6
PRINCOR FINANCIAL SERVICES CORPORATION
The Principal Financial Group
Xxx Xxxxxx, Xxxx 00000-0000
(000) 000-0000
PRINCIPAL MUTUAL FUNDS
SELECTED DEALER SELLING AGREEMENT
Selected Dealer Selling Agreement between Princor Financial Services
Corporation ("Princor", "We" or "Us") and
_________________________________________________________ ("Dealer" or "You")
dated as of _________________.
As Distributor and Principal Underwriter for the Principal Mutual Funds (each
Fund and any series of a Fund hereinafter collectively referred to as the
"Funds" and individually as a "Fund"), each an open-end investment company or a
series of such a company of which we are, or may become, Distributor and whose
shares are offered to the public at an offering price which may or may not
include a sales charge, we invite you to become a Selected Dealer to distribute
Class A and Class B shares of the Funds.
1. Each Fund offers Class A Shares. Some Funds also offer Class B Shares.
Class A Shares bear a front-end load, or, in certain cases, a deferred
load (the "Class A Shares"). Class B Shares bear a deferred load (the
"Class B Shares"). (The Class A Shares and Class B Shares are
collectively referred to as the "Shares.") Class A Shares of the Money
Market Fund are offered at net asset value, without any sales charge.
2. Orders for Shares received from you and accepted by us will be at the
current public offering price applicable to each order as established by
the then current prospectus of each Fund. Each Fund reserves the right to
withdraw shares from sale temporarily or permanently. All orders are
subject to acceptance or rejection by us and the Fund, each in its sole
discretion.
3. The sales charge applicable to any sale of Class A Shares by you and the
dealer discount applicable to any order from you for the purchase of
Class A Shares accepted by us shall be that percentage of the applicable
public offering price determined as set forth in the Funds' then current
prospectus and/or statement of additional information.
The rates of any sales charge and/or dealer discount for Class A Shares
are subject to change by us, and any orders placed after the effective
date of such change will be subject to the rate(s) in effect at the time
of receipt of the payment by us.
Any such sales charges and discounts to selected dealers are subject to
reductions under a variety of circumstances as may be described in the
Funds' then current prospectus and/or statement of additional
information. To obtain any such reductions, we must be notified when a
sale takes place which would qualify for the reduced charge. You are
responsible for determining whether investors are entitled to purchase
Class A shares at a reduced sales charge, or at no sales charge, in
accordance with the disclosure in the Fund's prospectus, and notify us of
this eligibility at the time shares are purchased. There is currently no
sales charge, selling concession or discount on purchases of shares by
the reinvestment of dividends or capital gains distributions, or when
there is a transfer from one Fund to another Fund or from one account to
another account.
4. If you sell Class B Shares, we will pay you a sales commission equal to
the percentage of the aggregate net asset value of such classes of shares
sold as set forth in the Funds' then current prospectus and/or statement
of additional information.
The rates of any sales charge and/or dealer discount for Class B Shares
are subject to change by us, and any orders placed after the effective
date of such change will be subject to the rate(s) in effect at the time
of receipt of the payment by us.
We shall be entitled to any contingent deferred sales charges ("CDSC") on
any shares sold. If, with respect to any Shares sold by you, any CDSC is
waived as provided in the Funds' then current prospectus and/or statement
of additional information, then in any such case you shall remit to us
promptly upon notice an amount equal to the commissions or a portion of
the commission paid on such shares.
5. Redemption of shares will be made at the net asset value of such shares
in accordance with the Funds' then current prospectus and statement of
additional information, less any applicable CDSC payable to us.
6. All of the Funds (except the Money Market Fund for its Class A shares)
have adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1
under the Investment Company Act of 1940. Each Agreement defines service
to be provided by Selected Dealers for which they will be compensated
pursuant to the Plan.
(a) As a Selected Dealer, you agree to provide distribution
assistance and administrative support services in connection with
the distribution of shares of the Funds to customers who may from
time to time directly or beneficially own shares, including but
not limited to distributing sales literature, answering routine
telephone or written customer inquiries regarding the Funds,
assisting in the establishment and maintenance of accounts in the
Funds and in the processing of purchases and redemptions of
Shares, making the Funds' investment plans and dividend options
available, assisting shareholders with tax information and
providing such other information and services in connection with
the distribution of Fund Shares as may be reasonably requested
from time to time.
(b) For such services, you will be compensated in accordance with the
then current prospectus of the Funds.
(c) The Plan may be terminated at any time without payment of any
penalty by any Fund in accordance with the rules governing such
plans promulgated by the Securities and Exchange Commission.
(d) The provisions of the Plan are incorporated herein and made a part
hereof by reference, and will continue in full force and effect so
long as its continuance is approved at least annually pursuant to
Rule 12b-1.
