DEALER SELLING AGREEMENT
(VARIABLE CONTRACTS)
THIS AGREEMENT, made this ____ day of ____________, 1998, by and between
Ascend Financial Services, Inc., a Minnesota corporation (the "Underwriter"),
having its principal office at 000 Xxxxxx Xxxxxx Xxxxx, Xx. Xxxx, Xxxxxxxxx
00000, Minnesota Life Insurance Company (the "Issuer"), having its principal
office at 000 Xxxxxx Xxxxxx Xxxxx, Xx. Xxxx, Xxxxxxxxx 00000, and
_____________________ (the "Dealer"), having its principal office at
__________________________.
WHEREAS, the Underwriter has entered into certain distribution agreements
relating to variable life insurance policies and variable annuity contracts
issued by separate accounts of the Issuer (such variable life insurance policies
and variable annuity contracts hereinafter referred to collectively as the
"Variable Contracts"), under which the Underwriter was engaged and agreed to act
as principal underwriter in the sale and distribution of such Variable Contracts
to the public, either through dealers or otherwise; and
WHEREAS, the parties hereto desire that the Dealer sell and distribute to
the public those Variable Contracts identified on Appendix A hereto, as may be
amended from time to time by the Underwriter upon written notice to the Dealer
of such change and effective as of the date set forth in such notice;
NOW, THEREFORE, the Underwriter hereby authorizes the Dealer to sell and
distribute the Variable Contracts to the public subject to the following terms
and conditions.
1. ACCEPTANCE OF APPLICATIONS; PROSPECTUSES AND REGISTRATION STATEMENTS.
Applications solicited by the Dealer will be accepted only in the amounts and on
the terms which are set forth in the then current Prospectuses (and/or
Statements of Additional Information, if any) for the Variable Contracts.
Applications shall be promptly forwarded to Issuer, upon receipt and approval by
the Dealer. Underwriter represents and warrants that the Prospectuses (and/or
Statements of Additional Information, if any) for the Variable Contracts are or
will be filed with the Securities and Exchange Commission ("SEC"), that such
filings conform in all material respects with the requirements of the SEC and
that, except as Underwriter has given written notice to Dealer, there are
effective Registration Statements relating to such Variable Contracts.
Underwriter shall give written notice to Dealer either (i) of specified states
or jurisdiction in which the Variable Contracts may be offered and sold by the
Dealer under all securities and insurance laws applicable to the Issuer and
Underwriter or (ii) of all states or jurisdictions where the Variable Contracts
may not be offered or sold, but Underwriter does not assume any responsibility
as to the Dealer's right to sell the Variable Contracts in any state or
jurisdiction. Underwriter, during the term of this Agreement, shall (i) notify
Dealer in writing of the issuance by the SEC of any stop order with respect to a
Registration Statement or the initiation of any proceedings for such purpose or
any other purpose relating to the registration and/or offering of the Variable
Contracts, (ii) of any other action or circumstance known to them that may
prevent the lawful sale of the Variable Contracts in any state or jurisdiction,
and (iii) advise the Dealer in writing of any amendment to any Registration
Statement or supplement to any Prospectus. The Underwriter shall make available
to Dealer such number of copies of the Prospectus, as amended or supplemented,
(and/or Statements of Additional Information, if any)
or any Approved Supplement Sales Literature (as defined in Paragraph 5) as the
Dealer may reasonably request.
2. DEALER COMMISSION. The Dealer shall receive, for sales of Variable
Contracts by the Dealer, the commissions or other payments specified in Appendix
B attached hereto; provided that the amount of such commissions or other
payments may be changed from time to time by the Underwriter upon notice to the
Dealer of such change. The effective date of such change shall be as set forth
in such notice. Dealer assumes sole responsibility to pay commissions due
Dealer's agents or registered representatives in connection with sales of the
Variable Contracts. Upon termination of this Agreement, for any reason, all
compensation otherwise payable to Dealer hereunder shall cease automatically,
including any renewal or trailing compensation. In the event of such
termination, however, Dealer shall receive any earned first year commissions
attributable to transactions entered into but not settled prior to the effective
date of termination.
