Exhibit (h)(4)
[FORM OF FINANCIAL INSTITUTION SELLING GROUP AGREEMENT]
ING PILGRIM SECURITIES, INC.
0000 X. Xxxxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000-0000
(000) 000-0000 or (000) 000-0000
FINANCIAL INSTITUTION SELLING GROUP AGREEMENT
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We are a party to certain principal underwriting agreements with each of
the Funds in the ING Pilgrim Group of Funds (hereinafter referred to as the
"Funds") under which we serve as exclusive agent for the Funds for the sale of
their shares of common stock or beneficial interest, as the case may be
("Shares"). The Funds and Share classes are listed on Schedule A hereto which we
may amend from time to time. You have indicated that you wish to act as agent
for your Customers in connection with the purchase, sale and redemption of
Shares of those Funds which are qualified for sale in the states in which you
have branch offices. We agree to honor your request, subject to the terms set
forth below.
1. (a) You represent and warrant to ING Pilgrim Securities, Inc.
("IPSI") that you are a "bank" as defined in Section 3(a)(6) of the Securities
Exchange Act of 1934 , as amended, (the "1934 Act") (or other financial
institution) and not otherwise required to register as a broker or dealer under
the 1934 Act or any state laws. You agree to abide by the laws, rules and
regulations of those state and federal banking, or any other requlatory,
authorities with appropriate jurisdiction over you, especially those regulations
dealing with your activities as described under this Agreement. You further
agree to abide by the provisions of the Investment Company Act of 1940, as
amended, the Securities Act of 1933, as amended, the 1934 Act, and all
applicable rules and regulations of the Securities and Exchange Commission
("SEC") and the National Association of Securities Dealers ("NASD"), including,
without limitation, the NASD Conduct Rules, whether or not you are a broker or
dealer subject to the jurisdiction of the SEC and the NASD. Because you will be
the only entity having a direct relationship with any Customers in connection
with securities purchases hereunder, you will be responsible in that
relationship for ensuring compliance with all laws, rules and regulations as
agreed above.
(b) You confirm that you are not in violation of any banking law,
rule or regulation as to which you are the subject and that the transactions
contemplated under this Agreement will not result in any violations of any
banking law, rule or regulation. You agree to notify IPSI immediately of any
action by or communication from state or federal banking authorities, state
securities authorities, the SEC, or any other party which may affect your status
as a bank, or which may otherwise affect in any material way your ability to act
in accordance with the terms of the Agreement. Any action or decision of any of
the foregoing regulatory authorities or any court of appropriate jurisdiction
which affects your ability to act in accordance with the terms of this
agreement, including the loss of your exemption from registration as a broker or
dealer, will terminate this Agreement effective upon IPSI's written notice of
termination to you.
2. In connection with all sales of Shares to your Customers you shall act
as agent for your Customers, and in no transaction shall you have any authority,
nor shall you hold yourself out as having any authority, to act as agent for any
Fund or for us. You shall be responsible for opening, approving and monitoring
Customers' accounts. You shall also be responsible for any and all credit that
you may extend to Customers, to the extent such extension of credit is permitted
under applicable rules and regulations, and for compliance with all regulatory
requirements respecting such extension of such credit. You shall also be
responsible for safeguarding Customers' funds and securities. All Shares will be
held in book-entry form on the books of the Funds on behalf of your Customers,
unless other instructions have been received. At no time will we have custody of
any Customer's funds or securities.
3. In connection with all sales of Shares to your Customers you shall
deliver or cause to be delivered to such Customer, at or prior to the time of
such purchase, a copy of the then-current Prospectus of the applicable Fund. You
hereby represent that you understand your obligation to deliver a Prospectus to
Customers who purchase Shares pursuant to federal securities laws and you have
taken all necessary steps to comply with such prospectus delivery requirements.
4. The Customers are, for all purposes, your Customers and not Customers
of IPSI. In receiving orders from you, on behalf of your Customers who purchase
Shares, IPSI is not, and shall not be deemed to be, soliciting Customers. IPSI
has no responsibility for determining whether a Fund, and which class of that
Fund's Shares, is a suitable investment for your Customers. This responsibility
is solely yours and you shall at all times use such care and diligence as may be
reasonably necessary to assure that the Shares are suitable investments for the
Customers, including, at a minimum, determining each Customers' financial and
tax status and investment objectives, as well as such other information that may
be useful or reasonable in making investment recommendations to a particular
Customer.
