PRUDENTIAL SECURITIES INCORPORATED
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
SELECTED DEALER AGREEMENT
,1997
[Dealer Name]
[Address]
Dear [Name]:
As the distributor of shares of certain investment companies presently or
hereafter managed by Prudential Mutual Fund Management, Inc. ("PMF"), shares of
which companies are distributed by us at their respective net asset values plus
sales charges, if any, pursuant to Distribution Agreements between us and each
such company (collectively, the "Funds"), we invite you to participate as a
selected dealer in the distribution of shares of any and all of the Funds as set
forth at Schedule A, upon the following terms and conditions:
1. You are to offer and sell such shares only at the public offering
prices which shall be currently in effect, in accordance with the terms of the
then current prospectus of each Fund. You shall not have authority to act as
agent for any Fund, for us, or for any other dealer in any respect. All orders
are subject to acceptance by us and become effective only upon confirmation by
us.
2. On each sale of shares by you, the total sales charges or discounts,
if any, to selected dealers shall be as stated in Schedule A, which Schedule A
may be amended from time to time in accordance with the provisions of Section
16. Schedule A may be provided in written or electronic format.
Such sales charges or discounts to selected dealers are subject to
reductions under a variety of circumstances as described in the then current
prospectus of the Funds. To obtain these reductions, we must be notified when
the sale takes place which
would qualify for the reduced charge. There is no sales charge or discount to
selected dealers on the reinvestment of dividends or capital gains reinvestment
or on shares acquired in exchange for shares of another Fund. Subject to other
provisions of this Agreement, from time to time an account servicing fee shall
be paid to selected dealer with respect to shares of the Funds. Such account
servicing fees should be payable only on accounts for which you provide personal
service and/or maintenance services for shareholder accounts.
3. As a selected dealer, you are hereby authorized to: (i) place purchase
orders on behalf of your customers or for your own BONA FIDE investment through
us for shares of the Funds which orders are to be effected subject to the
applicable compensation provisions set forth in each Fund's then current
prospectus; and (ii) tender shares directly to the Fund or its agent for
redemption subject to the applicable terms and conditions set forth in each
Fund's then current prospectus.
4. Redemption of shares will be made at the net asset value of such
shares in accordance with the then current prospectus of each Fund.
5. You represent and warrant that:
(a) You are a registered broker dealer with the Securities and
Exchange Commission ("SEC") and a member of the National Association of
Securities Dealers, Inc. ("NASD") and that you agree to abide by the
Conduct Rules of the NASD;
(b) You are a corporation duly organized and existing and in good
standing under the laws of the state, commonwealth or other jurisdiction in
which you are organized and that you are duly registered or exempt from
registration as a broker-dealer in all fifty states, Puerto Rico and the
District of Columbia and that you will not offer shares of any Fund for
sale in any state where we have informed you in writing that they are not
qualified for sale under the Blue Sky laws and regulations of such states
or where you are not qualified to act as a broker-dealer;
(c) You are empowered under applicable laws and by your charter and
by-laws to enter into and perform this Agreement
2
and that there are no impediments, prior or existing, regulatory,
self-regulatory, administrative, civil or criminal matters affecting your
ability to perform under this Agreement;
(d) All requisite corporate proceedings have been taken to authorize
you to enter into and perform this Agreement;
(e) You agree to keep in force appropriate broker's blanket bond
insurance policies covering any and all acts of your employees, officers
and directors adequate to reasonably protect and indemnify Prudential
Securities Incorporated ("PSI") and the Funds against any loss which any
party may suffer or incur, directly or indirectly, as a result of any
action by you, or your employees, officers and directors; and
(f) You agree to maintain the required net capital as warranted by
the rules and regulations of the SEC, NASD and other regulatory
authorities.
6. We represent and warrant that:
(a) We are a registered broker dealer with the SEC and a member of
the NASD and that we agree to abide by the Conduct Rules of the NASD;
(b) We are a corporation duly organized and existing and in good
standing under the laws of the state, commonwealth or other jurisdiction in
which we are organized and that we are duly registered or exempt from
registration as a broker-dealer in all fifty states, Puerto Rico and the
District of Columbia;
(c) We are empowered under applicable laws and by our charter and
by-laws to enter into and perform this Agreement and that there are no
impediments, prior or existing, regulatory, self-regulatory,
administrative, civil or criminal matters affecting our ability to perform
under this Agreement;
(d) All requisite corporate procedures have been taken to authorize
us to enter into and perform this Agreement;
3
(e) We agree to maintain the required net capital as warranted by the
rules and regulations of the SEC, NASD and other regulatory authorities.
