DISTRIBUTION AGREEMENT
AGREEMENT, dated as of November 28, 2000 by and between Ayco Series Trust,
a Delaware business trust ("Trust") and Xxxxxx Allied Company, L.P., a Delaware
limited partnership ("Distributor").
WHEREAS, the Trust is a Delaware business trust whose shareholders will
include separate accounts in unit investment trust form ("Eligible Separate
Accounts") of insurance companies that have entered into Participation
Agreements, as described below, with the Trust ("Participating Insurance
Companies");
WHEREAS, the Trust's shares may be divided into series, each representing a
different portfolio of investments ("Fund") and, although not currently planned,
each Fund may be further divided into multiple classes of shares;
WHEREAS, the Participating Insurance Companies issue, among other products,
variable life insurance and annuity products ("Variable Products") whose net
premiums, contributions or other consideration may be allocated to Eligible
Separate Accounts for investment in the Trust;
WHEREAS, any Fund sold in connection with the Variable Products will not
otherwise be sold except directly to tax-qualified pension and retirement plans
outside the separate account context ("Qualified Plans") or to the Trust's
investment manager and its affiliates;
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended ("Investment
Company Act");
WHEREAS, the Investment Company Act prohibits any principal underwriter for
a registered open-end management investment company from offering for sale,
selling or delivering after sale any security of which the investment company is
the issuer, except pursuant to a written agreement with the investment company,
and Distributor will be the principal underwriter for sales of the shares issued
by the Trust; and
WHEREAS, Distributor is registered as a broker-dealer under the Securities
Exchange Act of 1934, as amended ("Securities Exchange Act"), and is a member in
good standing of the National Association of Securities Dealers, Inc. ("NASD").
NOW THEREFORE, the Trust and Distributor agree as follows:
Section 1. The Trust has adopted a form of Participation Agreement,
---------
which was approved by the Board of Trustees of the Trust. This Distribution
Agreement shall be subject to the provisions of such form of Participation
Agreement, the terms of which are incorporated herein by reference, made a part
hereof and controlling. The form of Participation Agreement may be amended or
superseded, without prior notice, and this Distribution Agreement shall be
deemed amended to the extent such form of Participation Agreement is amended or
superseded. Distributor represents and warrants that it will act in a manner
consistent with such form of Participation Agreement as it is currently set
forth and as it may be amended or superseded, so long as Distributor serves as
the principal underwriter of the shares of the Trust.
Section 2. Distributor is hereby authorized, from time to time, to
---------
enter into separate written agreements ("Sales Agreements"), on terms and
conditions not inconsistent with this Agreement, with Participating Insurance
Companies that have Eligible Separate Accounts and that agree to participate in
the distribution of the Trust's shares, directly or through their affiliated
broker-dealers, by means of the distribution of Variable Products and to use
their best efforts to solicit applications for Variable Products. The Board of
Trustees of the Trust may, in its sole discretion, determine that certain Funds
or classes of shares of any Fund shall: (i) be made available only to certain
types of Variable Products or to a single Participating Insurance Company and
its affiliates; or (ii) not be made available to any Variable Products.
Section 3. Such Participating Insurance Companies and their agents or
---------
representatives soliciting applications for Variable Products shall be duly and
appropriately licensed, registered or otherwise qualified for the sale of
Variable Products under all applicable insurance laws and all applicable
securities laws of one or more states or other jurisdictions in which Variable
Products may be lawfully sold. Each such Participating Insurance Company shall,
when required by law, be both registered as a broker-dealer under the Securities
Exchange Act and a member in good standing of the NASD. Each such Participating
Insurance Company shall agree to comply with all applicable laws and
regulations, whether federal or state, and whether relating to insurance,
securities or other general areas, including but not limited to, the
recordkeeping and sales supervision requirements of such laws and regulations.
Section 4. The Trust's shares are divided into Funds, each representing
---------
a different portfolio of investments. Each Fund and any restrictions on
availability for shares relating thereto are set forth in Schedule A hereto,
which may be amended from time to time.