5. You will maintain all required books and records with respect to your
securities business, your Customers and their transactions. You acknowledge that
the responsibility for maintenance of such books and records is your
responsibility and not that of IPSI.
6. It is hereby understood that in all cases in which you place orders
with us for the purchase and sale of Shares (a) you are acting solely as agent
for the Customer; (b) the transactions are without recourse against you by the
Customer; (c) as between you and the Customer, the Customer will have full
beneficial ownership of the securities; (d) each such transaction is initiated
solely upon the order of the Customer; (e) we shall execute transactions only
upon receiving instructions from you acting as agent for the Customer or upon
receiving instructions directly from the Customer; and (f) each such transaction
is for the account of the Customer and not for your account.
7. You agree that you will fulfill all regulatory requirements to
supervise the activities of each of your employees, representatives and
associated persons in a manner reasonably designed to achieve compliance with
applicable securities and banking laws, rules and regulations. You further agree
that responsibility for proper supervision shall rest with you and IPSI shall
have no responsibility in this regard.
8. Orders authorized by and received from you will be accepted by us only
at the regular public offering price applicable to each order, as established by
the then current Prospectus of the appropriate Fund, subject to the discounts
defined in such Prospectus. Following receipt from you of any order to purchase
Shares for the account of a Customer, we shall confirm such order to you in
writing. You shall be responsible for sending your Customer a written
confirmation of the order with a copy of the appropriate Fund's current
Prospectus. All orders are subject to acceptance or rejection by us in our sole
discretion. Unless other instructions have been given, the Funds' transfer agent
will be responsible for preparing and mailing all periodic statements of
ownership to your Customers and/or updates showing a Customer's account balance.
9. The offering Prospectuses of the Funds and this Agreement set forth
the terms applicable to sales of Shares of the Funds through you and all other
representations or documents are subordinate. This Agreement is in all respects
subject to statements regarding the sale and repurchase or redemption of Shares
made in offering Prospectuses of the respective Funds, which in the event of any
inconsistency between this Agreement and such Prospectuses shall control.
10. Any sales charges and dealers' concessions will be as set forth in the
current Prospectus of each Fund. For each order for Shares accepted by us, you
will be entitled to receive the applicable commission as set forth in the
respective Prospectuses. All commissions or concessions set forth in the Funds'
Prospectuses are subject to change by us without notice and will comply with any
changes in regulatory requirements.
11. We are also authorized to pay you continuing service fees, with
respect to the Shares of all the Funds, to compensate you for providing certain
services for your clients such as processing purchase and redemption
transactions, establishing shareholder accounts and providing certain
information and assistance with respect to the Funds, provided you meet certain
service-related criteria and have executed a "Service Agreement" which is
available from us upon request.
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12. Where payment is due hereunder, we agree to send payment for
concessions and securities to your address as it appears on our records. You
must notify us of address changes and promptly negotiate such payments. Any such
payments that remain outstanding for 12 months shall be void and the obligation
represented thereby shall be extinguished.
13. With respect to Funds which impose a Contingent Deferred Sales Charge
("CDSC"), we agree to compensate you at a specified rate as disclosed in each
Fund's current Prospectus on purchase payments only for those shares which are
subject to the CDSC at the time of investment. We reserve the right to reclaim
any commission payment from you if we later determine a CDSC waiver (as
described in the Prospectus) applied at the time of investment. We reserve the
right to modify any CDSC waiver at any time. We will promptly notify each member
of the Financial Institution Selling Group of any modification thereto.
