Exhibit (e)(5)
DISTRIBUTION AGREEMENT
This Agreement is made this 29/th/ day of December, 1998, by and between
Heartland Group, Inc. ("HGI"), a Maryland corporation registered under the
Investment Company Act of 1940 (the "1940 Act") as an open-end management
investment company, and Heartland Advisors, Inc. ("Distributor"), a Wisconsin
corporation which is registered as a broker-dealer under the Securities Exchange
Act of 1934 and the laws of each state or other jurisdiction in which it engages
in business to the extent such law requires, and is a member of the National
Association of Securities Dealers, Inc. ("NASD") (such registrations and
membership are hereinafter collectively referred to as the
"Registrations").
1. Appointment. Subject to Paragraph 6 hereof, HGI hereby appoints Distributor
as its exclusive agent to sell and to arrange for the sale of shares of its
common stock ("Shares"), including both issued and treasury shares, of the
series listed in Schedule A hereto (as such schedule may be amended from
time to time), on the terms and for the period set forth in this Agreement.
Each such series is hereinafter referred to as the "Fund." No person other
than Distributor is authorized to act as "principal underwriter," as
defined in the 1940 Act, for the Funds. Distributor accepts such
appointment and agrees to perform the services described herein.
2. Solicitation of Orders for Purchase of Shares.
(a) Subject to the provisions of Paragraphs 6, 7, and 9 hereof, and to
such minimum purchase requirements as may be indicated in the Fund's
prospectus or otherwise specified in writing to Distributor by HGI,
Distributor is authorized to solicit, as agent on behalf of the Fund,
unconditional orders for purchases of the Fund's Shares authorized for
issuance and registered under the Securities Act of 1933 (the "1933
Act"), provided that:
(1) Distributor shall act solely as a disclosed agent on behalf of
and for the account of the Fund;
(2) HGI, its transfer agent, or agents of its transfer agent duly
authorized by HGI shall receive directly from investors all
payments for the purchase of the Fund's Shares, and also shall
pay directly to shareholders amounts due to them for the
redemption or repurchase of all the Fund's Shares with
Distributor having no rights or duties to accept such payment or
to effect such redemptions or repurchases;
(3) Distributor shall cause to be confirmed all orders received for
purchase of the Fund's Shares which confirmation shall clearly
state (i) that Distributor is acting as agent of the Fund in the
transaction (ii) that all certificates for redemption,
remittances, and registration instructions should be sent
directly to the Fund or its transfer agent, and (iii) the Fund's
mailing address;
(4) Distributor shall have no liability for payment for purchases of
the Fund's Shares it sells as agent; and
(5) Each order to purchase Shares of the Fund received by Distributor
shall be subject to acceptance by an officer of HGI and entry of
the order on the Fund's records of shareholder accounts and is
not binding until so accepted and entered.
The purchase price to the public of the Fund's Shares shall be the
public offering price as defined in Paragraph 8 hereof.
(b) In consideration of the rights granted to the Distributor under this
Agreement, Distributor will use its best efforts, but only in
jurisdictions in which Distributor may lawfully do so, to solicit from
investors unconditional orders to purchase Shares of the Fund. Except
as provided in Paragraph 4 hereof, HGI shall make available to the
Distributor without cost to the Distributor such number of copies of
the Fund's currently effective prospectus and statement of additional
information and copies of all information, financial statements, and
other papers which the Distributor may reasonably request for use in
connection with the distribution of the Shares.
3. Compensation of the Distributor. Distributor shall receive a fee duly
authorized and approved by HGI in accordance with the Fund's 12b-1 Plan.
