DISTRIBUTION CONTRACT
Fixed Income SHares
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
February ___, 2000
PIMCO Funds Distributors LLC
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Ladies and Gentlemen:
This will confirm the agreement between the undersigned (the "Trust") and you
(the "Distributor") as follows:
1. Description of Trust. The Trust, Fixed Income SHares ("FISH"), is an
open-end management investment company which presently has the following two
investment portfolios: FISH: Series C and FISH: Series M (each a "Portfolio").
Additional investment portfolios may be established in the future. This
Contract shall pertain to the Portfolios and to such additional investment
portfolios as shall be designated in Supplements to this Contract, as further
agreed between the Trust and the Distributor. The Trust engages in the
business of investing and reinvesting the assets of the Portfolios in the
manner and in accordance with the investment objectives and restrictions
specified in the Trust's currently effective Prospectus or Prospectuses and
Statement of Additional Information (together, the "Prospectus") relating to
the Portfolios included in the Trust's Registration Statement, as amended from
time to time (the "Registration Statement"), as filed by the Trust under the
Investment Company Act of 1940, as amended (together with the rules and
regulations thereunder, the "1940 Act") and the Securities Act of 1933, as
amended (together with the rules and regulations thereunder,
the "1933 Act"). Copies of the documents referred to in the preceding sentence
have been furnished to the Distributor. Any amendments to those documents
shall be furnished to the Distributor promptly.
2. Appointment and Acceptance. The Trust hereby appoints the Distributor as a
distributor of shares of beneficial interest in the Trust (the "shares") which
may from time to time be registered under the 1933 Act and as servicing agent
of shareholders and shareholder accounts of the Trust, and the Distributor
hereby accepts such appointment in accordance with the terms and conditions set
forth herein. As the Trust's agent, the Distributor shall, except to the
extent provided in Section 4 hereof, be the exclusive distributor for the
unsold portion of the shares.
3. Sale of Shares to Distributor and Sales by Distributor. The Distributor
will have the right, as agent, to publicly sell shares of the Portfolios to
registered investment advisors approved by PIMCO Advisory Services ("RIAs")
against orders therefor. The price for shares shall be net asset value.
The Trust shall sell through the Distributor, as the Trust's agent, shares to
RIAs as described in the Prospectus. All orders through the Distributor shall
be subject to acceptance and confirmation by the Trust. The Trust shall have
the right, at its election, to deliver either shares issued upon original issue
or treasury shares.
Prior to the time of transfer of any shares by the Trust to, or on the order
of, the Distributor or any RIA, the Distributor shall pay or cause to be paid
to the Trust or to its order an amount in New York clearing house funds equal
to the applicable net asset value of the shares. Upon receipt of registration
instructions in proper form, the Distributor will transmit or cause to be
transmitted such instructions to the Trust or its agent for registration of the
shares purchased.
On every sale, the Trust shall receive the net asset value of the shares. The
net asset value of shares shall be determined in the manner provided in the
Declaration of Trust and By-laws of the Trust as then in effect.
4. Sales of Shares by the Trust. In addition to sales by the Distributor, the
Trust reserves the right to issue shares at any time directly to its
shareholders as a stock dividend or stock split or to sell shares to its
shareholders or other persons at not less than net asset value to the extent
that the Trust, its officers, or other persons associated with the Trust
participate in the sale, or to the extent that the Trust or the transfer agent
for its shares receive purchase requests for shares.
5. Fees. The Trust, on behalf of the Portfolios, shall pay the Distributor no
fees.
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6. Reservation of Right Not to Sell. The Trust reserves the right to refuse at
any time or times to sell any of its shares for any reason deemed adequate by
it.