14. Any order by you for the purchase of Shares of the respective Funds
through us shall be accepted at the time when it is received by us, and at the
offering and sale price next determined, unless rejected by us or the respective
Funds. In addition to the right to reject any order, the Funds have reserved the
right to withhold Shares from sale temporarily or permanently. We will not
accept any order from you which is placed on a conditional basis or subject to
any delay or contingency prior to execution. The procedure relating to the
handling of orders shall be subject to instructions which we shall provide to
you from time to time. The Shares purchased will be issued by the respective
Funds only against receipt of the purchase price, in collected funds subject to
deduction of all commissions on such sale. Payment for Shares ordered from us
may be in the form of a check, Federal Funds wire transfer or any clearinghouse
agency that we may designate from time to time. Payment shall be made within
three (3) business days after our acceptance of the order placed on behalf of
your Customer, or such shorter time period as may be required by law. If payment
for the Shares purchased is not received within such time period, we reserve the
right to cancel the sale or, at our option, to sell Shares to the Fund at the
then prevailing net asset value. In this event, you agree to be responsible for
any loss, expense, liability or damage suffered by us and/or the respective
Funds resulting from your delay or failure to make payment as aforesaid.
15. You are obliged to date and time stamp all orders received by you and
promptly transmit all orders to us in time to provide for processing at the
price next determined after receipt of each order, in accordance with the
Prospectuses. You are not to withhold placing with us orders received from any
Customers for the purchase of Shares so as to profit yourself as a result of
such withholding. You shall not purchase Shares through us except for the
purpose of covering purchase orders already received from your Customers.
16. You shall be solely responsible for the accuracy, timeliness and
completeness of any orders transmitted by you on behalf of your Customers for
purchases, exchanges or redemptions.
17. If your Customer's account is established without your Customer
signing the application form, you represent that the instructions relating to
the registration (including the Customer's tax identification number) and
selected options furnished to the Fund (whether on the application form, in some
other document, or orally) are in accordance with the Customer's instructions.
18. If any Share is repurchased by any of the respective Funds or is
tendered thereto for redemption within seven (7) business days after
confirmation by us of the original purchase order from you for such security you
shall forthwith refund to us the full commissions paid to you on the original
sale.
19. You shall not, if acting as principal, purchase any Share of any of
the respective Funds from a record holder at a price lower than the net asset
value next determined by or for the respective Funds' Shares. You shall,
however, be permitted to sell any Shares for the account of a shareholder of the
respective Funds at the net asset value less any applicable CDSC currently
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quoted by or for the respective Funds' Shares, and may charge a fair service fee
for handling the transaction provided you disclose the fee to the record owner.
20. We shall furnish to you without charge reasonable quantities of
offering Prospectuses, with any supplements currently in effect, Statements of
Additional Information, copies of current shareholder reports of the respective
Funds, and sales materials issued by us from time to time. You shall deliver
copies of current shareholder reports, Prospectuses and any supplements to those
of your Customers whose Shares are held in nominee name on the books of the
Funds. In the purchase of Shares through us, you are entitled to rely only on
the information contained in the offering Prospectus(es). You may not publish
any advertisement or distribute sales literature or other written material to
the public which makes reference to us or any of the Funds (except material
which we furnished to you) without our prior written approval.
21. You agree that you shall make no representations concerning Shares of
any Fund except those contained in the applicable current Prospectus, Statement
of Additional Information, and printed information subsequently issued by the
appropriate Fund or by us as information supplemental to such Prospectus. You
agree that you will not make Shares available to your Customers except under
circumstances that will result in compliance with applicable Federal and State
securities and banking laws.
22. Shares sold hereunder shall be available in book-entry form on the
books of the Funds' transfer agent unless otherwise determined by the
appropriate Fund or by us.
23. You shall make available Shares of the respective Funds only through
us. In no transaction (whether of purchase or sale) shall you have any authority
to act as agent for, partner of, or participant in a joint venture with us or
with the respective Funds or any other entity having either a Selling Group
Agreement or other agreement with us.
24. All sales will be made subject to our receipt of Shares from the
appropriate Fund. We reserve the right, in our discretion, without notice, to
modify, suspend or withdraw entirely the offering of any Shares and, upon
notice, to change the sales charge or discount or to modify, cancel or change
the terms of this Agreement. You agree that any order to purchase Shares of the
Funds placed by you after any notice of amendment to this Agreement has been
sent to you shall constitute your agreement to any such amendment.
25. Sales and exchanges of Shares may only be made in those states and
jurisdictions where Shares are registered or qualified for sale to the public.
