by LIFE
COMPANY to disregard voting instructions of Participants. LIFE COMPANY's
responsibilities in connection with the foregoing shall be carried out with a
view only to the interests of Participants.
5.4 Conflict Remedies.
(a) It is agreed that if it is determined by a majority of the members of the
Board of Trustees or a majority of the Disinterested Trustees that a material
irreconcilable conflict exists, LIFE COMPANY will, if it is a Participating
Insurance Company for which a material irreconcilable conflict is relevant, at
its own expense and to the extent reasonably practicable (as determined by a
majority of the Disinterested Trustees), take whatever steps are necessary to
remedy or eliminate the material irreconcilable conflict, which steps may
include, but are not limited to:
(i) withdrawing the assets allocable to some or all of the Accounts from AVIF or
any Fund and reinvesting such assets in a different investment medium, including
another Fund of AVIF, or submitting the question whether such segregation should
be implemented to a vote of all affected Participants and, as appropriate,
segregating the assets of any particular group (e.g., annuity Participants, life
insurance Participants or all Participants) that votes in favor of such
segregation, or offering to the affected Participants the option of making such
a change; and
(ii) establishing a new registered investment company of the type defined as a
"management company" in Section 4(3) of the 1940 Act or a new separate account
that is operated as a management company.
(b) If the material irreconcilable conflict arises because of LIFE COMPANY's
decision to disregard Participant voting instructions and that decision
represents a minority position or would preclude a majority vote, LIFE COMPANY
may be required, at AVIF's election, to withdraw each
15
Account's investment in AVIF or any Fund. No charge or penalty will be imposed
as a result of such withdrawal. Any such withdrawal must take place within six
(6) months after AVIF gives notice to LIFE COMPANY that this provision is being
implemented, and until such withdrawal AVIF shall continue to accept and
implement orders by LIFE COMPANY for the purchase and redemption of Shares of
AVIF and provided such withdrawal shall be limited to the extent required by the
foregoing material irreconcilable conflict as determined by a majority of the
Disinterested Trustees.
(c) If a material irreconcilable conflict arises because a particular state
insurance regulator's decision applicable to LIFE COMPANY conflicts with the
majority of other state regulators, then LIFE COMPANY will withdraw each
Account's investment in AVIF within six (6) months after AVIF's Board of
Trustees informs LIFE COMPANY that it has determined that such decision has
created a material irreconcilable conflict, and until such withdrawal AVIF shall
continue to accept and implement orders by LIFE COMPANY for the purchase and
redemption of Shares of AVIF and provided such withdrawal shall be limited to
the extent required by the foregoing material irreconcilable conflict as
determined by a majority of the Disinterested Trustees. No charge or penalty
will be imposed as a result of such withdrawal.
(d) LIFE COMPANY agrees that any remedial action taken by it in resolving any
material irreconcilable conflict will be carried out at its expense and with a
view only to the interests of Participants.
(e) For purposes hereof, a majority of the Disinterested Trustees will determine
whether or not any proposed action adequately remedies any material
irreconcilable conflict. In no event, however, will AVIF or any of its
affiliates be required to establish a new funding medium for any Contracts. LIFE
COMPANY will not be required by the terms hereof to establish a new funding
medium for any Contracts if an offer to do so has been declined by vote of a
majority of Participants materially adversely affected by the material
irreconcilable conflict.
5.5 Notice to LIFE COMPANY
AVIF will promptly make known in writing to LIFE COMPANY the Board of Trustees'
determination of the existence of a material irreconcilable conflict, a
description of the facts that give rise to such conflict and the implications of
such conflict.
5.6 Information Requested by Board of Trustees.
LIFE COMPANY and AVIF (or its investment adviser) will at least annually submit
to the Board of Trustees of AVIF such reports, materials or data as the Board of
Trustees may reasonably request so that the Board of Trustees may fully carry
out the obligations imposed upon it by the provisions hereof or any exemptive
order granted by the SEC to permit Mixed and Shared Funding, and said reports,
materials and data will be submitted at any reasonable time deemed appropriate
by the Board of Trustees. All reports received by the Board of Trustees of
potential or existing conflicts, and all Board of Trustees actions with regard
to determining the existence of a conflict, notifying Participating Insurance
Companies and Participating Plans of a conflict, and determining whether any
proposed action adequately remedies a conflict, will be properly recorded in the
minutes
16
of the Board of Trustees or other appropriate records, and such minutes or other
records will be made available to the SEC upon request.
