DISTRIBUTION AGREEMENT
NATIONS FUND, INC.
Xxxxxxxx Inc.
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Gentlemen:
This is to confirm that, in consideration of the agreements hereinafter
contained, the undersigned, Nations Fund, Inc. (the "Company"), a Maryland
corporation, has agreed that Xxxxxxxx Inc. (the "Distributor") shall be, for the
period of this Agreement, the exclusive distributor of the shares of common
stock in all classes of shares ("Shares") of the investment portfolios of the
Company listed on Schedule I (individually, a "Fund" and collectively the
"Funds"). Absent written notification to the contrary by either the Company or
the Distributor, each new investment portfolio established in the future shall
automatically become a "Fund" for all purposes hereunder and shares of each new
class established in the future shall automatically become "Shares" for all
purposes hereunder as if set forth on Schedule I.
1. Services as Distributor.
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1.1 The Distributor will act as agent for the distribution of Shares in
accordance with the instructions of the Company's Board of Directors and the
Company's registration statement and prospectus then in effect under the
Securities Act of 1933, as amended, and will transmit promptly any orders
received by it for the purchase or redemption of Shares to the Company or its
transfer agent.
1.2 The Distribution agrees to use appropriate efforts to solicit
orders for the sale of Shares and will undertake such advertising and promotion
as it believes appropriate in connection with such solicitation. The Company
understands that the Distributor is and may in the future be the distributor of
shares of other investment company portfolios ("Portfolios") including
Portfolios having investment objectives similar to those of the Funds. The
Company
further understands that existing and future investors in the Funds may invest
in shares of such other Portfolios. The Company agrees that the Distributor's
duties to such Portfolios shall not be deemed in conflict with its duties to the
Company under this paragraph 1.2.
1.3 The Distributor shall, at its own expense, finance such activities
as it deems reasonable and which are primarily intended to result in the sale of
Shares, including, but not limited to, advertising, compensation of
underwritings, dealers and sales personnel, the printing and mailing of
prospectuses to other than current shareholders, and the printing and mailing of
sales literature. The Distributor shall be responsible for reviewing and
providing advice and counsel on all sales literature (e.g., advertisements,
brochures and shareholder communications) with respect to each of the Funds. In
addition, the Distributor will provide one or more persons, during normal
business hours, to respond to telephone questions with respect to the Funds.
1.4 All activities by the Distributor and its agents and employees as
distributor of Shares shall comply with all applicable laws, rules and
regulations, including, without limitation, all rules and regulations made or
adopted pursuant to the Investment Company Act of 1940 ("1940 Act") by the
Securities and Exchange Commission (the "SEC") or any securities association
registered under the Securities Exchange Act of 1934.
1.5 Whenever in their judgment such action is warranted by unusual
market, economic or political conditions, or by other circumstances of any kind,
the Company's officers may decline to accept any orders for, or make any sales
of Shares until such time as those officers deem it advisable to accept such
orders and to make such sales.
1.6 The Company agrees at its own expense to execute any and all
documents and to furnish any and all information and otherwise to take all
actions that may be reasonably necessary in connection with the registration or
qualification of Shares for sale in such states as the Distributor may designate
to the Company and the Company may approve, and the Company shall pay all fees
and other expenses incurred in connection with such registration or
qualification.
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1.7 The Company shall furnish from time to time, for use in connection
with the sale of Shares, such information with respect to the Funds and Shares
as the Distributor may reasonably request; and the Company warrants that the
statements contained in any such information shall fairly show or represent what
they purport to show or represent. The Company shall also furnish the
Distributor upon request with: (a) audited annual and unaudited semi-annual
statements of the Company's books and accounts with respect to each Fund, and,
(b) from time to time such additional information regarding the Funds' financial
condition as the Distributor may reasonably request.
1.8 The Distributor may be reimbursed for all or a portion of the
expenses described above to the extent permitted by a distribution plan adopted
by the Company on behalf of a Fund pursuant to Rule 12b-1 under the 1940 Act. No
provision of this Agreement shall be deemed to prohibit any payments by a Fund
to the Distributor or by a Fund or the Distributor to investment dealers, banks
or other financial institutions through whom shares of the Fund are sold where
such payments are made under a distribution plan adopted by the Company on
behalf of such Fund pursuant to Rule 12b-1 under the 1940 Act. In addition, the
Company shall pay to the Distributor the proceeds from any contingent deferred
sales charge imposed on the redemption of the shares as specified in the Fund's
Registration Statement.
1.9 The Distributor will execute and deliver agreements with
broker/dealers, financial institutions and other industry professionals based on
the forms attached hereto or based on the additional forms of agreement approved
from time to time by the Company's Board of Directors with respect to the
various classes of shares of the Funds , including but not limited to forms of
sales support agreements and shareholder servicing agreements approved in
connection with a distribution and/or servicing plan approved in accordance with
Rule 12b-1 under the 1940 Act.
