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DISTRIBUTION AGREEMENT
____________, 1996
PFS Distributors, Inc.
0000 Xxxxxxxxxxxx Xxxx., Xxxx 000
Xxxxxx, Xxxxxxx 00000-0000
Dear Sirs:
This is to confirm that, in consideration of the agreements
hereinafter contained, the undersigned, Xxxxx Xxxxxx Concert Series
Inc., a business corporation organized under the laws of the State of
Maryland has agreed that PFS Distributors, Inc. ("PFS") shall be, for the
period of this Agreement, the distributor of shares (the "Shares") of the
Fund.
1. Services as Distributor
1.1 PFS will act as agent for the distribution of Shares
covered by the registration statement, prospectus and statement of
additional information then in effect under the Securities Act of 1933, as
amended (the "1933 Act"), and the Investment Company Act of 1940, as amended
(the "1940 Act").
1.2 PFS agrees to use its best efforts to solicit orders for
the sale of Shares and will undertake such advertising and promotion as it
believes is reasonable in connection with such solicitation.
1.3 All activities by PFS as distributor of the Shares shall
comply with all applicable laws, rules, and regulations, including, without
limitation, all rules and regulations made or adopted by the Securities and
Exchange Commission (the "SEC") or by any securities association
registered under the Securities Exchange Act of 1934.
1.4 PFS will provide one or more persons during normal business
hours to respond to telephone questions concerning the Fund.
1.5 PFS will transmit any orders received by it for purchase
or redemption of Shares to PFS Shareholder Service (the "Sub-Transfer
Agent"), the Fund's sub-transfer and dividend agent, or any successor
Sub-Transfer Agent of which the Fund has notified PFS in writing.
1.6 Whenever in their judgment such action is warranted
for any reason, including, without limitation, market, economic or
political conditions, the Fund's officers may decline to accept any orders
for, or make any sales of, the Shares until such time as those officers deem
it advisable to accept such orders and to make such sales.
1.7 PFS will act only on its own behalf as principal should it
choose to enter into selling agreements with selected dealers or others.
1.8 The Fund will pay to PFS an annual fee in connection with
the offering and sale of the Shares under this Agreement. The annual fee
paid to PFS, will be calculated daily and paid monthly by the Fund at an
annual rate set forth in the Services and Distribution Plan (the "Plan")
based on the average daily net assets of each portfolio of the Fund which
has adopted a Plan; provided that payment shall be made in any month only
to the extent that such payment shall not exceed the sales charge
limitations established by the National Association of Securities Dealers,
Inc.
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The annual fee paid to PFS under this Section 1.8 maybe used by PFS to
cover any expenses primarily intended to result in the sale of Shares,
including, but not limited to, the following:
(a) cost of payments made to PFS investments
representatives and other employees of PFS or other broker-dealers
that engage in the distribution of the Fund's Shares;
(b) payments made to, and expenses of, persons who provide
support services in connection with the distribution of the
Fund's Shares, including, but not limited to, office space and
equipment, telephone facilities, answering routine inquiries
regarding the Fund, processing shareholder transactions and providing
any other shareholder services not provided by the Fund's Transfer
Agent;
(c) costs relating to the formulation and
implementation of marketing and promotional activities,
including, but not limited to, direct mail promotions and television,
radio, newspaper, magazine and other mass media advertising;
(d) costs of printing and distributing prospectuses and
reports of the Fund to prospective shareholders of the Fund;
(e) costs involved in preparing, printing and distributing
sales literature pertaining to the Fund; and
(f) costs involved in obtaining whatever information,
analyses and reports with respect to marketing and promotional
activities that the Fund may, from time to time, deem advisable;
except that distribution expenses shall not include any expenditures in
connection with services which PFS, any of its affiliates, or any other person
have agreed to bear without reimbursement.
1.9 PFS shall prepare and deliver reports to the Treasurer
of the Fund on a regular, at least quarterly, basis, showing the distribution
expenses incurred pursuant to this Agreement and the Plan and the purposes
therefor, as well as any supplemental reports as the Trustees, from time
to time, may reasonably request.
