EX-99.3
EXECUTION VERSION
AMENDED AND RESTATED DISTRIBUTION AGREEMENT
This AMENDED AND RESTATED DISTRIBUTION AGREEMENT ("Agreement"), is entered
into as of March 1, 2009 by and between Minnesota Life Insurance Company, a
Minnesota corporation ("Issuer"), on its behalf and on behalf of each variable
separate account identified in Schedule 1 hereto, and Securian Financial
Services, Inc. ("Distributor"), a Minnesota corporation.
WHEREAS, Distributor is a broker-dealer that engages in the distribution
and sales of variable insurance products and other investment products;
WHEREAS, Issuer desires to issue certain variable insurance products to the
public through Distributor acting as principal underwriter and distributor;
WHEREAS, Issuer and Distributor acknowledge that Distributor may distribute
variable insurance products and other investment products for other companies;
and
WHEREAS, Issuer and Distributor acknowledge that Issuer and Distributor are
affiliated parties as such affiliation is recognized under applicable laws and
regulations, and that with respect to variable insurance products, Issuer and
Distributor rely on certain SEC and FINRA interpretive advice and rules
applicable to the distribution of such products, including SEC Release No.
34-8389.
NOW, THEREFORE, in consideration of their mutual promises, Issuer and
Distributor hereby agree as follows:
1. DEFINITIONS
1.1. "Annual Review" has the meaning set forth in Section 6.4.3.
1.2. "Application" means an application for a Contract.
1.3. "1933 Act" means the Securities Act of 1933, as amended.
1.4. "1934 Act" means the Securities Exchange Act of 1934, as amended.
1.5. "1940 Act" means the Investment Company Act of 1940, as amended.
1.6. "Contract Prospectus" means the prospectus and all supplements thereto
included within a Registration Statement, except that, if the most recently
filed version of the prospectus (including any supplements thereto) filed
pursuant to Rule 497 under the 1933 Act subsequent to the date on which a
Registration Statement became effective differs from the prospectus included
within such Registration Statement at the time it became effective, the term
"Contract Prospectus" shall refer to the prospectus and supplements thereto most
recently filed under Rule 497 under the 1933 Act, from and after the date on
which it shall have been filed. For purposes of Section 9 of this Agreement, the
term "any Contract Prospectus" means any document that is or at any time was a
Contract Prospectus within the meaning of this Section 1.6.
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1.7. "Contracts" means the class or classes of variable insurance products
offered for sale by the Issuer through the Variable Accounts. For this purpose
and under this Agreement generally, a "class of Contracts" shall mean those
Contracts issued by Issuer on the same policy form or forms and covered by the
same Registration Statement.
1.8. "FINRA" means Financial Industry Regulatory Authority (formerly known
as the NASD).
1.9. "Fund" means an investment company in which the Variable Account
invests.
1.10. "Fund Prospectus" means a prospectus for an underlying insurance
product fund in which the Contracts invest that meets the requirements of
Section 10(a) of the 1933 Act or Rule 498 thereunder.
1.11. "Indemnified Person" means a person or entity entitled to
indemnification under Section 9.
1.12. "Indemnifying Party" means the party obligated to indemnify any other
person under Section 9.
1.13. "Interim Review" has the meaning set forth in Section 6.4.3.
1.14. "Material Compliance Matter" has the meaning set forth in Section
6.4.5.
1.15. "Office(s)" has the meaning set forth in Section 6.7.
1.16. "Premium" means a payment made under a Contract by an applicant or
purchaser to purchase benefits under the Contract.
1.17. "Registration Statement" means each currently effective registration
statement filed with the SEC under the 1933 Act on a prescribed form, or
currently effective post-effective amendment thereto, as the case may be,
relating to a class of Contracts, including financial statements included in,
and all exhibits to, such registration statement or post-effective amendment.
For purposes of Section 9 of this Agreement, the term "Registration Statement"
means any document that is or at any time was a Registration Statement within
the meaning of this Section 1.17.
1.18. "Regulations" means the rules and regulations promulgated by the SEC
under the 1933 Act, the 1934 Act, and the 1940 Act as in effect at the time this
Agreement is executed or thereafter promulgated.
1.19. "Representative" means an individual who is registered as a principal
or representative of Distributor.
1.20. "SEC" means the Securities and Exchange Commission.
1.21. "Selling Firm" means a broker-dealer which has entered into an
agreement with Distributor thereby authorizing such broker-dealer to solicit
Applications.
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1.22. "Variable Account" means a separate account supporting a class or
classes of Contracts and specified on Schedule 1 as in effect at the time this
Agreement is executed, or as it may be amended from time to time in accordance
with Section 11.2 of this Agreement.
