DISTRIBUTION AGREEMENT
AGREEMENT made this ___ day of ______, 2005, between XXXXXX XXXXXXX
INSTITUTIONAL FUND, INC., a Maryland Corporation (the "FUND"), and XXXXXX
XXXXXXX DISTRIBUTION, INC, a Pennsylvania corporation (the "DISTRIBUTOR").
W I T N E S S E T H:
WHEREAS, the Fund is registered under the Investment Company Act of
1940, as amended (the "1940 ACT"), as an open-end management investment
company and it is in the interest of the Fund to offer its shares for sale
continuously and to appoint a principal underwriter for the purpose of
facilitating such offers and sales;
WHEREAS, the Fund and the Distributor wish to enter into an agreement
with each other with respect to the continuous offering of the Fund's shares
of beneficial interest ("SHARES");
NOW, THEREFORE, the parties agree as follows:
Section 1. APPOINTMENT OF THE DISTRIBUTOR.
The Fund hereby appoints the Distributor its exclusive underwriter in
connection with the offering and sale of the Shares on the terms set forth in
this Agreement and the Distributor hereby accepts such appointment and agrees
to act hereunder.
Section 2. SERVICES AND DUTIES OF THE DISTRIBUTOR.
(a) The Distributor agrees to sell, as agent for the Fund, from time to
time during the term of this Agreement, Shares upon the terms described in
the Prospectus. As used in this Agreement, the term "PROSPECTUS" shall mean
the prospectus included as part of the Fund's Registration Statement, as such
prospectus may be amended or supplemented from time to time, and the term
"REGISTRATION STATEMENT" shall mean the Registration Statement most recently
filed from time to time by the Fund with the Securities and Exchange
Commission (the "COMMISSION") and effective under the Securities Act of 1933
Act, as amended (the "1933 ACT") and the 1940 Act, as such Registration
Statement is amended by any amendments thereto at the time in effect.
(b) The Distributor will hold itself available to receive orders,
satisfactory to the Distributor, for the purchase of Shares and will accept
such orders on behalf of the Fund and will transmit such orders as are so
accepted to the Fund's transfer and shareholder servicing agent as promptly
as practicable. The Distributor shall promptly forward to the Fund's
custodian funds received in respect of purchases of shares in accordance with
the instructions of the Fund's administrator. Purchase orders shall be deemed
effective at the time and in the manner set forth in the Prospectus.
(c) In connection with such purchases and redemptions, the Fund
authorizes and designates the Distributor to take any action, and to make any
arrangements for the collection of purchase monies or for the payment of
redemption proceeds authorized or permitted to be taken or made in accordance
with the 1940 Act and as set forth in the Articles of Incorporation, By-Laws
and the then-current Prospectus of the Fund.
(d) The authority of the Distributor under this Section 2 may, with the
consent of the Fund, be redelegated in whole or in part to another person or
firm. If, consistent with this paragraph, the Distributor enters into selling
agreements with other brokers or dealers as selling agents or selected
dealers, it agrees to do so on a form approved by the Fund's officers.
(e) The offering price of the Shares shall be the net asset value
(determined as set forth in the Prospectus) per Share next determined
following receipt of an order. The Fund shall furnish the Distributor, with
all possible promptness, an advice of each computation of net asset value.
(f) The Distributor shall not be obligated to sell any certain number of
Shares and nothing herein contained shall prevent the Distributor from
entering into like distribution arrangements with other investment companies.
Section 3. DUTIES OF THE FUND.
(a) The Fund agrees to sell its Shares so long as it has Shares available
for sale and to cause the Fund's transfer and shareholder servicing agent to
record on its books the ownership of (or deliver certificates, if any,) for
such Shares registered in such names and amounts as the Distributor has
requested in writing or other means of data transmission, as promptly as
practicable after receipt by the Fund of the net asset value thereof and
written request of the Distributor therefor.
(b) The Fund shall keep the Distributor fully informed with regard to its
affairs and shall furnish to the Distributor copies of all information,
financial statements and other papers which the Distributor may reasonably
request for use in connection with the distribution of Shares of the Fund,
and this shall include one certified copy, upon request by the Distributor,
of all financial statements prepared for the Fund by independent accountants
and such reasonable number of copies of its most current Prospectus and
annual and interim reports as the Distributor may request and shall cooperate
fully in the efforts of the Distributor to sell and arrange for the sale of
the Shares and in the performance of the Distributor under this Agreement.
