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EXHIBIT 6(B)
FORM OF SELECTED DEALER AGREEMENT
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[X.X. XXXXXXX AND COMPANY LETTERHEAD]
Date:_________________________
Re: LETTER AGREEMENT FOR CONTINUOUS OFFERING OF PRINCIPAL PRESERVATION
SHARES BY SELECTED DEALERS
Ladies and Gentlemen:
X.X. Xxxxxxx and Company, Inc. (the "Company") desires to enter into an
agreement with you for making available to your customers and reselling to us
shares of each series of Principal Preservation Portfolios, Inc. ("Principal
Preservation") of which we are, or may become, Distributor (hereinafter
collectively referred to as the "Portfolios" and individually as a "Portfolio")
and whose shares are offered to the public at an offering price which may or may
not include a front-end sales charge or a contingent deferred sales charge
(hereinafter referred to as "Shares"). Upon acceptance of this Agreement by you,
you understand that you may offer Shares and act as authorized agent for your
customers' purchase of Shares from us, subject, however, to all of the following
terms and conditions, and to our right, without notice, to suspend or terminate
the sale of the Shares of any one or more of the Portfolios:
1. Shares will be made available at the current offering price
in effect at the time the order of such Shares is confirmed and accepted by us
at our office in West Bend, Wisconsin. All purchase orders, resale orders and
applications of your customers submitted by you are subject to acceptance or
rejection in our sole discretion and, if accepted, each purchase will be deemed
to have been consummated at our office in West Bend, Wisconsin.
2. You agree to abide by the provisions of the Investment
Company Act of 1940, as amended (the "1940 Act"), the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended, and all applicable
rules and regulations of the Securities and Exchange Commission ("SEC") and the
NASD, including without limitation, the NASD Rules of Fair Practice, whether or
not you are a broker-dealer subject to the jurisdiction of the SEC and NASD. You
further agree to comply with all applicable state and Federal laws and the rules
and regulations of authorized regulatory agencies. You agree that you will not
offer Shares in any state or other jurisdiction unless we have advised you in
advance that such sale is exempt from the qualification requirements of such
state's securities laws.
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3. You will make available to your customers Shares of any
Portfolio only in accordance with the terms and conditions of its then current
Prospectus and Statement of Additional Information (collectively referred to as
the "Prospectus") and you will make no representations about such Shares not
included in said Prospectus or in any authorized supplemental material supplied
or authorized by us. You will use reasonable efforts in the offer of Shares and
agree to be responsible for the proper instruction and training of all brokerage
personnel in this area employed by you, in order that the Shares will be offered
in accordance with the terms and conditions of this Agreement and all applicable
laws, rules and regulations. You agree to hold us harmless and indemnify us,
Principal Preservation and our and their respective officers, directors and
employees in the event that you or any of your current or former employees or
agents should violate any law, rule or regulation, or any provision of this
Agreement, which violation may result in any loss or liability to us, our
affiliates or any Portfolio. If we determine to refund any amounts paid by an
investor by reason of any such violation, you shall promptly return to us on
demand any agency commissions previously paid by us to you with respect to the
transaction for which the refund is made. Furthermore, you agree to indemnify
us, our affiliates and Principal Preservation against any and all claims,
demands, controversies, actions, losses, damages, liabilities, expenses,
arbitrations, complaints or investigations, including without limitation,
reasonable attorneys' fees and court costs that are the result of or arise
directly or indirectly, in whole or in part, from us, our affiliates or
Principal Preservation acting upon instructions for the purchase, exchange or
resale of uncertificated book shares received through our manual or automated
phone system or the Fund/SERV program of National Securities Clearing
Corporation; provided such loss, liability or damages are not the result of the
gross negligence, recklessness or intentional misconduct of us, our affiliates
or Principal Preservation. All expenses which you incur in connection with your
activities under this Agreement shall be borne by you. In connection with all
purchase or resale orders, you are acting as agent for your customer and each
transaction is for the account of your customer and not for your own account.
