FORM OF
DISTRIBUTION AGREEMENT
AGREEMENT made as of the 29th day of June, 2001, between the funds
listed on Schedule A (each, the "Company"), having its principal place of
business at 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, and X.X. Xxxxxx Fund
Distributors, Inc. ("Distributor"), having its principal place of business at
0000 Xxxxxxx Xxxx, Xxxxxxxx, XX 00000.
WHEREAS, the Company is an open-end management investment company,
organized as a Massachusetts business trust or a Delaware business trust and
registered with the Securities and Exchange Commission (the "Commission")
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, Distributor is acting as the distributor of the shares of
beneficial interest ("Shares") of each of the investment portfolios of the
Company set forth in Schedule A (such portfolios being referred to
individually as a "Fund" and collectively as the "Funds").
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein set forth, the parties agree as follows:
1. SERVICES AS DISTRIBUTOR.
1.1 Distributor will act as agent for the distribution of the Shares
covered by the registration statement and prospectus of the Company then in
effect under the Securities Act of 1933, as amended (the "Securities Act").
As used in this Agreement, the term "registration statement" shall mean Parts
A (the prospectus), B (the Statement of Additional Information) and C of each
registration statement that is filed on Form N-1A, or any successor thereto,
with the Commission, together with any amendments thereto. The term
"prospectus" shall mean each form of prospectus and Statement of Additional
Information used by the Funds for delivery to shareholders and prospective
shareholders after the effective dates of the above referenced registration
statements, together with any amendments and supplements thereto.
1.2 Distributor agrees to use best efforts to solicit orders for the
sale of the Shares and will undertake such advertising and promotion as it
believes reasonable in connection with such solicitation; provided, however,
that all sales and marketing materials shall have been approved by the
Company. The Company understands that Distributor's affiliates are now and
may in the future be the distributor of the shares of several investment
companies or series (together, "Investment Companies") including Investment
Companies having investment objectives similar to those of the Company. The
Company further understands that investors and potential investors in the
Company may invest in shares of such other Investment Companies. The Company
agrees that Distributor's and/or its affiliates' duties to such Investment
Companies shall not be deemed in conflict with their duties to the Company
under this paragraph 1.2.
Except as provided in Section 2 herein, Distributor shall, at its own
expense, finance appropriate activities which it deems reasonable, which are
primarily intended to result
in the sale of the Shares, including, but not limited to, advertising,
compensation of underwriters, dealers and sales personnel, the printing and
mailing of prospectuses to other than current Shareholders, and the printing
and mailing of sales literature.
1.3 In its capacity as distributor of the Shares, all activities of
Distributor and its partners, agents, and employees shall comply with all
applicable laws, rules and regulations, including, without limitation, the
1940 Act, all rules and regulations promulgated by the Commission thereunder
and all rules and regulations adopted by any securities association
registered under the Securities Exchange Act of 1934.
1.4 Distributor will provide one or more persons, during normal
business hours, to respond to telephone questions with respect to the Company.
1.5 Distributor will transmit any orders received by it for purchase
or redemption of the Shares to the transfer agent and custodian for the Funds.
1.6 The Company's officers may decline to accept any orders for, or
make any sales of, the Shares until such time as those officers deem it
advisable to accept such orders and to make such sales.
1.7 Distributor will act only on its own behalf as principal if it
chooses to enter into selling agreements with selected dealers or others.
1.8 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 qualification
of the Shares for sale in such states as Distributor may designate.
1.9 The Company shall furnish from time to time, for use in
connection with the sale of the Shares, such information with respect to the
Funds and the Shares as 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 Distributor upon request with: (a) unaudited semi-annual
statements of the Funds' books and accounts prepared by the Company, (b) a
monthly itemized list of the securities in the Funds, (c) monthly balance
sheets as soon as practicable after the end of each month, and (d) from time
to time such additional information regarding the financial condition of the
Funds as Distributor may reasonably request.