2. Representations; Indemnification.
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2.1 The Company represents to the Distributor that all registration
statements and prospectuses filed by the Company with the SEC under the
Securities Act of 1933, as amended ("Act"), with respect to Shares have been
prepared in conformity with the requirements of said Act and rules and
regulations of the SEC thereunder. As used in this Agreement, the
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terms "registration statement" and "prospectus" shall mean any registration
statement and then current prospectus (together with any related then current
statement of additional information) filed with the SEC with respect to Shares,
and any amendments and supplements thereto which at any time shall have been
filed therewith. The Company represents and warrants to the Distributor that any
registration statement and prospectus, when such registration statement becomes
effective, will contain all statements required to be stated therein in
conformity with said Act and the rules and regulations of the SEC; that all
statements of fact contained in any such registration statement and prospectus
will be true and correct when such registration statement and prospectus become
effective; and that neither any registration statement nor any prospectus when
any 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
Shares. The Company 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 which in light of future
developments, may, in the opinion of the Company's counsel, be necessary or
advisable. The Company shall promptly notify the Distributor of any advice given
to it by the Company's counsel regarding the necessity or advisability so to
amend or supplement such registration statement or prospectus. If the Company
shall not propose such amendment or amendments and/or supplement within fifteen
days after receipt by the Company of a written request from the Distributor to
do so, the Distributor may, at its option, terminate this Agreement. The Company
shall not file any amendment to any registration statement or supplement to any
prospectus without giving the Distributor reasonable notice thereof in advance;
provided, however, that nothing contained in this Agreement shall in any way
limit the Company's right to file at any time such amendments to any
registration statement and/or supplements to any prospectus, of whatever
character, as the Company may deem advisable, such right being in all respects
absolute and unconditional.
2.2 The Company authorizes the Distributor and dealers to use any
prospectus in the form furnished from time to time in connection with the sale
of Shares and represented by the Company as being the then current form of
prospectus. The Company agrees to indemnify, defend and hold the Distributor,
its several officers and directors, and any person who controls the Distributor
within the meaning of Section 15 of the Act free and harmless from and against
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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
directors, or any such controlling person, may incur under the Act or under
common law or otherwise, arising out of or based upon any untrue statement, or
alleged untrue statement, of a material fact contained in any registration
statement or any prospectus 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 or prospectus or necessary to make any statement in such
documents not misleading; providing, however, that the Company's agreement to
indemnify the Distributor, 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 untrue statement or alleged untrue statement or omission or
alleged omission made in any registration statement or prospectus or in any
financial or other statements in reliance upon and in conformity with any
information furnished to the Company by the Distributor or any affiliate thereof
and used in the preparation thereof; and further provided that the Company's
agreement to indemnify the Distributor and the Company's representations and
warranties herein set forth shall not be deemed to cover any liability to the
Company or its shareholders to which the Distributor would otherwise be subject
by reason or willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of the Distributor's reckless disregard
of its obligations and duties under this Agreement. The Company's agreement to
indemnify the Distributor, its officers and directors, and any such controlling
person, as aforesaid, is expressly conditioned upon the Company's being notified
of any action bought against the Distributor, its officers or directors, or any
such controlling person, such notification to be given by letter or by telegram
addressed to the Company at its principal office and sent to the Company by the
person against whom such action is brought, within a reasonable period of time
after the summons or other first legal process shall have been served. The
failure to so notify the Company of any such action shall not relieve the
Company from any liability which the Company may have to the person against whom
such action is brought by reason or any such untrue, or allegedly untrue,
statement or omission, or alleged omission, otherwise than on account of the
Company's indemnity agreement contained in this paragraph 2.2. The Company 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 Company and
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approved by the Distributor, which approval shall not unreasonably be withheld.
In the event the Company elects to assume the defense of any such suit and
retain counsel of good standing 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 Company does not elect to
assume the defense of any such suit, or in case the Distributor reasonably does
not approve of counsel chosen by the Company, the Company 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. The Company's indemnification
agreement contained in this paragraph 2.2 and the Company'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 the Distributor, its
officers and directors, or any controlling person, and shall survive the
delivery of any Shares. This agreement of indemnify will inure exclusively to
the Distributor'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 Company agrees promptly to notify the Distributor of the
commencement of any litigation or proceedings against the Company or any of its
officers or directors in connection with the issue and sale of any Shares.
