ADVANTUS FUNDS
DEALER SALES AGREEMENT
THIS AGREEMENT, made this _____ day of ___________, 200__, by and
between Securian 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
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
2
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.
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
3
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 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
4
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 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
5
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 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;
6
(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.
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.
7
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:
----------------------------------- --------------------------------------
(Name) (NSCC Clearing Number)
----------------------------------- --------------------------------------
(Tax Identification Number) (NSCC Executing Broker Symbol)
----------------------------------- --------------------------------------
(Street Address) (Telephone Number)
-----------------------------------
(City) (State) (Zip)
Date of offer:______________ , 200_
By
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(Signature)
Please Print Name
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Its
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(Title)
Accepted by
SECURIAN FINANCIAL SERVICES, INC.
Date of acceptance:__________, 200_
By
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(Signature)
Its
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(Title)
8
SCHEDULE A
(Standard)
Dealer Compensation Schedule
Effective October 25, 2001
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 and Class B
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.
A-2