2. AUTHORIZATIONS AND APPOINTMENT
2.1. SCOPE OF AUTHORITY. Issuer hereby authorizes Distributor on a
non-exclusive agency basis, and Distributor accepts such authority, subject to
the registration requirements of the 1933 Act and the 1940 Act and the
provisions of the 1934 Act and conditions herein, to be the distributor and
principal underwriter for the sale of the Contracts to the public in each state
and other jurisdiction in which the Contracts may lawfully be sold during the
term of this Agreement. Distributor will actively engage in its duties under
this Agreement on a continuous basis while the Registration Statements for the
Contracts remain effective. Distributor shall use its best efforts to market the
Contracts actively and to arrange for the sale of the contracts by other
registered broker-dealers subject to compliance with applicable law, including
the rules of FINRA. However, Distributor shall not be obligated to sell any
specific number or amount of Contracts. Also, the parties acknowledge and agree
that Distributor may distribute variable insurance products and other investment
products for other companies.
2.2. LIMITS ON AUTHORITY. Except as otherwise expressly provided herein,
Distributor shall at all times act as an independent contractor and nothing
herein shall be construed so as to cause Distributor or its agents, officers or
employees to be agents, officers or employees of Issuer by virtue of their
activities in connection with the sale of Contracts. Distributor and its
Representatives shall not have authority, on behalf of Issuer: to make, alter or
discharge any Contract or other insurance policy or annuity entered into
pursuant to a Contract; to waive any Contract forfeiture provision; to extend
the time of paying any Premium; or to receive any monies or Premiums from
customers or Selling Firms (except for the sole purpose of forwarding monies or
Premiums to Issuer). Distributor shall not expend, nor contract for the
expenditure of, the funds of Issuer. Distributor shall not possess or exercise
any authority on behalf of Issuer other than that expressly conferred on
Distributor by this Agreement or another agreement to which Issuer is a party
with Distributor or to which Issuer consents. Distributor acknowledges and
agrees that Issuer shall have the right at any time and for any reason to
suspend or limit the public offering of the Contracts.
3. SOLICITATION ACTIVITIES
3.1. REPRESENTATIVES. No Representative shall solicit the sale of a
Contract unless at the time of such solicitation such individual is duly
registered with FINRA and duly licensed with all applicable state insurance and
securities regulatory authorities, and is duly appointed as an insurance agent
of Issuer.
3.2. APPOINTMENT BY ISSUER. Issuer shall take all actions necessary to
effect the appointment of Representatives as may from time to time be identified
by Distributor as qualified to serve as insurance agents of Issuer; provided,
however, that Issuer reserves the right, in its reasonable discretion, to refuse
to appoint any such person or renew any such appointment or to terminate any
appointment, consistent with its duties and responsibilities under applicable
law.
3.3. DISTRIBUTOR DUE DILIGENCE. Distributor is responsible for
investigating the character, work experience, and background of any
Representative prior to recommending the
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proposed Representative to Issuer for appointment. Distributor will not employ,
or permit to be associated with it, in any material connection with the
Contracts or the handling of Contract assets, any person who, to the knowledge
of Distributor, is subject to statutory disqualification as set forth in Section
3(a)(39) of the 1934 Act.
3.4. SUPERVISION BY DISTRIBUTOR. Distributor is responsible for supervising
the activities of the Representatives and for ensuring that the Representatives
are properly licensed and in compliance with all applicable federal or state
laws, rules and regulations, including but not limited to NASD Rule 2821, and
all rules and procedures of Issuer provided in writing by Issuer. Distributor
shall notify Issuer promptly, in writing, of the termination of any
Representative.
3.5. SALES AND SOLICITATION ACTIVITIES. All solicitation and sales
activities engaged in by Distributor and its Representatives with respect to the
Contracts shall be in compliance with all applicable federal and state
securities laws and regulations, with the rules of FINRA, as well as with all
applicable insurance laws and regulations, including any laws and regulations
related to suitability, any other applicable federal or state law, rule, or
regulation, and any of the rules and procedures that Issuer may issue from time
to time. In particular, without limiting the generality of the foregoing:
3.5.1. Distributor, along with appropriate Issuer FINRA registered
principals, shall train, supervise and be solely responsible for the conduct of
Representatives with regard to their solicitation of Applications and Premiums
and distribution of the Contracts, and shall supervise their compliance with
applicable rules and regulations of any insurance or securities regulatory
agencies or self-regulatory organizations that have jurisdiction over variable
insurance product activities.
3.5.2. Neither Distributor nor any Representative shall offer, attempt
to offer, or solicit Applications for, the Contracts, in any state or other
jurisdiction unless Issuer has notified Distributor that such Contracts may
lawfully be sold or offered for sale in such state, and has not subsequently
revised such notice.
3.5.3. Neither Distributor nor any Representative shall give any
information or make any representation in regard to a class of Contracts in
connection with the offer or sale of such class of Contracts that is not in
accordance with the Contract Prospectus and the statement of additional
information for such class of Contracts, or in the then effective prospectus or
statement of additional information for a Fund, or in current advertising
materials for such class of Contracts authorized by Issuer.
3.5.4. Distributor and all Representatives agree to distribute and
sell the Contracts in accordance with the market timing and frequent trading
policies of the Variable Accounts as stated in the then-currently effective
Contract Prospectus and the statement of additional information.