7. Use of Sub-Agents; Non-exclusivity. The Distributor may employ such
sub-agents, for the purposes of selling shares of the Trust as the Distributor,
in its sole discretion, shall deem advisable or desirable. The Distributor may
enter into similar arrangements with other issuers and, except to the extent
necessary to perform its obligations hereunder, nothing herein shall be deemed
to limit or restrict the right of the Distributor, or any affiliate of the
Distributor, or any employee of the Distributor, to engage in any other
business or to devote time and attention to the management or other aspects of
any other business, whether of a similar or dissimilar nature, or to render
services of any kind to any other corporation, firm, individual or association.
8. Basis of Purchases and Sales of Shares. The Distributor's obligation to
sell shares hereunder shall be on a best efforts basis only and the Distributor
shall not be obligated to sell any specific number of shares. Shares will be
sold by the Distributor only against orders therefor.
The Distributor will not purchase shares from anyone other than the Trust and
will not take "long" or "short" positions in shares contrary to any applicable
provisions of the Declaration of Trust of the Trust, as amended.
9. Rules of Securities Associations, etc. As the Trust's agent, the
Distributor may sell and distribute shares in such manner not inconsistent with
the provisions hereof and the Trust's Prospectus as the Distributor may
determine from time to time. In this connection, the Distributor shall comply
with all laws, rules and regulations applicable to it, including, without
limiting the generality of the foregoing, all applicable rules or regulations
under the 1940 Act and of any securities association registered under the
Securities Exchange Act of 1934, as amended (together with the rules and
regulations thereunder, the "1934 Act"). The Distributor will conform to the
Conduct Rules of the National Association of Securities Dealers, Inc. and the
securities laws of any jurisdiction in which it sells, directly or indirectly,
any shares. The Distributor also agrees to furnish to the Trust sufficient
copies of any agreement or plan it intends to use in connection with any sales
of shares in adequate time for the Trust to file and clear them with the proper
authorities before they are put in use, and not to use them until so filed and
cleared.
10. Independent Contractor. The Distributor shall be an independent contractor
and neither the Distributor nor any of its officers or employees as such, is or
shall be an employee of the Trust. The Distributor is responsible for its own
conduct and the employment, control and conduct of its agents and employees and
for injury to such agents or employees or to others through its agents or
employees. The Distributor assumes full responsibility for its agents and
employees under applicable statutes and agrees to pay all employer taxes
thereunder.
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11. Registration and Qualification of Shares. The Trust agrees to execute such
papers and to do such acts and things as shall from time to time be reasonably
requested by the Distributor for the purpose of qualifying and maintaining
qualification of the shares for sale under the so-called Blue Sky Laws of any
state or for maintaining the registration of each Portfolio of the Trust and
the Trust under the 1933 Act and the 1940 Act, to the end that there will be
available for sale from time to time such number of shares as the Distributor
may reasonably be expected to sell. The Trust shall advise the Distributor
promptly of (a) any action of the Securities and Exchange Commission or any
authorities of any state or territory, of which it may be advised, affecting
registration or qualification of the Trust, a Portfolio or the shares thereof,
or rights to offer such shares for sale and (b) the happening of any event
which makes untrue any statement or which requires the making of any change in
the registration statement or Prospectus in order to make the statements
therein not misleading.
12. Securities Transactions. The Trust agrees that the Distributor may effect
a transaction on any national securities exchange of which it is a member for
the account of the Trust and any Portfolio of the Trust which is permitted by
Section 11(a) of the 1934 Act.
13. Expenses.
(a) The Distributor shall from time to time employ or associate with it
such persons as it believes necessary to assist it in carrying out its
obligations under this Contract. The compensation of such persons shall be
paid by the Distributor.
(b) The Distributor shall pay all expenses incurred in connection with
its qualification as a dealer or broker under Federal or state law.
(c) The Trust may enter into arrangements with affiliates of the
Distributor providing for the payment by such affiliates of some or all
expenses of preparing, printing and distributing advertising and sales
literature.