5.7 Compliance with SEC Rules.
If, at any time during which AVIF is serving as an investment medium for
variable life insurance Contracts, 1940 Act Rules 6e-3(T) or, if applicable,
6e-2 are amended or Rule 6e-3 is adopted to provide exemptive relief with
respect to Mixed and Shared Funding, AVIF agrees that it will comply with the
terms and conditions thereof and that the terms of this Section 5 shall be
deemed modified if and only to the extent required in order also to comply with
the terms and conditions of such exemptive relief that is afforded by any of
said rules that are applicable.
5.8 Other Requirements.
AVIF will require that each Participating Insurance Company and Participating
Plan enter into an agreement with AVIF that contains in substance the same
provisions as are set forth in Sections 4.1(b), 4.1(d), 4.3(a), 4.4(b),
4.5(a), 5, and 10 of this Agreement.
Section 6. Termination
6.1 Events of Termination.
Subject to Section 6.4 below, this Agreement will terminate as to a Fund:
(a) at the option of any party, with or without cause with respect to the Fund,
upon six (6) months advance written notice to the other parties, or, if later,
upon receipt of any required exemptive relief from the SEC, unless otherwise
agreed to in writing by the parties; or
(b) at the option of AVIF upon institution of formal proceedings against LIFE
COMPANY or its affiliates by the NASD, the SEC, any state insurance regulator or
any other regulatory body regarding LIFE COMPANY's obligations under this
Agreement or related to the sale of the Contracts, the operation of each
Account, or the purchase of Shares, if, in each case, AVIF reasonably determines
that such proceedings, or the facts on which such proceedings would be based,
have a material likelihood of imposing material adverse consequences on the Fund
with respect to which the Agreement is to be terminated; or
(c) at the option of LIFE COMPANY upon institution of formal proceedings against
AVIF, its principal underwriter, or its investment adviser by the NASD, the SEC,
or any state insurance regulator or any other regulatory body regarding AVIF's
obligations under this Agreement or related to the operation or management of
AVIF or the purchase of AVIF Shares, if, in each case, LIFE COMPANY reasonably
determines that such proceedings, or the facts on which such proceedings would
be based, have a material likelihood of imposing material adverse consequences
on LIFE COMPANY, or the Subaccount corresponding to the Fund with respect to
which the Agreement is to be terminated; or
17
(d) at the option of any Party in the event that (i) the Fund's Shares are not
registered and, in all material respects, issued and sold in accordance with any
applicable federal or state law, or (ii) such law precludes the use of such
Shares as an underlying investment medium of the Contracts issued or to be
issued by LIFE COMPANY; or
(e) upon termination of the corresponding Subaccount's investment in the Fund
pursuant to Section 5 hereof; or
(f) at the option of LIFE COMPANY if the Fund ceases to qualify as a RIC under
Subchapter M of the Code or under successor or similar provisions, or if LIFE
COMPANY reasonably believes that the Fund may fail to so qualify; or
(g) at the option of LIFE COMPANY if the Fund fails to comply with Section
817(h) of the Code or with successor or similar provisions, or if LIFE COMPANY
reasonably believes that the Fund may fail to so comply; or
(b) at the option of AVIF if the Contracts issued by LIFE COMPANY cease to
qualify as annuity contracts or life insurance contracts under the Code (other
than by reason of the Fund's noncompliance with Section 817(b) or Subchapter M
of the Code) or if interests in an Account under the Contracts are not
registered, where required, an~ in all material respects, are not issued or sold
in accordance with any applicable federal or state law; or
(i) upon another party's material breach of any provision of this Agreement.
6.2 Notice Requirement for Termination.
No termination of this Agreement will be effective unless and until the Party
terminating this Agreement gives prior written notice to the other Party to this
Agreement of its intent to terminate, and such notice shall set forth the basis
for such termination. Furthermore:
(a) in the event that any termination is based upon the provisions of Sections
6.1(a) or 6.1(e) hereof, such prior written notice shall be given at least
six (6) months in advance of the effective date of termination unless a shorter
time is agreed to by the Parties hereto;
(b) in the event that any termination is based upon the provisions of Sections
6.1(b) or 6.1(c) hereof, such prior written notice shall be given at least
ninety (90) days in advance of the effective date of termination unless a
shorter time is agreed to by die Parties hereto; and
(c) in the event that any termination is based upon the provisions of Sections
6.1(d), 6.1(f), 6.1(g), 6.1(h) or 6.1(i) hereof, such prior written notice
shall be given as soon as possible within twenty-four (24) hours after the
terminating Party learns of the event causing termination to be required.