1.10 The Company represents to Distributor that, with respect to the
Shares, all registration statements and prospectuses filed by the Company
with the Commission under the Securities Act have been carefully prepared in
conformity with requirements of said Act and rules and regulations of the
Commission thereunder. The registration statement and prospectus contain all
statements required to be stated therein in conformity with said Act and the
rules and regulations of said Commission and all statements of fact contained
in any such registration statement and prospectus are true and correct in all
material respects. Furthermore, neither any
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registration statement nor any prospectus includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading to a purchaser of
the 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 as, in the light of future
developments, may, in the opinion of the Company's counsel, be necessary or
advisable. If the Company shall not propose such amendment or amendments
and/or supplement or supplements within fifteen days after receipt by the
Company of a written request from Distributor to do so, 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 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.
1.11 The Company may request Distributor to use an electronic
processing system over the internet in which electronically transmitted
orders are forwarded electronically for processing by a third party known to
the Company under circumstances in which Distributor will not review the
orders. Under such circumstances, the Company acknowledges and agrees that
it will independently determine that the third party is a satisfactory
service provider and that Distributor's review will not be necessary. The
Company authorizes Distributor and dealers to use any prospectus in the form
furnished from time to time in connection with the sale of the Shares. The
Distributor shall not be liable for any error of judgment or mistake of law
or for any loss suffered by the Company in connection with the matters to
which this Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on the Distributor's part in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement. In the absence of willful misfeasance, bad
faith or gross negligence or reckless disregard of obligations or duties
hereunder on the part of Distributor or any of its officers, directors or
employees, the Company agrees to indemnify, defend and hold Distributor, its
several partners and employees, and any person who controls Distributor
within the meaning of Section 15 of the Securities Act free and harmless 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 reasonable counsel fees incurred in connection therewith) which
Distributor, its partners and employees, or any such controlling person, may
incur (a) arising out of or based upon the electronic processing of orders
over the internet; (b) based on any act or omission in the course of, or
connected with, rendering services hereunder; (c) based on any
representations made herein by the Company; (d) based on any act or omission
of any prior Distributor (in its capacity as Distributor or
Sub-Administrator), Administrator or Adviser to the Company, including the
registration or failure to register any shares of the Company in accordance
with state or federal laws or resulting from or relating to any books or
records delivered to the Distributor in connection with its responsibilities
under this Agreement and occurring prior to the date of this Agreement; or
(e) under the Securities Act or under common law or otherwise, arising out of
or based upon (i) any untrue statement, or alleged untrue statement, of a
material fact contained in any registration statement or any prospectus, (ii)
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any omission, or alleged omission, to state a material fact required to be
stated in any registration statement or any prospectus or necessary to make
the statements in either thereof not misleading or (iii) any Company
advertisement or sales literature that is not in compliance with applicable
laws, rules or regulations (including, but not limited to the Conduct Rules
of the National Association of Securities Dealers, Inc.); provided, however,
that the Company's agreement to indemnify Distributor, its partners or
employees, and any such controlling person shall not be deemed to cover any
claims, demands, liabilities or expenses arising out of any statements or
representations as are contained in any prospectus, advertisement or sales
literature and in such financial and other statements as are furnished in
writing to the Company by Distributor and used in the answers to the
registration statement or in the corresponding statements made in the
prospectus, advertisement or sales literature, or arising out of or based
upon any omission or alleged omission to state a material fact in connection
with the giving of such information required to be stated in such answers or
necessary to make the answers not misleading; and further provided that the
Company's agreement to indemnify Distributor and the Company's
representations and warranties hereinbefore set forth in paragraph 1.10 shall
not be deemed to cover any liability to the Company or its Shareholders to
which 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 Distributor's reckless disregard of its obligations and
duties under this Agreement. The Company's agreement to indemnify
Distributor, its partners and employees and any such controlling person, as
aforesaid, is expressly conditioned upon the Company being notified of any
action brought against Distributor, its partners or employees, or any such
controlling person, such notification to be given by letter or by telegram
addressed to the Company at its principal office in New York, NY and sent to
the Company 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 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 of 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 1.11. 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 approved by
Distributor, which approval shall not be unreasonably withheld. In the event
the Company elects to assume the defense of any such suit and retain counsel
of good standing approved by 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 Distributor reasonably does not approve of counsel
chosen by the Company, the Company will reimburse Distributor, its partners
and employees, or the controlling person or persons named as defendant or
defendants in such suit, for the fees and expenses of any counsel retained by
Distributor or them. The Company's indemnification agreement contained in
this paragraph 1.11 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 Distributor, its partners and
employees, or any controlling person, and shall survive the delivery of any
Shares.