In the event that a Registered Representative listed in Appendix C ceases
to be associated with the Dealer, and this Agreement is not then terminated, all
compensation otherwise payable to Dealer hereunder and attributable to Variable
Contracts sold by that Registered Representative shall cease automatically.
3. PREMIUM AND PURCHASE PAYMENTS. Initial premium and purchase payments for
the Variable Contracts shall be allocated as described in the then current
Prospectuses (and/or Statements of Additional Information, if any) for the
Variable Contracts and as instructed from time to time by the Underwriter.
Premium and purchase payments shall be forwarded to the Issuer promptly upon
receipt. Each premium and purchase payment shall be confirmed by the Dealer to
the Underwriter in writing on the day such payment is received.
All other premium payments and all monies or other settlements received by
the Dealer for or on behalf of the Underwriter or Issuer shall be received by
the Dealer in fiduciary capacity in trust for the Underwriter and Issuer and
shall be promptly transmitted to the Issuer, and, in no event, shall the Dealer
commingle such premiums and monies with other funds. The Dealer shall keep
correct accounts and records of all business transacted and monies collected by
Dealer for the Underwriter or Issuer to the extent required by the Underwriter,
which accounts and records shall be open at all times, during normal business
hours, to inspection and examination by the Underwriter's authorized
representative. All accounts, records and any supplies furnished to the Dealer
for its use, consumption or distribution to customers by the Underwriter shall
remain the property of the Underwriter and to the extent remaining shall be
returned to the Underwriter upon demand.
4. FAILURE OF ORDER. The Underwriter and the Issuer each reserves the right
at any time to refuse to accept and approve any application for the Variable
Contracts obtained by the Dealer, and each reserves the right to settle any
claims against the Underwriter and the Issuer arising from the sale of the
Variable Contracts by the Dealer and to refund to the owner of any Variable
Contract payments made by him on his Variable Contract, without the Dealer's
consent. In the event any order for a Variable Contract is rejected by the
Underwriter or the Issuer or any premium or purchase payment received for a
Variable Contract cannot be collected, otherwise proves insufficient or
worthless, or is not paid, any compensation paid to the Dealer hereunder shall,
promptly upon notice to the Dealer, be returned by the Dealer to the Underwriter
-2-
either in cash or as a charge against the Dealer's account with the Underwriter,
as the Underwriter may elect. The Underwriter or Issuer shall also have the
right to refund any premiums or purchase payments paid on a Variable Contract if
it believes this is proper where a Variable Contract is rescinded, cancelled, or
not accepted, or for any other reason it believes is proper. The Dealer agrees
to return to the Underwriter, upon its request, all Dealer commissions credited
on any premiums or purchase payments which are refunded. The Dealer hereby
agrees that until the Underwriter receives full reimbursement in cash, the
amount of compensation due and owing the Underwriter shall constitute a debt to
the Underwriter which the Underwriter may collect by any lawful means, and after
written notice is given to Dealer, with interest thereon at the maximum rate
possible.
5. DEALER'S UNDERTAKINGS. In offering and selling the Variable Contracts,
the Dealer shall comply with all state and federal laws and regulations
applicable to it, all rules of the National Association of Securities Dealers,
Inc. (the "NASD") applicable to it, and all policies and rules of the
Underwriter applicable to it and communicated in writing to it. In the event of
the suspension, revocation, cancellation or other impairment of the Dealer's
membership in the NASD or the Dealer's registration, license or qualification to
sell the Variable Contracts under any applicable state or federal law or
regulation, the Dealer shall give the Underwriter prompt notice of such
suspension, revocation, cancellation or other impairment, and the Dealer's
authority under this Agreement shall thereupon terminate as provided in
Paragraph 12.
