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EXHIBIT 2(h)(1)
AMENDED AND RESTATED
UNDERWRITING AND DISTRIBUTION SERVICES AGREEMENT
AGREEMENT made this 31st day of March 1999, between XXXXXX FLOATING RATE
FUND, a Massachusetts business trust (the "Fund"), and XXXXXX DISTRIBUTORS,
INC., a Delaware corporation ("KDI"), as amended and restated this 1st day of
October, 1999.
In consideration of the mutual covenants hereinafter contained, it is
hereby agreed by and between the parties hereto as follows:
1. The Fund hereby appoints KDI to act as distributor of shares of
beneficial interest (hereinafter called "shares") of the Fund in jurisdictions
wherein shares of the Fund may legally be offered for sale; provided, however,
that the Fund in its absolute discretion may: (a) issue or sell shares directly
to holders of shares of the Fund upon such terms and conditions and for such
consideration, if any, as it may determine, whether in connection with the
distribution of subscription or purchase rights, the payment or reinvestment of
dividends or distributions, or otherwise; (b) issue or sell shares at net asset
value to the shareholders of any other investment company, for which KDI shall
act as exclusive distributor, who wish to exchange all or a portion of their
investment in shares of such other investment company for shares of the Fund; or
(c) issue shares in connection with the merger or consolidation of any other
investment company with the Fund or the Fund's acquisition, by purchase or
otherwise, of all or substantially all of the assets of any other investment
company or all or substantially all of the outstanding shares of any such
company. KDI shall appoint various financial service firms ("Firms") to provide
distribution services to investors. The Firms shall provide such office space
and equipment, telephone facilities, personnel, literature distribution,
advertising and promotion as is necessary or beneficial for providing
information and distribution services to existing and potential clients of the
Firms. KDI may also provide some of the above services for the Fund.
KDI accepts such appointment as principal underwriter and agrees to render
such services and to assume the obligations herein set forth for the
compensation herein provided. KDI shall for all purposes herein provided be
deemed to be an independent contractor and, unless expressly provided herein or
otherwise authorized, shall have no authority to act for or represent the Fund
in any way. KDI, by separate agreement with the Fund, may also serve the Fund in
other capacities. The services of KDI to the Fund under this Agreement are not
to be deemed exclusive, and KDI shall be free to render similar services or
other services to others so long as its services hereunder are not impaired
thereby.
In carrying out its duties and responsibilities hereunder, KDI may,
pursuant to separate written contracts, appoint various Firms to provide
advertising, promotion and other distribution services contemplated hereunder
directly to or for the benefit of existing and potential shareholders who may be
clients of such Firms. Such Firms shall at all times be deemed to be independent
contractors retained by KDI and not the Fund.
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KDI shall use its best efforts with reasonable promptness to sell such part
of the authorized shares of the Fund remaining unissued as from time to time
shall be effectively registered under the Securities Act of 1933 ("Securities
Act"), at prices determined as hereinafter provided and on terms hereinafter set
forth, all subject to applicable federal and state laws and regulations and to
the Fund's organizational documents, provided, however, that KDI may in its
discretion refuse to accept orders for shares from any particular applicant.
2. KDI shall sell shares of the Fund to or through qualified Firms in such
manner, not inconsistent with the provisions hereof and the Fund's currently
effective registration statement, including the prospectus and the statement of
additional information and any supplements or amendments thereto ("Registration
Statement"), as KDI may determine from time to time, provided that no Firm or
other person shall be appointed or authorized to act as agent of the Fund
without prior consent of the Fund. In addition to sales made by it as agent of
the Fund, KDI may, in its discretion, also sell shares of the Fund as principal
to persons with whom it does not have selling group agreements.
Shares of any class of the Fund offered for sale or sold by KDI shall be so
offered or sold at a price per share determined in accordance with the
Registration Statement. The price the Fund shall receive for all shares
purchased from it shall be the net asset value used in determining the public
offering price applicable to the sale of such shares, except with respect to
shares sold during the Initial Offering Period, as defined in the Prospectus,
which shall be offered and sold at the price set forth therein. Any excess of
the sales price over the net asset value of the shares of the Fund sold by KDI
as agent shall be retained by KDI as a commission for its services hereunder.
KDI may compensate Firms for sales of shares at the commission levels provided
in the Registration Statement from time to time. KDI may pay other commissions,
fees or concessions to Firms, and may pay them to others in its discretion, in
such amounts as KDI shall determine from time to time. KDI shall be entitled to
receive and retain any applicable early withdrawal charge as described in the
Registration Statement. KDI shall also receive any distribution services fees
payable by the Fund as provided in the Fund's plan of distribution with respect
to any class of shares, as amended from time to time (the "Plan").
KDI will require each Firm to conform to the provisions hereof and the
Registration Statement with respect to the public offering price or net asset
value, as applicable, of the Fund's shares, and neither KDI nor any such Firms
shall withhold the placing of purchase orders so as to make a profit thereby.
3. The Fund will use its best efforts to keep effectively registered under
the Securities Act for sale as herein contemplated such shares as KDI shall
reasonably request and as the Securities and Exchange Commission shall permit to
be so registered. Notwithstanding any other provision hereof, the Fund may
terminate, suspend or withdraw the offering of shares whenever, in its sole
discretion, it deems such action to be desirable.
4. The Fund will execute any and all documents and furnish any and all
information that may be reasonably necessary in connection with the
qualification of its shares for sale (including the qualification of the Fund as
a dealer where necessary or advisable) in such states as
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KDI may reasonably request (it being understood that the Fund shall not be
required without its consent to comply with any requirement which in its opinion
is unduly burdensome). The Fund will furnish to KDI from time to time such
information with respect to the Fund and its shares as KDI may reasonably
request for use in connection with the sale of shares of the Fund.
5. KDI shall issue and deliver or shall arrange for various Firms to issue
and deliver on behalf of the Fund such confirmations of sales made by it
pursuant to this Agreement as may be required. At or prior to the time of
issuance of shares, KDI will pay or cause to be paid to the Fund the amount due
the Fund for the sale of such shares. Certificates shall be issued or shares
registered on the transfer books of the Fund in such names and denominations as
KDI may specify.
6. KDI shall order shares of the Fund from the Fund only to the extent that
it shall have received purchase orders therefor. KDI will not make, or authorize
Firms or others to make: (a) any short sales of shares of the Fund; or (b) any
sales of such shares to any Board member or officer of the Fund or to any
officer or Board member of KDI or of any corporation or association furnishing
investment advisory, managerial or supervisory services to the Fund, or to any
corporation or association, unless such sales are made in accordance with the
Registration Statement relating to the sale of such shares. KDI, as agent of and
for the account of the Fund, may repurchase the shares of the Fund at such
prices and upon such terms and conditions as shall be specified in the
Registration Statement. In selling or reacquiring shares of the Fund for the
account of the Fund, KDI will in all respects conform to the requirements of all
state and federal laws and the Conduct Rules of the National Association of
Securities Dealers, Inc., relating to such sale or reacquisition, as the case
may be, KDI will observe and be bound by all the provisions of the Fund's
organizational documents (and of any fundamental policies adopted by the Fund
pursuant to the Investment Company Act, notice of which shall have been given to
KDI) which at the time in any way require, limit, restrict, prohibit or
otherwise regulate any action on the part of KDI hereunder.
KDI agrees to indemnify and hold harmless the Fund and each of its Board
members and officers and each person, if any, who controls the Fund within the
meaning of Section 15 of the Securities Act, against any and all losses, claims,
damages, liabilities or litigation (including legal and other expenses) to which
the Fund or such Board members, officers, or controlling persons may become
subject under such Act, under any other statute, at common law or otherwise,
arising out of the acquisition of any shares by any person which (i) may be
based upon any wrongful act by KDI or any of KDI's employees or representatives,
or (ii) may be based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statement therein not misleading if such statement or
omission was made in reliance upon information furnished to the Fund by KDI, or
(iii) may be incurred or arise by reason of KDI's acting as the Fund's agent
instead of purchasing and reselling shares as principal in distributing the
shares to the public, provided, however, that in no case (i) is KDI's indemnity
in favor of a Board member or officer or any other person deemed to protect such
Board member or officer or other person against any liability to which any such
person would otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence in the performance of his
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duties or by reason of reckless disregard of obligations and duties under this
Agreement or (ii) is KDI to be liable under the indemnity agreement contained in
this paragraph with respect to any claim made against the Fund or any person
indemnified unless the Fund or such person, as the case may be, shall have
notified KDI in writing within a reasonable time after the summons or other
first legal process giving information of the nature of the claims shall have
been served upon the Fund or such upon such person (or after the Fund or such
person shall have received notice of such service on any designated agent), but
failure to notify KDI of any such claim shall not relieve KDI from any liability
which KDI may have to the Fund or any other person against whom such action is
brought otherwise than on account of KDI's indemnity agreement contained in this
paragraph. KDI shall be entitled to participate, at KDI's own expense, in the
defense, or, if KDI so elects, to assume the defense of any suit brought to
enforce any such liability, but if KDI elects to assume the defense, such
defense shall be conducted by counsel chosen by KDI and satisfactory to the
Fund, to its officers and Board members, or to any controlling person or
persons, defendant or defendants in the suit. In the event KDI elects to assume
the defense of any such suit and retain such counsel, the Fund, such officers
and Board members or controlling person or persons, defendant or defendants in
the suit shall bear the fees and expenses of any additional counsel retained by
them, but, in case KDI does not elect to assume the defense of any such suit,
KDI will reimburse the Fund, such officers and Board members or controlling
person or persons, defendant or defendants in such suit for reasonable fees and
expenses of any counsel retained by them. KDI agrees to notify the Fund promptly
of the commencement of any litigation or proceedings against it in connection
with the issue and sale of any shares. The Fund shall not, without the prior
written consent of KDI, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which the Fund is or could have been a
party and indemnity has or could have been sought hereunder by the Fund, unless
such settlement includes an unconditional release of KDI from all liability on
claims that are the subject matter of such action, suit or proceeding.