3.5.5. Completed Applications for the Contracts solicited by
Distributor, Distributor's Representatives, or Selling Firms shall be
transmitted directly to Issuer (or as otherwise designated by Issuer) the next
business day following their receipt by Distributor, and in any event within
such period required by applicable law, including NASD Rule 2821. All payments
under the Contracts shall be made by check, money order, or wire payable to
Issuer or by other method acceptable to Issuer as set forth in the Contract
Prospectus. If Distributor holds any Premium at any time, Distributor shall hold
such Premium in a fiduciary capacity and such
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Premium shall be remitted promptly to Issuer in accordance with applicable law.
Distributor acknowledges that all such Premiums, whether by check, money order
or wire, shall be the property of Issuer. Distributor acknowledges that Issuer
shall have the unconditional right to reject, in whole or in part, any
Application or Premium. Distributor acknowledges that it will not permit any
other broker-dealer to participate in the distribution of the Contracts unless
such broker-dealer agrees that it will not accept any Premiums unless made
payable to Issuer. Such broker-dealer must also agree to forward promptly to
Issuer any Premiums received by such broker-dealer together with a completed
Application.
3.6. SUITABILITY. In view of both parties' desire to ensure that Contracts
will be sold to purchasers for whom the Contracts will be suitable, the written
agreement between Distributor and its Representatives and/or Distributor's
policies and procedures shall require that the Representatives not make
recommendations to an applicant to purchase a Contract in the absence of
reasonable grounds to believe that a recommendation to an applicant to purchase
a Contract is suitable for that applicant. Distributor shall review all
Applications for suitability in accordance with suitability standards, including
NASD Rule 2821 and FINRA Rule 2310 and interpretations and guidance relating
thereto, those established by law, rule or regulation (including variable
insurance regulations adopted by states where the Contracts are sold), as well
as any standards that may be established by mutual agreement of Issuer and
Distributor from time to time.
3.7. SELLING AGREEMENTS AND SELLING FIRMS. Distributor is authorized to
enter into written agreements, on such terms as Distributor and Issuer may
determine are not inconsistent with this Agreement, with organizations that
agree to participate in the distribution of the Contracts and to use their best
efforts to solicit Applications. Such organizations shall be duly licensed,
registered, or otherwise qualified for the sale of such Contracts (and the
riders and other Contracts offered in connection therewith) under the federal
securities laws and any applicable securities and insurance laws of each state
or other jurisdiction where such Contracts may be sold and in which Issuer is
licensed to sell such Contracts. Unless subject to an exemption, each
organization shall be registered as a broker-dealer under the 1934 Act and be a
member in good standing of FINRA. Distributor agrees that it shall be
responsible for ensuring that any organization with which it enters into a
selling agreement for the sale of the Contracts, and such organization's agents
and representatives, are duly and appropriately licensed, registered, appointed
and otherwise qualified to offer and sell the Contracts under the federal
securities laws and any applicable securities and insurance laws of each state
or other jurisdiction in which the Contracts may be lawfully sold and in which
Issuer is licensed to sell the contracts.
4. CONTRACT PROSPECTUSES, REGISTRATION STATEMENTS, CONTRACT FORMS AND
MARKETING MATERIALS
4.1. PREPARATION AND FILING OF CONTRACT PROSPECTUSES, REGISTRATION
STATEMENTS AND CONTRACT FORMS. Issuer shall be responsible for preparing the
Contract forms and filing and maintaining them with applicable state insurance
regulatory authorities, for gaining and maintaining approval of the Contract
forms from such state insurance regulatory authorities where required, and for
preparing and keeping current the Contract Prospectuses and Registration
Statements and filing them with the SEC and state regulatory authorities, to the
extent required.
4.2. NOTIFICATION BY ISSUER. Issuer agrees to advise Distributor
immediately of:
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4.2.1. Any request by the SEC (i) for amendment of the Registration
Statement or (ii) for additional information that Issuer determines is material
to Distributor;
4.2.2. The issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose; and
4.2.3. The occurrence of any material event, if known by Issuer, that
makes untrue any material statement made in the Registration Statement or that
requires the making of a change therein in order to make any material statement
made therein not misleading.
4.3. PREPARATION AND FILING OF SALES MATERIALS. Issuer shall be responsible
for the design, development and preparation of all promotional, sales, and
advertising material relating to the Contracts, subject to review and approval
by Distributor of such material. Distributor shall be responsible for ensuring
that all such material complies with all applicable securities laws and rules.
Distributor shall be responsible for filing such material, as required, with
FINRA and any state securities regulatory authorities. Issuer shall be
responsible for filing all promotional, sales, or advertising material, as
required, with any state insurance regulatory authorities.
4.4. RESOLUTION OF COMMENTS. The parties shall notify each other
expeditiously of any comments provided by the SEC, FINRA or any securities or
insurance regulatory authority described in section 4.3, and will cooperate
expeditiously in resolving and implementing any comments, as applicable. In
addition, Distributor shall promptly furnish to Issuer copies of any letters
from FINRA requesting changes in any promotional, sales, and advertising
material used or to be used in connection with its distribution activities under
this Agreement, and shall use reasonable efforts, after receipt of such a
letter, to cease, as soon as reasonably practicable, the use of such material
until Issuer shall have approved (or re-approved, as applicable) their use in
writing.
