ADVANTUS FUNDS
DEALER SALES AGREEMENT
THIS AGREEMENT, made this _____ day of ___________, 199__, 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, and ______________ (the "Dealer") having its principal
office at __________________________________________.
WHEREAS, the Underwriter has entered into Distribution Agreements with
certain registered management investment companies (the "Funds"), as listed on
Schedule A hereto and made a part hereof, which Schedule A may be amended
without notice from time to time by the Underwriter, under which the Underwriter
has been engaged and agreed to act as principal underwriter for the Funds in the
sale and distribution of shares of the Funds to the public, either through
dealers or otherwise; and
WHEREAS, the parties hereto desire that the Dealer be a member of a
selling group to sell and distribute shares of the Funds to the public;
NOW, THEREFORE, the Dealer hereby offers to become a member in a
selling group to sell and distribute shares of the Funds to the public subject
to the following terms and conditions.
1. ACCEPTANCE OF SUBSCRIPTIONS; PROSPECTUS AND REGISTRATION
STATEMENT. Subscriptions solicited by the Dealer will be accepted only in the
amounts and on the terms which are set forth in the then current Prospectus
(and/or Statement of Additional Information, if any) for the Funds. Underwriter
represents and warrants that the Prospectus (and/or Statement of Additional
Information, if any) for the Funds shown on Schedule A 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 is an effective
Registration Statement relating to such Funds. Underwriter shall give written
notice to Dealer either (i) of specified states or jurisdiction in which the
Funds may be offered and sold by the Dealer or (ii) of all states or
jurisdictions where the Funds may not be offered or sold, but Underwriter does
not assume any responsibility as to the Dealer's right to sell the Funds 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 Funds, (ii) of any other action or circumstance known to them that may
prevent the lawful sale of the Funds in any state or jurisdiction, and (iii)
advise the Dealer in writing of any amendment to the 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 Supplemental Sales
Literature (as defined in Paragraph 5) as the Dealer may reasonably request.
2. DEALER DISCOUNT AND OTHER COMPENSATION. The Dealer shall receive,
for sales of shares of the Funds' common stock, the applicable Dealer Commission
or other compensation as set forth in Schedule A attached hereto and made a part
hereof. Additionally, with respect to certain of the Funds, the Dealer may be
entitled to receive additional compensation upon such terms and conditions and
in such amounts as set forth in Schedule A hereto for providing to Fund
shareholders certain personal and account maintenance services (including, but
not limited to, responding to shareholder inquiries and providing information on
their investments) not otherwise required to be provided by the applicable
Funds' investment adviser or transfer agent ("Service Fees") or (in addition to
the aforementioned Dealer Discount) for sales of shares of the applicable Fund's
common stock ("Distribution Fees"). Schedule A may be amended in whole or in
part without notice from time to time by the Underwriter. Dealer assumes sole
responsibility to pay commissions due Dealer's agents or registered
representatives in connection with sales of the Funds' shares of common stock.
Upon termination of this Agreement, for any reason, all compensation otherwise
payable to Dealer hereunder shall cease automatically, including any Service
Fees or Distribution Fees.
3. ORDERS. Orders to purchase shares of the Funds shall be placed as
described in the then current Prospectus (and/or Statement of Additional
Information, if any) of the Funds and as instructed from time to time by the
Underwriter. Orders shall be placed promptly upon receipt, and there shall be no
postponement of orders received so as to profit the Dealer by reason of such
postponement. Each order shall be confirmed by the Dealer to the Underwriter in
writing on the day such order was placed.
All monies or other settlements received by the Dealer for or on behalf
of the Underwriter shall be received by the Dealer in fiduciary capacity in
trust for the Underwriter and shall be immediately transmitted to the
Underwriter, and, in no event, shall the Dealer commingle such monies with other
funds. The Dealer shall keep correct accounts and records of all business
transacted and monies collected by him for the Underwriter to the extent
required by the Underwriter, which accounts and records shall be open at all
times to inspection and examination by the Underwriter's authorized
representative. All accounts, records and any supplies furnished to the Dealer
by the Underwriter shall remain the property of the Underwriter and shall be
returned to the Underwriter upon demand.
4. FAILURE OF ORDER. The Underwriter reserves the right at any time
to refuse to accept and approve any application for the purchase of shares of
the Funds obtained by the Dealer, and also reserves the right to settle any
claims against the Underwriter arising from the sale of shares of the Funds by
the Dealer and to refund to the investor payments made by him on his shares,
without the Dealer's consent. In the event any order for the purchase of shares
of the Funds is rejected by the Underwriter or any payment received for the
purchase of shares of the Funds cannot be collected or otherwise proves
insufficient or worthless, any compensation paid to the Dealer hereunder shall,
promptly upon notice to the Dealer, be returned by the Dealer to the Underwriter
either in cash or as a charge against the Dealer's account with the Underwriter,
as the Underwriter may elect, and the Dealer hereby agrees that until the
Underwriter receives full reimbursement in cash, the amount of compensation due
and owing the Underwriter shall
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constitute a debt to the Underwriter which the Underwriter may collect by any
lawful means, with interest thereon at the maximum rate possible.