4. Expenses. The Fund shall pay all charges of its transfer, shareholder
recordkeeping, dividend disbursing, and redemption agents, if any; all
expenses of notices, proxy solicitation material, and reports to
shareholders; all expenses of preparation and printing of annual or more
frequent revision of the Fund's prospectus and statement of additional
information and of supplying copies thereof to existing shareholders; all
expenses of registering and maintaining the registration of the Fund under
the 1940 Act and of the Fund's Shares under the 1933 Act; all expense of
qualifying and maintaining qualification of such Fund and of the Fund's
Shares, whether by registration, perfection of an exemption from
registration, or notice filing, under the securities laws of the
jurisdictions in which Fund Shares will be offered and of registration and
qualification of the Fund under all laws applicable to the Fund or its
business activities. Expenses incurred in the sale and promotion of the
Fund shall be paid by the Fund, except in accordance with the Fund's Rule
12b-1 Plan. Any expenses borne by HGI that are attributable solely to the
organization, operation, or business of a Fund shall be paid solely out of
Fund assets. Any expense borne by HGI which is not solely attributable to a
Fund, nor solely to any other series of shares
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of HGI, shall be apportioned in such manner as Administrator determines is
fair and appropriate, or as otherwise specified by HGI's Board of
Directors. Distributor shall bear (i) the costs and expenses of preparing,
printing, and distributing any materials not prepared by the Fund and other
materials used by Distributor in connection with the offering of shares for
sale of the public, including the additional cost of printing copies of the
prospectus and of annual and interim reports for distribution to persons
other than shareholders or for filing with any regulatory authorities; (ii)
any expenses of advertising incurred by Distributor in connection with such
offering; and (iii) the expenses of registration or qualification of
Distributor under Federal or state law.
5. Selling Agreements. Distributor is authorized as agent on behalf of each
Fund to enter into agreements with other broker-dealers, banks, and other
financial intermediaries providing for the solicitation of unconditional
orders for purchases of the Fund's Shares authorized for issuance and
registered under the 1933 Act. All such agreements shall be either in the
form of agreement attached hereto or in such other form as may be approved
by the officers of HGI ("Selling Agreement"). All solicitations made by
other broker-dealers pursuant to a Selling Agreement shall be subject to
the same terms of this Agreement which apply to solicitations made by
Distributor.
6. Solicitation of Orders to Purchase Shares by Fund. The rights granted to
Distributor shall be nonexclusive in that the Fund reserves the right to
solicit purchases from, and sell its Shares to, investors. Further, the
Fund reserves the right to issue Shares in connection with the merger or
consolidation of any other investment company, trust, or personal holding
company with the Fund, or the Fund's acquisition, by the purchase or
otherwise, of all or substantially all of the assets of an investment
company, trust, or personal holding company, or substantially all of the
outstanding shares or interests of any such entity. Any right granted to
Distributor to solicit purchase of Shares will not apply to Shares that may
be offered by the Fund to shareholders by virtue of their being
shareholders of the Fund.
7. Shares Covered by This Agreement. This Agreement relates to the
solicitation of orders to purchase Shares that are duly authorized and
registered, and available for sale by the Fund, including redeemed or
repurchased Shares if and to the extent that they may be legally sold and
if, but only if, the Fund authorizes Distributor to sell them.
8. Public Offering Price. All solicitations by Distributor pursuant to this
Agreement shall be for orders to purchase Shares of the Fund at the public
offering price. Except as otherwise provided in any schedule with respect
to one or more Funds attached to this Agreement, the public offering price
for each accepted subscription for the Fund's Shares will be the net asset
value per share next determined by the Fund after it accepts such
subscription. The net asset value per share shall be determined in the
manner provided in HGI's Articles of Incorporation as now in effect or as
they may be amended, and as reflected in the Fund's then current prospectus
and statement of additional information.
9. Suspension of Sales. If and whenever the determination of the Fund's net
asset value is suspended and until such suspension is terminated, no
further orders for Shares shall be accepted by the Fund except such
unconditional orders placed with the Fund and accepted by it before the
suspension. In addition, the Fund reserves the right to suspend sales of
Shares if, in the judgment of HGI's Board of Directors (the
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"Board"), it is in the best interest of the Fund to do so, such suspension
to continue for such period as may be determined by the Board; and in that
event, (i) at the direction of HGI, Distributor shall suspend its
solicitation of orders to purchase Shares of the Fund until otherwise
instructed by HGI and (ii) no orders to purchase Shares shall be accepted
by the Fund while such suspension remains in effect unless otherwise
directed by the Board.
10. Authorized Representations.
(a) HGI is not authorized by Distributor to give on behalf of Distributor
any information or to make any representations other than the information
and representations concerning Distributor in the registration statement of
HGI filed with the Securities and Exchange Commission ("SEC") under the
1933 Act or the 1940 Act, or both, including the prospectus which is a part
thereof, as either or both may be amended from time to time (the
"Registration Statement").
(b) Distributor is not authorized by HGI to give on behalf of the Fund any
information or to make any representations in connection with the sale of
Shares of the Fund other than the information and representations contained
in the Registration Statement or contained in reports to shareholders of
the Fund or other material that may be prepared by HGI or approved by HGI
for Distributor's use.
11. Registration of Additional Shares. HGI hereby agrees to register either
(i) an indefinite number of Fund Shares pursuant to Rule 24f-2 under the
1940 Act or (ii) such definite number of Fund Shares as HGI shall deem
advisable pursuant to Rule 24e-2 under the 1940 Act. HGI will, in
cooperation with Distributor, take such action as may be necessary from
time to time to register or qualify, or perfect an exemption from
registration for, the Fund Shares so registered for sale under the 1933 Act
in any jurisdiction mutually agreeable to Distributor and HGI, and to
maintain such registration, qualification, or exemption from registration;
provided, however, that nothing herein shall be deemed to prevent HGI from
registering Fund Shares without approval of Distributor in any jurisdiction
it deems appropriate.
12. Conformity with Law. Distributor agrees that in soliciting orders to
purchase Fund Shares it shall duly conform in all respects with applicable
federal and state laws and the rules and regulations of the NASD.
Distributor will use its best efforts to maintain its Registrations in good
standing during the terms of this Agreement and will promptly notify HGI in
the event of the suspension or termination of any of the Registrations.
13. Independent Contractor. Distributor shall be an independent contractor and
neither Distributor, nor any of its officers, directors, employees, agents,
or representatives is or shall be an employee of the Fund in the
performance of Distributor's duties hereunder. Distributor shall be
responsible for its own conduct and the employment, control, and conduct of
its agents and employees, and for injury to such agents or
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employees or to others through its agents and employees and agree to pay
all employees taxes thereunder.
14. Indemnification.
(a) Distributor agrees to indemnify and hold harmless the Fund, HGI, HGI's
present or former directors, officers, employees, representatives, and
each person, if any, who controls or previously controlled the Fund or
HGI within the meaning of Section 15 of the 1933 Act against any and
all losses, liabilities, damages, claims, or expenses (including the
reasonable costs of investigating or defending any alleged loss,
liability, damage, claims, or expense and reasonable legal counsel
fees incurred in connection therewith) to which the Fund, HGI, or any
such person may become subject under the 1933 Act, under any other
statute, at common law, or otherwise, arising out of the acquisition
of any Fund Shares by any person which (i) may be based upon any
wrongful act by Distributor or any of Distributor's directors,
officers, employees, agents, or representatives, or (ii) may be based
upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, any shareholder report,
or other information covering Fund Shares filed or made public by the
Fund or HGI, or any amendment thereof or supplement thereto, 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 made in reliance upon
information furnished to HGI by Distributor. In no case (i) is
Distributor's indemnity in favor of the Fund, HGI, or any person
indemnified to be deemed to protect HGI or such indemnified person
against any liability to which the Fund, HGI, or such person would
otherwise be subject by reason of willful misfeasance, bad faith, or
gross negligence in the performance of his or her duties or by reason
of his or her reckless disregard of his or her obligations and duties
under this Agreement, or (ii) is Distributor to be liable under its
indemnity agreement contained in this paragraph with respect to any
claim made against the Fund, HGI, or any person indemnified unless the
Fund, HGI, or such person, as the case may be, shall have notified
Distributor in writing of the claim within a reasonable time after the
summons or other first written notification giving information of the
nature of the claim shall have been served upon the Fund, HGI, or upon
such person (or after the Fund, HGI, or such person shall have
received notice of such service on any designated agent). However,
failure to notify Distributor of any such claim shall not relieve
Distributor from any liability which Distributor may have to the Fund,
HGI, or any person against whom such action is brought otherwise than
on account of Distributor's indemnity agreement contained in this
paragraph.
(b) Distributor shall be entitled to participate, at its own expense, in
the defense, or, if Distributor so elects, to assume the defense of
any suit brought to enforce any such claim, but, if Distributor elects
to assume the defense, such defense shall be conducted by legal
counsel chosen by Distributor and satisfactory to HGI and to
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the persons indemnified who are defendants in the suit. In the event
that Distributor elects to assume the defense of any such suit and
retain such legal counsel, HGI and the persons indemnified who are
defendants in the suit shall bear the fees and expenses of any
additional legal counsel retained by them. If Distributor does not
elect to assume the defense of any such suit, Distributor will
reimburse the Fund, HGI, and the persons indemnified who are
defendants in such suit for the reasonable fees and expenses of any
legal counsel retained by them. In any event, Distributor shall not
be responsible for any claim settled or compromised, or for any
confession of judgment, without its prior written consent, which
consent shall not be unreasonably withheld. Distributor agrees
promptly to notify HGI of the commencement of any litigation or
proceedings against it or any of its officers, employees, or
representatives in connection with the issuance or sale of any Fund
Shares.
(c) The Fund agrees to indemnify and hold harmless Distributor and each of
its present or former directors, officers, employees, agents, or
representatives, and each person, if any, who controls or previously
controlled Distributor within the meaning of Section 15 of the 1933
Act against any and all losses, liabilities, damages, claims, or
expenses (including the reasonable costs of investigating or defending
any alleged loss, liability, damage, claim, or expense, and reasonable
legal counsel fees incurred in connection therewith) to which
Distributor or any such person may become subject under the 1933 Act,
under any other statute, at common law, or otherwise, arising out of
the acquisition of any Fund Shares by any person which (i) may be
based upon any wrongful act by HGI or any of HGI's directors,
officers, employees, agents, or representatives, except those who are
affiliates of Distributor, or (ii) may be based upon any untrue
statement or alleged untrue statement, prospectus, shareholder report,
or other information covering Fund Shares filed or made public by HGI
or any amendment thereof or supplement thereto, 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 unless such statement or omission was made in reliance upon
information furnished to HGI by Distributor. In no case (i) is the
Fund's indemnity in favor of Distributor or any person indemnified to
be deemed to protect Distributor or such indemnified person against
any liability to which Distributor or such person would otherwise be
subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of his or her duties or by reason of his
or her reckless disregard of his or her 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 claim made
against Distributor, or person indemnified unless Distributor, or such
person, as the case may be, shall have notified HGI in writing of the
claim within a reasonable time after the summons or other first
written notification giving information of the nature of the claim
shall have been served upon Distributor or upon such person (or after
Distributor or such person shall have received notice of such service
on any designated agent). However, failure to notify HGI of any such
claim shall not relieve the Fund from any liability which the Fund may
have
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to Distributor or any person against whom such action is brought other
than on account of the Fund's indemnity agreement contained in this
paragraph.
(d) The Fund shall be entitled to participate, at its own expense, in the
defense, or, if HGI so elects on behalf of the Fund, to assume the
defense of any suit brought to enforce any such claim, but if HGI
elects to assume the defense, such defense shall be conducted by legal
counsel chosen by HGI and satisfactory to Distributor and to the
persons indemnified who are defendants in the suit. In the event that
HGI elects to assume the defense of any such suit and retain such
legal counsel, Distributor and the persons indemnified who are
defendants in the suit shall bear the fees and expenses of any
additional legal counsel retained by them. If HGI does not elect to
assume the defense of any such suit, the Fund will reimburse
Distributor and the persons indemnified who are defendants in such
suit for the reasonable fees and expenses of any legal counsel
retained by them. In any event, HGI shall not be responsible for any
claim settled or compromised, or for any confession of judgment,
without its prior written consent, which consent shall not be
unreasonably withheld. HGI agrees promptly to notify Distributor of
the commencement of any litigation or proceedings against it or any of
its directors, officers, employees, agents, or representative in
connection with the issuance or sale of any Fund Shares.
15. Effective Date, Duration, Termination, and Assignment. This Agreement
shall become effective as to any Fund on the date set forth in Schedule A
to this Agreement and unless terminated as provided herein, shall remain in
effect through June 30 of the year next following the effective date and
from year to year thereafter, but only so long as such continuance is
specifically approved at least annually (a) by the vote of a majority of
the members of the Board who are not interested persons of Distributor or
its affiliates, voting in person at a meeting called for the purpose of
voting on such approval, and (b) by the vote of either the Board or a
majority of the outstanding shares of the Fund. This Agreement may be
terminated by and between an individual Fund and Distributor at any time,
without the payment of any penalty (a) on 60 days' written notice by the
Board or by a vote of a majority of the outstanding Shares of the Fund, or
by Distributor, or (b) immediately, on written notice by the Board, in the
event of termination or suspension of any of the Registrations. This
Agreement will automatically terminate in the event of its assignment. The
definitions contained in Section 2(a) of the 1940 Act, particularly the
definitions of "interested person," "assignment," and "majority of the
outstanding shares," shall be applied in interpreting the provisions of
this Paragraph 15.
16. Amendment of this Agreement. No provision of this Agreement may be changed,
waived, discharged, or terminated orally, except by an instrument in
writing signed by each party against which enforcement of the change,
waiver, discharge, or termination is sought. If HGI should at any time deem
it necessary or advisable in the best interests of HGI or the Fund that any
amendment of this Agreement be made in order to comply with the
recommendations or requirements of the SEC or any other
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governmental authority or to obtain any advantage under state or federal
tax laws and notifies Distributor of the form of such amendment, and the
reasons therefor, and if Distributor should decline to assent to such
amendment, HGI may terminate this Agreement forthwith. If Distributor
should at any time request that a change be made in HGI's Articles of
Incorporation or Bylaws or in its methods of doing business, in order to
comply with any requirement of federal law or regulations of the SEC, or of
a national securities association of which Distributor is or may be a
member, relating to the sale of Fund Shares, and HGI should not make such
necessary changes within a reasonable time, Distributor may terminate this
Agreement forthwith.
17. Notice. Any notice under this Agreement shall be in writing, addressed and
delivered or sent by certified mail, postage prepaid, to the other party at
such address as such other party may designate for the receipt of such
notices. Until further notice, it is agreed that the address of both HGI
and Distributor is 000 Xxxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000,
Attention: Secretary. With respect to any notice given hereunder to HGI, a
copy shall be delivered to Xxxxxxx & Xxxxx LLP, 000 Xxxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxxx, Esq., and with
respect to any notice given hereunder to Distributor, a copy shall be
delivered to Heartland Advisors, Inc., 000 Xxxxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxx 00000, Attention: General Counsel.
18. Headings. Headings are placed herein for convenience of reference only and
shall not be taken as part hereof or control or affect the meaning,
construction, or effect of this Agreement.
19. Governing Law. This Agreement shall be governed by the laws of the State
of Wisconsin.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the day and year first above written.
HEARTLAND GROUP, INC.
By: ________________________________
Xxxxxxx X. Xxxxxxxxx
President
Attest:
__________________________________
Xxxx X. Xxxxxxxxxxxx
Secretary
HEARTLAND ADVISORS, INC.
By: ________________________________
Xxxxxxx X. Xxxxxxxxx
President
Attest:
__________________________________
Xxxx X. Xxxxxxxxxxxx
Secretary
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DISTRIBUTION AGREEMENT
SCHEDULE A
The Funds of Heartland Group, Inc. subject to this Agreement are:
Effective Date
--------------
Heartland Taxable Short Duration Municipal Fund No Load Class 12/29/98
Dated: December 29, 1998
HEARTLAND GROUP, INC.
By: ________________________________
Xxxxxxx X. Xxxxxxxxx
President
Attest:
__________________________________
Xxxx X. Xxxxxxxxxxxx
Secretary
HEARTLAND ADVISORS, INC.
By: ________________________________
Xxxxxxx X. Xxxxxxxxx
President
Attest:
__________________________________
Xxxx X. Xxxxxxxxxxxx
Secretary
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