The Dealer shall not sell any of the Variable Contracts pursuant to this
Agreement unless the then current applicable Prospectus is furnished to the
purchaser prior to the offer and sale. The Dealer shall not use any supplemental
sales literature of any kind without prior written approval of the Underwriter
unless it is furnished by the Underwriter for such purpose ("Approved
Supplemental Sales Literature"). No person is authorized to make any
representation concerning the Variable Contracts, the Issuer or the Issuer's
separate accounts except those contained in the then current Prospectuses
(and/or Statements of Additional Information, if any) or Approved Supplemental
Sales Literature. In offering and selling the Variable Contracts, the Dealer
shall rely solely on the representations contained in the then current
Prospectuses (and/or Statements of Additional Information, if any) or Approved
Supplemental Sales Literature.
Dealer agrees to furnish to Underwriter such information as may from time
to time be requested by Underwriter for the purpose of complying with the
applicable provisions of federal or state securities laws and the by-laws, rules
or regulations of the NASD or any other securities regulatory authority. Dealer
shall immediately notify the Compliance Department of Underwriter of any
proceeding, suit or action, whether criminal, civil or administrative, or the
commencement by the NASD or any other securities regulatory authority or any
other state or federal authority of any investigation, if such proceeding, suit,
action or investigation arises out of or in connection with Dealer's activities
as broker or dealer, or insurance agent or agency, with respect to the Variable
Contracts. Dealer shall also immediately notify the Compliance Department of
Underwriter of any complaint by a customer or prospective customer or regulatory
authority regarding the Variable Contracts or Dealer's activities as broker or
dealer, or insurance agent or agency, with respect to the Variable Contracts.
Except for those books and records required by law or regulation to be
maintained by Dealer, all books, documents, prospectuses, application forms or
other materials or supplies in
-3-
the possession of Dealer which pertain to the Variable Contracts or to the
business of Underwriter or the Issuer shall be the property of Underwriter or
the Issuer, as the case may be, which at any and all times shall be open to
inspection by any duly authorized representative of Underwriter or Issuer and at
the termination of this Agreement shall be returned to Underwriter.
6. APPOINTMENT OF DEALER BY ISSUER. If required by the insurance laws of
any jurisdiction, the Issuer hereby appoints the Dealer as its agent for
purposes of offering the Variable Contracts in such jurisdiction.
7. INSURANCE LICENSING. Dealer shall, at all times when performing its
functions under this Agreement, be validly licensed as an insurance agent or
agency in the states and other local jurisdictions that require such licensing
or registration in connection with Dealer's offer and sale of the Variable
Contracts; or, in those states in which Dealer cannot obtain a corporate
insurance agent's license, Dealer shall maintain a contractual relationship with
an agency which shall be validly licensed as an insurance agency, with variable
insurance contract authority, in such jurisdiction or jurisdictions (the
"Agency"). Dealer warrants that its contractual relationship with any such
Agency is currently, and will continue, in compliance with any applicable rules
or positions of the SEC or the NASD, or their respective staffs, as necessary to
avoid registration by such Agency as a broker-dealer under the Securities
Exchange Act of 1934 (the "1934 Act"), as amended, as a result of the activities
of Dealer and such Agency in connection with the offer and sale of the Variable
Contracts. Dealer shall provide Underwriter with a list of all Agencies relied
upon by Dealer to comply with this paragraph and with evidence of their valid
insurance licenses in the applicable jurisdictions, and Dealer hereby covenants
to maintain the completeness and accuracy of such list. If required by the law
of any state or jurisdiction where Dealer is not licensed as an insurance
agency, commissions payable to Dealer hereunder shall be paid to the appropriate
Agency, and Dealer hereby appoints Agency to receive on its behalf any and all
such commissions.
8. REPRESENTATIONS AND AGREEMENTS OF THE DEALER. By accepting this
Agreement, and except as modified by Paragraph 7, the Dealer represents that it:
(i) is registered as a broker-dealer under the 1934 Act, as amended; (ii) is
qualified to act under all applicable securities and insurance statutes, rules
and regulations in each jurisdiction in which it will offer the Variable
Contracts; (iii) is a member in good standing of the NASD; and (iv) will
maintain such registrations, qualifications and memberships throughout the term
of this Agreement.