Purchases and redemptions of the Trust's shares of each Fund shall be at
the net asset value therefor, computed as set forth in the most recent relevant
Prospectus and Statement of Additional Information relating to the Trust's
shares contained in its Registration Statement on Form N-1A or any amendments
thereto (respectively, "Trust Prospectus" and "SAI"), and any supplements
thereto. Purchase and redemption orders shall be submitted by the Participating
Insurance Company to the Trust's Transfer Agent pursuant to procedures and in
accordance with payment provisions adopted by Distributor and the Trust from
time to time. Shares of any Fund may not be sold or transferred, except to an
Eligible Separate Account or Qualified Plan, without the prior approval of the
Trust's Board of Trustees.
Section 5. The Trust shall not pay any compensation to Distributor for
---------
services as a principal underwriter hereunder, but may, as appropriate,
reimburse Distributor for its expenses related to such services. Distributor
may, but need not, pay or charge Participating Insurance Companies pursuant to
Sales Agreements, as described in Section 2 hereof.
Section 6. The Trust represents to Distributor that the Trust
---------
Prospectus and SAI, as of their respective effective dates, contain (or will
contain) all statements and information which are required to be stated therein
by the Securities Act of 1933, as amended ("Securities Act"), and the Investment
Company Act and in all respects conform to the requirements thereof, and neither
the Trust Prospectus nor the SAI includes any untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
the foregoing representations shall not apply to information contained in or
omitted from the Trust Prospectus and SAI in reliance upon, and in conformity
with, written information furnished by Distributor specifically for use in the
preparation thereof.
In this regard, Distributor acknowledges that the day-to-day operations of
the Trust, including without limitation, investment management, securities
brokerage allocation, cash control, accounting, recordkeeping and other
administrative, marketing and regulatory compliance functions, are carried on
and may in the future be carried on by Ayco Asset Management, a division of The
Ayco Company, L.P. ("Ayco"), affiliates of Ayco, and other parties unaffiliated
with the Manager or Ayco on behalf of the Trust (collectively, the "Preparing
Parties"), under various agreements and arrangements, and that such activities
in large measure provide the basis upon which statements and information are
included or omitted from the Trust Prospectus and SAI. Distributor further
acknowledges that because of the foregoing arrangements, the preparation of the
Trust Prospectus and SAI is substantially in the control of the Preparing
Parties, subject to the broad supervisory authority and responsibility of the
Trust's Board of Trustees, and that, essentially, the only information in the
Trust Prospectus or SAI not independently known to, or prepared by, the
Preparing Parties is personal information as to each Trustee's full name, age,
background, business experience and other personal information that may require
disclosures under securities laws and for which the Preparing Parties
necessarily must rely on each Trustee to produce.
Section 7. The Trust will periodically prepare Trust Prospectuses (and,
---------
if applicable, SAIs) and any supplements thereto, proxy materials, annual
reports, and semi-annual reports (collectively, the "Documents") and shall, in
accordance with the form of Participation Agreement, provide sufficient copies
of such Documents or shall make camera ready copy or an electronic file
available to Distributor for reproduction by Distributor or the Participating
Insurance Companies. With respect to Documents provided to existing owners of
Variable Products, the cost of preparing, printing, mailing and otherwise
distributing such Documents to such owners shall be borne by the Trust. With
respect to the Trust's shares, the Trust shall not pay the cost of printing,
mailing or otherwise distributing the Documents except as specified in this
Section 7. The Trust will use its best efforts to provide notice to Distributor
of anticipated filings or supplements to Documents. Distributor or the
Participating Insurance Companies may alter the form of some or all of the
Documents, with the prior approval of the Trust's officers and legal counsel.
Any preparation and printing costs associated with altering the form of the
Documents will be borne by Distributor or the Participating Insurance Companies,
not the Trust.
Section 8. Distributor and officers of the Trust may, from time to
---------
time, authorize descriptions of the Trust for use in sales literature or
advertising by the Participating Insurance Companies (including brochures,
letters, illustrations and other similar materials, whether transmitted directly
to potential applicants or published in print or audio-visual media), which
authorization will not be unreasonably withheld or delayed.
Section 9. Distributor shall furnish to the Trust, at least quarterly,
---------
reports as to the sale of the Trust's shares made pursuant to this Agreement.