5. DEALER'S UNDERTAKINGS. In offering and selling shares of the
Funds, the Dealer shall comply with all applicable state and federal laws and
regulations and all applicable rules of the National Association of Securities
Dealers, Inc. (the "NASD"). 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 shares of the Funds
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 10.
The Dealer shall not sell shares of the Funds pursuant to this
Agreement unless the then current 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 shares of the Funds except those contained in the then current
Prospectus (and/or Statement of Additional Information, if any) or Approved
Supplemental Sales Literature. In offering and selling shares of the Funds, the
Dealer shall rely solely on the representations contained in the then current
Prospectus (and/or Statement of Additional Information, if any) or Approved
Supplemental Sales Literature.
With respect to any Fund offering multiple classes of shares, the
Dealer shall disclose to prospective investors the existence of all available
classes of such Fund and shall determine the suitability of each available class
as an investment for each such prospective investor.
The Dealer understands and agrees that each shareholder account which
includes shares of any Fund subject to the Fund's contingent deferred sales
charge (as described in the applicable Fund's current Prospectus and Statement
of Additional Information) shall not be included in the Dealer's Omnibus or
house account, if any, but shall be established as a separate shareholder
account in which purchase and redemption transactions are reported separately to
the Underwriter.
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 with respect to the Funds. Dealer shall also immediately
notify the Compliance Department of Underwriter of any complaint by a customer
or prospective customer or regulatory authority regarding the Funds or Dealer's
activities as broker or dealer with respect to the Funds.
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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 the possession of Dealer which pertain to the
Funds or to the business of Underwriter shall be the property of Underwriter,
which at any and all times shall be open to inspection by any duly authorized
representative of Underwriter and at the termination of this Agreement shall be
returned to Underwriter.
6. REPRESENTATIONS AND AGREEMENTS OF THE DEALER. By accepting this
Agreement, the Dealer represents that it: (i) is registered as a broker-dealer
under the Securities Exchange Act of 1934 (the "1934 Act"), as amended; (ii) is
qualified to act as a dealer in each jurisdiction in which it will offer shares
of the Funds; (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.
7. 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 purchases of shares of the
Funds. 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 shares of the Funds, giving special emphasis to the principles
of full and fair disclosure to prospective investors. The Dealer may solicit
sales of shares of the Funds only through properly licensed registered
representatives of the Dealer.
8. INDEMNIFICATION PROVISIONS.
A. INDEMNIFICATION BY UNDERWRITER. The Underwriter hereby
agrees to indemnify and to hold harmless the Dealer 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
the Funds 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, not 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
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authorized pursuant to this Agreement to sell shares of the Funds or who have
access to monies belonging to the Underwriter, including but not limited to
monies submitted with applications for purchase of shares of the Funds or monies
being returned to investors, 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 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 to the extent of the Underwriter's loss due
to activities covered by the bond. If there is any deficiency amount, whether
due to a deductible or otherwise, Dealer shall promptly pay to the Underwriter
such amount on demand, and Dealer hereby indemnifies and holds harmless the
Underwriter 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 its 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
misrepresentation, any unauthorized action or statement, or any other willful,
reckless or negligent violation of any law, regulation, contract or other
arrangement 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 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
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responsibilities, cooperate with the indemnifying party and its counsel. The
indemnifying party's obligations under this Paragraph 8 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 the 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.
9. ASSIGNMENT. This Agreement may not be assigned by the Dealer without
prior written consent of the Underwriter.
10. TERMINATION. Either party may terminate this Agreement at any time
upon giving written notice to the other party 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 shares of the Funds under any
applicable state or federal law or regulation.
11. FIRST CLAIM ON EARNINGS. Underwriter shall have first claim on all
of 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. While Underwriter may release Dealer's earnings while
Dealer owes a debt to Underwriter, this does not mean Underwriter has waived
this right of first claim to Dealer's earnings. Underwriter's claim 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.
12. 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 or the Dealer's business affairs,
customers, 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
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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 out 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
employee, representatives and agents are informed of the contents of this
Paragraph 12 and that they shall comply with its terms;
(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 12, 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.
13. NATURE OF RELATIONSHIP; LIMITATIONS ON DEALER'S AUTHORITY. In
soliciting purchases of shares of the Funds, the Dealer shall act as an
independent contractor and not on behalf or subject to the control of the
Underwriter. Nothing herein shall constitute the Dealer as a partner of the
Underwriter, any other broker-dealer, any registered representative of the
Underwriter or the Funds, or render any such entity liable for obligations of
the Dealer. The Dealer's participation in the sale and distribution of shares of
the Funds as contemplated by this Agreement is not exclusive and the Underwriter
may engage other broker-dealers and/or its registered representatives to
participate in the sale and distribution of shares of the Funds 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 behalf or in its name or to incur any expenses or obligations
in the name of the Underwriter, and Dealer agrees to indemnify and save the
Underwriter harmless from any and all expenses, or obligations incurred by
Dealer in the name of the Underwriter for which Dealer is responsible. Dealer
agrees to pay all expenses incurred by Dealer in connection with Dealer's work.