The Fund agrees to indemnify and hold harmless KDI and each of KDI's
directors and officers and each person, if any, who controls KDI within the
meaning of Section 15 of the Securities Act, against any and all losses, claims,
damages, liabilities or litigation (including legal and other expenses) to which
KDI or such directors, officers or controlling persons may become subject under
such Act, under any other statute, at common law or otherwise, arising out of
the acquisition of any shares by any person which (i) may be based upon any
wrongful act by the Fund or any of its employees or representatives, or (ii) may
be based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading if such statement or omission was not
made in reliance upon information furnished to KDI by the Fund; provided,
however, that in no case (i) is the Fund's indemnity in favor of a director or
officer or any other person deemed to protect such director or officer or any
other person against any liability to which such person would otherwise be
subject by reason of willful misfeasance, bad faith, or gross negligence in the
performance of his duties or by reason of his reckless disregard of obligations
and duties under this Agreement or (ii) is the Fund to be liable under its
indemnity agreement contained in this paragraph with respect to any claims made
against KDI or any such director, officer or controlling person unless KDI or
such director, officer or controlling person, as the case may be, shall have
notified the Fund in writing within a reasonable time after the summons or other
first legal process
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giving information of the nature of the claim shall have been served upon KDI or
upon such director, officer or controlling person (or after KDI or such
director, officer or controlling person shall have received notice of such
service on any designated agent), but failure to notify the Fund of any such
claim shall not relieve it from any liability which it may have to the person
against whom such action is brought otherwise than on account of its indemnity
agreement contained in this paragraph. The Fund will be entitled to participate
at its own expense in the defense, or, if it so elects, to assume the defense of
any suit brought to enforce any such liability, but if the Fund elects to assume
the defense, such defense shall be conducted by counsel chosen by it and
satisfactory to KDI, its directors, officers or controlling person or persons,
by defendant or defendants in the suit. In the event that the Fund elects to
assume the defense of any such suit and retain such counsel, KDI, its directors,
officers or controlling person or persons, defendant or defendants in the suit,
shall bear the fees and expenses of any additional counsel retained by them,
but, in case the Fund does not elect to assume the defense of any such suit, it
will reimburse KDI or such directors, officers or controlling person or persons,
defendant or defendants in the suit, for reasonable fees and expenses of any
counsel retained by them. The Fund agrees to notify KDI promptly of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of any shares. KDI shall
not, without the prior written consent of the Fund, effect any settlement of any
pending or threatened action, suit or proceeding in respect of which either KDI
is or could have been a party and indemnity has or could have been sought
hereunder by KDI, unless such settlement includes an unconditional release of
the Fund from all liability on claims that are the subject matter of such
action, suit or proceeding.
7. The Fund shall assume and pay all charges and expenses of its operations
not specifically assumed or otherwise to be provided by KDI under this Agreement
or the Plan. The Fund will pay (or will enter into arrangements providing that
others will pay) all fees and expenses in connection with the registration of
the Fund and its shares under the United States securities laws and, effective
January 1, 2000, the registration and qualification of shares for sale in
various jurisdictions in which the Fund shall determine it advisable to qualify
such shares for sale (including registering the Fund as a broker or dealer or
any officer of the Fund or other person as agent or salesman of the Fund in any
such jurisdictions) ("Blue Sky Expenses"). Prior to January 1, 2000, KDI will
pay all such Blue Sky expenses. In addition, KDI will pay all expenses (other
than expenses which one or more Firms may bear pursuant to any agreement with
KDI) incident to the sale and distribution of the shares issued or sold
hereunder, including, without limiting the generality of the foregoing, all (a)
expenses of printing and distributing any prospectus and of preparing, printing
and distributing or disseminating any other literature, advertising and selling
aids in connection with the offering of the shares for sale (except that such
expenses need not include expenses incurred by the Fund in connection with the
preparation, typesetting, printing and distribution of any registration
statement or prospectus, report or other communication to shareholders in their
capacity as such), and (b) expenses of advertising in connection with such
offering.