9. DEALER'S EMPLOYEES. By accepting this Agreement, the Dealer
assumes full responsibility for the actions and course of conduct of its
registered representatives in the solicitation of applications for the purchase
of the Variable Contracts. The Dealer shall provide thorough and prior training
to its registered representatives concerning the selling methods to be used in
connection with the offer and sale of the Variable Contracts, giving special
emphasis to the principles of full and fair disclosure to prospective investors.
The Dealer may solicit sales of the Variable Contracts only through registered
representatives of the Dealer, who shall also have such variable contract or
other insurance licenses as are necessary for the sale of the Variable Contracts
and who shall have been appointed agents of the Issuer, a list of which
registered representatives as of the date hereof is attached hereto as Appendix
C. The Issuer may refuse to appoint as its agent any registered representative
of the Dealer if such registered representative is deemed by the Issuer to be
unsuitable for any reason. The Dealer shall supervise all activities of persons
associated with it relating to the sale of the Variable Contracts with a view to
preventing
-4-
violations of any rules of the NASD or any applicable federal or state laws or
regulations. THE DEALER SHALL FROM TIME TO TIME PROVIDE THE UNDERWRITER WITH AN
UPDATED LIST OF THE DEALER'S REGISTERED REPRESENTATIVES, AND SHALL GIVE THE
UNDERWRITER PROMPT NOTICE IN THE EVENT OF (a) THE SUSPENSION, REVOCATION,
CANCELLATION OR OTHER IMPAIRMENT OF ANY SUCH REGISTERED REPRESENTATIVE'S
REGISTRATION WITH THE NASD OR ANY SUCH REGISTERED REPRESENTATIVE'S REGISTRATION,
LICENSE OR QUALIFICATION TO SELL THE VARIABLE CONTRACTS UNDER ANY APPLICABLE
STATE OR FEDERAL LAW OR REGULATION, OR (b) THE TERMINATION OF ANY SUCH
REGISTERED REPRESENTATIVE'S ASSOCIATION WITH THE DEALER.
10. INDEMNIFICATION PROVISIONS.
A. INDEMNIFICATION BY UNDERWRITER. The Underwriter hereby agrees to
indemnify and to hold harmless the Dealer, each of its directors, officers or
employees and each person, if any, who controls the Dealer within the meaning of
Section 15 of the Securities Act of 1933 (the "1933 Act") or Section 20(a) of
the 1934 Act and their respective successors and assigns (hereinafter in this
paragraph separately and collectively referred to as the "Defendants") from and
against any and all losses, claims, demands or liabilities (or actions in
respect thereof), joint or several, to which the Defendants may become subject
under the 1933 Act, at common law or otherwise (including any legal or other
expense reasonably incurred in connection therewith), insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon: (i) any untrue or allegedly untrue statement of a material fact
contained in the then current Prospectus (and/or Statement of Additional
Information, if any) of any Variable Contract or arise out of or are based upon
the omission or alleged omission to state therein a material fact that is
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, nor misleading, or arise
out of any claim based upon any Approved Supplemental Sales Literature, or (ii)
the failure of Underwriter or its officers, directors, employees or agents to
comply with any applicable provisions of this Agreement; provided that this
indemnity agreement is subject to the condition that notice be given as provided
below.
B. FIDELITY BOND OF DEALER AND INDEMNIFICATION BY DEALER. Dealer represents
that all directors, officers, partners, employees or registered representatives
of Dealer who are authorized pursuant to this Agreement to sell the Variable
Contracts or who have access to premiums or other monies belonging to the
Underwriter or Issuer, including but not limited to monies submitted with
applications for purchase of the Variable Contracts or monies being returned to
Variable Contract owners, are and shall be covered by a blanket fidelity bond,
including coverage for larceny and embezzlement, issued by a reputable bonding
company. This bond shall be maintained by Dealer at Dealer's expense. Such bond
shall be at least of the form, type and amount required under the NASD Rules of
Fair Practice. The maintenance by the Dealer of the NASD Fidelity Bond shall
constitute compliance with this requirement. The Underwriter may require
evidence, satisfactory to it, that such coverage is in force. Dealer shall give
prompt written notice to the Underwriter of any notice of cancellation or change
of coverage with respect to such bond.
Dealer hereby assigns any proceeds received from the fidelity bonding
company to the Underwriter and Issuer to the extent of the Underwriter's or
Issuer's loss due to activities under this Agreement covered by the bond. If
there is any deficiency amount, whether due to a deductible or otherwise, Dealer
shall promptly pay to the Underwriter or Issuer such amount on
-5-
demand, and Dealer hereby indemnifies and holds harmless the Underwriter
and Issuer from any such deficiency and from the costs of collection thereof,
including reasonable attorneys fees.
Dealer also agrees to indemnify and hold harmless the Underwriter and
Issuer, and their officers, directors and employees and each person who controls
them within the meaning of Section 15 of the 1933 Act or Section 20(a) of the
1934 Act and their respective successors and assigns (hereinafter in this
paragraph separately and collectively referred to as Defendants) against any and
all losses, claims, damages or liabilities, including reasonable attorneys fees,
to which they may become subject under the 1933 Act, the 1934 Act, or other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon: (i) any oral or written
misrepresentations, or any unauthorized action or statement, by Dealer or its
officers, directors, employees or agents, or (ii) the failure of Dealer or its
officers, directors, employees or agents to comply with any applicable
provisions of this Agreement; provided, that this indemnity agreement is subject
to the condition that notice be given as provided below.
C. NOTICE AND DEFENSE. Upon the presentation in writing of any claim or the
commencement of any suit against any Defendant in respect of which
indemnification may be sought from the indemnifying party on account of its
agreement contained in the preceding paragraphs, such Defendant shall with
reasonable promptness give notice in writing of such suit to the indemnifying
party, but failure to so give such notice shall not relieve the indemnifying
party from any liability that it may have to the Defendants otherwise than on
account of this indemnity agreement. The indemnifying party shall be entitled to
participate at its own expense in the defense, or, if it so elects, to assume
the defense of any such claim or suit with counsel chosen by it and satisfactory
to the Defendants who are parties to such suit or against whom such claim is
presented. If the indemnifying party elects to assume the defense and retain
such counsel as herein provided, such Defendant shall bear the fees and expenses
subsequently incurred of any additional counsel retained by them, except the
reasonable costs of investigation and such other costs as are approved by the
indemnifying party; provided, that if counsel for an indemnified Defendant
determines in good faith that there is a conflict which requires separate
representation for the indemnified Defendant, the indemnified Defendant shall be
entitled to indemnification for the reasonable expenses of one additional
counsel and local counsel to the extent provided above. Such counsel shall, to
the fullest extent consistent with its professional responsibilities, cooperate
with the indemnifying party and its counsel. The indemnifying party's
obligations under this Paragraph 10 shall survive the termination of this
Agreement.
D. SETTLEMENT; CONTRIBUTION. The indemnifying party shall not be liable
under this Agreement for any settlement made by an indemnified party without the
indemnifying party's prior written consent, and the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of the settlement of any claim or action with the consent of
the indemnifying party. The indemnifying party shall not settle any such claim
or action without prior written consent of the indemnified party. If the
foregoing indemnifications should, for reasons of public policy, not be
available to any indemnified party, then indemnifying party will contribute to
the amount paid or payable by the indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party on the one hand and such
indemnified party on the other arising out of the matters contemplated by this
Agreement.
-6-
11. ASSIGNMENT. This Agreement may not be assigned by the Dealer without
consent of the Underwriter and Issuer.
12. TERMINATION. Any party may terminate this Agreement at any time upon
giving written notice to the other parties hereto. This Agreement shall
terminate automatically in the event of the suspension, revocation, cancellation
or other impairment of the Dealer's membership in the NASD or the Dealer's
registration, license or qualification to sell the Variable Contracts under any
applicable state or federal law or regulation. This Agreement shall also
automatically terminate should there be any material change in the ownership of
the Dealer from that existing at the date of this Agreement without the consent
of the Underwriter.