7. Each party to this Agreement represents that it currently is and, while
this Agreement is in effect, will continue to be a member in good standing
of the National Association of Securities Dealers, Inc. ("NASD") and agrees
to abide by all Rules and Regulations of that Association, including the
NASD Conduct Rules. If you are a foreign dealer, not eligible for
membership in the NASD, you still agree to abide by the Rules and
Regulations of the NASD. We both agree to comply with all applicable state
and federal laws, rules and regulations of the Securities and Exchange
Commission and other authorized United States or foreign regulatory
agencies. You further agree that you will not sell, offer for sale, or
solicit shares of the Funds in any state where they have not been qualified
for sale. You will solicit applications and sell shares only in accordance
with the terms and on the basis of the representations contained in the
appropriate prospectus, statement of additional information and any
supplemental literature furnished by us.
8. You represent that you are currently a member of SIPC and, while this
Agreement is in effect, will continue to be a member of SIPC. You agree
to notify us immediately if your SIPC membership status changes.
9. IT IS AGREED
(a) That neither of us shall withhold placing customers' orders for
shares so as to profit as a result of such withholding.
(b) We shall not purchase shares from the Funds except for the
purpose of covering purchase orders already received, and you
shall not purchase shares of the Funds except for the purpose of
covering purchase orders already received by you or for your own
bona fide investment purposes, provided, however, any shares
purchased for your own bona fide investment purposes will not be
resold except through redemption of the Funds. Delivery of
certificates, if any, for shares purchased shall be made by a
Fund only against receipt of the purchase price. If payment for
the shares purchased and all necessary applications and documents
required by the Funds or us are not received within five business
days or such shorter time as may be required by law, the sale may
be cancelled forthwith without any responsibility or liability on
our part or on the part of the Funds (in which case you will be
responsible for any loss, including loss of profit, suffered by a
Fund resulting from your failure to make payments or provide
documents as aforesaid), or, at our option, we may cause the
shares ordered to be redeemed by the relevant Fund (in which case
we may hold you responsible for any loss).
(c) We shall accept only unconditional orders. Any right granted to
you to sell shares on behalf of the Funds will not apply to shares
issued in connection with the merger or consolidation of any other
investment company with a Fund or its acquisition, purchase or
otherwise, of all or substantially all the assets of any
investment company or substantially all the outstanding shares of
any such company. Also, any such right shall not apply to shares
issued, sold, or transferred, whether Treasury or newly issued
shares, that may be offered by a Fund to its shareholders as stock
dividends or splits for not less than "net asset value."
(d) We reserve the right to reject any order or application for shares
or to withdraw the offering of shares entirely, and to change any
sales charge and dealer concession, provided that no such change
shall affect concessions on orders accepted by us prior to notice
of such change, unless such change results from a reduction in
sales charges because of legal requirements.
(e) You shall not purchase shares of a Fund from a shareholder at a
price per share which is lower than the current net asset value
per share which is next computed after the receipt of the tender
of such shares by the shareholder.
(f) If shares of the Fund are tendered for redemption within seven
business days after confirmation by us of your original purchase
order for such shares, (i) you shall immediately refund to us the
full concession allowed to you on the original sale, and (ii) we
shall pay to the Fund our share of the "sales charge" on the
original sale by us, and shall also pay to the Fund the refund
which we received under (i) above. You shall be notified by us of
such redemption within ten days of the date on which proper
request for redemption is delivered to us or the Fund. Termination
or cancellation of this Agreement shall not relieve you or us from
requirements of this subparagraph (f).
(g) This Agreement may not be assigned or transferred in any manner
including by operation of law.
10. We will furnish you, without charge, reasonable quantities of
prospectuses and sales material or supplemental literature relating to
the sale of shares of the Funds.
11. In all sales of shares, you act as principal and are not employed by us as
broker-agent or employee. You are not authorized to act for us nor to make
any representations in our behalf. In purchasing or selling shares
hereunder you are entitled to rely only upon the current prospectus,
statement of additional information and supplemental literature approved in
writing by us. In the offer and sale of shares of the Funds, you shall not
use any prospectus or supplemental literature not approved in writing by
us. No person is authorized to make any representations concerning shares
of the Funds except those contained in a current prospectus, statement of
additional information and supplemental literature approved in writing by
us. You will use your best efforts in the promotion of sales of shares and
will be responsible for the proper instruction and training of all sales
personnel employed by you. You are responsible for determining whether a
Fund, and which share class of that Fund, is suitable for your customer.
12. Confidentiality. We acknowledge that, in the course of performing our
duties under this Agreement or otherwise, we may receive or learn
information about individuals who have applied for or purchased financial
products or financial services from Financial Institution*, including, but
not limited to, personal, financial and/or health information
("Confidential Information"). We agree that we will keep all Confidential
Information strictly confidential; and, that we will not use or disclose to
any affiliate or third party, either orally or in writing, any Confidential
Information for any purpose other than the purpose for which the
Confidential Information was provided to you. Without limiting any of the
foregoing, we agree to take all precautions that are reasonably necessary
to protect the security of the Confidential Information. We agree to
restrict access to Confidential Information to those employees who need to
know that information to perform duties under this Agreement. We further
agree that, upon request of Financial Institution, we will return to the
Financial Institution all tangible items containing any Confidential
Information, including all copies, abstractions and compilations thereof,
without retaining any copies of the items required to be returned. The
obligations of this paragraph extend to the employees, agents, affiliates
and contractors of Dealer, and we shall inform such persons of their
obligations hereunder.