18
6.3 Funds To Remain Available.
Notwithstanding any termination of this Agreement, AVIF will, at the option of
LIFE COMPANY, continue to make available additional shares of the Fund 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 will be permitted to reallocate investments in the Fund (as
in effect on such date), redeem investments in the Fund and/or invest in the
Fund upon the making of additional purchase payments under the Existing
Contracts. The parties agree that this Section 6.3 will not apply to any
terminations under Section 5 and the effect of such terminations will be
governed by Section 5 of this Agreement.
6.4 Survival of Warranties and Indemnifications.
All warranties and indemnifications will survive the termination of this
Agreement.
6.5 Continuance of Agreement for Certain Purposes.
If any Party terminates this Agreement with respect to any Fund pursuant to
Sections 6.1(b), 6.1(c), 6.1(d), 6.1(t), 6.1(g), 6.1(h) or 6.1(i) hereof, this
Agreement shall nevertheless continue in effect as to any Shares of that Fund
that are outstanding as of the date of such termination (the "Initial
Termination Date"). This continuation shall extend to the earlier of the date as
of which an Account owns no Shares of the affected Fund or a date (the "Final
Termination Date") six (6) months following the Initial Termination Date, except
that LIFE COMPANY may, by written notice shorten said six (6) month period in
the case of a termination pursuant to Sections 6.1(d), 6.1(t), 6.1(g), 6.1(h) or
6.1(i).
Section 7. Parties To Cooperate Respecting Termination
The Parties hereto agree to cooperate and give reasonable assistance to one
another in taking all necessary and appropriate steps for the purpose of
ensuring that an Account owns no Shares of a Fund after the Final Termination
Date with respect thereto, or, in the case of a termination pursuant to Section
6.1(a), the termination date specified in the notice of termination.
Section 8. Assignment
This Agreement may not be assigned by any Party, except with the written consent
of each other Party.
19
Section 9. Notices
Notices and communications required or permitted will be given by means mutually
acceptable to the Parties concerned. Each other notice or communication required
or permitted by this Agreement will be given to the following persons at the
following addresses and facsimile numbers, or such other persons, addresses or
facsimile numbers as the Party receiving such notices or communications may
subsequently direct in writing:
AIM Variable Insurance Funds and
A I M Distributors, Inc.
00 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxxx X. Xxxxxx, Esq.
Minnesota Life Insurance Company Life Company and
Securian Financial Services, Inc.
000 Xxxxxx Xxxxxx Xxxxx Xx. Xxxx, XX 00000
Facsimile: 000-000-0000
Attn: General Counsel
Section 10. Voting Procedures
Subject to the cost allocation procedures set forth in Section 3 hereof, LIFE
COMPANY will distribute all proxy material furnished by AVIF to Participants to
whom pass-through voting privileges are required to be extended and will solicit
voting instructions from Participants. LIFE COMPANY will vote Shares in
accordance with timely instructions received from Participants. LIFE COMPANY
will vote Shares that are (a) not attributable to Participants to whom
pass-through voting privileges are extended, or (b) attributable to
Participants, but for which no timely instructions have been received, in the
same proportion as Shares for which said instructions have been received from
Participants, so long as and to the extent that the SEC continues to interpret
the 1940 Act to require pass through voting privileges for Participants. Neither
LIFE COMPANY nor any of its affiliates will in any way recommend action in
connection with or oppose or interfere with the solicitation of proxies for the
Shares held for such Participants. LIFE COMPANY reserves the right to vote
shares held in any Account in its own right, to the extent permitted by law.
LIFE COMPANY shall be responsible for assuring that each of its Accounts holding
Shares calculates voting privileges in a manner consistent with that of other
Participating Insurance Companies or in the manner required by the Mixed and
Shared Funding exemptive order obtained by AVIF. AVIF will notify LIFE COMPANY
of any changes of interpretations or amendments to Mixed and Shared Funding
exemptive order it has obtained. AVIF will comply with all provisions of the
1940 Act requiring voting by shareholders, and in particular, AVIF either will
provide for annual meetings (except insofar as the SEC may interpret Section 16
of the 1940 Act not to require such meetings) or will comply with Section 16( c)
of the 1940 Act (although AVIF is not one of the trusts described in
20
Section 16(c) of that Act) as well as with Sections 16(a) and, if and when
applicable, 16(b). Further, AVIF will act in accordance with the SEC's
interpretation of the requirements of Section 16(a) with respect to periodic
elections of trustees and with whatever rules the SEC may promulgate with
respect thereto.