Termination or cancellation of this Agreement shall not relieve you from the
requirements of this paragraph as to transactions or occurrences arising prior
to such termination.
4. You will be entitled to agency commissions from the Company
on the sale of Shares as described in the current Prospectus for the relevant
Portfolio at the time of the sale. The Company reserves the right to increase,
decrease or discontinue payment of agency commissions for sale of Shares at any
time in its sole discretion upon written notice to you and any orders placed
after the effective date of such change will be subject to the rate(s) of agency
commissions in effect at the time of receipt of the payment by us.
5. Payments for purchases of Shares made by telephone or wire
order (including purchase orders received through our manual or automated phone
system, or via
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the Fund/SERV program of National Securities Clearing Corporation), and all
necessary account information required by us to establish an account or to
settle a resale order, including, without limitation, the tax identification
number of the purchaser, certified either by the purchaser or by you, shall be
provided to us and received by us within three business days after our
acceptance of your order or such shorter time as may be required by law. If such
payment or other settlement information are not timely received by us, you
understand that we reserve the right, without notice, to cancel the purchase or
resale order, or, at our option in the case of a purchase order, to sell the
Shares ordered by you back to the relevant Portfolio, and in either case you may
be held responsible for any loss, including loss of profit, suffered by us or
any relevant Portfolio resulting from your failure to make the aforesaid timely
payment or settlement. If sales of any Portfolio's Shares are contingent upon
the Portfolio's receipt of Federal Funds in payment therefor, you will forward
promptly to us any purchase orders and/or payments received by you for such
Shares from your customers. With respect to purchase orders of uncertificated
book shares placed via Fund/SERV, you shall retain in your files all
applications and other documents required by us to establish an account or to
settle a resale order. You will provide us with the original of such documents
at our request.
6. You agree that you will act as agent with respect to Shares
only if they are purchased from us or repurchased by us from your customers. If
Shares are purchased from us by your customers, you warrant that such purchases
are only for investment. If Shares are purchased by you from your customers for
resale to us, you agree that such customers will be paid not less than the
applicable redemption or repurchase price then quoted by the Portfolio.
7. We may consider any order you place for Portfolio Shares to
be the total holding of Shares by the investor, and we may assume that the
investor is not entitled to any reduction in sales price beyond that accorded to
the amount of that purchase order as determined by the schedule set forth in the
then current Prospectus, unless you advise us otherwise when you place the
order.
8. You may place resale orders with us for Shares owned by
your customers, but only in accordance with the terms of the applicable
Prospectus. You understand and agree that by placing a resale order with us by
wire or telephone (including resale orders for uncertificated book shares placed
via our manual or automated phone system or via the Fund/SERV program of
National Securities Clearing Corporation), you represent to us that a request
for the redemption of the Shares covered by the resale order has been delivered
to you by the registered owner(s) of such Shares, and that such request has been
executed in the manner and with the signature(s) of such registered owner(s)
guaranteed as required by the then current Prospectus of the applicable
Portfolio. Such resale orders shall be subject to the following additional
conditions:
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(a) You shall furnish us with the exact
registration and account number to be
redeemed at the time you place a resale
order by wire or telephone. Other than for
resale orders of uncertificated book shares
placed via Fund/SERV, you shall tender to
us, within three business days of your
placing such resale order: (i) a stock power
or letter, duly signed by the registered
owner(s) of the Shares which are the subject
of the order, duly guaranteed, (ii) any
Share certificates required for such
redemption, and (iii) any additional
documents which may be required by the
applicable Portfolio or its transfer agent,
in accordance with the terms of the then
current Prospectus of the applicable
Portfolio and the policies of the transfer
agent. With respect to resale orders of
uncertificated book shares placed via
Fund/SERV, you shall retain in your files
all documents required by us to effect such
trans action. You will provide us with the
original of such documents at our request.
(b) The resale price will be the next net asset
value per share of the Shares computed after
our receipt, prior to the close of the New
York Stock Exchange ("NYSE"), of an order
placed by you to resell such Shares, except
that orders placed by you after the close of
the NYSE on a business day will be based on
the Portfolio's net asset value per share
determined that day, but only if such orders
were received by you from your customer
prior to the close of business of the NYSE
that day and if you placed your resale order
with us prior to our normal close of
business that day.
(c) In connection with a resale order you have
placed, if you fail to make delivery of all
required certificates and documents in a
timely manner, as stated above (other than
for resale orders placed via Fund/SERV), or
if the registered owner(s) of the Shares
subject to the resale order redeems such
Shares prior to your settlement of the
order, we have the right to cancel your
resale order. If any cancellation of a
resale order or if any error in the timing
of the acceptance of a resale order placed
by you shall result in a loss to us or the
applicable Portfolio, you shall promptly
reimburse us for such loss.
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9. If any Shares sold to your customers under the terms of
this Agreement are redeemed by any of the Portfolios (including without
limitation redemptions resulting from an exchange for Shares of another
Portfolio) or are repurchased by us as agent for the Portfolio or are tendered
to a Portfolio for redemption within seven business days after our confirmation
to your customers of your original purchase order for such Shares, you shall
promptly repay us the full amount of the agency commission (including any
supplemental commission) allowed to you on the original sale, provided we notify
you of such repurchase or redemption. Termination amendment or cancellation of
this Agreement shall not relieve you from the requirements of this paragraph.
10. You will comply with, and conform your practices to, any
and all written compliance standards and policies and procedures that we may
from time to time provide to you.
11. You understand and agree that we are in no way responsible
for the manner of your performance of, or for any of your acts or omissions in
connection with, the services you provide under this Agreement. Nothing in this
Agreement shall be construed to constitute you or any of your agents, employees
or representatives as the agent or employee of us or any of the Portfolios.
12. You may terminate this Agreement by written notice to us,
which termination shall become effective ten days after the date of mailing such
notice to us. You agree that we have and reserve the right, in our sole
discretion without notice to you, to suspend sales of Shares of any of the
Portfolios, at any time, or to withdraw entirely the offering of Shares of any
of the Portfolios, at any time, or, in our sole discretion, to modify, amend or
cancel this Agreement upon written notice to you of such modification, amendment
or cancellation, which shall be effective on the date stated in such notice.
Without limiting the foregoing, we may terminate this Agreement if you violate
any of the provisions of this Agreement, said termination to become effective on
the date we mail such notice to you. Without limiting the foregoing, and any
provision hereof to the contrary notwithstanding, the appointment of a trustee
for all or substantially all of your business assets, or your violation of
applicable state or Federal laws or rules and regulations of authorized
regulatory agencies will terminate this Agreement effective upon the date we
mail notice to you of such termination. Our failure to terminate this Agreement
for a particular cause shall not constitute a waiver of our right to terminate
this Agreement at a later date for the same or any other cause. All notices
hereunder shall be to the respective parties at the addresses listed hereon,
unless such address is changed by written notice sent to the last address of the
other party provided under this Agreement.
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13. This Agreement shall become effective as of the date when
it is executed and dated by you below and shall be in substitution of any prior
agreement between you and us covering any of the Portfolios. This Agreement and
all the rights and obligations of the parties hereunder shall be governed by and
construed under the laws of the State of Wisconsin applicable to agreements to
be performed in Wisconsin, without giving effect to choice of law rules. This
Agreement is not assignable or transferable, except that we may without notice
or consent from you, assign or transfer this Agreement to any successor firm or
corporation which becomes the Distributor or Sub-Distributor of the Portfolios
or assign any of our duties under this Agreement to any entity under common
control with us.
Sincerely,
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
Xxxxxx X. Xxxxxxxxx, President
Accepted:
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(Name of Selected Dealer)
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(Address)
By:
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(Authorized Signature of Selected Dealer)
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(Name) (Title)