We agree to advise you currently of the identity of those states and
jurisdictions in which the Shares are registered or qualified for sale, and you
agree to indemnify us and/or the Funds for any claim, liability, expense or loss
in any way arising out of sale of Shares in any state or jurisdiction not
identified by us as a state or jurisdiction in which such Shares are so
registered or qualified. We agree to indemnify you for any claim, liability,
expense or loss attributable to Shares not being registered or qualified in any
state or jurisdiction identified by us as a state or jurisdiction in which such
Shares are currently registered or qualified.
26. We act solely as agent for the Funds, and are not responsible for
qualifying the Funds or their Shares for sale in any state or jurisdiction. We
also are not responsible for the issuance, form, validity, enforceability or
value of the Shares.
27. You agree that all of your activities shall be conducted in accordance
with the Interagency Statement on Retail Sales of Non Deposit Investment
Products, dated February 15, 1994, and any subsequent amendment thereto or
superseding rules and regulations.
28. Either of us, upon request of the other party, shall provide the other
party with data or documents needed by the requesting party to carry out all
allocated functions herein.
29. Each of us shall cooperate with all appropriate governmental or self
regulatory authorities (including without limitation the SEC, NASD and state
securities regulators) and shall permit such authorities reasonable access to
books and records in connection with any inspection, inquiry or investigation
relating to this Agreement or the transactions contemplated thereby.
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30. Each of us shall indemnify and hold harmless the other from and
against any and all losses, claims, liabilities, expenses and damages (including
any and all investigative, legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any investigation, claim,
action, suit or proceeding, whether judicial, regulatory or private) to which a
party may become subject as a result of any breach or default by the other party
of any representation, warranty, covenant or other obligation set forth in this
Agreement. In the event either of us is entitled to indemnification under this
Section 30 or any other provision of this Agreement, the indemnified party shall
be entitled to engage counsel of the indemnified party's choice to represent it
in all matters, and the indemnifying party shall upon request promptly advance
all expenses incurred by the indemnified party with respect to any indemnified
matter.
31. Either of us may cancel this Agreement at any time by written notice
to the other.
32. This Agreement shall be governed by and construed in accordance with
the laws of the State of Arizona, without giving effect to the choice of law
principles thereof. Jurisdiction and venue over any legal action brought
hereunder shall reside exclusively in Phoenix, Arizona, and each party
irrevocably submits to the jurisdiction of any state or federal court sitting in
the City of Phoenix.
33. In the event that any action, suit, arbitration or other proceeding is
instituted concerning or arising out of this Agreement, the prevailing party
shall recover all of such party's costs and attorneys' fees incurred in each and
every such action, suit, arbitration or other proceeding, including any and all
appeals or petitions therefrom.
34. Whenever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be or become prohibited or invalid
under applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
35. This Agreement contains the entire understanding among the parties
with respect to the subject matter hereof and supersedes any prior or
contemporaneous written or oral understandings and agreements among them
regarding the subject matter of this Agreement. Except for those modifications
described herein which shall be effective upon your delivery of an order for
Shares following notice by us to you of a modification in the terms of this
Agreement, this Agreement may not be amended except pursuant to a writing signed
by the parties hereto. No failure or delay in exercising any right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise of
any other right.
36. All communications to us should be sent to the above address. Any
notice to you shall be duly given if mailed or telegraphed to you at the address
specified by you below.
37. The names of your Customers shall remain your sole property and shall
not be used by us for any purpose except for regulatory, servicing and
informational mailings in the normal course of business.
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This Agreement and the terms and provisions thereof shall become effective upon
our receipt of a signed copy.
If the foregoing accurately reflects your understanding with respect to the
subject matter of this Agreement, please execute this Agreement in duplicate and
return one of the originals to us for our file.
Accepted this ________ day of _____________________, 20__ by:
__________________________________ __________________________________
Name of Institution Authorized Officer Signature
Address: Print Name & Title of Officer:
__________________________________ __________________________________
__________________________________ __________________________________
__________________________________
Accepted on behalf of ING Pilgrim Securities, Inc. by:
__________________________________
Signature
__________________________________
Print Name and Title
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