Section 11. Foreign Tax Credits
AVIF agrees to consult in advance with LIFE COMPANY concerning any decision to
elect or not to elect pursuant to Section 853 of the Code to pass through the
benefit of any foreign tax credits to its shareholders.
Section 12. Indemnification
12.1 Of AVIF and AIM by LIFE COMPANY and UNDERWRITER.
(a) Except to the extent provided in Sections 12.1(b) and 12.1(c), below, LIFE
COMPANY and UNDERWRITER agree to indemnify and hold harmless AVIF, AIM, their
affiliates, and each person, if any, who controls AVIF, AIM, or their affiliates
within the meaning of Section 15 of the 1933 Act and each of their respective
trustees and officers, (collectively, the "Indemnified Parties" for purposes of
this Section 12.1) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of LIFE COMPANY
and UNDERWRITER) or actions in respect thereof(including, to the extent
reasonable, legal and other expenses), to which the Indemnified Parties may
become subject under any statute, regulation, at common law or otherwise;
provided, the Account owns shares of the Fund and insofar as such losses,
claims, damages, liabilities or actions:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any Account's 1933 Act registration
statement, any Account Prospectus, the Contracts, or sales literature or
advertising for 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 to LIFE COMPANY or UNDERWRITER
by or on behalf of AVIF or AIM for use in any Account's 1933 Act registration
statement, any Account Prospectus, the Contracts, or sales literature or
advertising or otherwise for use in connection with the sale of Contracts or
Shares (or any amendment or supplement to any of the foregoing); or
21
(ii) arise out of or as a result of any other statements or representations
(other than statements or representations contained in AVIF's 1933 Act
registration statement, AVIF Prospectus, sales literature or advertising of
AVIF, or any amendment or supplement to any of the foregoing, not supplied for
use therein by or on behalf of LIFE COMPANY, UNDERWRITER or their respective
affiliates and on which such persons have reasonably relied) or the negligent,
illegal or fraudulent conduct of LIFE COMPANY, UNDER WRITER or their respective
affiliates or persons under their control (including, without limitation, their
employees and "persons associated with a member," as that term is defined in
paragraph (q) of Article I of the NASD's By-Laws), in connection with the sale
or distribution of the Contracts or Shares; or
(iii) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in AVIF's 1933 Act registration
statement, AVIF Prospectus, sales literature or advertising of AVIF, or any
amendment or supplement to any of the foregoing, 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 and in conformity with information furnished
to AVIF, AIM or their affiliates by or on behalf of LIFE COMPANY, UNDERWRITER or
their respective affiliates for use in AVIF's 1933 Act registration statement,
AVIF Prospectus, sales literature or advertising of AVIF, or any amendment or
supplement to any of the foregoing; or
(iv) arise as a result of any failure by LIFE COMPANY or UNDERWRITER to perform
the obligations, provide the services. and furnish the materials required of
them under the terms of this Agreement, or any material breach of any
representation and/or warranty made by LIFE COMPANY or UNDERWRITER in this
Agreement or arise out of or result from any other material breach of this
Agreement by LIFE COMPANY or UNDERWRITER; or
arise as a result of failure by the Contracts issued by LIFE COMPANY to qualify
as annuity contracts or life insurance contracts under the Code, otherwise than
by reason of any Fund's failure to comply with Subchapter M or Section 817(h) of
the Code.
(b) Neither LIFE COMPANY nor UNDERWRITER shall be liable under this Section 12.1
with respect to any losses, claims, damages, liabilities or actions to which an
Indemnified Party would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance by that Indemnified Party of
its duties or by reason of that Indemnified Party's reckless disregard of
obligations or duties (i) under this Agreement, or (ii) to AVIF or AIM.
