DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT, dated as of __________________________, 2000 by
and between COUNTRYWIDE STRATEGIC TRUST, a Massachusetts business trust (the
"Trust"), with respect to each of its series of shares of beneficial interest
("Shares") (each series of shares is a "Fund"), and TOUCHSTONE SECURITIES, INC.,
a Nebraska corporation ("Touchstone" or the Distributor").
W I T N E S S E T H
WHEREAS, the Trust is engaged in business as an open-end investment
company registered under the Investment Company Act of 1940 (collectively with
the rules and regulations promulgated thereunder, the "1940 Act");
WHEREAS, the Board of Trustees of the Trust has adopted a Plan of
Distribution for Class A and Single Class Shares, dated as of August 1, 1993
and a Plan of Distribution for Class C Shares, dated as of August 1,
1993 the ("Distribution Plans"), each of which is incorporated herein by
reference and pursuant to which the Trust desires to enter into this
Distribution Agreement; and
WHEREAS, the Trust wishes to engage Touchstone to provide certain
services with respect to the distribution of Shares of each Fund, and Touchstone
is willing to provide such services to the Trust, with respect to the Funds, on
the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. APPOINTMENT OF DISTRIBUTOR; DUTIES.
(a) The Trust grants to the Distributor the right, as agent of
the Trust, to sell Shares upon the terms hereinbelow set forth during the term
of this Agreement. While this Agreement is in force, the Distributor agrees to
use its best efforts to find purchasers for the Shares.
(b) The Distributor shall have the right, as agent of the
Trust, to order Shares as needed, but not more than the Shares needed (except
for clerical errors and errors of transmission), to fill unconditional orders
for Shares placed with the Distributor, all such orders to be made in the manner
set forth in the respective Fund's then-current prospectus (the "Prospectus")
and then-current statement of additional information (the "Statement of
Additional Information"). The price which shall be paid to the Fund for the
Shares so purchased shall be that Fund's net asset value per Share as determined
in accordance with the provisions of the Trust's Declaration of Trust and
By-Laws, as each may from time to time be amended, and that Fund's Prospectus
and Statement of Additional Information (collectively, the "Governing
Instruments"). In addition to the price of the Shares, the Distributor shall
collect any applicable sales charge on Shares sold, from each purchaser thereof,
as provided in the respective Fund's Prospectus and Statement of Additional
Information, after taking into account any applicable reductions or eliminations
of sales charges described therein. The Distributor shall retain the sales
charge less any applicable commissions or transaction or agency fees paid to any
broker-dealer, bank, trust company or other financial institution having a
selling, servicing or agency agreement with the Distributor (an "Agent"),
through which such Shares have been sold. The Distributor or its Agent shall
notify the custodian of the respective Fund at the end of each business day, or
as soon thereafter as the orders placed with the Distributor have been compiled,
of the number of Shares and the prices thereof which have been ordered through
the Distributor since the end of the previous business day.
(c) The right granted to the Distributor to place orders for
Shares shall be exclusive, except that this exclusive right shall not apply to
Shares issued in the event that an investment company (whether a regulated or
private investment company or a personal holding company) is merged with and
into or consolidated with a Fund or the Trust or in the event that the Trust
acquires, on behalf of a Fund, by purchase or otherwise, all or substantially
all of the assets or the outstanding shares of any such company; nor shall it
apply to Shares issued by the Trust as a dividend or stock split. The exclusive
right to place orders for Shares, as hereby granted to the Distributor, may be
waived by the Distributor by notice to the Trust in writing, either
unconditionally or subject to such conditions and limitations as may be set
forth in such notice to the Trust. The Trust hereby acknowledges that the
Distributor may render distribution and other services to other parties,
including other investment companies. In connection with its duties hereunder,
the Distributor shall also arrange for computation of performance statistics
with respect to each Fund and arrange for publication of current price
information in newspapers and other publications.
(d) The Trust retains the ultimate right to control the sale
of the Shares, including the right to suspend sales in any jurisdiction, to
appoint and discharge agents of the Trust in connection with the Shares, and to
refuse to sell Shares to any person for any reason whatsoever.
2. TRUST DUTIES.
(a) The net asset value of Shares shall be determined by the
Trust, or by an agent of the Trust, as of the times and in accordance with the
method established pursuant to the Governing Instruments (and on such other days
as the Trustees deem necessary in order to comply with Rule 22c-1 under the 1940
Act). The Trust shall have right to suspend the sale of Shares if, because of
some extraordinary condition, trading in the securities in which such Fund
invests) is suspended or restricted or if conditions existing render such action
advisable or for any other reason deemed adequate by the Trust.
(b) The Trust will, from time to time, but subject to the
necessary approval, if any, of the Fund's shareholders, take all necessary
action to register such number of Shares under the Securities Act of 1933, as
amended (the "1933 Act"), as the Distributor may reasonably be expected to sell.
3. RELATIONSHIP BETWEEN TRUST AND DISTRIBUTOR. The Distributor shall be
an independent contractor and neither the Distributor nor any of its directors,
officers or employees, as such, is or shall be considered an employee of the
Trust pursuant to this Agreement. It is understood that the Trustees, officers
and shareholders of the Trust are or may become interested in the Distributor as
directors, officers, employees, or otherwise and that directors, officers and
employees of the Distributor are or may become interested in the Trust as
shareholders or otherwise. The Distributor is responsible for its own conduct
and the employment, control and conduct (but only with respect to the duties and
obligations of the Distributor hereunder) of its agents and employees and for
any injury to any person through its agents or employees. The Distributor
assumes full responsibility for its agents and employees under applicable
statutes and agrees to pay all employer taxes thereunder.
4. BEST EFFORTS. The Distributor covenants and agrees that, in selling
Shares, it will use its best efforts in all respects duly to conform with the
requirements of all state and federal laws and the Rules of Fair Practice of the
National Association of Securities Dealers, Inc. (the "NASD") relating to the
sale of shares.
The Distributor will use its best efforts to assure that no person uses any
sales aids, promotional material or sales literature regarding the Shares that
have not been specifically approved in advance by the Distributor and the Trust.
The Distributor will use its best efforts to assure that no person, in
connection with the offer or sale of the Shares, makes any representations
regarding the Shares, the Trust or the Distributor which are not either then
authorized by the Trust and the Distributor or contained in a then-effective
registration statement relating to any of the Funds and the offering of the
Shares (the "Registration Statement").
5. INDEMNIFICATION
(a) The Distributor will indemnify and hold harmless the Trust
and each of its Trustees and officers and each person, if any, who controls the
Trust within the meaning of Section 15 of the Act (the "Indemnified Parties")
against all losses, liabilities, damages, claims or expenses (including the
reasonable cost of investigating or defending any alleged loss, liability,
damages, claim or expense and reasonable counsel fees incurred in connection
therewith) arising from any claim, demand, action or suit (individually a
"Claim" and, collectively, "Claims") made by any person who shall have acquired
any of the Shares through the Distributor, which Claim is based upon the 1933
Act or any other statute or common law and arises either:
(i) by reason of any wrongful act of the Distributor or any
of its employees (including any failure to conform with any
requirement of any state or federal law or the Rules of Fair
Practice of the NASD relating to the sale of Shares), or
(ii) on the ground that the Registration Statement
under the 1933 Act, including all amendments thereto, or the
respective Prospectus or Statement of Additional Information
or previous prospectus or statement of additional information,
with respect to such Shares, includes or included an untrue
statement of a material fact or omits or omitted to state a
material fact required to be stated therein or necessary in
order to make the statements therein not misleading,
but if and only if any such act, statement or omission was made in reliance upon
information furnished by the Distributor to the Trust.
(b) In no event (i) is the indemnity of the Distributor in
favor of any Indemnified Party pursuant to paragraph (a), above to be deemed to
protect any such Indemnified Party against liability to which such Indemnified
party would otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of his, her or its duties or by reason of
his, her or its reckless disregard of his, her or its obligations and duties
under this Agreement, or (ii) is the Distributor to be liable under or pursuant
to paragraph (a), above, with respect to any Claim made against any Indemnified
Party unless such Indemnified Party shall have notified the Distributor in
writing within a reasonable time after the summons or other first legal process
giving information as to the nature of the Claim shall have been served upon
such Indemnified Party (or after such Indemnified Party shall have received
notice of such service on any designated agent), but the failure of the
Indemnified Party to notify the Distributor of any such Claim shall not relieve
the Distributor from any liability which it may have to any Indemnified Party
otherwise than pursuant to this Agreement.
(c) The Distributor shall be entitled to participate, at its
own expense, in the defense, or, if it so elects, to assume the defense, of any
suit brought to enforce any such Claim, and, if the Distributor elects to assume
the defense, such defense shall be conducted by counsel chosen by it and
reasonably satisfactory to each Indemnified Party. If the Distributor elects to
assume the defense of any such suit and retain such counsel, each Indemnified
Party shall bear the fees and expenses of any additional counsel retained by it,
provided, however, that if the Distributor does not elect to assume the defense
of any such suit, it shall reimburse the Indemnified Parties for the reasonable
fees and expenses of any counsel retained by them.
(d) Except with the prior written consent of the Distributor,
no Indemnified Party shall confess any Claim or make any compromise in any case
in which the Distributor is or will be asked to indemnify such Indemnified
Party.
(e) The Distributor agrees promptly to notify the Trust of the
commencement of any litigation or proceeding against it in connection with the
issuance and sale of any of the Shares.
(f) Neither the Distributor nor any Agent nor any other person
is authorized to give any information or to make any representation on behalf of
the Trust in connection with the sale of Shares, other than those contained in
the Trust's Registration Statement or Prospectus or Statement of Additional
Information relating to the respective Fund.
6. EXPENSES
(a) The Trust will pay, by causing the appropriate Fund(s) to
pay:
(i) all costs and expenses of the Trust and of the
Funds, including fees and disbursements of the Trust's counsel, in
connection with the preparation and filing of the Registration
Statement, Prospectuses and Statements of Additional Information, and
preparing and mailing to existing shareholders Prospectuses, Statements
of Additional Information and, with respect to Shares, statements of
confirmation and periodic reports (including the entire expense of
setting in type the Registration Statements, Prospectuses and
Statements of Additional Information or any periodic report with
respect to Shares);
(ii) the cost of preparing temporary or permanent
certificates for Shares;
(iii) the cost and expenses of delivering to the
Distributor at its office in Cincinnati, Ohio all Shares purchased
through it as agent hereunder;
(iv) subject to the Distribution Plans, a
distribution fee to the Distributor not to exceed the percentage, as
indicated on Schedule A hereto, of the respective Fund's average daily
net assets for its then-current fiscal year;
(v) all fees and disbursements of any transfer agent and
custodian of a Fund;
(vi) all fees of each shareholder servicing agent to a Fund,
if any;
(vii) all fees of any administrator or fund accounting agent
of a Fund;
(viii) all fees of the investment advisor, if any, of a Fund;
and
(ix) such other costs and expenses as shall be
determined, by agreement of the parties, to properly be chargeable to
and borne by the Trust.
(b) The Distributor, with respect to the sale of Shares, but subject to
the Trust's obligations under clause (iv) of subsection (a) above, will (i)
after the Prospectus and Statement of Additional Information and periodic
reports with respect to each Fund have been set in type, bear the expense (other
than the cost of printing and mailing to existing shareholders of such Fund) of
printing and distributing any copies thereof ordered by it which are to be used
in connection with the offering or sale of Shares to any Agent or prospective
investor, (ii) bear the expenses of preparing, printing and distributing any
other literature used by the Distributor or furnished by it for use by any Agent
in connection with the offering of Shares for sale to the public and any expense
of sending confirmations and statements to any Agent and (iii) bear the cost of
any compensation paid to Agents in connection with the sale of Shares.
7. COMPENSATION. As compensation to the Distributor for assuming the
expenses and performing the distribution services to be assumed and performed by
it pursuant to this Agreement, the Distributor will receive from the Trust such
amounts and at such times as are set forth in Schedule A to this Agreement (as
the same may from time to time be amended by agreement between the parties
hereto).
8. AMENDMENTS. If, at any time during the term of this Agreement, the
Trust shall deem it necessary or advisable in the best interests of any Fund
that any amendment of this Agreement be made in order to comply with any
recommendation or requirement of the Securities and Exchange Commission (the
"SEC") or other governmental authority or to obtain any advantage under Ohio,
Massachusetts or other applicable state law or under the federal tax laws, it
shall notify the Distributor of the form of amendment which it deems necessary
or advisable and the reasons therefor. If the Distributor declines to assent to
such amendment (after a reasonable time), the Trust may terminate this Agreement
forthwith by written notice to the Distributor without payment of any penalty.
If, at any time during the term of this Agreement, the Distributor requests the
Trust to make any change in the Governing Instruments or in its methods of doing
business which are necessary in order to comply with any requirement of federal
law or regulations of the SEC or of a national securities association of which
the Distributor is or may become a member, relating to the sale of Shares, the
Distributor may terminate this Agreement forthwith by written notice to the
Trust without payment of any penalty.
9. OWNERSHIP OF SHARES. The Distributor agrees that it will not take
any long or short position in the Shares and that, so far as it can control the
situation, it will prevent any of its Directors or officers from taking any long
or short positions in the Shares, except as permitted by the Governing
Instruments.
10. TERMINATION. This Agreement shall become effective upon its
execution and shall continue in force indefinitely, provided that such
continuance is "specifically approved at least annually" by the vote of a
majority of the Trustees of the Trust who are not "interested persons" of the
Trust or of the Distributor at a meeting specifically called for the purpose of
voting on such approval, and by the Board of Trustees of the Trust. The
aforesaid requirement that continuance of this Agreement be "specifically
approved at least annually" shall be construed in a manner consistent with the
1940 Act.
This Agreement may be terminated as to any Fund at any time by (i) the
Trust, (a) by the vote of a majority of the Trustees of the Trust who are not
"interested persons" of the Trust or the Distributor, (b) by the vote of the
Board of Trustees of the Trust, or (c) by the "vote of a majority of the
outstanding voting securities" of the Fund, or (ii) by the Distributor, in any
case without payment of any penalty on not more than 60 days' nor less than 30
days' written notice to the other party.
This Agreement shall automatically terminate in the event of its
assignment.
11. DEFINITIONS. The terms "vote of a majority of the outstanding
voting securities", "interested persons", "assignment" and "specifically
approved at least annually" shall have the respective meanings specified in, and
shall be construed in a manner consistent with, the 1940 Act, subject, however,
to such exemptions as may be granted by the SEC thereunder.
12. MISCELLANEOUS.
(a) If any provision of this Agreement becomes or is found to
be invalid by any court having jurisdiction or by any statute, rule or
regulation, the remainder of this Agreement shall not be affected
thereby.
(b) Any notices under this Agreement shall be in writing
addressed and delivered personally (or by telecopy) or mailed
postage-paid, to the other party at such address as such other party
may designate in accordance with this paragraph for the receipt of such
notice. Until further notice to the other party given in accordance
with this paragraph, it is agreed that the address of the Trust and of
the Distributor for this purpose shall be 000 Xxxx Xxxxxx, Xxxxxxxxxx,
Xxxx 00000.
(c) Each party will perform such further actions and execute
such further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of Ohio. The captions in the
Agreement are included for convenience only and in no way define or
delimit any of the provisions hereof or otherwise affect their
construction or effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered in their names on their behalf by the
undersigned, thereunto duly authorized as of the day and year first above
written. The Distributor acknowledges that, under the Trust's Declaration of
Trust, the obligations of this Agreement are not binding upon any of the
Trustees or shareholders of a Fund individually, but bind only the Trust estate.
COUNTRYWIDE STRATEGIC TRUST
By__________________________________
President
TOUCHSTONE SECURITIES, INC.
By__________________________________
President
Schedule A
Touchstone Strategic Trust
As compensation for assuming the expenses and performing the distribution
services enumerated in the Distribution Agreement, Distributor will receive from
Trust, in respect of each investment in the Trust, amounts determined as set
forth below:
For the Emerging Growth Fund, the International Equity Fund,
the Value Plus Fund and the Enhanced 30 Fund
Compensation as a
Amount of Investment % of Investment
-------------------- -------------------
Under $50,000 5.75%
$50,000 but less than $100,000 4.50%
$100,000 but less than $250,000 3.50%
$250,000 but less than $500,000 2.95%
$500,000 but less than $1 million 2.25%
$1 million or more None
In addition, Class A shares will each pay a distribution fee to the
Distributor at an annual rate of up to 0.25% of the average daily net assets
attributable to Class A shares in anticipation or as reimbursement for expenses
(other than interest or carrying charges) (i) of compensating Dealers or other
persons for providing personal shareholder services, maintaining shareholder
accounts and providing distribution assistance and (ii) of promoting the sale of
shares of the Funds.
In addition, Class C shares will each pay a distribution fee to the
Distributor at an annual rate of up to 0.25% of the average daily net assets
attributable to that class in anticipation or as reimbursement for expenses
(other than interest or carrying charges) (i) of compensating Dealers or other
persons for providing personal shareholder services, maintaining shareholder
accounts and providing distribution assistance and (ii) of promoting the sale of
shares of the Funds.
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