2. Duties of the Fund
2.1 The Fund agrees at its own expense to execute any and all
documents, to furnish any and all information and to take any other
actions that may be reasonably necessary in connection with the qualification
of the Shares for sale in those states that PFS may designate.
2.2 The Fund shall furnish from time to time for use in connection
with the sale of the Shares, such information reports with respect to the
Fund and its Shares as PFS may reasonably request, all of which shall be
signed by one or more of the Fund's duly authorized officers; and the Fund
warrants that the statements contained in any such reports, when so signed by
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the Fund's officers, shall be true and correct. The Fund shall also furnish
PFS upon request with (a) annual audits of the Fund's books and accounts made
by independent certified public accountants regularly retained by the
Fund; (b) semi-annual unaudited financial statements pertaining to the Fund;
(c) quarterly earnings statements prepared by the Fund; (d) a monthly itemized
list of the securities in the Fund's portfolio; (e) monthly balance sheets as
soon as practicable after the end of each month; and (f) from time to time
such additional information regarding the Fund's financial condition as
PFS may reasonably request.
3. Representations and Warranties
The Fund represents to PFS that all registration statements,
prospectuses and statements of additional information filed by the Fund
with the SEC under the 1933 Act and the 1940 Act with respect to the
Shares have been carefully prepared in conformity with the requirements
of the 1933 Act, the 1940 Act and the rules and regulations of the SEC
thereunder. As used in this Agreement, the terms "registration statement",
"prospectus" and "statement of additional information" shall mean any
registration statement, prospectus and statement of additional information
filed by the Fund with the SEC and any amendments and supplements thereto
which at any time shall have been filed with the SEC. The Fund represents and
warrants to PFS that any registration statement, prospectus and statement
of additional information, when such registration statement becomes
effective, will include all statements required to be contained therein in
conformance with the 1933 Act, the 1940 Act and the rules and regulations of
the SEC; that all statements of fact contained in any registration
statement, prospectus or statement of additional information will be true and
correct when such registration statement becomes effective; and that neither
any registration statement nor any prospectus or statement of additional
information when such registration statement becomes effective will include
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading to a purchaser of the Fund's Shares. The Fund may, but shall
not be obligated to, propose from time to time such amendment or
amendments to any registration statement and such supplement or
supplements to any prospectus or statement of additional information
as, in the light of future developments, may, in the opinion of the Fund's
counsel, be necessary or advisable. If the Fund shall not propose such
amendment or amendments and/or supplement or supplements within fifteen
days after receipt by the Fund of a written request from PFS to do so, PFS
may, at its option, terminate this Agreement. The Fund shall not file any
amendment to any registration statement or supplement to any prospectus
or statement of additional information without giving PFS reasonable notice
thereof in advance; provided, however, that nothing contained in this
Agreement shall in any way limit the Fund's right to file at any time such
amendments to any registration statement and/or supplements to any
prospectus or statement of additional information, of whatever character,
as the Fund may deem advisable, such right being in all respects absolute and
unconditional.