22
(c) Neither LIFE COMPANY nor UNDERWRITER shall be liable under this Section 12.1
with respect to any action against an Indemnified Party unless AVIF or AIM shall
have notified LIFE COMPANY and UNDERWRITER in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the action 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 LIFE COMPANY and UNDERWRITER of any such action
shall not relieve LIFE COMPANY and UNDERWRITER from any liability which they may
have to the Indemnified Party against whom such action is brought otherwise than
on account of this Section 12.1. Except as otherwise provided herein, in case
any such action is brought against an Indemnified Party, LIFE COMPANY and
UNDERWRITER shall be entitled to participate, at their own expense, in the
defense of such action and also shall be entitled to assume the defense thereof,
with counsel approved by the Indemnified Party named in the action, which
approval shall not be unreasonably withheld. After notice from LIFE COMPANY or
UNDERWRITER to such Indemnified Party of LIFE COMPANY's or UNDERWRITER's
election to assume the defense thereof, the Indemnified Party will c!:>operate
fully with LIFE COMPANY and UNDERWRITER and shall bear the fees and expenses of
any additional counsel retained by it, and neither LIFE
COMPANY nor UNDERWRITER will be liable to such Indemnified Party under this
Agreement for any legal or other expenses subsequently incurred by such
Indemnified Party independently in connection with the defense thereof, other
than reasonable costs of investigation.
12.2 Of LIFE COMPANY and UNDERWRITER by AVIF and AIM.
(a) Except to the extent provided in Sections 12.2(c), 12.2(d) and 12.2(e),
below, AVIF and AIM agree to indemnify and hold harmless LIFE COMPANY,
UNDERWRITER, their respective affiliates, and each person, if any, who controls
LIFE COMPANY, UNDERWRITER or their respective affiliates within the meaning of
Section 15 of the 1933 Act and each of their respective trustees and officers,
(collectively, the "Indemnified Parties" for purposes of this Section 12.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of AVIF and/or AIM) or actions in respect
thereof (including, to the extent reasonable, legal and other expenses), to
which the Indemnified Parties may become subject under any statute, regulation,
at common law, or otherwise; provided, the Account owns shares of the Fund and
insofar as such losses, claims, damages, liabilities or actions:
(i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in AVIF's 1933 Act registration
statement, AVIF Prospectus or sales literature or advertising of AVIF (or any
amendment or supplement to any of the foregoing), or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, that this agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or such alleged statement or
omission was made in reliance upon and in conformity with information furnished
to AVIF or its affiliates by or on behalf of LIFE COMPANY, UNDERWRITER or their
respective affiliates for use in AVIFs
23
1933 Act registration statement, AVIF Prospectus, or in sales literature or
advertising or otherwise for use in connection with the sale of Contracts or
Shares (or any amendment or supplement to any of the foregoing); or
(ii) arise out of or as a result of any other statements or representations
(other than statements or representations contained in any Account's 1933 Act
registration statement, any Account Prospectus, sales literature or advertising
for the Contracts, or any amendment or supplement to any of the foregoing, not
supplied for use therein by or on behalf of AVIF, AIM or their affiliates and on
which such persons have reasonably relied) or the negligent, illegal or
fraudulent conduct of AVIF, AIM or their affiliates or persons under their
control (including, without limitation, their employees and "persons associated
with a member" as that term is defined in Section (q) of Article I of the NASD
By-Laws), in connection with the sale or distribution of AVIF Shares; or
(iii) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any Account's 1933 Act registration
statement, any Account Prospectus, sales literature or advertising covering the
Contracts, or any amendment or supplement to any of the foregoing, 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 statement or omission was made in reliance upon and in conformity with
information furnished to LIFE COMPANY, UNDERWRITER or their respective
affiliates by or on behalf of AVIF or AIM for use in any Account's 1933 Act
registration statement, any Account Prospectus, sales literature or advertising
covering the Contracts, or any amendment or supplement to any of the foregoing;
or
(iv) arise as a result of any failure by AVIF to perform the obligations,
provide the services and furnish the materials required of it under the terms of
this Agreement, or any material breach of any representation and/or warranty
made by AVIF in this Agreement or arise out of or result from any other material
breach of this Agreement by AVIF.