2.3 The Distributor agrees to indemnify, defend and hold the Company ,
its several officers and directors, and any person who controls the Company
within the meaning of Section 15 of the Act free and harmless from and against
any and all claims, demands, liabilities and expenses (including the costs of
investigation or defending such claims, demands or liabilities and any counsel
fees incurred in connection therewith) which the Company, its officers or
directors or any such controlling person, may incur under the Act or under
common law or otherwise, but only to the extent that such liability or expense
incurred by the Company, 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 by the Distributor or any affiliate thereof to the Company or its
counsel and used in the Company's registration statement or corresponding
statements made in the prospectus, 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 by the Distributor or any affiliate thereof to the Company
or its counsel required to be stated in such answers or necessary to make
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such information not misleading. The Distributor's agreement to indemnify the
Company, its officers and directors, and any such controlling person, as
aforesaid, is expressly conditioned upon the Distributor's being notified of any
action brought against the Company, its officers or directors, or any such
controlling person, such notification to be given by letter or telegram
addressed to the Distributor at its principal office in Little Rock, Arkansas
and sent to the Distributor by the person against whom such action is brought,
within a reasonable period of time after the summons or other first legal
process shall have been served. The Distributor shall have the right to control
the defense of such action, with counsel of its own choosing, satisfactory to
the Company, if such action is based solely upon such alleged misstatement or
omission on the Distributor's part or any affiliate thereof, and in any other
event the Company, 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 so to notify the Distributor of any such action
shall not relieve the Distributor or any affiliate thereof from any liability
which the Distributor or any affiliate thereof may have to the Company, 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 the Distributor's indemnity agreement contained in this
paragraph 2.3.
2.4 No Shares shall be offered by either the Distributor or the Company
under any of the provisions of this Agreement and no orders for the purchase or
sale of Shares hereunder shall be accepted by the Company 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 provisions of the Act, or
if and so long as a current prospectus, as required by Section 10(b) of said
Act, as amended, is not on file with the SEC; provided, however, that nothing
contained in this paragraph 2.4 shall in any way restrict or have any
application to or bearing upon the Company's obligation to repurchase Shares
from any shareholder in accordance with the provisions of the Company's
prospectus or Articles of Incorporation.
2.5 The Company agrees to advise the Distributor as soon as reasonably
practical:
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(a) of any request by the SEC for amendments to the registration
statement or prospectus then in effect;
(b) of the issuance by the SEC of any stop order suspending the
effectiveness of the registration statement or prospectus then in effect or of
the initiation of any proceeding for that purpose;
(c) of the happening of any event that makes untrue any statement
of a material fact made in the registration statement or prospectus then in
effect or which requires the making of a change in such registration statement
or prospectus in order to make the statements therein not misleading;
(d) of all actions of the SEC with respect to any amendment to any
registration statement or prospectus which may from time to time be filed with
the SEC; and
(e) if a current prospectus is not on file with the SEC.
For purposes of this section, informal requests by or acts of the Staff
of the SEC shall not be deemed actions of or requests by the SEC.
3. Confidentiality.
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The Distributor agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Company all records and
other information relative to the Funds and/or the Company and its prior,
present or potential shareholders, and not to use such records and information
for any purpose other than performance of its responsibilities and duties
hereunder, except after prior notification to and approval in writing by the
Company, which approval shall not be unreasonably withheld and may not be
withheld where the Distributor may be exposed to civil or criminal contempt
proceedings for failure to comply, when requested to divulge such information by
duly constituted authorities, or when so requested by the Company.
4. Limitations of Liability.
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Except as provided in paragraph 2.3, the Distributor shall not be
liable for any error of judgment or mistake or law or for any loss suffered by
the Company or any Fund in
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connection with matters to which this agreement relates, except a loss resulting
from willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard of its obligations and
duties under this agreement.
5. Term.
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This agreement shall become effective on the date of its execution and,
unless soon terminated as provided herein, shall continue thereafter with
respect to each Fund for successive annual periods, provided such continuance is
specifically approved at least annually by (i) the Company's Board of Directors
or (ii) by a vote of a majority (as defined in the 1940 Act) of the outstanding
voting securities of the Fund, provided that in either event the continuance is
also approved by the majority of the Company's Directors who are not parties to
this agreement or interested persons (as defined in the 1940 Act) of any such
party, by vote cast in person at a meeting called for the purpose of voting on
such approval. This agreement is not assignable and is terminable with respect
to a Fund, without penalty, on not less than sixty days' notice, by the
Company's Board of Directors, by vote of a majority (as defined in the 1940 Act)
of the outstanding voting securities of such Fund, or by the Distributor. This
agreement will also terminate automatically in the event of its assignment (as
defined in the 1940 Act).
6. Miscellaneous.
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6.1 No provision of this Agreement may be changed, waived, discharged
or terminated orally, but only by an instrument in writing signed by the party
against which an enforcement of the change, waiver, discharge or termination is
sought.
6.2 This agreement shall be governed by the laws of the State of
Arkansas.
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Please confirm that the foregoing is in accordance with your
understanding by indicating your acceptance hereof at the place indicated below,
whereupon it shall become a binding agreement between us.
Yours very truly,
NATIONS FUND, INC.
By: /s/ Xxxxxxx X. Xxxxx, Xx.
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Xxxxxxx X. Xxxxx, Xx.
Secretary
Accepted:
XXXXXXXX INC.
By: /s/ X. Xxxx Xxxxxx
---------------------------
X. Xxxx Xxxxxx
Senior Vice President
Dated as of September 1, 1993
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SCHEDULE I
1. Nations Prime Fund
2. Nations Treasury Fund
3. Nations Equity Income Fund
4. Nations Small Company Fund
Last Amended: June 8, 2001