* "Financial Institution" is defined here to mean "any institution the
business of which is engaging in activities that are financial in
nature or incidental to such financial activities as described in
section 4(k) of the Bank Holding Company Act of 1956 (12 USC 1843(k)."
Notification obligation. Upon learning of any unauthorized disclosure or
use of any Confidential Information, we shall notify the Financial
Institution promptly and cooperate fully with Financial Institution to
protect such Confidential Information.
Disclosure required by law. If we believe it is required by law, a
subpoena or court order to disclose any Confidential Information, then
we, prior to any disclosure, shall promptly notify the Financial
Institution in writing attaching a copy of the subpoena, court order or
other demand and shall make all reasonable efforts to allow the Financial
Institution an opportunity to seek a protective order or other judicial
relief.
Compliance with law. In connection with our performance under this
Agreement, we agree to comply with all applicable laws, including but not
limited to laws protecting the privacy of non-public personal information
about individuals.
Survival. The provisions of this Agreement relating to confidentiality
shall survive termination or expiration of this Agreement.
13. You will indemnify, defend, and hold harmless our firm and all of its
affiliates, and their officers, directors, employees, agents, and assignees
against all losses, claims, demands, liabilities, and expenses, including
reasonable legal and other expenses incurred in defending such claims or
liabilities, whether or not resulting in any liability to any of them, or
which they or any of them may incur, including but not limited to alleged
violations of the Securities Act of 1933, as amended and/or to the
Securities Exchange Act of 1934, as amended, arising out of: (i) the offer
or sale of any securities pursuant to this Agreement, or (ii) your breach
of any of the terms and conditions of this Agreement, other than any claim,
demand, or liability arising from any untrue statement or alleged untrue
statement of a material fact contained in a prospectus for the Funds, as
filed and in effect with the SEC, or any amendment or supplement thereto,
or in any application prepared or approved in writing by our counsel and
filed with any state regulatory agency in order to register or qualify
under the securities laws thereof (the "blue sky applications"), or which
shall arise out of or be based upon any omission or alleged omission to
state therein a material fact required to be stated in the prospectus or
any of the blue sky applications or which is necessary to make the
statements or a part thereof not misleading, which indemnity provision
shall survive the termination of this Agreement.
We will indemnify, defend, and hold harmless your firm and all of its
affiliates, and their officers, directors, employees, agents, and
assignees against all losses, claims, demands, liabilities, and expenses,
including reasonable legal and other expenses incurred in defending such
claims or liabilities, whether or not resulting in any liability to any
of them, or which they or any of them may incur, including but not
limited to alleged violations of the Securities Act of 1933, as amended
and/or to the Securities Exchange Act of 1934, as amended, arising out of
(i) our breach of any of the terms and conditions of this Agreement or
(ii) any untrue statement or alleged untrue statement of a material fact
contained in a prospectus for the Funds, as filed and in effect with the
SEC, or any amendment or supplement thereto, or in any blue sky
application, or which shall arise out of or be based upon any omission or
alleged omission to state therein a material fact required to be stated
in the prospectus or any of the blue sky applications or which is
necessary to make the statements or a part thereof not misleading.
The provisions of this Section 13 shall survive the termination of this
agreement.
14. The parties acknowledge that they are financial institutions subject to
the USA Patriot Act of 2001 and the Bank Secrecy Act (collectively, the
"AML Acts"), which require among other things, that financial
institutions adopt compliance programs to guard against money laundering.
The parties further acknowledge that they are in compliance and will
continue to comply with the AML Acts and applicable anti-money laundering
rules of self-regulatory organizations, including 3011 of the NASD, in
all relevant respects.
You represent that you have adopted a Customer Identification Program in
compliance with applicable laws and will verify the identity of each of
your customers who opens an account with you on or after October 1, 2003
and who invest in shares of the Funds.
15. No obligation not expressly assumed by us in this Agreement shall be
implied.
16. Either party to this Agreement may terminate this Agreement by written
notice to the other party. We may modify this Agreement at any time by
written notice to you. Any notice shall be deemed to have been given on
the date upon which it was either delivered personally or by fax or
e-mail transmission to the other party or to any office or member
thereof, or was mailed post-paid to his or its address as shown herein.
17. 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 herein.
18. This Agreement shall be construed in accordance with the laws of the
State of Iowa and shall be binding upon both parties hereto when signed
by both of us in the spaces provided below. This Agreement shall not be
applicable to shares of the Funds in any state in which those shares are
not qualified for sale.
19. This Agreement shall be binding upon both parties hereto when executed by
both parties and supersedes any prior agreement or understanding between
us and you with respect to the sale of the shares and any of the Funds.
20. If the foregoing represents your understanding, please so indicate by
signing in the proper space below.
PRINCOR FINANCIAL SERVICES CORPORATION
By:
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Title: ______________________________________________
We accept the offer set forth above, which constitutes a Selling Agreement with
us.
BY:
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Signature
Please type or print name
TITLE:
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DEALER:
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ADDRESS:
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E-MAIL ADDRESS: _________________________________________________
DATE:
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