PRINCOR FINANCIAL SERVICES CORPORATION
Principal Financial Group
Xxx Xxxxxx, Xxxx 00000-0000
(000) 000-0000
DEALER
SELLING AGREEMENT
FOR CLASS R SHARES OF
PRINCIPAL MUTUAL FUNDS
Dealer Selling Agreement between Princor Financial Services Corporation
("Princor", "We" or "Us") and _________________________________________
("Dealer" or "You") dated as of __________________________.
As Distributor and Principal Underwriter for the Principal Funds (hereinafter
collectively referred to as the "Funds" and individually as a "Fund"), each an
open-end investment company whose Class R Shares are offered at net asset value
to distributees of retirement plans administered by Principal Life Insurance
Company, (hereinafter ?PLIC Administered Plan?) we invite you to become a
Selected Dealer to distribute and provide administrative support services in
connection with the distribution of shares of the Funds.
1. We will offer Class R Shares through telephone counselors to individual
participants of PLIC Administered Plans who have or will receive a
distribution from the retirement plan. Each Fund reserves the right to
withdraw shares from sale temporarily or permanently and all orders are
subject to acceptance or rejection by us and the Fund, each in its sole
discretion. We will pay you a sales commission during each of the four
years following the date of purchase in an amount equal, on an annualized
basis, to .10% of the average net assets of each Class R Share account
established for participants in a PLIC Administered Plan the agent or
representative of record for which is one of your registered
representatives. We will pay such commissions to you bi-monthly on the 15th
and last day of each month.
2. The amount of sales commissions for Class R Shares is subject to change by
us from time to time, and any orders placed after the effective date of
such change will be subject to the rate(s) in effect at the time of receipt
of the payment by us.
3. Redemption of Class R Shares will be made at the net asset value of such
shares in accordance with the then current Prospectus and Statement of
Additional Information of the Fund(s).
4. All of the Funds have adopted a Distribution Plan (the "Plan") pursuant to
Rule 12b-1 under the Investment Company Act of 1940 (the "1940 Act"). Each
Agreement defines services to be provided by Selected Dealers for which
they will be compensated pursuant to the Plan.
(a) As a Selected Dealer, you agree to provide distribution assistance and
administrative support services in connection with the distribution of
shares of the Fund(s) to customers who may from time to time directly
or beneficially own Shares, including but not limited to distributing
salesliterature, answering routine customer inquiries regarding the
Funds, assisting in the establishment and maintenance of accounts in
the Funds and in the processing of purchases and redemptions of
shares, making the Plan Funds' investment plans and dividend options
available, and providing such other information and services in
connection with the distribution of Fund(s) Shares as may be
reasonably requested from time to time.
(b) For such services, you will be compensated in accordance with the then
current Prospectus of the Funds.
(c) The Plan may be terminated at any time without payment of any penalty
by any Fund in accordance with the rules governing such plans
promulgated by the Securities and Exchange Commission.
(d) The provisions of the Plan are incorporated herein and made a part
hereof by reference, and will continue in full force and effect so
long as its continuance is approved at least annually pursuant to Rule
12b-1.
5. Each party to this Agreement represents that it currently is and, while
this Agreement is in effect, will continue to be a member in good standing
of the National Association of Securities Dealers, Inc. ("NASD") and agrees
to abide by all Rules and Regulations of that Association, including the
NASD Rules of Fair Practice. If you are a foreign dealer, not eligible for
membership in the Association, you still agree to abide by the Rules and
Regulations of the Association. We both agree to comply with all applicable
state and federal laws, rules and regulations of the Securities and
Exchange Commission and other authorized United States or foreign
regulatory agencies. You further agree that you will not sell, offer for
sale, or solicit shares of the Funds in any state where they have not been
qualified for sale. You will solicit applications and sell shares only in
accordance with the terms and on the basis of the representations contained
in the appropriate prospectus and any supplemental literature furnished by
us.
6. You must represent that you are currently a member of SIPC and, while this
agreement is in effect, will continue to be a member of SIPC. You agree to
notify us immediately if your SIPC membership status changes.
7. IT IS AGREED
(a) That neither of us shall withhold placing customers' orders for shares
so as to profit as a result of such withholding.
(b) We shall not purchase shares from the Funds except for the purpose of
covering purchase orders already received. Delivery of certificates,
if any, for shares shall be made by a Fund only against receipt of the
purchase price.
(c) No commission will be paid to you for shares issued in connection with
the merger or consolidation of any other investment company with a
Fund or its acquisition, purchase or otherwise, of all or
substantially all the assets of any investment company or
substantially all the outstanding shares of any such company. Also, no
commission will be paid to you for shares issued, sold, or
transferred, whether Treasury or newly issued shares, that may be
offered by a Fund to its shareholders as stock dividends or splits for
not less than "net asset value."