7. This Agreement is in all respects subject to Rule 2830 of the Conduct
Rules of the NASD which shall control any provisions to the contrary in this
Agreement.
8. You agree:
(a) To purchase shares on behalf of your customers only through us or
to sell shares only on behalf of your customers.
(b) To purchase shares on behalf of your customers through us only
for the purpose of covering purchase orders already received from
your customers or for your own BONA FIDE investment.
(c) That you will not purchase from, or sell any shares on behalf of,
investors at prices lower than the redemption prices then quoted
by the Funds, subject to any applicable charges as stated in such
Fund's then current prospectus. You shall, however, be permitted
to sell shares for the account of their record owners to the Fund
at the redemption prices currently established for such shares
and may charge the owner a fair commission for handling the
transaction.
(d) That you will not delay placing customers' orders for shares.
(e) That if any shares confirmed to you hereunder are redeemed by the
Funds within seven business days after such confirmation of your
original order, you shall forthwith refund to us the full sales
charge or discount, if any, allowed to you on such sales. We
shall forthwith pay to the Fund our share of the sales charge, if
any, on the original sale, and shall also pay to the Fund the
refund from you as herein provided. Termination or cancellation
of
4
this Agreement shall not relieve you or us from the requirements
of this subparagraph.
(f) To (i) be liable for, (ii) hold PSI, the Funds, PMF and
Prudential Mutual Fund Services, Inc. ("PMFS") (the Funds'
transfer agent), our officers, directors and employees harmless
from and (iii) indemnify us and them from any loss, liability,
cost and expense arising from: (A) any statements or
representations that you or your employees make concerning the
Funds that are inconsistent with either the pertinent Fund's
current prospectus and statement of additional information or any
other written material we have provided to you, (B) any sale of
shares of a Fund in any state, any U.S. territory or the District
of Columbia where the Fund's shares were not properly registered
or qualified, when we have indicated to you that the Fund's
shares were not properly registered and qualified; and (C) any of
your actions relating to the processing of purchase, exchange and
redemption orders and the servicing of shareholder accounts.
Your obligation under this paragraph shall survive the
termination of this Agreement.
(g) As a condition of the receipt of an account servicing fee as
described at Sections 2 and 13, you agree to provide to
shareholders of the Funds personal service and/or maintenance
services with respect to shareholder accounts.
9. We shall not accept from you any conditional orders for shares.
Delivery of certificates, if any, for shares purchased shall be made by the Fund
only against receipt of the purchase price, subject to deduction for sales
charge or discount reallowed to you and our portion of the sales charge on such
sale, if any. If payment for the shares purchased is not received within the
time customary for such payments, the sale may be canceled 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
the Funds resulting from your failure to make payments as aforesaid), or, at our
option, we may sell on your behalf the shares ordered back to the Funds (in
which
5
case we may hold you responsible for any loss, including loss of profit,
suffered by us resulting from your failure to make payment as aforesaid).
10. Shares of the Funds are qualified for sale or exempt from
qualification in the states and territories or districts listed in Schedule B,
which Schedule B may be amended from time to time. Schedule B may be provided
in written or electronic format. Qualification of shares of the Funds in the
various states, including the filing in any state of further notices respecting
such shares, is our responsibility or the responsibility of the Funds.
11. You will not offer or sell any of the shares except under
circumstances that will result in compliance with the applicable Federal and
state securities laws (subject to our obligations set forth in Section 10) and
in connection with sales and offers to sell shares you will furnish to each
person to whom any such sale or offer is made a copy of the applicable then
current prospectus. All out-of-pocket expenses incurred in connection with your
activities under this Agreement will be borne by you.
