DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT (this "Agreement"), dated as of __________ __,
1999 between XXXXXXXX XXXXX RESEARCH TRUST, a Delaware business trust (the
"Trust"), on behalf of the SENBANC FUND, a series of the Trust (the "Fund"), and
PROVIDENT DISTRIBUTORS, INC., a Delaware corporation (the "Distributor").
RECITALS
A. The Trust is registered under the Investment Company Act of 1940, as
amended (the "Investment Company Act"), as an open-end management investment
company and it is affirmatively in the interest of the Fund to offer its shares
for sales continuously.
B. The Distributor is a broker-dealer registered under the Securities
Exchange Act of 1934, as amended.
C. The Trust and the Distributor wish to enter into an agreement with
each other with respect to the continuous offering of the Fund's shares in order
to provide for the sale and distribution of shares of the Fund. In
consideration of the promises and the covenants hereinafter contained, the Trust
and the Distributor hereby agree as follows:
1. APPOINTMENT OF THE DISTRIBUTOR. The Trust hereby appoints the
Distributor as agent for the Trust, to sell and distribute shares of the Fund to
the public, upon the terms and conditions and during the term of this Agreement,
and the Distributor hereby accepts such appointment and agrees to act hereunder.
2. NATURE OF DUTIES. The Distributor shall (i) sell and distribute
the Fund's shares and (ii) qualify and maintain the qualification as a
broker-dealer in such states where shares of the Fund are qualified for sale.
In carrying out its duties and responsibilities hereunder, the Distributor
intends to enter into a selling agreement with J.J.B. Xxxxxxxx, X.X. Xxxxx, Inc.
("Xxxxxxxx Xxxxx"), and may enter into other selling agreements (each a "Selling
Agreement") with brokers, dealers and other financial intermediaries
(collectively with Xxxxxxxx Xxxxx, "Intermediaries") in order to implement this
Agreement; such Intermediaries shall at all times be deemed to be independent
contractors retained by the Distributor and not the Trust.
3. SALE OF SHARES OF THE FUND.
3.1 The Distributor will have the right to sell on behalf of the
Fund, as its agent, any shares needed but not more than the shares needed
(except for clerical errors in transmission) to fill unconditional orders
for shares of the Fund placed with the Distributor
by investors. The Distributor agrees that the Fund shall receive 100% of
the net asset value, determined as set forth in the Fund's Prospectus, for
all shares sold by the Distributor.
3.2 The shares are to be sold by or through the Distributor to
investors at a price per share ("offering price") equal to the sum of the
net asset value per share and any applicable sales charges, determined as
set forth in the Fund's Prospectus. The Distributor shall receive
compensation for its distribution activities and services as set forth in
this Agreement and the Fund's written plan contemplated by Rule 12b-1 under
the Investment Company Act, as such plan may be amended from time to time
(the "Distribution Plan"). The Trust hereby authorizes the Distributor to
provide compensation to Intermediaries for such activities and services,
and the Distributor may reallocate all or a portion of its compensation to
such Intermediaries for such activities and services. Such reallocation
shall be in an amount as set forth from time to time in the Fund's
Prospectus.
3.3 The Trust shall have the right to suspend the sale of Fund
shares at times when redemption is suspended pursuant to the conditions set
forth in subsection 4.2. The Trust shall also have the right to suspend
the sale of Fund shares if there shall have been an event that, in the
judgment of the Trustees of the Trust, makes it impracticable or
inadvisable to sell shares, or if in the judgment of the Trustees, the
suspension of the sale of Fund shares is in the best interests of the Fund.
3.4 The Trust, or any agent of the Trust designated in writing
by the Trust, shall be promptly advised of all purchase orders for shares
received by the Distributor. Any order may be rejected by the Trust for
any reason whatsoever. The Trust (or its agent) will confirm orders upon
their receipt, will make appropriate book entries and upon receipt by the
Trust (or its agent) of payment therefore, will deliver deposit receipts or
certificates for such shares pursuant to the instructions of the
Distributor. Payment shall be made to the Trust in New York Clearing House
funds, or by federal funds wire, cashiers check or certified check. The
Distributor agrees to cause such payment and such instructions to be
delivered promptly to the Trust (or its agent).
4. REPURCHASE OR REDEMPTION OF SHARES OF THE FUND.
4.1 Any of the outstanding shares may be tendered for redemption
at any time, and the Trust agrees to repurchase or redeem the shares so
tendered in accordance with its obligations set forth in the Trust's
Declaration of Trust, as amended from time to time, and the applicable
provision set forth in the Prospectus.