(d) We reserve the right to reject any order or application for shares or
to withdraw the offering of shares entirely, and to change any
commission, sales charge and dealer concession, provided that no such
change shall affect orders accepted by us prior to notice of such
change, unless such change results from a reduction required by law.
(e) You shall not purchase shares of a Fund from a shareholder at a price
per share which is lower than the current net asset value per share
which is next computed after the receipt of the tender of such shares
by the shareholder.
(f) If shares of the Fund are tendered for redemption within seven
business days after confirmation by us of the original purchase order
for such shares, (i) you shall immediately refund to us the full
commission or concession allowed to you on the original sale, if any,
and (ii) we shall pay to the Fund our share of the "sales charge" on
the original sale by us, and shall also pay to the Fund the refund
which we received under (i) above. You shall be notified by us of such
redemption within ten days of the date on which proper request for
redemption is delivered to us or the Fund. Termination or cancellation
of this Agreement shall not relieve you or us from requirements of
this subparagraph (f).
(g) This agreement may not be assigned or transferred in any manner
including by operation of law.
8. We will furnish you, without charge, reasonable quantities of Prospectuses
and sales material or supplemental literature relating to the sale or
servicing of shares of the Funds.
9. You are not employed by us as broker-agent or employee. You are not
authorized to act for us nor to make any representations in our behalf. In
purchasing or selling shares hereunder you are entitled to rely only upon
the current Prospectus and supplemental literature approved in writing by
us. In the offer and sale of shares of the Funds, you shall not use any
Prospectus or supplemental literature not approved in writing by us. No
person is authorized to make any representations concerning shares of the
Funds except those contained in a current Prospectus and supplemental
literature approved in writing by us. You will use your best efforts in the
promotion of sales of Shares and will be responsible for the proper
instruction and training of all sales personnel employed by you.
10. You will indemnify, defend, and hold harmless our firm and all of its
affiliates, and their officers, directors, employees, agents, and assignees
against all losses, claims, demands, liabilities, and expenses, including
reasonable legal and other expenses incurred in defending such claims or
liabilities, whether or not resulting in any liability to any of them, or
which they or any of them may incur, including but not limited to alleged
violations of the Securities Act of 1933, as amended and/or to the
Securities Exchange Act of 1934, as amended, arising out of the offer or
sale of any securities pursuant to this Agreement, or arising out of the
breach of any of the terms and conditions of this Agreement, other than any
claim, demand, or liability arising from any untrue statement or alleged
untrue statement of a material fact contained in a prospectus for the
Funds, as filed and in effect with the SEC, or any amendment or supplement
thereto, or in any application prepared or approved in writing by our
counsel and filed with any state regulatory agency in order to register or
qualify under the securities laws thereof (the "blue sky applications"), or
which shall arise out of or be based upon any omission or alleged omission
to state therein a material fact required to be stated in the prospectus or
any of the blue sky applications or which is necessary to make the
statements or a part thereof not misleading, which indemnity provision
shall survive the termination of this Agreement.
11. No obligation not expressly assumed by us in this Agreement shall be
implied.
12. Either party to this Agreement may terminate this Agreement by written
notice to the other party. We may modify this Agreement at any time by
written notice to you. Any notice shall be deemed to have been given on the
date upon which it was either delivered personally or by fax transmission
to the other party or to any office or member thereof, or was mailed
post-paid or delivered to a telegraph office for transmission at his or its
address as shown herein.
13. All communications to us should be sent to the above address. Any notice to
you shall be duly given if mailed or telegraphed to you at the address
specified by you herein.
14. This Agreement shall be construed in accordance with the laws of the State
of Iowa and shall be binding upon both parties hereto when signed by both
of us in the spaces provided below. This Agreement shall not be applicable
to shares of the Fund(s) in any state in which those shares are not
qualified for sale.
15. This Agreement shall be binding upon both parties hereto when executed by
both parties and supersedes any prior agreement or understanding between us
and you with respect to the sale of the shares and any of the Funds.
16. This Agreement is in all respects subject to Section 26 of the Rules of
Fair Practice of the NASD which shall control any provisions to the
contrary in this Agreement.
17. If the foregoing represents your understanding, please so indicate by
signing in the proper space below.
Very truly yours,
PRINCOR FINANCIAL SERVICES CORPORATION
By: _________________________________________
Title: ________________________________________
We accept the offer set forth above, which constitutes a Selling Agreement with
us.
BY: ____________________________________________________
TITLE: _________________________________________________
DEALER: ______________________________________________
ADDRESS: _____________________________________________
DATE: _________________________________________________