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This Agreement of indemnity will inure exclusively to Distributor's
benefit, to the benefit of its several partners and employees, and their
respective estates, and to the benefit of the controlling persons and their
successors. The Company agrees promptly to notify 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.
1.12 Distributor agrees to indemnify, defend and hold the Company,
its several officers and Trustees/Directors (hereinafter referred to as
"Directors") and any person who controls the Company within the meaning of
Section 15 of the Securities Act free and harmless from and against any and
all claims, demands, liabilities and expenses (including the costs of
investigating or defending such claims, demands, or liabilities and any
reasonable counsel fees incurred in connection therewith) which the Company,
its officers or Directors or any such controlling person, may incur under the
Securities 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 in writing by Distributor to
the Company and used in the answers to any of the items of the registration
statement or in the 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 in writing by
Distributor to the Company required to be stated in such answers or necessary
to make such information not misleading. Distributor's agreement to
indemnify the Company, its officers and Directors, and any such controlling
person, as aforesaid, is expressly conditioned upon Distributor 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 Distributor at its principal office in
Columbus, Ohio, and sent to 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. Distributor shall have the right of first
control of 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 Distributor's part, 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 to so notify Distributor of any such action shall
not relieve Distributor from any liability which Distributor 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 Distributor's indemnity agreement
contained in this paragraph 1.12.
1.13 No Shares shall be offered by either 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 Securities Act or if and so long as a current prospectus as required
by Section 10(b)(2) of said Act is not on file with the Commission; provided,
however, that nothing contained in this paragraph 1.13 shall in any way
restrict or have an application to or bearing
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upon the Company's obligation to repurchase Shares from any Shareholder in
accordance with the provisions of the Company's prospectus, Declaration of
Trust, or Bylaws.
1.14 The Company agrees to advise Distributor as soon as reasonably
practical by a notice in writing delivered to Distributor or its counsel:
(a) of any request by the Commission for amendments to the
registration statement or prospectus then in effect or for
additional information;
(b) in the event of the issuance by the Commission of any stop
order suspending the effectiveness of the registration
statement or prospectus then in effect or the initiation by
service of process on the Company 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; and
(d) of all action of the Commission with respect to any amendment
to any registration statement or prospectus which may from
time to time be filed with the Commission.
For purposes of this section, informal requests by or acts of the Staff of
the Commission shall not be deemed actions of or requests by the Commission.
1.15 Distributor agrees on behalf of itself and its partners and
employees to treat confidentially and as proprietary information of the
Company all records and other information relative to 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 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.
1.16 This Agreement shall be governed by the laws of the State of New
York.
1.17 In the event Distributor purchases the initial shares of the
Company for purposes of satisfying the minimum net worth requirements set
forth in Section 14 (a) of the 1940 Act, and a notice of termination is
subsequently given or this Agreement is otherwise terminated pursuant to
Section 6 herein for any reason prior to the time that organizational
expenses incurred by the Company have been fully amortized, then the Company
shall cause the
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successor distributor of the shares (the "Successor Distributor") to pay to
Distributor, within ten (10) days prior to the termination of this Agreement,
an amount of cash that is sufficient to purchase the initial shares that are
held by Distributor
1.18 The Company and Distributor each represents and warrants that
(a) it has adopted a policy for the safeguarding of non-public personal
information pertaining to their respective customers and consumers ("Privacy
Policy") and (b) its Privacy Policy will, at all times during the term of
this Agreement, be in substantial compliance with all applicable statutes,
rules and regulations. The Company and Distributor further represent and
warrant that (1) each has delivered a copy of its Privacy Policy to the other
party and (2) in the event that its Privacy Policy is amended or restated, it
will promptly deliver to the other party a copy of the amended and restated
Privacy Policy. The Distributor represents and warrants that, in connection
with its provision of services hereunder, it will, at all times during the
term of this Agreement, be in substantial compliance with the Company's
Privacy Policy, as and to the extent the same may be applicable to it in
respect of the Company's shareholders and other consumers.