No transfer taxes, if any, which may be payable in connection with the
issue or delivery of shares sold as herein contemplated or of the certificates
for such shares shall be borne by the Fund, and KDI will bear all such transfer
taxes.
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8. This Agreement shall become effective on the date hereof and shall
continue until September 30, 2000; and shall continue from year to year
thereafter only so long as such continuance is approved in the manner required
by the Investment Company Act.
This Agreement shall automatically terminate in the event of its assignment
and may be terminated at any time without the payment of any penalty by the Fund
or by KDI on sixty (60) days' written notice to the other party. The indemnity
provisions contained herein shall remain operative and in full force and effect
regardless of any termination of this Agreement. The Fund may effect termination
with respect to any class of the Fund by a vote of (i) a majority of the Board
members who are not interested persons of the Fund and who have no direct or
indirect financial interest in the operation of the Plan, this Agreement, or in
any other agreement related to the Plan, or (ii) a majority of the outstanding
voting securities of such class. Without prejudice to any other remedies of the
Fund, the Fund may terminate this Agreement at any time immediately upon KDI's
failure to fulfill any of its obligations hereunder.
All material amendments to this Agreement must be approved by a vote of a
majority of the Board, and of the Board members who are not interested persons
of the Fund and who have no direct or indirect financial interest in the
operation of the Plan, this Agreement or in any other agreement related to the
Plan, cast in person at a meeting called for such purpose.
The terms "assignment," "interested person" and "vote of a majority of the
outstanding voting securities" shall have the meanings set forth in the
Investment Company Act and the rules and regulations thereunder.
KDI shall receive such compensation for its distribution services as set
forth in the Plan. Termination of this Agreement shall not affect the right of
KDI to receive payments on any unpaid balance of the compensation earned prior
to such termination, as set forth in the Plan.
Notwithstanding anything in this Agreement to the contrary, KDI shall be
contractually bound hereunder by the terms of any publicly announced waiver of
or cap on the compensation received for its distribution services under the Plan
or by the terms of any written document provided to the Board of the Fund
announcing a waiver or cap, as if such waiver or cap were fully set forth
herein.
9. KDI will not use or distribute, or authorize the use, distribution or
dissemination by Firms or others in connection with the sale of Fund shares any
statements other than those contained in the Registration Statement, except such
supplemental literature or advertising as shall be lawful under federal and
state securities laws and regulations. KDI will furnish the Fund with copies of
all such material.
10. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder shall not be thereby
affected.
11. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for
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the receipt of such notice.
12. All parties hereto are expressly put on notice of the Fund's
Declaration of Trust, and all amendments thereto, all of which are on file with
the Secretary of The Commonwealth of Massachusetts, and the limitation of
shareholder and trustee liability contained therein. This Agreement has been
executed by and on behalf of the Fund by its representatives as such
representatives and not individually, and the obligations of the Fund hereunder
are not binding upon any of the Trustees, officers or shareholders of the Fund
individually but are binding upon only the assets and property of the Fund. With
respect to any claim by KDI for recovery of any liability of the Fund arising
hereunder allocated to a particular class, whether in accordance with the
express terms hereof or otherwise, KDI shall have recourse solely against the
assets of that class to satisfy such claim and shall have no recourse against
the assets of any other class for such purpose.
13. This Agreement shall be construed in accordance with applicable federal
law and with the laws of The Commonwealth of Massachusetts.
14. This Agreement is the entire contract between the parties relating to
the subject matter hereof and supersedes all prior agreements between the
parties relating to the subject matter hereof.
IN WITNESS WHEREOF, the Fund and KDI have caused this Agreement to be
executed as of the day and year first above written.
XXXXXX FLOATING RATE FUND
___________________________________
By: Xxxxxx X. Xxxxxxxx
Title: Vice President
XXXXXX DISTRIBUTORS, INC.
___________________________________
By: Xxxxx X. Xxxxxxxxxx
Title: President