13. FIRST CLAIM ON EARNINGS. Underwriter shall have a right of set-off on
all of the Dealer's earnings under this Agreement. This means that Underwriter
as and when it elects may keep all or any part of such earnings to reduce any
debt Dealer owes Underwriter or Issuer. While Underwriter may release Dealer's
earnings while Dealer owes a debt to Underwriter or Issuer, this does not mean
Underwriter has waived this right of set-off to Dealer's earnings. Underwriter's
right of set- off also takes precedence over claims of Dealer's creditors. All
Dealer's earnings kept by Underwriter will be used to reduce debt owed to
Underwriter.
14. CONFIDENTIALITY. During the term of this Agreement, a party may acquire
access to confidential or proprietary information of another, including, but not
limited to, the Underwriter's, the Issuer's or the Dealer's business affairs,
customers, policyholders, clients, property, methods of operation, procedures,
marketing policies and practices, computer software and operational systems
(collectively, "Confidential Information"); provided, however, that the term
"Confidential Information" does not include information which: (a) becomes
generally available to the public other than as a result of a disclosure by a
party or its agents or employees; (b) was available to a party prior to its
disclosure to the other; (c) has become available to a party from a source other
than that of the parties to this Agreement; (d) is intended to be transferred to
another person or entity upon the termination of this Agreement; (e) is required
to be disclosed to any regulatory authority or self regulatory organization or
pursuant to a court order or subpoena; or (f) is derived from customers.
Confidential Information designated as such by a party shall constitute
proprietary information and/or trade secrets of such party and will be the sole
property of such party. Each party agrees that:
(a) it shall use such Confidential Information only for the purposes of
carrying our its obligations under, and performing any inspections or audits
permitted by, this Agreement;
(b) all Confidential Information and any physical and electronic
embodiments thereof will be held by each party in strict confidence;
(c) it shall take reasonable steps to ensure that its employees,
representatives and agents are informed of the contents of this Paragraph 14 and
that they shall comply with its terms;
-7-
(d) it will not reveal, disclose, publish, sell or distribute such
Confidential Information to other present or future agents or broker-dealers, or
to any other person or entity, without prior written consent of the other
parties;
(e) the parties shall immediately return any Confidential Information in
their possession to the other upon (i) such party's request at any time or (ii)
the termination of this Agreement.
The parties recognize that the disclosure of Confidential Information by
the other or its employees, representatives or agents may give rise to
irreparable injury, which may not be adequately compensated damages.
Accordingly, in the event of a breach or threatened breach by a party or its
employees, representatives or agents of the provisions of this Paragraph 14, the
non-breaching party shall be entitled to an injunction restraining the other
party and its employees from disclosing, in whole or in part, the Confidential
Information.
15. NATURE OF RELATIONSHIP; LIMITATIONS ON DEALER'S AUTHORITY. The Dealer
shall act as an independent contractor and not on behalf or subject to the
control of the Underwriter or Issuer. Nothing herein shall constitute the Dealer
as a partner of the Underwriter or Issuer, any other broker-dealer, any
registered representative of the Underwriter, or render any such entity liable
for obligations of the Dealer. The Dealer's participation in the sale and
distribution of the Variable Contracts as contemplated by this Agreement is not
exclusive and the Underwriter may engage other broker-dealers and/or their
registered representatives to participate in the sale and distribution of the
Variable Contracts on terms and conditions which may differ from the terms and
conditions of this Agreement. The Dealer understands that Dealer has no
authority to start any legal proceedings on Underwriter's or Issuer's behalf or
in their names or to incur any expenses or obligations in the name of the
Underwriter or Issuer, and Dealer agrees to indemnify and save the Underwriter
and Issuer harmless from any and all expenses or obligations incurred by Dealer
in the name of the Underwriter or Issuer for which Dealer is responsible. Dealer
agrees to pay all expenses incurred by Dealer in connection with Dealer's work.
16. SECTION HEADINGS. The titles of the sections and paragraphs of this
Agreement are for convenience only and shall not in any way affect the
interpretation of any provision or condition of this Agreement.