2. RESERVED.
3. SALE AND PAYMENT.
Shares of a Fund may be subject to a sales load and may be subject to the
imposition of a distribution fee pursuant to the Distribution Plan for the
Funds. To the extent that Shares of a Fund are sold at an offering price
which includes a sales load or at net asset value subject to a contingent
deferred sales load with respect to certain redemptions (either within a
single class of Shares or pursuant to two or more classes of Shares), such
Shares shall hereinafter be referred to collectively as "Load Shares" (in the
case of Shares that are sold with a front-end sales load or Shares that are
sold subject to a contingent deferred sales load), "Front-End Load Shares" or
"CDSL Shares" and individually as a "Load Share," a "Front-End Load Share" or
a "CDSL Share." A Fund that contains Front-End Load Shares shall hereinafter
be referred to collectively as "Load Funds" or "Front-End Load Funds" and
individually as a "Load Fund" or a "Front-end Load Fund." A Fund that
contains CDSL Shares shall hereinafter be referred to collectively as "Load
Funds" or "CDSL Funds" and individually as a "Load Fund" or a "CDSL Fund."
Under this Agreement, the following provisions shall apply with respect to
the sale of, and payment for, Load Shares.
3.1 Distributor shall have the right to purchase Load Shares at
their net asset value and to sell such Load Shares to the public against
orders therefor at the applicable public offering price, as defined in
Section 4 hereof. Distributor shall also have the right to sell Load Shares
to dealers against orders therefor at the public offering price less a
concession determined by Distributor, which concession shall not exceed the
amount of the sales charge or underwriting discount, if any, referred to in
Section 4 below.
3.2 Prior to the time of delivery of any Load Shares by a Load Fund
to, or on the order of, Distributor, Distributor shall pay or cause to be
paid to the Load Fund or to its order an amount in Boston or New York
clearing house funds equal to the applicable net asset value of
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such Shares. Distributor may retain so much of any sales charge or
underwriting discount as is not allowed by Distributor as a concession to
dealers.
4. PUBLIC OFFERING PRICE.
The public offering price of a Load Share shall be the net asset
value of such Load Share, plus any applicable sales charge, all as set forth
in the current prospectus of the Load Fund. The net asset value of Shares
shall be determined in accordance with the provisions of the Declaration or
Trust and Bylaws of the Company and the then-current prospectus of the Load
Fund.
5. ISSUANCE OF SHARES.
The Company reserves the right to issue, transfer or sell Load
Shares at net asset value (a) in connection with the merger or consolidation
of the Company or the Load Fund(s) with any other investment company or the
acquisition by the Company or the Load Fund(s) of all or substantially all of
the assets or of the outstanding Shares of any other investment company; (b)
in connection with a pro rata distribution directly to the holders of Shares
in the nature of a stock dividend or split; (c) upon the exercise of
subscription rights granted to the holders of Shares on a pro rata basis; (d)
in connection with the issuance of Load Shares pursuant to any exchange and
reinvestment privileges described in any then-current prospectus of the Load
Fund; and (e) otherwise in accordance with any then-current prospectus of the
Load Fund.
6. TERM, DURATION AND TERMINATION.
This Agreement shall become effective with respect to each Fund
listed on Schedule A hereof as of the date first written above (or, if a
particular Fund is not in existence on such date, on the date an amendment to
Schedule A to this Agreement relating to that Fund is executed) and, unless
sooner terminated as provided herein, shall continue until August 31, 2002.
Thereafter, if not terminated, this Agreement shall continue with respect to
a particular Fund automatically for successive one-year terms, provided that
such continuance is specifically approved at least annually by (a) by the
vote of a majority of those members of the Company's Directors who are not
parties to this Agreement or interested persons of any such party, cast in
person at a meeting for the purpose of voting on such approval and (b) by the
vote of the Company's Directors or the vote of a majority of the outstanding
voting securities of such Fund. The termination of this Agreement with
respect to one Fund or Company shall not result in the termination of this
Agreement with respect to any other Fund or Company listed on Schedule A.
