LIFEUSA FUNDS
DEALER SALES AGREEMENT
THIS AGREEMENT, made this ___ day of _______ , 19 ___ , by and between
LifeUSA Securities, Inc. (LUSI) a Minnesota corporation (the "Underwriter"),
having its principal office at 000 Xxxxx Xxxxxxx 000, Xxxxxxxxxxx, XX
00000-0000, 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; Registration Statement; Prospectus.
Subscriptions solicited by the Dealer will be accepted only in the amounts and
on the terms which are set forth in then current Prospectus (and/or Statement of
Additional Information, in 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 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 given 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 jurisdiction 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 Statement of Additional
Information, if any) or any supplemental sales literature created by the
Underwriter as the Dealer may reasonably request. The Dealer shall provide the
Underwriter and/or the Funds with any information the Underwriter or the Funds
may request to satisfy the registration and/or qualification requirements needed
to offer Fund shares in each jurisdiction where the Dealer offers such shares
for sale.
2. Dealer Discount and Other Compensation. The Dealer shall receive, for
sales of shares of the Funds' common stock, the applicable Dealer Discount or
other compensation as set forth in Schedule A attached hereto and made a part
thereof. Additionally, with respect to certain of the Funds, the Dealer may be
entitled to receive additional compensation from the Underwriter upon such terms
and conditions and in such amounts as set forth in Schedule A hereto to
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.
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 form 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 Fund to the Dealer in writing
on the day such order was placed.
All monies or other settlements received by the Dealer for or on behalf of
the Fund shall be received by the Dealer in fiduciary capacity in trust for such
Fund and shall be immediately transmitted to the Fund, 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
a Fund to the extent required by a Fund, which accounts and records shall be
open at all times to inspection and examination by a Fund's authorized
representative. All accounts, records and any supplies furnished to the Dealer
by a Fund shall remain the property of a Fund and shall be returned to a Fund
upon demand.
4. Failure of Order. The Funds reserve 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 reserve the right to settle any claims against
the Funds 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 Funds, such order is canceled or otherwise altered, 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, for any
payments, losses or expenses associated with such order, 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, with interest
thereon at the maximum rate possible.
5. General. 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 understands that Dealer has no
authority to incur any expenses or obligations in the name of the Underwriter,
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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. 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.
6. Dealer's Undertakings. No person is authorized to make any
representations concerning shares of the Funds except those contained in the
then current Prospectus (and/or Statement of Additional Information, if any).
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. 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). In offering and
selling shares of the Funds, the Dealer shall comply with all applicable state
and federal laws and regulation sand 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 12.
7. 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, 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.
8. Dealer's Associates. 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.
9. 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
"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 Act, at common law or otherwise (including any legal or other expenses
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 any untrue 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; provided
that this indemnity agreement is subject to the condition that notice be given
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as provided below. 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 Underwriter on account of its agreement
contained in the preceding sentence, such Defendant shall with reasonable
promptness give notice in writing of such suit to the Underwriter, but failure
so to give such notice shall not relieve the Underwriter from any liability that
it may have to the Defendants otherwise than on account of said indemnity
agreement. The Underwriter 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, but if the Underwriter elects to assume the defense, such defense shall be
conducted by counsel chosen by it and satisfactory to the Defendants who are
parties to such suit or against whom such claim is presented. If the Underwriter
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 Underwriter, 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 Underwriter and its
counsel. The Underwriter agrees to notify the Dealer promptly, as soon as it has
knowledge thereof, of the commencement of any litigation or proceedings against
the Underwriter or the Funds or any of their directors or officers, in
connection with the offer or sale of shares of the Funds to the public. The
Underwriter's obligation under this paragraph shall survive the termination of
this Agreement.
10. 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
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. The 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 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 Securities Act of 1933 (hereinafter in this
paragraph 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 Securities Act of 1933, the Securities Exchange Act of 1934,
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
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misrepresentations, 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.
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
Dealer on account of its agreement contained in the preceding sentence, such
Defendant shall with reasonable promptness give notice in writing of such suit
to the Dealer, but failure to so give such notice shall not relieve the Dealer
from any liability that it may have to the Defendants otherwise than on account
of this indemnity agreement. The Dealer 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
Dealer 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 Dealer; 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 Dealer and its counsel. The
Dealer's obligations under this paragraph shall survive the termination of this
Agreement.
12. 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.
13. First Claim on Earnings and Legal Proceedings. In order to secure the
full and prompt payment by Dealer of any and all indebtedness due from the
Dealer to Underwriter, Underwriter will have a first security interest in and
lien on any compensation due at any time to Dealer from Underwriter under this
Agreement. This means that Underwriter, as and when it elects, may withhold
payment to Dealer of all or any part of Dealer's compensation, and such withheld
amounts will be applied to the reduction of any debt owed by Dealer to
Underwriter. Release of any part of Dealer's compensation while a debt is owed
by Dealer to Underwriter will not constitute a waiver of Underwriter's first
security interest in Dealer's compensation. Underwriter's claim to Dealer's
compensation takes precedence over claims of Dealer's other creditors to the
full extent permitted by applicable law. Dealer has no right to commence any
legal proceedings on behalf of or in the name of Underwriter.
14. 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.
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15. 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.
16. 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 the 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.
17. Governing Law. This Agreement shall be construed in accordance with the
laws of the State of Minnesota.
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DEALER:
------------------------------- --------------------------------------
(Name) (NSCC Clearing Number)
-------------------------------- --------------------------------------
(Tax Identification Number) (NSCC Executing Broker Symbol)
-------------------------------- --------------------------------------
(Street Address) (Telephone Number)
------------------------------------
(City) (State) (Zip)
Date of offer: ________________ , 19 ___
By: ________________________________________________________________________
(Signature)
Please Print Name __________________________________________________________
Its:__________________________________________________________________________
(Title)
Accepted by:
Date of acceptance: ________________________ , 19 ___
By: ________________________________________________________________________
(Signature)
Its: ________________________________________________________________________
(Title)
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SCHEDULE A
Dealer Compensation Schedule
Effective February 1, 1997
I. LifeUSA Aggressive Growth Portfolio
LifeUSA Growth Portfolio
LifeUSA Global Portfolio
LifeUSA Balanced Portfolio
LifeUSA Current Income Portfolio
LifeUSA Principal Preservation Portfolio
A. Dealer Commissions
------------------
Amount of Sale
--------------
Less than $100,000 5.00%
$100,000 but less
than $250,000 3.50%
$250,000 but less
than $500,000 2.25%
$500,000 but less
than $1,000,000 1.50%
$1,000,000 and over .25%
B. Distribution Fees
-----------------
In addition to the Dealer Commissions, the Dealer shall receive
quarterly Distribution 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 or record in the amount of 1/4 of .25%.
II. LifeUSA Principal Preservation Portfolio
----------------------------------------
LUSI does not receive a sales load on sales of LUSA Principal
Preservation Portfolio. Shares of Principal Preservation Portfolio acquired in
an exchange from any of the other LUSA Funds may be exchanged at relative net
asset values for shares of any of the other LUSA Funds. Shares of LUSA Principal
Preservation Portfolio acquired in exchange from any of the other LUSA Funds may
be exchanged at relative net asset values plus applicable sales load for shares
of any of the other LUSA Funds. In the event Dealer's customer exchanges shares
of LUSA Principal Preservation Portfolio for shares of another LUSA Fund and
pays a sales load in connection with such exchange, the Dealer shall receive a
Dealer Discount as described above.
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