17. COUNTERPARTS. This Agreement may be executed in counterparts which,
taken together, shall constitute the whole of the Agreement as between the
parties.
18. NOTICE. Any notice to be given to a party hereto pursuant to this
Agreement shall be in writing, addressed to such party at the address of such
party set forth in the preamble hereof, or such other address as such other
party may from time to time designate in writing to the party hereto giving
notice. Any notice delivered by the mails, postage fully prepaid, shall be
deemed to have been given five (5) days after mailing or, if earlier, upon
receipt.
19. WAIVER. The Underwriter or Issuer may choose from time to time not to
enforce a provision of this Agreement or one of its rules. This does not mean
that it has waived
-8-
the right to enforce it in the future. Also, it does not mean that it ratifies
or consents to those actions of the Dealer which are not in accord with this
Agreement or its rules.
20. AMENDMENT. This Agreement may not be amended except by written
agreement by the parties hereto.
21. GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the State of Minnesota.
DEALER:
---------------------------------------------------
(Name)
---------------------------------------------------
(Tax Identification Number)
---------------------------------------------------
(Street Address)
---------------------------------------------------
(City) (State) (Zip)
By
---------------------------------------------------
Its
---------------------------------------------------
Ascend Financial Services, Inc.
By
----------------------------
Its
----------------------------
Date: , 1998
-------------
Minnesota Life Insurance Company
By
----------------------------
Its
----------------------------
Date: , 1998
--------------
-9-
APPENDIX A
TO THE
DEALER SELLING AGREEMENT
BETWEEN
ASCEND FINANCIAL SERVICES, INC., MINNESOTA LIFE INSURANCE COMPANY
AND ___________________
DATE OF THIS APPENDIX A: ____________, 1998
The Variable Contracts covered by this Agreement shall include the following:
Variable Life Insurance Policies
--------------------------------
Variable Adjustable Life
Variable Adjustable Life Second Death
Variable Group Universal Life
Variable Annuity Contracts
--------------------------
MultiOption Annuity
MultiOption Select Annuity
Adjustable Income Annuity
MegAnnuity
MultiOption Classic Annuity
MultiOption Achiever Annuity
APPENDIX B
SCHEDULE OF DEALER COMPENSATION
ON
VARIABLE ANNUITY CONTRACTS
During the term of this Agreement and while a Registered Representative of the
Dealer named on Appendix C continues to be the agent named by the Policyholder,
Dealer shall receive the Dealer Commissions and other compensation described
below for variable annuity contracts sold pursuant to this Agreement. Service
fees, if any, will be paid provided a Registered Representative of the Dealer
named on Appendix C continues to service the contract to the satisfaction of the
Issuer.
I. DEALER COMMISSIONS
A. Commissions for MultiOption Annuities (Forms 92-9283 and 92-9284)
A commission of 3.0% of the amount of each purchase payment
received under the Contract.
------------------------------------------------------------
Cumulative Contribution Amount Rate of commissions
------------------------------------------------------------
$25 - 499,999 3.00%
$500,000 - 749,999 2.75%
$750,000 - 999,999 2.50%
$1,000,000 - 1,499,999 2.25%
$1,500,000 - 1,999,999 2.00%
$2,000,000 - 2,499,999 1.75%
$2,500,000 - 2,999,999 1.50%
$3,000,000 - 3,999,999 1.25%
$4,000,000 - 5,000,000 1.00%
$5,000,000+ 0.00%
C. Commissions for Adjustable Income Annuity Contract:
Each time a new purchase payment is made, a new commission will
be calculated. The applicable percentage from the chart below
will be based on the total cumulative purchase payments to date
under a Contract, including the new purchase payment. The new
commission equals this percentage times the amount of the new
purchase payment.
