ADVANTUS FUNDS
DEALER SALES AGREEMENT
THIS AGREEMENT, made this _____ day of ________________, 19___, by and
between MIMLIC Sales Corporation, 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; REGISTRATION STATEMENT; PROSPECTUS.
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 supplemental sales literature created by the
Underwriter 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 Discount
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.
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
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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 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,
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.
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.
6. DEALER'S UNDERTAKINGS. 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). 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 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 12.
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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.
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 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.
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 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 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; 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 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
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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. 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 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
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.
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
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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.
11. ASSIGNMENT AND TERMINATION. This Agreement may not be assigned by
the Dealer without consent of the Underwriter.
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. 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. Dealer has no right to start any legal proceedings on
Underwriter's behalf or in its name.
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 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
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(Signature)
Please Print Name
--------------------------------------------------
Its
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(Title)
Accepted by
MIMLIC SALES CORPORATION
Date of acceptance: , 19
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By
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(Signature)
Its
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(Title)
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SCHEDULE A
Dealer Compensation Schedule
Effective March 1, 1995
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.
(International Fund offers only Class A and Class C Shares.)
A. DEALER COMMISSIONS
DEALER CONCESSION AS PERCENTAGE OF OFFERING PRICE
-------------------------------------------------
Class A Class B Class C
Amount of Sale Shares Shares Shares
-------------- ------- ------- -------
Less than $50,000 4.50% 3.75% -0-
$50,000 but less
than $100,000 4.05 3.38 -0-
$100,000 but less
than $250,000 3.15 2.63 -0-
$250,000 but less
than $500,000 2.25 1.88 -0-
$500,000 but less
than $1,000,000 1.35 1.13 -0-
$1,000,000 and over .9* n/a* n/a*
* Orders of $1,000,000 or more will be accepted only for Class A Shares. MIMLIC
does not receive a sales load on sales of Class A Shares of $1,000,000 or more.
The Dealer will receive the commission indicated on such sales; provided,
however, that if the customer redeems any
portion of such investment within 18 months after purchase, the pro rated
commission paid on the portion redeemed shall be charged back against the
Dealer's compensation account in an amount determined as follows:
Percentage of Commission Month After Sale
Charged Back When Redemption Occurs
------------ ----------------------
100% 0-6
66 2/3 7-12
33 1/3 13-18
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:
Distribution Fees Service Fees
----------------- ------------
Class A Class C Class B Class C
------- ------- ------- -------
1/4 of .25% 1/4 of .75% 1/4 of .25% 1/4 of .25%
II. Advantus Money Market Fund, Inc.
MIMLIC does not receive a sales load 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 Discount as described
above.
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