4. Indemnification
4.1 The Fund authorizes PFS and dealers to use any prospectus
or statement of additional information furnished by the Fund from time to
time, in connection with the sale of the Shares. The Fund agrees to indemnify,
defend and hold PFS, its several officers and directors, and any person who
controls PFS within the meaning of Section 15 of the 1933 Act, free and
harmless from and against any and all claims, demands, liabilities and
expenses (including the cost of investigating or defending such claims,
demands or liabilities and any such counsel fees incurred in connection
therewith) which PFS, its officers and directors, or any such controlling
person, may incur under the 1933 Act or under common law or otherwise, arising
out of or based upon any untrue statement, or alleged untrue statement, of
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a material fact contained in any registration statement, any prospectus or
any statement of additional information or arising out of or based upon any
omission, or alleged omission, to state a material fact required to be stated
in any registration statement, any prospectus or any statement of
additional information or necessary to make the statements in any thereof
not misleading; provided, however, that the Fund's agreement to
indemnify PFS, its officers or directors, and any such controlling person
shall not be deemed to cover any claims, demands, liabilities or expenses
arising out of any statements or representations made by PFS or its
representatives or agents other than such statements and representations as
are contained in any prospectus or statement of additional information and
in such financial and other statements as are furnished to PFS pursuant to
paragraph 2.2 of this Agreement; and further provided that the Fund's
agreement to indemnify PFS and the Fund's representations and warranties
herein before set forth in paragraph 3 of this Agreement shall not be deemed
to cover any liability to the Fund or its shareholders to which PFS would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of PFS's reckless
disregard of its obligations and duties under this Agreement. The Fund's
agreement to indemnify PFS, its officers and directors, and any such
controlling person, as aforesaid, is expressly conditioned upon the Fund's
being notified of any action brought against PFS, its officers or
directors, or any such controlling person, such notification to be given
by letter or by telegram addressed to the Fund at its principal office in New
York, New York and sent to the Fund by the person against whom such action is
brought, within ten days after the summons or other first legal process
shall have been served. The failure so to notify the Fund of any such action
shall not relieve the Fund from any liability that the Fund may have to the
person against whom such action is brought by reason of any such untrue,
or alleged untrue, statement or omission, or alleged omission, otherwise
than on account of the Fund's indemnity agreement contained in this
paragraph 4.1. The Fund will be entitled to assume the defense of any suit
brought to enforce any such claim, demand or liability, but, in such case,
such defense shall be conducted by counsel of good standing chosen by the
Fund and approved by PFS. In the event the Fund elects to assume the defense
of any such suit and retains counsel of good standing approved by PFS, the
defendant or defendants in such suit shall bear the fees and expenses of any
additional counsel retained by any of them; but if the Fund does not elect to
assume the defense of any such suit, or if PFS does not approve of counsel
chosen by the Fund, the Fund will reimburse PFS, its officers and directors,
or the controlling person or persons named as defendant or defendants in such
suit, for the fees and expenses of any counsel retained by PFS or them. The
Fund's indemnification agreement contained in this paragraph 4.1 and the
Fund's representations and warranties in this Agreement shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of PFS, its officers and directors, or any controlling person, and
shall survive the delivery of any of the Fund's Shares. This agreement
of indemnity will inure exclusively to PFS's benefit, to the benefit of its
several officers and directors, and their respective estates, and to the
benefit of the controlling persons and their successors. The Fund agrees to
notify PFS promptly of the commencement of any litigation or proceedings
against the Fund or any of its officers or Directors in connection with the
issuance and sale of any of the Fund's Shares.
4.2 PFS agrees to indemnify, defend and hold the Fund, its
several officers and Directors, and any person who controls the Fund within
the meaning of Section 15 of the 1933 Act, free and harmless from and against
any and all claims, demands, liabilities and expenses (including the costs of
investigating or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) that the Fund, its
officers or Directors or any such controlling person may incur under the
1933 Act, or under common law or otherwise, but only to the extent that such
liability or expense incurred by the Fund, its officers or Directors or such
controlling person resulting from such claims or demands shall arise out of
or be based upon any untrue, or alleged untrue, statement of a material fact
contained in information furnished in writing by PFS to the Fund and used in
the answers to any of the items of the registration statement or in the
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corresponding statements made in the prospectus or statement of additional
information, or shall arise out of or be based upon any omission, or
alleged omission, to state a material fact in connection with such information
furnished in writing by PFS to the Fund and required to be stated in such
answers or necessary to make such information not misleading. PFS's
agreement to indemnify the Fund, its officers or Directors, and any such
controlling person, as aforesaid, is expressly conditioned upon PFS
being notified of any action brought against the Fund, its officers or
Directors, or any such controlling person, such notification to be given by
letter or telegram addressed to PFS at its principal office in New York, New
York and sent to PFS by the person against whom such action is brought,
within ten days after the summons or other first legal process shall have
been served. PFS shall have the right to control the defense of such action,
with counsel of its own choosing, satisfactory to the Fund, if such action
is based solely upon such alleged misstatement or omission on PFS's part,
and in any other event the Fund, its officers or Directors or such
controlling person shall each have the right to participate in the defense or
preparation of the defense of any such action. The failure to so notify PFS
of any such action shall not relieve PFS from any liability that PFS may have
to the Fund, its officers or Directors, or to such controlling person by
reason of any such untrue, or alleged untrue, statement or omission, or
alleged omission, otherwise than on account of PFS's indemnity agreement
contained in this paragraph 4.2. PFS agrees to notify the Fund promptly of
the commencement of any litigation or proceedings against PFS or any of its
officers or directors in connection with the issuance and sale of any of the
Fund's Shares.