(d) The Trust shall pay or cause to be paid all expenses incurred in
connection with (i) the preparation, printing and distribution to shareholders
of the Prospectus and reports and other communications to existing
shareholders, (ii) future registrations of shares under the 1933 Act and the
1940 Act, (iii) amendments of the Registration Statement subsequent to the
initial public offering of shares, (iv) qualification of shares for sale in
jurisdictions designated by the Distributor, including under the securities or
so-called "Blue Sky" laws of any State, (v) qualification of the Trust as a
dealer or broker under the laws of jurisdictions designated by the Distributor,
(vi) qualification of the Trust as a foreign corporation authorized to do
business in any jurisdiction if the Distributor determines that such
qualification is necessary or desirable for the purpose of facilitating sales
of shares, (vii) maintaining facilities for the issue and transfer of shares,
and (viii) supplying information, prices and other data to be furnished by the
Trust under this Contract.
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(e) The Trust shall pay any original issue taxes or transfer taxes
applicable to the sale or delivery of shares or certificates therefor.
14. Indemnification of Distributor. The Trust shall prepare and furnish to the
Distributor from time to time such number of copies of the most recent form of
the Prospectus filed with the SEC as the Distributor may reasonably request.
The Trust authorizes the Distributor to use the Prospectus, in the form
furnished to the Distributor from time to time, in connection with the sale of
shares. The Trust shall indemnify, defend and hold harmless the Distributor,
its officers and trustees and any person who controls the Distributor within
the meaning of the 1933 Act, 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 counsel fees incurred in connection
therewith) which the Distributor, its officers and trustees or any such
controlling person may incur under the 1933 Act, the 1940 Act, the common law
or otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus or
arising out of or based upon any alleged omission to state a material fact
required to be stated in either or necessary to make the statements in either
not misleading. This Contract shall not be construed to protect the
Distributor against any liability to the Trust or its shareholders to which the
Distributor would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this Contract. This
indemnity agreement is expressly conditioned upon the Trust being notified of
any action brought against the Distributor, its officers or directors or any
such controlling person, which notification shall be given by letter or by
telegram addressed to the Trust at its principal office in New York, New York,
and sent to the Trust by the person against whom such action is brought within
10 days after the summons or other first legal process shall have been served.
The failure to notify the Trust of any such action shall not relieve the Trust
from any liability which it may have to the person against whom such action is
brought by reason of any such alleged untrue statement or omission otherwise
than on account of the indemnity agreement contained in this Section 14. The
Trust shall be entitled to assume the defense of any suit brought to enforce
any such claim, demand or liability, but, in such case, the defense shall be
conducted by counsel chosen by the Trust and approved by the Distributor. If
the Trust elects to assume the defense of any such suit and retain counsel
approved by the Distributor, the defendant or defendants in such suit shall
bear the fees and expenses of any additional counsel retained by any of them,
but in case the Trust does not elect to assume the defense of any such suit, or
in the case the Distributor does not approve of counsel chosen by the Trust,
the Trust will reimburse the Distributor, 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 the Distributor or them.
In addition, the Distributor shall have the right to employ counsel to
represent it, its officers and directors and any such controlling person who
may be subject to liability arising out of any claim in respect of which
indemnity may be sought by the Distributor against the Trust hereunder if in
the reasonable judgment of the Distributor it is advisable for the Distributor,
its officers and directors or such controlling person to be represented by
separate counsel, in which event the
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fees and expense of such separate counsel shall be borne by the Trust. This
indemnity agreement and the Trust's representations and warranties in this
Contract shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Distributor, its officers and
directors or any such controlling person. This indemnity agreement shall inure
exclusively to the benefit of the Distributor and its successors, the
Distributor's officers and directors and their respective estates and any such
controlling persons and their successors and estates. The Trust shall promptly
notify the Distributor of the commencement of any litigation or proceedings
against it in connection with the issue and sale of any shares.