4.5. USE IN SOLICITATION ACTIVITIES. Issuer shall be responsible for
furnishing Distributor with such Applications, Contract Prospectuses, Fund
Prospectuses and other materials for use by Distributor and Representatives in
their solicitation activities with respect to the Contracts. Issuer shall notify
Distributor of those states or jurisdictions that require delivery of a
statement of additional information with a prospectus to a prospective
purchaser. Distributor shall not use and shall take reasonable steps to ensure
that its Representatives do not use any promotional, sales or advertising
materials that have not been approved by Issuer. Issuer has the right to recall
promotional, sales, and advertising material from use at any time by notice to
Distributor. In the event that Issuer chooses to recall any such materials,
Distributor will promptly cease their use and destroy any unused material.
4.6. DEFINITIONS. For purposes of this Agreement, the phrase "promotional,
sales, and advertising 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, telephone directories (other
than routine listings) electronic communications, the Internet or other public
media), sales literature (e.g., 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
whether in electronic or paper form), Registration Statements, Contract
Prospectuses, Fund Prospectuses, statements of additional information of such
prospectuses, shareholder reports, and proxy materials.
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5. COMPENSATION AND EXPENSES
5.1. Issuer shall be solely responsible for the costs of: (i) preparation
and filing of the Contracts, Registration Statements, and promotional materials;
(ii) providing sales presentations, mailings, advertising and for any other
marketing efforts in connection with the distribution or sale of the Contracts;
(iii) printing and distributing Registration Statements and Contract
Prospectuses; and (iv) all legal expenses in connection with the foregoing.
5.2. Issuer shall pay all compensation to the Representatives and Selling
Firms as paying agent on behalf of Distributor and will maintain the books and
records reflecting such payments in accordance with the requirements of the 1934
Act on behalf of Distributor. Issuer shall comply with the terms and conditions
of SEC Release No. 34-8389 and other applicable SEC and FINRA guidance in this
regard.
6. COMPLIANCE
6.1. COMPLIANCE WITH APPLICABLE LAWS. Issuer and Distributor are, and
covenant that they shall remain, in compliance in all material respects with all
applicable federal, state, and self-regulatory organization laws, rules and
regulations.
6.2. CONFIRMATIONS AND 1934 ACT COMPLIANCE. Issuer, or its appointed
designee, as agent for Distributor, shall send written confirmation to each
applicant for and purchaser of a Contract in accordance with, and in such form
and containing such information and statements as set forth in, Rule 10b-10
under the 1934 Act, SEC Release No. 34-8389, and any other SEC or FINRA rule
requiring the delivery of such information and statements. Issuer shall maintain
and preserve such books and records with respect to such confirmations in
conformity with the requirements of SEC Release No. 34-8389 and Rules 17a-3 and
17a-4 under the 1934 Act to the extent such requirements apply. Issuer also
shall maintain, as agent for Distributor, such other books and records of
Distributor pertaining to the offer and sale of the Contracts and required by
the 1934 Act as may be mutually agreed upon by Issuer and Distributor, including
but not limited to maintaining records of the payment of commissions and other
payments or service fees to Representatives and Selling Firms. Issuer shall
maintain all such books and records and hold such books and records on behalf of
and as agent for Distributor whose property they are, and acknowledges that such
books and records are at all times subject to inspection by the SEC in
accordance with Section 17(a) of the 1934 Act, FINRA, and by all other
regulatory bodies having jurisdiction over the Contracts or Distributor.
6.3. MAINTENANCE OF BOOKS AND RECORDS. To the extent Issuer employs
electronic storage media in connection with books and records created,
maintained and stored on behalf of Distributor, Issuer agrees to comply with the
requirements set forth in Rule 17a-4(f)(3)(vii) and 17a-4(i) of the 1934 Act.
With respect to any books and records maintained and preserved on behalf of
Distributor, Issuer hereby undertakes to permit examination of books and records
at any time or from time to time during business hours by representatives or
designees of the SEC, and to promptly furnish to the SEC or its designee a true,
correct, complete and current hard copy of any or all of any part of such books
and records.
6.4. RULE 38A-1 COMPLIANCE.
6.4.1. Distributor represents and warrants that it has adopted written
compliance policies and procedures as required by Rule 38a-1 under the 1940 Act.
Such written
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compliance policies and procedures: (i) are reasonably designed to prevent
violations of the federal securities laws, as such laws are defined in Rule
38a-1 under the 1940 Act and relate to Distributor's duties under this Agreement
as principal underwriter for the Contracts and the Variable Accounts; and (ii)
include Distributor's policies and procedures with regard to compliance with the
SEC's pricing rules for Variable Accounts, including but not limited to Rule
22c-1 under the 1940 Act, and with regard to Issuer's Disruptive Trading policy
as that policy is disclosed in the Prospectuses for the Contracts (the "Rule
38a-1 policies and procedures").
6.4.2. Distributor will promptly provide the Chief Compliance Officer
for the Variable Accounts with any material changes that have been made to
Distributor's Rule 38a-1 policies and procedures. Distributor shall retain such
written 38a-1 policies and procedures for the time periods required by Rule
38a-1.
6.4.3. Distributor agrees to cooperate with Issuer in its testing and
annual review of Distributor's Rule 38a-1 policies and procedures conducted by
the Chief Compliance Officer for the Variable Accounts to determine the adequacy
of Distributor's Rule 38a-1 policies and procedures and the effectiveness of
their implementation (the "Annual Review"). Distributor also agrees to cooperate
in any interim testing and reviews of Distributor's Rule 38a-1 policies and
procedures to determine their adequacy and the effectiveness of their
implementation in response to significant compliance events, changes in business
arrangements, and/or regulatory developments ("Interim Review"). Such
cooperation includes, without limitation, furnishing such certifications,
subcertifications, and documentation as the Chief Compliance Officer for the
Variable Accounts shall reasonably request from time to time.
6.4.4. Distributor will provide Issuer with ongoing, direct, and
immediate access to Distributor's compliance personnel and shall cooperate with
the Compliance Officer for the Variable Accounts in carrying out Issuer's
obligations under Rule 38a-1 to oversee the compliance program of Distributor.
6.4.5. Distributor will promptly notify the Chief Compliance Officer
for the Variable Accounts in the event that a Material Compliance Matter, as
defined under Rule 38a-1, occurs with respect to Distributor's 38a-1 policies
and procedures and will cooperate with Issuer in providing Issuer and the Chief
Compliance Officer for the Variable Accounts with periodic and special reports
with regard to the correction of any such Material Compliance Matter. A
"Material Compliance Matter" has the same meaning as the term defined in Rule
38a-1, and includes any compliance matters that involves: (i) a violation of the
Federal Securities Laws by Distributor (or its officers, directors, employees,
or agents); (ii) a violation of Distributor's Rule 38a-1 policies and
procedures; or (iii) a weakness in the design or implementation of Distributor's
Rule 38a-1 policies and procedures.
6.4.6. Distributor (and anyone acting under the direction of
Distributor) will refrain from, directly or indirectly, taking any action to
coerce, manipulate, mislead, or fraudulently influence the Chief Compliance
Officer for the Variable Accounts in the performance of her or his
responsibilities under Rule 38a-1.
6.5. PRIVACY. Issuer and Distributor hereby acknowledge and agree that they
are subject to Title V of the Xxxxx-Xxxxx-Xxxxxx Act of 1999 and to implementing
regulations enacted by the SEC ("Regulation S-P") and applicable FINRA guidance
including but not limited to Regulatory Notice 05-49. The obligation of the
parties hereunder shall include:
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6.5.1. PRIVACY NOTICES. Any nonpublic personal information regarding
"customers" or "consumers" of the parties, as those terms are defined in
Regulation S-P, shall be shared between the parties and with others, only in
accordance with the disclosures contained in the Privacy Notices that shall be
provided by Issuer and Distributor to customers in accordance with the
requirements of Regulation S-P.
6.5.2. SYSTEM SAFEGUARDS ON CUSTOMER INFORMATION (CUSTOMER INFORMATION
SECURITY PROGRAM). As required by Rule 30 under Regulation S-P, Issuer and
Distributor shall adopt written policies and procedures that establish adequate
administrative, technical, and physical safeguards for the protection of
customer records and information. These policies and procedures must be
reasonably designed to: (i) ensure the security and confidentiality of customer
records and information, (ii) protect against anticipated threats or hazards to
the security and integrity of customer records and information, and (iii)
protect against unauthorized access to or use of customer records or
information. If other applicable privacy laws, including any such laws or
regulations promulgated by a state or municipality having jurisdiction over the
parties, should afford customers or consumers greater protections or rights than
those provided by the Regulation S-P or should impose greater obligations or
restrictions on the parties ("Additional Privacy Laws"), the parties shall
comply with the terms of such Additional Privacy Laws.
6.6. REPORTS. Each party shall furnish or cause to be furnished to the
other such reports as the party may reasonably request for the purpose of
meeting its reporting and record keeping requirements under the 1933 Act, the
1934 Act and the 1940 Act and regulations thereunder as well as the insurance
laws of the State of Minnesota and any other applicable states or jurisdictions,
as well as any other applicable law.
6.7. ISSUANCE AND ADMINISTRATION OF CONTRACTS. Issuer, or its appointed
designee, shall be responsible for issuing the Contracts and administering the
Contracts and the Variable Account, including all Contract owner communications,
provided, however, that Distributor and its designated Office(s) of Supervisory
Jurisdiction and Branch Office(s) (the "Office(s)") shall have full
responsibility for the activities of all persons employed by Issuer which
activities must be performed or oversighted by a registered broker-dealer or
associated person of a broker-dealer, and for the training, supervision and
control of such persons to the extent of such activities.