(c) The Fund shall take, from time to time, such steps, including payment
of the related filing fee, as may be necessary to register its Shares under
the 1933 Act to the end that there will be available for sale such number of
Shares as the Distributor may be expected to sell. The Fund agrees to file
from time to time such amendments, reports and other documents as may be
necessary in order that there may be no untrue statement of a
material fact in a Registration Statement or Prospectus, or necessary in
order that there may be no omission to state a material fact in the
Registration Statement or Prospectus which omission would make the statements
therein misleading.
(d) The Fund shall use its best efforts to qualify and maintain the
qualification of an appropriate number of its Shares for sale under the
securities laws of such states as the Distributor and the Fund may approve,
and, if necessary or appropriate in connection therewith, to qualify and
maintain the qualification of the Fund as a broker or dealer in such states;
provided that the Fund shall not be required to amend its Articles of
Incorporation or By-Laws to comply with the laws of any state, to maintain an
office in any state, to change the terms of the offering of the Shares in any
state from the terms set forth in its Registration Statement and Prospectus,
to qualify as a foreign corporation in any state or to consent to service of
process in any state other than with respect to claims arising out of the
offering of the Shares. The Distributor shall furnish such information and
other material relating to its affairs and activities as may be required by
the Fund in connection with such qualifications.
Section 4. EXPENSES.
(a) The Fund shall bear all costs and expenses of the continuous offering
of the Shares in connection with: (i) its fees and disbursements of its
counsel and independent accountants, (ii) the preparation, filing and
printing of any registration statements and/or prospectuses required to be
filed by and under the federal and state securities laws, (iii) the
preparation and mailing of annual and interim reports, prospectuses and proxy
materials to shareholders and (iv) the qualifications of Shares for sale and
of the Fund as a broker or dealer under the securities laws of such states or
other jurisdictions as shall be selected by the Fund and the Distributor
pursuant to Section 3(d) hereof and the cost and expenses payable to each
such state for continuing qualification therein.
(b) The Distributor shall bear (i) the costs and expenses of preparing,
printing and distributing any materials not prepared by the Fund and other
materials used by the Distributor in connection with its offering of the
Shares for sale to the public, including the additional cost of printing
copies, at printer's over-run cost, of the Prospectus and of annual and
interim reports to shareholders other than copies thereof required for
distribution to shareholders or for filing with any federal and state
securities authorities, (ii) any expenses of advertising incurred by the
Distributor in connection with such offering and (iii) the expenses of
registration or qualification of the Distributor as a dealer or broker under
federal or state laws and the expenses of continuing such registration or
qualification.
Section 5. INDEMNIFICATION.
The Fund agrees to indemnify, defend and hold the Distributor, its
officers and directors and any person who controls the Distributor within the
meaning of Section 15 of the 1933 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
counsel fees incurred in connection therewith) which the Distributor, its
officers, directors or any such controlling person may incur under the 1933
Act, or under common law or otherwise, arising out of or based upon any
untrue statement of a material fact contained in the Registration Statement
or Prospectus or arising out of or based upon any alleged omission to state a
material fact required to be stated in either thereof or necessary to make
the statements in either thereof not misleading, except insofar as such
claims, demands, liabilities or expenses arise out of or are based upon any
such untrue statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with information furnished in writing
by the Distributor to the Fund for use in the Registration Statement or
Prospectus; provided, however, that this indemnity agreement, to the extent
that it might require indemnity of any person who is also an officer or
Director of the Fund or who controls the Fund within the meaning of Section
15 of the 1933 Act, shall not inure to the benefit of such officer, Director
or controlling person unless a court of competent jurisdiction shall
determine, or it shall have been determined by controlling precedent, that
such result would not be against public policy as expressed in the 1933 Act;
and further provided, that in no event shall anything contained herein be so
construed as to protect the Distributor against any liability to the Fund or
to its security holders to which the 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 its reckless disregard of its
obligations under this Agreement. The Fund's agreement to indemnify the
Distributor, its officers and directors and any such controlling person as
aforesaid is expressly conditioned upon the Fund's being promptly notified of
any action brought against the Distributor, its officers or directors, or any
such controlling person, such notification to be given to the Fund at its
principal business office. The Fund agrees promptly to notify the Distributor
of the commencement of any litigation or proceedings against it or any of its
officers or Directors in connection with the issue and sale of any Shares.
The Distributor agrees to indemnify, defend and hold the Fund, its
Directors and officers and any person who controls the Fund, if any, within
the meaning of Section 15 of the 1933 Act, free and harmless from and against
any and all claims, demands, liabilities and expenses (including the cost of
investigating or defending against such claims, demands or liabilities and
any counsel fees incurred in connection therewith) which the Fund, its
Directors or officers or any such controlling person may incur under the 1933
Act or under common law or otherwise, but only to the extent that such
liability or expense incurred by the Fund, its Directors or officers or such
controlling person resulting from such claims or demands shall arise out of
or be based upon any alleged untrue statement of a material fact contained in
information furnished in writing by the Distributor to the Fund for use in
the preparation of the Registration Statement or
Prospectus or shall arise out of or be based upon any alleged omission to
state a material fact in such information or a fact necessary to make such
information not misleading, it being understood that the Fund will rely upon
the information provided by the Distributor for use in the preparation of the
Registration Statement and Prospectus. The Distributor's agreement to
indemnify the Fund, its Directors and officers, and any such controlling
person as aforesaid is expressly conditioned upon the Distributor's being
promptly notified of any action brought against the Fund, its Directors or
officers or any such controlling person, such notification to be given to the
Distributor at its principal business office.
Section 6. COMPLIANCE WITH SECURITIES LAWS.
The Fund represents that it is registered as an open-end management
investment company under the 1940 Act, and agrees that it will comply with
the provisions of the 1940 Act and of the rules and regulations thereunder.
The Fund and the Distributor each agree to comply with the applicable terms
and provisions of the 1940 Act, the 1933 Act and, subject to the provisions
of Section 3(d), applicable state "Blue Sky" laws. The Distributor agrees to
comply with the applicable terms and provisions of the Securities Exchange
Act of 1934.
Section 7. TERM OF AGREEMENT; TERMINATION.
This Agreement shall commence on the date first set forth above. This
Agreement shall continue in effect for a period more than two years from the
date hereof only so long as such continuance is specifically approved at
least annually in conformity with the requirements of the 1940 Act.
This Agreement shall terminate automatically in the event of its
assignment (as defined by the 0000 Xxx) unless the Commission has issued an
order exempting the Fund and the Distributor from the provisions of the 1940
Act which would have otherwise have effected the termination of this
Agreement. In addition, this Agreement may be terminated by either party at
any time, without penalty, on not more than sixty days' nor less than thirty
days' written notice to the other party.
Section 8. NOTICES.
Any notice required to be given pursuant to this Agreement shall be
deemed duly given if delivered or mailed by registered mail, postage prepaid,
(1) to the Distributor at Xxxxxx Xxxxxxx Distribution, Inc., Xxx Xxxxx
Xxxxxx, Xxxx Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: President, or (2)
to the Fund at Xxxxxx Xxxxxxx Institutional Fund, Inc., 1221 Avenue of the
Americas, 00xx Xxxxx, Xxx Xxxx, X.X. 00000, Xxxxxxxxx: Secretary.
Section 9. NO PERSONAL LIABILITY.
The Directors have authorized the execution of this Agreement in their
capacity as Directors and not individually and the Distributor agrees that
neither the shareholders nor the Directors nor any officer, employee,
representative or agent of the Fund shall be personally liable upon, nor
shall resort be had to their private property for the satisfaction of,
obligations given, executed or delivered on behalf of or by the Fund, that
the shareholders, Directors, officers, employees, representatives and agents
of the Fund shall not be personally liable hereunder, and that it shall look
solely to the property of the Fund for the satisfaction of any claim
hereunder. No series of the Fund shall be liable for any claims against any
other series of the Fund.
Section 10. GOVERNING LAW.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
XXXXXX XXXXXXX DISTRIBUTION, INC.
By: __________________________
Name:
Title:
XXXXXX XXXXXXX INSTITUTIONAL FUND,
INC.
By: _________________________
Name:
Title