15. Indemnification of Trust. The Distributor agrees to indemnify, defend and
hold harmless the Trust, its officers and Trustees and any person who controls
the Trust within the meaning of the 1933 Act, 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 counsel fees incurred
in connection therewith) which the Trust, its officers or Trustees or any such
controlling person, may incur under the 1933 Act, the 1940 Act, the common law
or otherwise, but only to the extent that such liability or expense incurred by
the Trust, its officers or Trustees or such controlling person resulting from
such claims or demands shall arise out of or be based upon (a) any alleged
untrue statement of a material fact contained in information furnished in
writing by the Distributor to the Trust specifically for use in the
Registration Statement or the Prospectus or shall arise out of or be based upon
any alleged omission to state a material fact in connection with such
information required to be stated in the Registration Statement or the
Prospectus or necessary to make such information not misleading, (b) any
alleged act or omission on the Distributor's part as the Trust's agent that has
not been expressly authorized by the Trust in writing, and (c) any claim,
action, suit or proceeding which arises out of or is alleged to arise out of
the Distributor's failure to exercise reasonable care and diligence with
respect to its services rendered in connection with investment, reinvestment,
employee benefit and other plans for shares. The foregoing rights of
indemnification shall be in addition to any other rights to which the Trust or
a trustee may be entitled as a matter of law. This indemnity agreement is
expressly conditioned upon the Distributor being notified of any action brought
against the Trust, its officers or Trustees or any such controlling person,
which notification shall be given by letter or telegram addressed to the
Distributor at its principal office in Stamford, Connecticut, and sent to the
Distributor by the person against whom such action is brought, within 10 days
after the summons or other first legal process shall have been served. The
failure to notify the Distributor of any such action shall not relieve the
Distributor from any liability which it may have to the Trust, its officers or
Trustees or such controlling person by reason of any alleged misstatement,
omission, act or failure on the Distributor's part otherwise than on account of
the indemnity agreement contained in this Section 15. The Distributor shall
have a right to control the defense of such action with counsel of its own
choosing and approved by the Trust if such action is based solely upon such
alleged misstatement, omission, act or failure on the Distributor's part, and
in any other event the Trust, its officers and Trustees or such controlling
person shall each have the right to participate in the defense or preparation
of the
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defense of any such action at their own expense. If the Distributor elects to
assume the defense of any such suit and retain counsel approved by the Trust,
the defendant or defendants in such suit shall bear the fees and expenses of
any additional counsel retained by any of them, but in case the Distributor
does not elect to assume the defense of any such suit, or in the case the Trust
does not approve of counsel chosen by the Distributor, the Distributor will
reimburse the Trust, its officers and Trustees or the controlling person or
persons named as defendant or defendants in such suit, for the fees and
expenses of any counsel retained by the Trust or them. In addition, the Trust
shall have the right to employ counsel to represent it, its officers and
Trustees and any such controlling person who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Trust against the Distributor hereunder if in the reasonable judgment of the
Trust it is advisable for the Trust, its officers and Trustees or such
controlling person to be represented by separate counsel, in which event the
fees and expense of such separate counsel shall be borne by the Distributor.
This indemnity agreement and the Distributor's representations and warranties
in this Contract shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of the Trust, its officers and
Trustees or any such controlling person. This indemnity agreement shall inure
exclusively to the benefit of the Trust and its successors, the Trust's
officers and Trustees and their respective estates and any such controlling
persons and their successors and estates. The Distributor shall promptly
notify the Trust of the commencement of any litigation or proceedings against
it in connection with the issue and sale of any shares.
16. Assignment Terminates this Contract; Amendments of this Contract. This
Contract shall automatically terminate, without the payment of any penalty, in
the event of its assignment. This Contract may be amended only if such
amendment be approved either by action of the Trustees of the Trust or at a
meeting of the shareholders of the Trust by the affirmative vote of a majority
of the outstanding shares of the Trust, and by a majority of the Trustees of
the Trust who are not interested persons of the Trust and who have no direct or
indirect financial interest in the operation of the Plans or this Contract by
vote cast in person at a meeting called for the purpose of voting on such
approval.