6.8. ANTI-MONEY LAUNDERING COMPLIANCE. Distributor represents and warrants
that it has, and covenants that it shall continue to have, an anti-money
laundering compliance program as required by NASD Rule 3011. Issuer covenants
that it shall implement such anti-money laundering programs as it may be
required to implement by applicable laws, rules and regulations.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS
7.1. REPRESENTATIONS, WARRANTIES AND COVENANTS OF DISTRIBUTOR. Distributor
represents and warrants to Issuer that Distributor is, and covenants that it
shall remain during the term of this Agreement: (i) registered as a
broker-dealer under the 1934 Act; (ii) a member in good standing with FINRA;
(iii) duly registered under applicable state securities laws; (iv) in good
standing in the state of Minnesota with power (corporate and otherwise) to own
its properties and conduct its business; and (v) in compliance with in all
material respects with all applicable laws, rules and regulations.
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7.2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF ISSUER. Issuer represents
and warrants to Distributor that Issuer is, and covenants that it shall remain
during the term of this Agreement: (i) validly existing as a life insurance
company in good standing under the laws of the state of Minnesota with power
(corporate or otherwise) to own its properties and conduct its business as
described in the Contract Prospectus; (ii) duly qualified for the transaction of
business; (iii) in good standing under the laws of other jurisdictions in which
it owns any property, or conducts any business, so as to require such
qualification; and (iv) in compliance with in all material respects with all
applicable laws, rules and regulations.
8. INVESTIGATIONS AND PROCEEDINGS
8.1. CONSULTATION AND COOPERATION. Distributor and Issuer shall cooperate
fully in any federal or state securities or insurance regulatory investigation
or proceeding or judicial proceeding arising in connection with the offering,
sale or distribution of the Contracts distributed under this Agreement. Without
limiting the foregoing, Issuer and Distributor shall notify each other promptly
of any notice of any regulatory investigation or proceeding or judicial
proceeding received by either party with respect to the Contracts marketed and
distributed under this Agreement or any activity in connection with any such
Contract promptly after receipt of such notice. In addition, Distributor agrees
to furnish regulatory authorities with any information or reports in connection
with the services it provides under this Agreement that may be requested in
order to ascertain whether the operations of Issuer, Distributor or the Variable
Accounts are being conducted in a manner consistent with applicable laws and
regulations. Distributor further agrees to comply with the reporting
requirements imposed by NASD Rule 3070 with regard to sales of the Contracts and
the activities of Representatives.
8.2. CUSTOMER COMPLAINTS. Distributor and Issuer shall cooperate fully in
responding to any customer complaints. Distributor will promptly provide to
Issuer a copy of all customer complaints received by Distributor concerning or
related to the Contracts, Issuer, Distributor, its Representatives, or a Selling
Firm in connection with any Contract sold under this Agreement or regarding any
activity of an aforementioned entity relating to the exercise of its duties or
obligations hereunder. Issuer will promptly provide to Distributor a copy of
customer correspondence involving a Contract that potentially may be viewed as a
complaint involving Distributor or its Representatives or any of Distributor's
or Representatives' duties or obligations hereunder so that Distributor may
review such correspondence and determine whether it constitutes a "complaint"
under applicable FINRA rules. Distributor will timely provide information as
needed to enable Issuer to respond to such complaints, or will itself respond to
any such complaints if, as Distributor shall determine, such response is
required by federal or state securities laws or the rules of FINRA. Without
limiting the foregoing, Issuer agrees to notify Distributor if persons
associated with Issuer are the subject of any written customer complaint
involving allegations of theft, forgery or misappropriation of funds or
securities, or is the subject of any claim for damages by a customer, broker, or
dealer that is settled for greater than an amount Distributor may designate from
time to time.
9. INDEMNIFICATION
9.1. BY ISSUER. Issuer shall indemnify and hold harmless Distributor and
each person who controls or is associated with Distributor within the meaning of
such terms under the federal securities laws, and any officer, director,
employee or agent of the foregoing, against any and all losses, claims, damages
or liabilities, joint or several (including any investigative, legal and other
expenses reasonably incurred in connection with, and any amounts paid in
settlement of,
10
any action, suit or proceeding or any claim asserted), to which Distributor
and/or any such person may become subject, under any statute or regulation, any
FINRA or SEC rule or interpretation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities:
9.1.1. arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in light of the circumstances in which they were made,
contained in (i) any Registration Statement or in any Contract Prospectus
required to be filed by Issuer; (ii) blue-sky application or other document
executed by Issuer specifically for the purpose of qualifying any or all of the
Contracts for sale under the securities laws of any jurisdiction; provided that
Issuer shall not be liable in any such case to the extent that such loss, claim,
damage or liability arises out of, or is based upon, an untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
information furnished in writing to Issuer by Distributor specifically for use
in the preparation of any such Registration Statement or any amendment thereof
or supplement thereto; or in any Contract Prospectus required to be filed by
Issuer;
9.1.2. result from any breach by Issuer of any provision of this
Agreement; or
9.1.3. result from Issuer's own misconduct or negligence.
This indemnification agreement shall be in addition to any liability that Issuer
may otherwise have; provided, however, that no person shall be entitled to
indemnification pursuant to this provision if such loss, claim, damage or
liability is due to the willful misfeasance, bad faith, gross negligence or
reckless disregard of duty by the person seeking indemnification.