(b) The parties agree that the foregoing indemnification by AVIF shall not apply
to any acts or omissions of AIM. Except to the extent provided in Sections
12.2(c), 12.2(d) and 12.2(e) hereof, AVIF and AIM agree to indemnify and hold
harmless the Indemnified Parties from and against any and all losses, claims,
damages, liabilities (including amounts paid in settlement thereof with, the
written consent of AVIF and/or AIM) or actions in respect thereof (including, to
the extent reasonable, legal and other expenses) to which the Indemnified
Parties may become subject directly or indirectly under any statute, at common
law or otherwise, insofar as such losses, claims, damages, liabilities or
actions directly or indirectly result from or arise out of the failure of any
Fund to operate as a regulated investment company in compliance with (i)
Subchapter M of the Code and regulations thereunder, or (ii) Section 817(h) of
the Code and regulations thereunder, including,
24
without limitation, any income taxes and related penalties, rescission charges,
liability under state law to Participants asserting liability against LIFE
COMPANY pursuant to the Contracts, the costs of any ruling and closing agreement
or other settlement with the IRS, and the cost of any substitution by LIFE
COMPANY of Shares of another investment company or portfolio for those of any
adversely affected Fund as a funding medium for each Account that LIFE COMPANY
reasonably deems necessary or appropriate as a result of the noncompliance.
(c) Neither AVIF nor AIM shall be liable under this Section 12.2 with respect to
any losses, claims, damages, liabilities or actions to which an Indemnified
Party would otherwise be subject by reason of willful misfeasance, bad faith, or
gross negligence in the performance by that Indemnified Party of its duties or
by reason of such Indemnified Party's reckless disregard of its obligations and
duties (i) under this Agreement, or (ii) to LIFE COMPANY, UNDERWRITER, each
Account or Participants.
(d) Neither AVIF nor AIM shall be liable under this Section 12.2 with respect to
any action against an Indemnified Party unless the Indemnified Party shall have
notified AVIF and/or AIM in writing within a reasonable time after the summons
or other first legal process giving information of the nature of the action
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 AVIF or AIM of any such action shall not relieve AVIF or AIM
from any liability which it may have to the Indemnified Party against whom such
action is brought otherwise than on account of this Section 12.2. Except as
otherwise provided herein, in case any such action is brought against an
Indemnified Party, AVIF and/or AIM will be entitled to participate, at its own
expense, in the defense of such action and also shall be entitled to assume the
defense thereof (which shall include, without limitation, the conduct of any
ruling request and closing agreement or other settlement proceeding with the
IRS), with counsel approved by the Indemnified Party named in the action, which
approval shall not be unreasonably withheld. After notice from AVIF and/or AIM
to such Indemnified Party of AVIF's or AIM's election to assume the defense
thereof, the Indemnified Party will cooperate fully with AVIF and AIM and shall
bear the fees and expenses of any additional counsel retained by it, and AVIF
and AIM will not be liable to such Indemnified Party under this Agreement for
any legal or other expenses subsequently incurred by such Indemnified Party
independently in connection with the defense thereof, other than reasonable
costs of investigation.
(e) In no event shall AVIF or AIM be liable under the indemnification provisions
contained in this Agreement to any individual or entity, including, without
limitation, LIFE COMPANY, UNDERWRITER or any other Participating Insurance
Company or any Participant, with respect to any losses, claims, damages,
liabilities or expenses that arise out of or result from (i) a breach of any
representation, warranty, and/or covenant made by LIFE COMPANY or UNDERWRITER
hereunder or by any Participating Insurance Company under an agreement
containing substantially similar representations, warranties and covenants; (ii)
the failure by LIFE COMPANY or any Participating Insurance Company to maintain
its segregated asset account (which invests in any Fund) as a legally and
validly established segregated asset account under applicable state law and as a
duly registered unit investment trust under the provisions of the 1940 Act
(unless exempt
25
therefrom); or (iii) the failure by LIFE COMPANY or any Participating Insurance
Company to maintain its variable annuity or life insurance contracts (with
respect to which any Fund serves as an underlying funding vehicle) as annuity
contracts or life insurance contracts under applicable provisions of the Code.
12.3 Effect of Notice.
Any notice given by the indemnifying Party to an Indemnified Party referred to
in Sections 12.1 (c) or 12.2 (d) above of participation in or control of any
action by the indemnifying Party will in no event be deemed to be an admission
by the indemnifying Party of liability, culpability or responsibility, and the
indemnifying Party will remain free to contest liability with respect to the
claim among the Parties or otherwise.
12.4 Successors.
A successor by law of any Party shall be entitled to the benefits of the
indemnification contained in this Section 12.
Section 13. Applicable Law
This Agreement will be construed and the provisions hereof interpreted under and
in accordance with Delaware law, without regard for that state's principles of
conflict of laws.
Section 14. Execution in Counterparts
This Agreement may be executed simultaneously in two or more counterparts, each
of which taken together will constitute one and the same instrument.