4.3 In case any action shall be brought against any
indemnified party under paragraph 4.1 or 4.2, and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate in, and, to the extent that it shall
wish to do so, to assume the defense thereof with counsel satisfactory to
such indemnified party. If the indemnifying party opts to assume the defense
of such action, the indemnifying party will not be liable to the indemnified
party for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than (a)
reasonable costs of investigation or the furnishing of documents or
witnesses and (b) all reasonable fees and expenses of separate counsel to
such indemnified party if (i) the indemnifying party and the indemnified
party shall have agreed to the retention of such counsel or (ii) the
indemnified party shall have concluded reasonably that representation of the
indemnifying party and the indemnified party by the same counsel would be
inappropriate due to actual or potential differing interests between them in
the conduct of the defense of such action.
5. Effectiveness of Registration
None of the Fund's Shares shall be offered by either PFS or the Fund
under any of the provisions of this Agreement and no orders for the
purchase or sale of the Shares under this Agreement shall be accepted by the
Fund if and so long as the effectiveness of the registration statement then
in effect or any necessary amendments thereto shall be suspended under any of
the provision of the 1933 Act or if and so long as a current prospectus as
required by Section 5(b) (2) of the 1933 Act is not on file with the SEC;
provided, that nothing contained in this paragraph 5 shall in any way
restrict or have an application to or bearing upon the Fund's obligation
to repurchase its Shares from any shareholder in accordance with the
provisions of the Fund's prospectus, statement of additional information or
Articles of Incorporation dated Articles of Incorporation, as amended from
time to time.
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6. Notice to PFS
The Fund agrees to advise PFS immediately in writing:
(a) of any request by the SEC for amendments to the
registration statement, prospectus or statement of additional
information then in effect or for additional information;
(b) In the event of the issuance by the SEC of any stop
order suspending the effectiveness of the registration
statement, prospectus or statement of additional information
then in effect or the initiation of any proceeding for that purpose;
(c) of the happening of any event that makes untrue any
statement or a material fact made in the registration statement,
prospectus or statement of additional information then in effect or
that requires the making of a change in such registration
statement, prospectus or statement of additional information in
order to make the statements therein not misleading; and
(d) of all actions of the SEC with respect to any amendment to
any registration statement, prospectus or statement of additional
information which may from time to time be filed with the SEC.
7. Term of the Agreement
This Agreement shall become effective on the date first written above
and shall continue for successive annual periods thereafter so long as such
continuance is specifically approved at least annually by (a) the Fund's
Board of Directors or (b) by a vote of a majority (as defined in the
0000 Xxx) of the Fund's outstanding voting securities, provided that in
either event the continuance is also approved by a majority of the Directors
of the Fund who are not interested persons (as defined in the 0000 Xxx) of
any party to this Agreement, by vote cast in person at a meeting called for
the purpose of voting on such approval. This Agreement is terminable,
without penalty, on 60 days' notice by the Fund's Board of Directors, by vote
of the holders of a majority of the Fund's Shares, or on 90 days' notice by
PFS. This Agreement will also terminate automatically in the event of its
assignment (as defined in the 1940 Act).
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If the foregoing is in accordance with your understanding, kindly
indicate your acceptance of this Agreement by signing and returning to us the
enclosed copy of this Agreement.
Very truly yours,
XXXXX XXXXXX CONCERT SERIES INC.
By:
XXXXX X. XXXXXXXX
CHAIRMAN OF THE BOARD
Accepted:
PFS DISTRIBUTORS, INC.
By:
