EXHIBIT 99.15(b)
EXCHANGE AND SERVICE AGREEMENT
with respect to
FINANCIAL INSTITUTIONS SERIES TRUST
AGREEMENT made as of the ______ day of ___, 1998, by and between PRINCETON
FUNDS DISTRIBUTOR, INC. ("PFD") and _______ (the "Participating Underwriter").
W I T N E S S E T H
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WHEREAS, PFD has entered into distribution agreements (the "Summit
Distribution Agreements") with FINANCIAL INSTITUTIONS SERIES TRUST (the
"Trust"), a business trust organized under the laws of Massachusetts, on behalf
of its series, SUMMIT CASH RESERVES FUND ("Summit"), pursuant to which PFD acts
as the exclusive distributor for the sale of Class A and Class B shares of
beneficial interest, par value $0.10 per share, of Summit (the "Class A Summit
Shares" and the "Class B Summit Shares," respectively, and together the "Summit
Shares"); and
WHEREAS, the Participating Underwriter has entered into underwriting or
distribution agreements (each, an "Underwriting Agreement") with each of the
open-end management investment companies (and their separate series, if any)
(each a "Participating Fund") listed on Schedule A to this Agreement, as amended
from time to time; and
WHEREAS, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("MLPF&S") has
entered into selected dealer or agent agreements with the Participating
Underwriter with respect to each Participating Fund (the "Participating Fund
Dealer Agreements"),
and with PFD with respect to Summit (the "Summit Dealer Agreements"), pursuant
to which MLPF&S may sell shares of Participating Funds ("Participating Fund
Shares") and Summit Shares to customers of MLPF&S (each a "Customer"); and
WHEREAS, PFD and the Participating Underwriter wish to offer the
opportunity to exchange Participating Fund Shares for Summit Shares, and Summit
Shares for Participating Fund Shares (the "Exchange Program"); and
WHEREAS, MLPF&S has agreed to administer the Exchange Program; and
WHEREAS, the Trust has adopted a Class B Shares Distribution Plan (the
"Summit Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940,
as amended (the "Act"), pursuant to which PFD receives a distribution fee from
Summit at the annual rate of 0.75% of Summit's average daily net assets relating
to Class B Summit Shares for providing sales and promotional activities and
services related to the direct or indirect distribution of Class B Summit
Shares; and
WHEREAS, the Summit Plan provides, inter alia, that PFD may use all or a
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portion of the distribution fees paid thereunder to compensate the Participating
Underwriter for its indirect efforts in distributing Class B Summit Shares;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereby agree as follows:
1. PFD and the Participating Underwriter agree that all offers of
exchange will be conducted in accordance with the terms and conditions of the
order of exemption (Release No. IC-22992, January 6, 1998) from the Securities
and Exchange Commission
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(the "SEC"), as such order may be amended from time to time (the "Order") by
PFD, MLPF&S and the Trust, among others, permitting the Exchange Program. A
copy of the Order and the related notice (Release No. IC-22933, December 10,
1997) and application to the SEC (the "Application") has been provided to the
Participating Underwriter by PFD, and the Participating Underwriter
acknowledges receipt of the Order and the Application.
2. PFD and the Participating Underwriter acknowledge that the Exchange
Program is intended to permit MLPF&S customers who hold Participating Fund
shares to participate in exchanges with Summit without the imposition of any
sales load, administrative fee or redemption fee at the time of exchange, except
as would be permissible under the Act and the Order. Shares of Participating
Funds of a class that are sold at an offering price that may include a front-end
sales load will exchange into Class A Summit Shares, and shares ("CDSC Shares")
of Participating Funds of a class that are sold at net asset value, but subject
to a contingent deferred sales charge ("CDSC") and a distribution fee pursuant
to a Rule 12b-1 Plan, will exchange into Class B Summit Shares. If a
Participating Fund has a conversion feature providing that CDSC Shares will be
exchanged automatically for shares of another class of the same Participating
Fund after a specified period of time, this feature will apply to the Class B
Summit Shares acquired upon exchange of CDSC Shares from the Participating Fund,
and such shares will convert into Class A Summit Shares in accordance with the
conversion schedule of the CDSC Shares of the Participating Fund.
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3. PFD represents and warrants that pursuant to the Summit Dealer
Agreements, MLPF&S will be responsible for tracking the payment of sales loads,
administrative fees and redemption fees by Participating Fund shareholders and
Summit shareholders, and otherwise will conduct the Exchange Program in
accordance with the terms of the Order.
4. The Participating Underwriter represents, warrants and covenants that
(a) each Participating Fund's prospectus will disclose, in compliance with
paragraph (b)(6) of Rule 11a-3, (i) the amount of any administrative or
redemption fee imposed on an exchange of the Participating Fund's shares for
Summit Shares or on an exchange of Summit Shares for shares of the Participating
Fund, and (ii) that the Exchange Program is subject to termination, and that its
terms are subject to change; (b) any sales literature or advertising prepared by
the Participating Underwriter or by a Participating Fund will disclose, in
compliance with paragraph (b)(7) of Rule 11a-3, (i) the existence of any
administrative or redemption fee imposed on an exchange between the
Participating Fund and Summit and (ii) that the Exchange Program is subject to
termination and that its terms are subject to change; and (c) if the Exchange
Program is to be terminated or materially amended with respect to any
Participating Fund, the Participating Fund will comply with the provisions of
paragraph (b)(8) of Rule 11a-3.
5. As payment for the Participating Underwriter's distribution services
with respect to Class B Summit Shares under the Exchange Program, PFD will pay
to the
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Participating Underwriter (i) Rule 12b-1 distribution fees received by PFD
under the Summit Plan in respect of Class B shares acquired in an exchange for
CDSC Shares of a Participating Fund, and (ii) any CDSCs received by PFD upon
the redemption of such shares.
6. The Participating Underwriter shall provide PFD, at least quarterly,
such information as reasonably requested by PFD to enable PFD to comply with
the reporting requirements of Rule 12b-1 regarding the disbursement of the
distribution fee during such period referred to in Paragraph 3 of the Summit
Plan.
7. (a) The Participating Underwriter hereby agrees to indemnify and hold
harmless PFD, each person, if any, who controls PFD, the Trust, and their
respective affiliates from and against any loss, liability, claim, damage or
expense (including the reasonable cost of investigating any alleged loss,
liability, claim, damage or expense and reasonable counsel fees incurred in
connection therewith) (collectively, "Losses"), as incurred, arising out of or
based upon the breach of any provision hereof by the Participating Underwriter
or the Participating Underwriter's failure to effect redemptions or purchases in
conformity with the terms and conditions of the Exchange Program as described
herein and in the Order.
(b) PFD hereby agrees to indemnify and hold harmless the Participating
Underwriter from and against any losses arising out of or based upon the breach
of any provision hereof by PFD.
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(c) Any person entitled to indemnification hereunder agrees to give prompt
written notice to the indemnifying party after the receipt by such person of any
written notice of the commencement of any action, suit, proceeding or
investigation or threat thereof made in writing (collectively, a "Claim") for
which such person will claim indemnification hereunder. The indemnifying party
shall be entitled to assume the defense of any such Claim with counsel that is
reasonably satisfactory to the indemnified party, unless in the judgment of
counsel to the indemnified party a conflict of interest may exist between the
indemnified party and the indemnifying party with respect to such Claim.
Whether or not such defense is assumed by the indemnifying party, the
indemnifying party will not be subject to any liability for any settlement made
without its consent (but such consent will not be unreasonably withheld). No
indemnifying party will consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect of such Claim.
8. This Agreement shall not take effect until it has been approved by vote
of a majority of both (a) the Trustees of the Trust and (b) those Trustees of
the Trust who are not "interested persons" of the Trust, as that term is defined
in the Act, and have no direct or indirect financial interest in the operation
of the Plan, this Agreement or any agreements related to the Plan or this
Agreement (the "Rule 12b-1 Trustees"), cast in person at a meeting or meetings
called for the purpose of voting on this Agreement.
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9. This Agreement shall continue in effect for as long as such continuance
is specifically approved at least annually in the manner provided for initial
approval of this Agreement in Paragraph 8 hereof.
10. This Agreement shall automatically terminate in the event of its
assignment, in the event of the termination of the Summit Plan or any amendment
to the Summit Plan that requires such termination, or in the event the Exchange
Program is terminated. This Agreement may be terminated at any time, without
the payment of any penalty, by vote of a majority of the Rule 12b-1 Trustees or
by vote of a majority of the outstanding Class B Summit Shares on not more than
sixty days' written notice to the parties hereto.
11. If this Agreement is terminated for any reason, then any CDSCs or Rule
12b-1 distribution fees collected subsequent to the termination on any Class B
Summit Shares that were acquired in an exchange for Participating Fund Shares
prior to the termination date shall, nevertheless, be paid to the Participating
Underwriter as if this Agreement were still in effect.
12. This Agreement constitutes the entire agreement of the parties with
respect to the subject matter hereof and supersedes all prior agreements,
arrangements and understandings whether written or oral, with respect thereto.
This Agreement may be amended only in writing signed by the parties hereto, and,
if required under Rule 12b-1,
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by agreement of the Trustees of the Trust in the manner provided for in
paragraph 8 hereof.
13. The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of New York, without regard to principles
of conflicts of laws, and the applicable provisions of the Act. To the extent
that the applicable laws of the State of New York, or any of the provisions
herein, conflict with the applicable provisions of the Act, the latter shall
control.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
PRINCETON FUNDS DISTRIBUTOR, INC.
By: ______________________________________
[PARTICIPATING UNDERWRITER]
By: ______________________________________
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