Section 15. Severability
If any provision of this Agreement is held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement will not be affected
thereby.
Section 16. Rights Cumulative
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, that the Parties are entitled to under federal and state laws.
26
Section 17. Headings
The Table of Contents and headings used in this Agreement are for purposes of
reference only and shall not limit or define the meaning of the provisions of
this Agreement.
Section 18. Confidentiality
AVIF acknowledges that the identities of the customers of LIFE COMPANY or any of
its affiliates (collectively, the ALIFE COMPANY Protected Parties' for purposes
of this Section 18)t information maintained regarding those customers, and all
computer programs and procedures or other information developed by the LIFE
COMPANY Protected Parties or any of their employees or agents in connection with
LIFE COMPANY's performance of its duties under this Agreement are the valuable
property of the LIFE COMPANY Protected Parties. AVIF agrees that if it comes
into possession of any list or compilation of the identities of or other
information about the LIFE COMPANY Protected Parties' customers or any other
information or property of the LIFE COMPANY Protected Parties other than such
information as may be independently developed or compiled by AVIF from
information supplied to it by the LIFE COMPANY Protected Parties' customers who
also maintain accounts directly with AVIF t AVIF will hold such information or
property in confidence and refrain from using, disclosing or distributing any of
such information or other property except: (a) with LIFE COMPANY's prior written
consent; or (b) as required by law or judicial process. LIFE COMPANY
acknowledges that the identities of the customers of AVIF or any of its
affiliates (collectively t the "AVIF Protected Parties" for purposes of this
Section 18), information maintained regarding those customers, and all computer
programs and procedures or other information developed by the AVIF Protected
Parties or any of their employees or agents in connection with AVIF's
performance of its duties under this Agreement are the valuable property of the
AVIF Protected Parties. LIFE COMPANY agrees that if it comes into possession of
any list or compilation of the identities of or other information about the AVIF
Protected Parties' customers or any other information or property of the AVIF
Protected Parties, other than such information as may be independently developed
or compiled by LIFE COMPANY from information supplied to it by the AVIF
Protected Parties' customers who also maintain accounts directly with LIFE
COMPANY, LIFE COMPANY will hold such information or property in confidence and
refrain from using, disclosing or distributing any of such information or other
property except: (a) with AVIF's prior written consent; or (b) as required by
law or judicial process. Each party acknowledges that any breach of the
agreements in this Section 18 would result in immediate and irreparable harm to
the other parties for which there would be no adequate remedy at law and agree
that in the event of such a breach, the other parties will be entitled to
equitable relief by way of temporary and permanent injunctions, as well as such
other relief as any court of competent jurisdiction deems appropriate.
Section 19. Trademarks and Fund Names
(a) Except as may otherwise be provided in a License Agreement among A I M
Management Group Inc., LIFE COMPANY and UNDERWRITER, neither LIFE COMPANY nor
UNDERWRITER or any of their respective affiliates, shall use any trademark,
trade name, service
27
xxxx or logo of AVIF, AIM or any of their respective affiliates, or any
variation of any such trademark, trade name, service xxxx or logo, without
AVIF's or AIM's prior written consent, the granting of which shall be at AVIF's
or AIM's sole option.
(b) Except as otherwise expressly provided in this Agreement, neither AVIF, its
investment adviser, its principal underwriter, or any affiliates thereof shall
use any trademark, trade name, service xxxx or logo of LIFE COMPANY, UNDERWRITER
or any of their affiliates, or any variation of any such trademark, trade name,
service xxxx or logo, without LIFE COMPANY's or UNDERWRITER's prior written
consent, the granting of which shall be at LIFE COMPANY's or UNDERWRITER's sole
option.
Section 20. Parties to Cooperate
Each party to this Agreement will cooperate with each other party and all
appropriate governmental authorities (including, without limitation, the SEC,
the NASD and state insurance regulators) and will permit each other and such
authorities reasonable access to its books and records (including copies
thereof) in connection with any investigation or inquiry relating to this
Agreement or the transactions contemplated hereby.
Section 21. Amendments
No provision of this Agreement may be amended or modified in any manner except
by a written agreement executed by all parties hereto.
28
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in
their names and on their behalf by and through their duly authorized officers
signing below.
AIM VARIABLE INSURANCE FUNDS
Attest: By:
--------------------------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxxx
Title Assistant Secretary Title: Senior Vice President
AIM DISTRIBUTORS, INC.