12. We shall be under no obligation to each other except for obligations
expressly assumed by us herein. Nothing herein contained, however, shall be
deemed to be a condition, stipulation or provision binding any persons acquiring
any security to waive compliance with any provision of the Securities Act of
1933, or of the Rules and Regulations of the SEC or to relieve the parties
hereto from any liability arising under the Securities Act of 1933.
13. Notwithstanding anything to the contrary contained herein, from time
to time during the term of this Agreement PSI may (but is not hereby obliged to)
make payments to you, in consideration of your furnishing personal service
and/or maintenance services for shareholder accounts with respect to the Funds.
Any such payments made pursuant to this Section 13 shall be subject to the
following terms and conditions:
(a) Any such payments shall be in such amounts as we may from time to
time advise you in writing but in any event not in excess of the
amounts permitted, if any, by each Fund's Plan of Distribution in
effect. Any such payments shall be in addition to
6
the selling concession, if any, allowed to you pursuant to this
Agreement.
(b) The provisions of this Section 13 relate to each Plan of
Distribution adopted by the Fund pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (the "Act").
(c) The provisions of this Section 13 and any other related
provisions applicable to a Fund shall remain in effect for not
more than a year and thereafter for successive annual periods
only so long as such continuance is specifically approved at
least annually in conformity with Rule 12b-1 under the Investment
Company Act ("Act"). The provisions of this Section 13 shall
automatically terminate with respect to a particular Plan in the
event of the assignment (as defined by the Act) of this Agreement
or in the event such Plan terminates or is not continued or in
the event this Agreement terminates or ceases to remain in
effect. In addition, the provisions of this Section 13 may be
terminated at any time, without penalty, by either party with
respect to any particular Plan on not more than 60 days' nor less
than 30 days' written notice delivered or mailed by registered
mail, postage prepaid, to the other party.
14. You and your agents and employees are not authorized to make any
written or oral representations concerning the Funds or their shares except
those contained in or consistent with the prospectus and such other written
materials we provide relating to the Funds. We shall supply prospectuses,
reasonable quantities of supplemental sales literature, sales bulletins, and
additional information as issued and/or requested by you. You agree not to use
other advertising or sales material relating to the Funds, unless forwarded to
PSI's Marketing Review Department for review prior to use and approved in
writing by us in advance of such use. Any printed information furnished by us
other than the then current prospectuses and SAIs for the Funds, periodic
reports and proxy solicitation materials is our sole responsibility and not the
responsibility of the Funds, and you agree that the Funds shall
7
have no liability or responsibility to you in these respects unless expressly
assumed in connection therewith.
15. Either party to this Agreement may terminate the Agreement by giving
30 days written notice to the other. Such notice shall be deemed to have been
given on the date on which it was either delivered personally to the other party
or any officer or partner thereof, or was mailed postpaid or delivered to a
telegraph office for transmission to the other party at his or its address as
shown below. This Agreement may be amended by us at any time and your placing
of an order after the effective date of any such amendment shall constitute your
acceptance thereof.
16. This Agreement shall be construed in accordance with the laws of the
State of New York and shall be binding upon both parties hereto when signed by
us and accepted by you in the space provided below.
17. If a dispute arises between you and us with respect to this Agreement
which you and we are unable to resolve ourselves, it shall be settled by
arbitration in accordance with the then-existing NASD Code of Arbitration
Procedures ("NASD Code"). The parties agree, that to the extent permitted by
the NASD Code, the arbitrator(s) shall be selected from the securities industry.
8
18. This Agreement is in full force and effect as of the date hereof and
supersedes any previous agreements relating to the subject matter hereof.
Very truly yours,
PRUDENTIAL SECURITIES INCORPORATED
By:
------------------------
Title:
------------------------
Firm Name:
----------------------
Address:
---------------------
City: State: Zip Code:
--------------------- --------- -------------------
ACCEPTED BY (signature)
--------------------------------------------------
Name (print) Title
---------------------------- ----------------------------
Date 199 Phone #
--------------------------- -- ----------------------------
Please return two signed copies of this Agreement
(one of which will be signed above by us and
thereafter returned to you) in the accompanying
return envelope to:
Prudential Securities Incorporated
Attention: Xxxxxxx X. Xxxxxx
National Sales Division
Three Gateway Center
000 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000-4077
9