9.2. BY DISTRIBUTOR. Distributor shall indemnify and hold harmless Issuer
and each person who controls or is associated with Issuer within the meaning of
such terms under the federal securities laws, and any officer, director,
employee of Issuer or agent of the foregoing, against any and all losses,
claims, damages or liabilities, joint or several (including any investigative,
legal and other expenses reasonably incurred in connection with, and any amounts
paid in settlement of, any action, suit or proceeding or any claim asserted), to
which Issuer and/or any such person may become subject under any statute or
regulation, any FINRA rule or interpretation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities:
9.2.1. arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, in light of the circumstances in which they
were made, contained in (i) any Registration Statement or in any Contract
Prospectus required to be filed by Issuer; (ii) blue-sky application or other
document executed by Issuer specifically for the purpose of qualifying any or
all of the Contracts for sale under the securities laws of any jurisdiction; in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon information furnished in writing by Distributor to Issuer specifically for
use in the preparation of any such Registration Statement or any such blue-sky
application or any amendment thereof or supplement thereto, or in any Contract
Prospectus required to be filed by Issuer;
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9.2.2. result because of any use by Distributor or its Representatives
of promotional, sales or advertising material not authorized by Issuer or any
verbal or written misrepresentations by Distributor or its Representative or any
unlawful sales practices concerning the Contracts by Distributor or its
Representatives under federal securities laws or FINRA regulations;
9.2.3. result from any breach by Distributor of any provision of this
Agreement; or
9.2.4. result from Distributor's own misconduct or negligence.
This indemnification shall be in addition to any liability that Distributor may
otherwise have; provided, however, that no person shall be entitled to
indemnification pursuant to this provision if such loss, claim, damage or
liability is due to the willful misfeasance, bad faith, gross negligence or
reckless disregard of duty by the person seeking indemnification.
9.3. GENERAL. Promptly after receipt by an Indemnified Person of notice of
the commencement of any action subject to indemnification pursuant to this
Section 9, such Indemnified Person shall notify the Indemnifying Party in
writing of the commencement thereof as soon as practicable thereafter, but
failure to so notify the Indemnifying Party shall not relieve the Indemnifying
Party from any liability which it may have to the Indemnified Person otherwise
than on account of this Section 9. The Indemnifying Party will be entitled to
participate in the defense of the Indemnified Person but such participation will
not relieve such Indemnifying Party of the obligation to reimburse the
Indemnified Person for reasonable legal and other expenses incurred by such
indemnified person in defending herself, himself or itself.
The indemnification provisions contained in this Section 9 shall remain
operative in full force and effect, regardless of any termination of this
Agreement. A successor by law of Distributor or Issuer, as the case may be,
shall be entitled to the benefits of the indemnification provisions contained in
this Section 9.
10. TERMINATION
10.1. This Agreement shall terminate automatically if it is assigned by
Distributor or Issuer without the prior written consent of the other party. This
Agreement may be terminated at any time for any reason or for no reason by
either party upon 180 days written notice to the other party, without payment of
any penalty. (The term "assigned" as used in this Section 10 shall not include
any transaction exempted from Section 15(b)(2) of the 1940 Act.) This Agreement
may be terminated at the option of either party to this Agreement upon the other
party's material breach of any provision of this Agreement or of any
representation or warranty made in this Agreement, unless such breach has been
cured within 30 days after receipt of notice of breach from the non-breaching
party. Provisions that by their content are intended to survive the performance,
termination, or cancellation of this Agreement shall survive the performance,
termination, or cancellation of this Agreement, including, but not limited to,
the confidentiality and indemnification provisions of this Agreement.
11. MISCELLANEOUS
11.1. BINDING EFFECT. This Agreement shall be binding on and shall inure to
the benefit of the respective successors and assigns of the parties hereto
provided that neither party shall
12
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the other party.
11.2. AMENDMENTS. This Agreement, or any provisions hereof, may not be
amended, supplemented, waived, or modified in any way, except by a written
instrument signed by authorized representatives of the parties hereto
specifically referencing this Agreement. No amendment, supplement, waiver, or
modification shall be effected by the acknowledgment or acceptance of a purchase
order, invoice, or other forms (including but not limited to computer-based
telecommunication systems) stipulating different terms.
11.3. RIGHTS, REMEDIES, ETC, ARE 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, which the
parties hereto are entitled to under state and federal laws. Failure of either
party to insist upon strict compliance with any of the conditions of this
Agreement shall not be construed as a waiver of any of the conditions, but the
same shall remain in full force and effect. No waiver of any of the provisions
of this Agreement shall be deemed, or shall constitute, a waiver of any other
provisions, whether or not similar, nor shall any waiver constitute a continuing
waiver.
11.4. NOTICES. All notices hereunder are to be made in writing and shall be
given:
if to Issuer, to:
Minnesota Life Insurance Company
Attn: General Counsel
000 Xxxxxx Xxxxxx Xxxxx
Xx. Xxxx, XX 00000-0000
if to Distributor, to:
Securian Financial Services, Inc.