4.2 Redemption of shares or payment may be suspended: 1) at
times when the New York Stock Exchange is closed other than customary
weekend closings and holiday closings, 2) when pursuant to rules and
regulations of the Securities and Exchange Commission (the "SEC"), trading
on said Exchange is restricted or an emergency exists as a result of which
disposal by the Fund of securities owned by it is not reasonably
practicable
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or it is not reasonably practicable for the Fund fairly to determine the
value of its net assets, or 3) during any other period when the SEC, by
order, so permits.
5. DUTIES OF THE TRUST.
5.1 The Trust shall make available to the Distributor such
number of copies of its Prospectus, quarterly reports and annual financial
statements as the Distributor shall reasonably request.
5.2 The Trust will qualify and maintain the qualifications, at
the Trust's expense, of an appropriate number of its shares for sale under
the securities laws of such state as selected by the Trust.
6. DUTIES OF THE DISTRIBUTOR.
6.1 The Distributor shall devote reasonable time and effort to
effect sales of shares of the Fund, but shall not be obligated to sell any
specific number of shares. The Distributor will qualify and maintain the
qualifications, at the Distributor's expense, of its registration as a
broker-dealer in such states where shares of the Fund are qualified for
sale. The services of the Distributor to the Trust hereunder are not to be
deemed exclusive and nothing contained herein shall prevent the Distributor
from entering into like arrangements with other investment companies so
long as the performance of its obligations hereunder is not impaired
thereby.
6.2 In selling the shares of the Fund, the Distributor shall use
all reasonable efforts to conform in all respects with the requirements of
all federal and state laws relating to the sale of such securities.
Neither the Distributor nor any other person is authorized by the Trust to
give any information or to make any representations other than those
contained in the Registration Statement or related Prospectus or in any
sales literature specifically approved in writing by the Trust.
6.3 The Distributor shall adopt and follow procedures, as
approved by the officers of the Trust, for the confirmation of sales to
investors, the collection of amounts payable by investors on such sales,
and the cancellation of unsettled transactions, as may be necessary to
comply with the requirements of the National Association of Securities
Dealers, Inc. (the "NASD"), as such requirements may from time to time
exist.
6.4 The Distributor warrants and represents that it is, and
agrees to use all commercially reasonable efforts to remain at all times, a
member in good standing of the NASD including its Code of Conduct, with
authority to act as the Distributor.
6.5 The Distributor warrants and represents that the Selling
Agreements shall provide that the Intermediaries shall provide the
Distributor with such information as is reasonably necessary to permit the
Distributor to comply with the reporting requirements set forth in this
Agreement and the Distribution Plan.
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7. ALLOCATION OF EXPENSES.
7.1 The Distributor shall bear all expenses incurred by it in
connection with its duties and activities under this Agreement, including
the costs and expenses of qualifying and maintaining the qualifications of
its registration as a broker-dealer in such states where shares of the Fund
are qualified for sale, preparing, printing and distributing any sales
literature, advertising and other materials which it creates for its use as
Distributor.
7.2 Except as provided in subsection 7.1 hereof, nothing
contained in this Agreement shall be deemed or construed to impose upon the
Distributor any obligation to incur, pay, or reimburse the Trust for any
other costs and expenses.
7.3 The Trust shall bear the following costs and expenses
related to the continuous offering of the Fund's shares, including fees and
disbursements of its counsel and auditors, in connection with the
preparation and filing of any required Registration Statements and
Prospectuses under the Investment Company Act and the Securities Act of
1933, and all amendments and supplements thereto, and preparing and mailing
annual and interim reports and proxy materials to shareholders (including
but not limited to the expense of setting in type any such Registration
Statements, Prospectuses, annual or interim reports or proxy materials).
7.4 Except as provided in subsection 7.3 hereof, nothing
contained in this Agreement shall be deemed or construed to impose upon the
Trust any obligation to incur, pay, or reimburse the Distributor for any
other costs and expenses.