These reports may be combined with any similar report prepared by Distributor or
any of the Preparing Parties.
Section 10. Distributor shall submit to all regulatory and
----------
administrative bodies having jurisdiction over the operations of Distributor,
the Trust, or any Participating Insurance Company, present or future, any
information, reports or other material which any such body by reason of this
Agreement may request or require as authorized by applicable laws or
regulations.
Section 11. This Agreement shall be subject to the provisions of the
----------
Investment Company Act, the Securities Exchange Act and the Securities Act and
the rules, regulations, and rulings thereunder and of the NASD, from time to
time in effect, including such exemptions and no-action positions as the
Securities and Exchange Commission or its staff may grant, and the terms hereof
shall be interpreted and construed in accordance therewith.
Section 12. This Agreement shall take effect on the on the date first
----------
written above, and shall continue in effect, unless sooner terminated as
provided herein, for two years from such date. This Agreement shall continue in
effect thereafter with respect to any Fund only so long as such continuance is
specifically approved at least annually by a majority of the Trustees of the
Trust who are not interested persons of the Trust or Distributor ("Independent
Trustees") and by (a) a vote of the majority of the outstanding voting
securities of such Fund, voted in accordance with the provisions contained in
the form of Participation Agreement or any policies on conflicts adopted by the
Board of Trustees of the Trust or (b) the Board of Trustees of the Trust. This
Agreement may be terminated at any time, without penalty, with respect to any
Fund, by a majority of the Independent Trustees or by a vote of the majority of
the outstanding voting securities of such Fund.
Section 13. This Agreement shall terminate automatically if assigned for
----------
purposes of the Investment Company Act.
Section 14. The Trust shall indemnify and hold harmless Distributor from
----------
any and all losses, claims, damages or liabilities (or actions in respect
thereof) to which Distributor may be subject, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or result
from the negligent, improper, fraudulent or unauthorized acts or omissions by
the Trust or its officers, trustees, agents or representatives, other than acts
or omissions caused directly or indirectly by Distributor.
Distributor will indemnify and hold harmless the Trust, its officers,
trustees, agents and representatives against any losses, claims, damages or
liabilities, to which the Trust, its officers, trustees, agents and
representatives may become subject, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon: (i)
any untrue statement or alleged untrue statement of any material fact contained
in the Trust Prospectus and/or SAI or any supplements thereto; (ii) the omission
or alleged omission to state any material fact required to be stated in the
Trust Prospectus and/or SAI or any supplements thereto or necessary to make the
statements therein not misleading; or (iii) bad faith, gross negligence, willful
misconduct or reckless disregard of Distributor in its capacity as a principal
underwriter of the Trust's shares and will reimburse the Trust, its officers,
Trustees, agents and representatives for any legal or other expenses reasonably
incurred by any of them in connection with investigating or defending against
such loss, claim, damage, liability or action; provided, however, that
Distributor shall not be liable in any such instance to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission of a material fact or alleged
omission made in the Trust Prospectus and/or SAI or any supplement in good faith
reliance upon and in conformity with written information furnished by the
Preparing Parties specifically for use in the preparation of the Trust
Prospectus and/or SAI
Section 15. A copy of the Certificate of Trust of the Trust is on file
----------
with the Secretary of State of Delaware and notice is given hereby that this
Agreement is executed on behalf of the Trustees of the Trust as trustees and not
individually, and that the obligations of or arising out of this Agreement are
not binding upon any of the Trustees or shareholders individually but are
binding only upon the assets and property of each Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
AYCO SERIES TRUST
By: /s/Xxxx X. Xxxxxxx
---------------------------------------
Xxxx X. Xxxxxxx, III
Title: ------------------------------------
Chief Financial Officer and Controller
XXXXXX ALLIED COMPANY, L.P.
By: BREHAM, INC., in its capacity as general
partner of Xxxxxx Allied Company, L.P.
By: /s/Xxxxx X. Xxxxxx
---------------------------------------
Xxxxx X. Xxxxxx
Title: ------------------------------------
Vice President and Secretary
SCHEDULE A
FUNDS OF
AYCO SERIES TRUST
-----------------
Ayco Large Cap Growth Fund I