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14. 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.
15. COUNTERPARTS. This Agreement may be executed in counterparts which,
taken together, shall constitute the whole of the Agreement as between the
parties.
16. 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.
17. WAIVER. No failure, neglect or forbearance on the part of the
Underwriter to require strict performance of this Agreement shall be construed
as a waiver of the rights or remedies of the Underwriter hereunder.
18. SUSPENDING SALES, AMENDING OR CANCELING THIS AGREEMENT. The
Underwriter may, at any time, without notice, suspend sales or withdraw any
offering of shares entirely. The Underwriter reserves the right to amend or
cancel this Agreement upon notice to Dealer. The Dealer agrees that any order to
purchase shares of Funds placed after notice of any amendment to this Agreement
has been sent to the Dealer shall constitute the Dealer's agreement to any such
amendment.
19. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of Minnesota.
DEALER:
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(Name) (NSCC Clearing Number)
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(Tax Identification Number) (NSCC Executing Broker Symbol)
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(Street Address) (Telephone Number)
------------------------------------
(City) (State) (Zip)
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Date of offer: _______________________, 199__
By
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(Signature)
Please Print Name
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Its
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(Title)
Accepted by
ASCEND FINANCIAL SERVICES, INC.
Date of acceptance: _____________________, 19___
By
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(Signature)
Its
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(Title)
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SCHEDULE A
(Standard)
Dealer Compensation Schedule
Effective February 1, 1999
I. Advantus Horizon Fund, Inc.
Advantus Mortgage Securities Fund, Inc.
Advantus Spectrum Fund, Inc.
Advantus Bond Fund, Inc.
Advantus Cornerstone Fund, Inc.
Advantus Enterprise Fund, Inc.
Advantus International Balanced Fund, Inc.
Advantus Venture Fund, Inc.
Advantus Index 500 Fund, Inc.
Advantus Real Estate Securities Fund, Inc. (Only Class A shares available)
A. DEALER COMMISSIONS
DEALER CONCESSION AS PERCENTAGE OF OFFERING PRICE
Class A Shares
Mortgage
Securities Fund Class A Shares
and Bond All Other Class B Shares Class C
Amount of Sale Fund Only Funds All Funds Shares
-------------- --------- ----- --------- ------
Less than $50,000 4.00% 5.00% 4.17% -0-
$50,000 but less
than $100,000 4.00% 4.00% 3.75% -0-
$100,000 but less
than $250,000 3.00% 3.00% 2.92% -0-
$250,000 but less
than $500,000 2.25% 2.25% 2.08% -0-
$500,000 but less
than $1,000,000 1.75% 1.75% 1.25% -0-
$1,000,000 1.00%* 1.00%* n/a* n/a*
* Orders of $1,000,000 or more will be accepted only for Class A Shares.
A-1
B. DISTRIBUTION AND SERVICE FEES
In addition to the Dealer Commissions, the Dealer shall receive
quarterly Distribution and/or Service Fees, equal to a percentage of
average daily net assets attributable to Shares held in accounts by
customers for whom the Dealer is the holder or agent of record or with
whom the Dealer maintains a servicing relationship in accordance with
the following table:
Quarterly Quarterly
Distribution Fee Service Fee
---------------- -----------
CLASS C CLASS A CLASS B CLASS C
------- ------- ------- --------
1/4 of .75% 1/4 of .25% 1/4 of .25% 1/4 of .25%
No Service Fee will be paid on an account unless or until the assets
have been in the account for 15 months or longer. Distribution Fees
are not subject to the 15 month retention requirement.
II. Advantus Money Market Fund, Inc.
No commissions are paid on sales of Advantus Money Market Fund. Shares of
Advantus Money Market Fund acquired in an exchange from any of the other
Advantus Funds may be exchanged at relative net asset values for shares of
any of the other Advantus Funds. Shares of Advantus Money Market Fund not
acquired in an exchange from any of the other Advantus Funds may be
exchanged at relative net asset values plus applicable sales load for
shares of any of the other Advantus Funds. In the event Dealer's customer
exchanges shares of Advantus Money Market Fund for shares of another
Advantus Fund and pays a sales load in connection with such exchange, the
Dealer shall receive a Dealer Commission as described above.
III. Termination of Compensation
All compensation payable to Dealer hereunder, including Service Fees or
Distribution Fees, shall automatically cease upon the termination of the
Advantus Funds Dealer Sales Agreement, for any reason.
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