This Agreement is terminable without penalty, on not less than sixty days'
prior written notice, by the Company's Directors, by vote of a majority of
the outstanding voting securities of the Company or by the Distributor. This
Agreement will also terminate automatically in the event of its assignment.
(As used in this Agreement, the terms "majority of the outstanding voting
securities," "interested persons" and "assignment" shall have the same
meanings as ascribed to such terms in the 1940 Act.)
7. CERTAIN MATTERS RELATING TO A MASSACHUSETTS BUSINESS TRUST.
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If the Company is a Massachusetts business trust, a copy of the
Declaration of Trust is on file with the Secretary of the State of
Massachusetts, and notice is hereby given that this instrument is executed on
behalf of the Directors of the Company as Directors and not individually, and
that the obligations of this instrument are not binding upon any of the
Directors or shareholders individually, but are binding only upon the assets
and property of the Company, and all persons dealing with any class of shares
of the Company must look solely to the Company property belonging to such
class for the enforcement of any claims against the Company.
8. NOTICES.
Any notice under this Agreement shall be in writing, addressed and
delivered, or mailed, postage paid, to the other party at such address as
such other party may designate for the receipt of such notices. Until
further notice to the other party, it is agreed that the address of the
Company for notice shall be 0000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, attn:
Xxxxx Xxxxxxxx, with a copy to Xxxxxx X. Xxxxxxx, Esq., and the address of
the Distributor shall be 0000 Xxxxxxx Xxxx, Xxxxxxxx, XX 00000.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first
written above.
X.X. XXXXXX FUNDS
X.X. XXXXXX INSTITUTIONAL FUNDS
X.X. XXXXXX SERIES TRUST
X.X. XXXXXX SERIES TRUST II
By:______________________________
Title:___________________________
Date:____________________________
X.X. XXXXXX FUND
DISTRIBUTORS, INC.
By:______________________________
Title:___________________________
Date:____________________________
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SCHEDULE A
TO THE DISTRIBUTION AGREEMENT
X.X. XXXXXX FUNDS
X.X. Xxxxxx Xxxxxxx Emerging Markets Debt Fund
X.X. Xxxxxx U.S. Small Company Opportunities Fund
X.X. XXXXXX INSTITUTIONAL FUNDS
X.X. Xxxxxx Short Term Bond Fund
X.X. Xxxxxx Bond Fund
X.X. Xxxxxx U.S. Equity Fund
X.X. Xxxxxx U.S. Small Company Fund
X.X. Xxxxxx Xxxxxxx International Value Fund
X.X. Xxxxxx Xxxxxxx Emerging Markets Equity Fund
X.X. Xxxxxx Diversified Fund
X.X. Xxxxxx Disciplined Equity Fund
X.X. Xxxxxx Xxxxxxx International Opportunities Fund
X.X. Xxxxxx Global Strategic Income Fund
X.X. Xxxxxx Tax Aware Short-Intermediate Income Fund
X.X. XXXXXX SERIES TRUST
X.X. Xxxxxx Enhanced Income Fund
X.X. Xxxxxx Global 50 Fund
X.X. Xxxxxx Global Healthcare Fund
X.X. Xxxxxx Tax Aware U.S. Equity Fund
X.X. Xxxxxx Tax Aware Disciplined Equity Fund
X.X. Xxxxxx California Bond Fund
X.X. Xxxxxx Market Neutral Fund
X.X. Xxxxxx Tax Aware Enhanced Income Fund
X.X. Xxxxxx Tax Aware Small Company Opportunities Fund
X.X. Xxxxxx Disciplined Equity Value Fund
X.X. XXXXXX SERIES TRUST II
X.X. Xxxxxx Bond Portfolio
X.X. Xxxxxx U.S. Disciplined Equity Portfolio
X.X. Xxxxxx Small Company Portfolio
X.X. Xxxxxx International Opportunities Portfolio
X.X. Xxxxxx Mid Cap Value Portfolio