Attest: By:
---------------------------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxxxx X. Xxxx
Title Assistant Secretary Title: President
MINNESOTA LIFE INSURANCE COMPANY,
on behalf of itself and itself separate
accounts
Attest: By:
----------------------------------------
Name: Name:
Title: Title:
SECURIAN FINANCIAL SERVICES, INC.
Attest: By:
----------------------------------------
Name: Name:
Title: Title:
SCHEDULE A
FUNDS AVAILABLE UNDER THE CONTRACTS
..
AIM VARIABLE INSURANCE FUNDS Series II shares
AIM V.I. Aggressive Growth Fund
AIM V.I. Balanced Fund
AIM V.I. Dent Demographic Trends Fund
AIM V.I. Premier Equity Fund
SEPARATE ACCOUNTS UTILIZING THE FUNDS
Variable Annuity Account
CONTRACTS FUNDED BY THE SEPARATE ACCOUNTS
Multi-Option Classic Variable Annuity
Multi-Option Achiever Variable Annuity
30
SCHEDULE B
AIM's PRICING ERROR POLICIES
Determination of Materiality
In the event that AIM discovers an error in the calculation of the Fund's net
asset value, the following policies will apply:
If the amount of the error is less than $.01 per share -- it is considered
immaterial and no adjustments are made.
If the amount of the error is $.01 per share or more, then the following
thresholds are applied:
a. If the amount of the difference in the erroneous net asset value and the
correct net asset value is less than .5% of the correct net asset value, AIM
will reimburse the affected Fund to the extent of any loss resulting from the
error. No other adjustments shall be made.
b. If the amount of the difference in the erroneous net asset value and the
correct net asset value is .5% of the correct net asset value or greater, then
AIM will determine the impact of the error to the affected Fund and shall
reimburse such Fund (and/or LIFE COMPANY, as appropriate, such as in the event
that the error was not discovered until after LIFE COMPANY processed
transactions using the erroneous net asset value) to the extent of any loss
resulting from the error. To the extent that an overstatement of net asset value
per share is detected quickly and LIFE COMPANY has not mailed redemption checks
to Participants, LIFE COMPANY and AIM agree to examine the extent of the error
to determine the feasibility of reprocessing such redemption transaction (for
purposes of reimbursing the Fund to the extent of any such overpayment).
Reprocessing Cost Reimbursement
To the extent a reprocessing of Participant transactions is required pursuant to
paragraph (b), above, AIM shall reimburse LIFE COMPANY for LIFE COMPANY's
reprocessing costs in an amount not to exceed $1.00 per contract affected by $10
or more.
The Pricing Policies described herein may be modified by AVIF as approved by its
Board of Trustees. AIM agrees to use its best efforts to notify LIFE COMPANY at
least five (5) days prior to any such meeting of the Board of Trustees of AVIF
to consider such proposed changes.
31
SCHEDULE C
EXPENSE ALLOCATIONS
Life Company AVIF I AIM
------------ ----------
preparing and filing the Accounts preparing and filing the Funds registration
registration statement statement
text composition for Account prospectuses text composition for Fund prospectuses and
and supplements supplements
text alterations of prospectuses (Account) text alterations of prospectuses (Fund) and
and supplements (Account) supplements (Fund)
printing Account and Fund prospectuses and a camera ready Fund prospectus
supplements
text composition and printing Account SAIs text composition Fund SAIs
mailing and distributing Account SAIs to mailing and distributing Fund SAIs to policy
policy owners upon request by policy owners owners upon request by policy owners
mailing and distributing prospectuses
(Account and Fund) and supplements (Account
and Fund) to policy owners of record as
required by Federal Securities Laws and to
prospective purchasers
text composition (Account), printing, text composition and printing of annual and
mailing, and distributing annual and semi-annual reports for (Fund)
semi-annual reports for Account (Fund and
Account as, applicable)
text composition, printing, mailing, text composition, printing, mailing,
distributing, and tabulation of proxy distributing and tabulation of proxy statements
statements and voting instruction and voting instruction solicitation materials to
solicitation materials to policy owners with policy owners with respect to proxies related to
respect to proxies related to the Account the Fund
preparation, printing and distributing sales
material and advertising relating to the
Funds, insofar as such materials relate to
the Contracts and filing such materials with
and obtaining approval from, the SEC, the
NASD, any state insurance regulatory
authority, and any other appropriate
regulatory authority, to the extent required
32