Attn: Chief Financial Officer
000 Xxxxxx Xxxxxx Xxxxx
Xx. Xxxx, XX 00000-0000
or such other address as such party may hereafter specify in writing.
Each such notice to a party shall be either hand delivered or transmitted by
registered or certified United States mail with return receipt requested, or by
overnight mail by a nationally recognized courier, and shall be effective upon
delivery. Failure to provide written notice shall not constitute a defense to
any action unless the party who did not receive written notice was materially
prejudiced thereby.
11.5. INTERPRETATION; JURISDICTION. This Agreement constitutes the whole
agreement between the parties hereto with respect to the subject matter hereof,
and supersedes all prior oral or written understandings, agreements or
negotiations between the parties with respect to such subject matter. No prior
writings by or between the parties with respect to the subject matter hereof
shall be used by either party in connection with the interpretation of any
provision of this Agreement. This Agreement is made in the State of Minnesota,
and all questions
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concerning its validity, construction or otherwise shall be determined under the
laws of Minnesota without giving effect to any jurisdiction's principles of
conflict of laws.
11.6. SEVERABILITY. If any provision, or a portion thereof, of this
Agreement is rendered invalid, illegal, void or unenforceable by reason of any
rule of law, administrative or judicial provision or public policy, such
provision, or portion thereof, shall be more narrowly and equitably construed so
that it becomes legal and enforceable while preserving the intent of the parties
to the greatest degree possible. If any such provision, or portion thereof,
cannot be more narrowly construed as provided in the previous sentence, such
provision, or the offending portion thereof, shall be stricken from this
Agreement. In the event this Agreement is modified pursuant to this Section, all
other provisions of this Agreement shall nevertheless remain in full force and
effect.
11.7. CONFIDENTIALITY. The parties covenant and agree that they will not at
any time during or after the termination of this Agreement, reveal, divulge or
make known to any person (other than their respective directors, officers,
employees, agents, professional advisors or affiliates who need to know such
information for the performance of obligations hereunder), or use for their own
account or purposes or for any other account or purpose other than the
performance of obligations under this Agreement, any confidential or proprietary
information, including but not limited to information about applicants for or
purchasers of the Contracts, business plans, product designs, marketing
strategies, action plans, pricing, methods, processes, records, financial
information or other data, trade secrets, customer lists, nonpublic personal
information concerning "consumers" or "customers" as described in Section 6.7
herein, or any other information obtained as a result of this Agreement, whether
any such information is in oral or printed form or on any computer tapes,
computer disks or other forms of electronic or magnetic media (collectively the
"confidential information") used or owned by a party or any of its affiliates
and made known (whether or not with the knowledge and permission of such party
or any of its affiliates, and whether or not developed, devised or otherwise
created in whole or in part by the efforts of the parties) to the other party at
any time by reason of their association under this Agreement; provided, however,
that confidential information shall not include any information: (i) that was
previously known by a party from a source, other than the other party (or any
affiliate thereof), without an obligation of confidence; (ii) that was
previously disclosed in a lawful manner to a party without breach of this
Agreement or of any other applicable agreement, and without any requirement of
confidentiality; (iii) that was or is rightfully received from a third party
without an obligation of confidence or from publicly available sources without
obligations of confidence; (iv) that is in the public domain; (v) that was or is
developed by means independent of information provided by a party or its
affiliates. The parties further covenant and agree that they shall retain all
such knowledge and information that they acquire or develop respecting such
confidential information in trust for the sole benefit of the parties, and their
respective successors and assigns provided, further, that this Agreement shall
not restrict any disclosure required to be made by order of a court or
governmental agency of competent jurisdiction or by a self-regulatory
organization of which a party is a member. The party receiving such an order
shall promptly notify the other parties of the order.
11.8. UNAUTHORIZED ACCESS TO CONFIDENTIAL INFORMATION. In the event either
party knows or suspects that confidential information has been subject to
unauthorized access, that party shall notify the other party and shall undertake
reasonable steps to prevent further unauthorized access, to limit and mitigate
any reasonably foreseeable harm resulting from the unauthorized disclosure, and
to make such notifications and take other actions as are required under
applicable law.
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11.9. SECTION AND OTHER HEADINGS. The headings in this Agreement are
included for convenience of reference only and in no way define or delineate any
of the provisions hereof or otherwise affect their construction or effect.
11.10. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
11.11. REGULATION. This Agreement shall be subject to the provisions of the
1933 Act, 1934 Act, the 1940 Act and the Regulations, and the rules and
regulations of FINRA, from time to time in effect, including such exemptions
from the 1940 Act as the SEC may grant, and the terms hereof shall be
interpreted and construed in accordance therewith.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by such authorized officers on the date specified above.
MINNESOTA LIFE INSURANCE COMPANY SECURIAN FINANCIAL SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------- -----------------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxxxx
Title: Executive Vice President & Vice Title: President & CEO
Chariman
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SCHEDULE 1
VARIABLE ACCOUNTS
Variable Fund D
Variable Annuity Account
Minnesota Life Variable Life Account
Minnesota Life Individual Variable Universal Life Account
Minnesota Life Variable Universal Life Account
16