8. INDEMNIFICATION.
8.1 The Trust agrees to indemnify, defend and hold harmless the
Distributor, its officers, directors, employees, agents, and any person who
controls the Distributor, if any, within the meaning of Section 15 of the
Securities Act (each, an "Indemnified Distributor Party" and collectively,
the "Indemnified Distributor Parties"), from and against any and all
claims, demands, actions, liabilities, losses, costs and expenses
(including the cost of investigating or defending same, and any reasonable
attorneys' fees and expenses incurred in connection
therewith) (collectively, "Liabilities") which the Indemnified Distributor
Parties may incur which arise out of or are based upon (a) any untrue
statement of a material fact contained in the Registration Statement,
Prospectus or annual or interim report or (b) any omission to state a
material fact required to be stated in any thereof or necessary to make the
statements in any thereof not misleading, except insofar as such
Liabilities arise out of or are based upon any such untrue statement or
omission or untrue statement or omission made in reliance upon and in
conformity with information furnished
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to the Trust in writing in connection therewith by or on behalf of the
Distributor; provided, however, that the indemnity agreement in this
Section 8.1 shall not inure to the benefit of any Indemnified Distributor
Party unless (i) a court of competent jurisdiction shall have determined,
in a final unappealable decision on the merits, that such Indemnified
Distributor Party was not liable, by reason of willful misfeasance, bad
faith, or gross negligence in the performance of its or his duties, or by
reason of its or his reckless disregard of its or his obligations under
this Agreement (collectively, "disabling conduct"), or (ii) in the absence
of such a judicial decision, a reasonable determination, based upon a
review of the facts, that the indemnified person was not liable by reason
of disabling conduct, evidenced by either (A) the vote of a majority of
trustees who are neither "interested persons" of the Trust as defined in
Section 2(a)(19) of the Investment Company Act nor parties to the
proceeding or matter in question, or (B) the written opinion of independent
legal counsel. The Trust's indemnification obligation as aforesaid is
expressly conditioned upon the Trust's being promptly notified, by letter
or telegram addressed to the Trust at its principal business office, of any
Liability of or against any Indemnified Distributor Person. The Trust
agrees promptly to notify the Distributor of the commencement of any
litigation or proceeding against the Trust or any Indemnified Fund Parties
(as defined below) in connection with the issue and sale of any Fund
shares.
8.2 The Distributor agrees to indemnify, defend and hold
harmless the Trust, its officers, directors, employees, agents and any
person who controls the Trust, if any, within the meaning of Section 15 of
the Securities Act (each, an "Indemnified Fund Party" and collectively, the
"Indemnified Fund Parties"), from and against any and all Liabilities which
the Indemnified Fund Parties may incur which arise out of or are based upon
(a) any untrue statement of a material fact contained in information
furnished to the Trust in writing by or on behalf of the Distributor for
use in the Registration Statement or Prospectus or any omission to state a
material fact in connection with such information required to be stated in
the Registration Statement, Prospectus or annual or interim report or
necessary to make such information not misleading; or (b) any acts or
omissions by the Indemnified Distributor Parties in connection with the
performance of the Distributor's obligations hereunder. The Distributor's
indemnification agreement as aforesaid is expressly conditioned upon the
Distributor's being promptly notified, by letter or telegram addressed to
the Distributor at its principal business office, of any Liability of or
against any Indemnified Fund Party.
9. DURATION AND TERMINATION OF THE AGREEMENT.
9.1 This Agreement shall become effective as of the date first
written above and shall remain in force from year to year thereafter, but
only so long as such continuance is specifically approved at least annually
by (i) the Trust's Board of Trustees or by the vote of a majority of the
outstanding voting securities of the Fund, and (ii) by the vote of a
majority of those Trustees who are not parties to this Agreement or
interested persons of any such party and who have no direct or indirect
financial interest in the operation of the
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Distribution Plan, this Agreement, or in any other agreement related to the
Distribution Plan, cast in person at a meeting or meetings called for the
purpose of voting on such approval.
9.2 This Agreement may be terminated at any time, without the
payment of any penalty, by the Trust's Board of Trustees or by vote of a
vote of a majority of the outstanding voting securities of the Fund, or by
the Distributor, on sixty days written notice to the other party. This
Agreement shall automatically terminate in the event of its assignment.
10. DEFINITION OF CERTAIN TERMS. The terms "vote of a majority of
the outstanding voting securities," "assignment," "affiliated person," and
"interested person," when used in this Agreement, shall have the respective
meanings specified in the Investment Company Act and the rules and regulations
of the Commission thereunder.
11. AMENDMENTS OF THIS AGREEMENT. This Agreement may be amended by
the parties only if such amendment is specifically approved by (i) the Trust's
Board of Trustees or by the vote of a majority of outstanding voting securities
of the Fund and (ii) by the vote of a majority of those Trustees who are not
parties to this Agreement or interested persons of any such party and who have
no direct or indirect financial interest in the operation of the Distribution
Plan, this Agreement, or in any other agreement related to the Distribution
Plan, cast in person at a meeting or meetings called for the purpose of voting
on such approval.
12. GOVERNING LAW. The provisions of this Agreement shall be
construed and interpreted in accordance with the laws of the State of Delaware,
and the applicable provisions, of the Investment Company Act. To the extent
that the applicable laws of the State of Delaware, or any of the provisions
herein, conflict with the applicable provisions of the Investment Company Act or
the rules and regulations thereunder, the latter shall control. The parties
hereto have executed this Agreement as of the day and year first above written.
XXXXXXXX XXXXX RESEARCH TRUST,
on behalf of the Senbanc Fund
By:
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Date
Name:
Title:
PROVIDENT DISTRIBUTORS, INC.
By:
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Date
Name:
Title:
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