Annuity-1
-------------------------------------------------------------------
Cumulative Contribution Amount Rate of commissions
-------------------------------------------------------------------
$25 - 499,999 3.00%
$500,000 - 749,999 2.75%
$750,000 - 999,999 2.50%
$1,000,000 - 1,499,999 2.25%
$1,500,000 - 1,999,999 2.00%
$2,000,000 - 2,499,999 1.75%
$2,500,000 - 2,999,999 1.50%
$3,000,000 - 3,999,999 1.25%
$4,000,000 - 5,000,000 1.00%
over $5,000,000 0.00%
In addition, a trail commission in an amount equal to .03125% of the cash value
held in each Contract at the end of each calendar quarter (.125% annually). Any
trail commission shall cease upon expiration of the cash value period of the
contract.
D. Trailing Commissions for MultiOption, MultiOption Select and
Adjustable Income Annuities
Trailing commissions on each of MultiOption, MultiOption Select
and Adjustable Income Annuities are payable in an amount equal to
.03125% of Qualifying Accumulation Values at the end of each
calendar quarter (.125% annually); provided, that such trailing
commissions will not be paid unless the aggregate of all
Qualifying Accumulation Values, as of the end of the quarter for
which such trailing commissions are determined, is at least
$100,000.
"Qualifying Accumulation Values" means, with respect to each
MultiOption annuity contract included in your Variable Annuity
Business, all separate account accumulation values held under such
contract; provided, that the separate account accumulation values
held under any contract shall not be Qualifying Accumulation
Values unless such separate account accumulation values are at
least:
SINGLE PREMIUM CONTRACTS
$10,000
FLEXIBLE PAYMENT CONTRACTS
$15,000 in contract years 1-5
$25,000 in contract years 6-10
$35,000 in contract years 11 and later
ADJUSTABLE INCOME ANNUITY
$10,000 Cash Value
Annuity-2
Trailing commissions will be calculated and paid one month
following the end of each quarter. No trailing commissions will
be paid after an Agent's relationship has been terminated.
E. Commissions For MegAnnuity
A trail commission in an amount equal to .05% of the accumulation
value in excess of $5 million, excluding values in Maturing
Government Bond Portfolios, held in each Contract at the end of
each calendar quarter (.20% annually).
Trailing commissions will be calculated and paid one month
following the end of each quarter. No trailing commissions will
be paid after the agency relationship has been terminated.
II. COMMISSIONS ON ANNUITIZATION BUSINESS
Commissions will be credited on annuitization business (except
MultiOption Select, Form 94-9307) if the values have been held by
Minnesota Life is a deferred annuity for at least five (5) years.
If those values have been held by Minnesota Life in a deferred annuity
for 60 months through 119 months, 1.5% of those values will be
credited. If the values have been held by Minnesota Life in a deferred
annuity for 120 months or more, 3.0% of those values will be credited.
In calculating this commission, any new contributions made within the
last two (2) years will not be considered.
On Multi-Option Select, commissions will be credited on annualization
business as follows:
(i) 3.0% commissions will be credited on all gains annuitized
(ii) Contributions held in contract for 60 months through 119 months,
1.5% of values will be credited
(iii) Contributions held in contract for 120 months or more, 3.0% of
values will be credited.
III. COMMISSION ADJUSTMENT BALANCE
If after all commission adjustments have been made, a balance is due
the Underwriter, a charge-back equal to the outstanding balance will
be made against future commission payments, until all negative amounts
have been recovered.
IV. BONUSES AND SERVICE FEES
Bonuses and service fees attributable to the contracts, if any, shall
be paid in accordance with the terms set forth in the standard
Minnesota Life Agent's Contract, a copy which has been provided to
Dealer and is incorporated herein by reference.
No bonus or service fees shall be paid to Dealer with respect to any
contract sold by a registered representative of Dealer who, at the time
of calculation of such amount, is not
Annuity-3
then an agent of Minnesota Life, nor shall any such contract, its
persistency, premiums or commissions otherwise payable in connection
therewith be included in the calculation of bonuses or service fees,
if any, due Dealer.
Annuity-4
APPENDIX C
REGISTERED REPRESENTATIVES OF THE DEALER
WHO ARE ALSO APPOINTED AGENTS OF THE ISSUER
C-1