17. Effective Period and Termination of this Contact. This Contract shall take
effect upon the date first above written and shall remain in full force and
effect continuously as to a Portfolio (unless terminated automatically as set
forth in Section 16 hereof) until terminated:
(a) Either by such Portfolio or the Distributor by not more than sixty
(60) days' nor less than thirty (30) days' written notice delivered or mailed
by registered mail, postage prepaid, to the other party; or
(b) Automatically as to any Portfolio at the close of business one year
from the date hereof, or upon the expiration of one year from the effective
date of the last continuance of this Contract, whichever is later, if the
continuance of this Contract is not specifically approved at least annually by
the Trustees of the Trust or the shareholders of such Portfolio by the
affirmative vote of a majority of the outstanding
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shares of such Portfolio, and by a majority of the Trustees of the Trust who
are not interested persons of the Trust and who have no direct or indirect
financial interest in the operation of the Plans or this Contract by vote cast
in person at a meeting called for the purpose of voting on such approval.
Action by a Portfolio under (a) above may be taken either (i) by vote of the
Trustees of the Trust, or (ii) by the affirmative vote of a majority of the
outstanding shares of such Portfolio. The requirement under (b) above that the
continuance of this Contract be "specifically approved at least annually" shall
be construed in a manner consistent with the 1940 Act and the rules and
regulations thereunder.
Termination of this Contract pursuant to this Section 17 shall be without the
payment of any penalty.
If this Contract is terminated or not renewed with respect to one or more
Portfolios, it may continue in effect with respect to any Portfolio as to which
it has not been terminated (or has been renewed).
18. Certain Definitions. For the purposes of this Contract, the "affirmative
vote of a majority of the outstanding shares" means the affirmative vote, at a
duly called and held meeting of shareholders, (a) of the holders of 67% or more
of the shares of the Trust or Portfolio, as the case may be, present (in person
or by proxy) and entitled to vote at such meeting, if the holders of more than
50% of the outstanding shares of the Trust or Portfolio, as the case may be,
entitled to vote at such meeting are present in person or by proxy, or (b) of
the holders of more than 50% of the outstanding shares of the Trust or
Portfolio, as the case may be, entitled to vote at such meeting, whichever is
less.
For the purposes of this Contract, the terms "interested persons" and
"assignment" shall have the meanings defined in the 1940 Act, subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
under said Act. Certain other items used herein that are not otherwise defined
have the meaning given in the Trust's Prospectus or constituent agreements or
documents of the Trust.
The Declaration of Trust establishing the Trust, a copy of which, together with
all amendments thereto (the "Declaration"), is on file in the Office of the
Secretary of State of the Commonwealth of Massachusetts, was filed on November
8, 1999. Under Massachusetts law, shareholders of a "Massachusetts business
trust" could, under certain circumstances, be held personally liable for the
obligations of the trust. However, the Declaration of Trust of FISH disclaims
shareholder liability for acts or obligations of FISH on behalf of its
Portfolios and requires that notice of such disclaimer be given in each
agreement, obligation, or instrument entered into or executed by FISH. The
Declaration of Trust provides for indemnification out of the property of the
relevant Portfolio for all loss and expense of any shareholder of that
Portfolio held personally liable for the obligations of FISH solely by reason
of his being or
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having been a shareholder of FISH. Thus, the risk of a shareholder's incurring
financial loss on account of such shareholder liability is limited to
circumstances in which the Portfolio itself would be unable to meet its
obligations.
If the foregoing correctly sets forth the agreement between the Trust and the
Distributor, please so indicate by signing and returning to the Trust the
enclosed copy hereof.
Very truly yours,
FIXED INCOME SHARES
By: ______________________________
Title:
ACCEPTED:
PIMCO FUNDS DISTRIBUTORS LLC
By: ______________________________
Title:
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