EXHIBIT 99.6(a)(2)
XXXXX XXXXX GROWTH TRUST
DISTRIBUTION AGREEMENT
ON BEHALF OF XXXXX XXXXX GREATER CHINA GROWTH FUND
AGREEMENT made this 27th day of October, 1992 between XXXXX XXXXX
GROWTH TRUST, a Massachusetts business trust having its principal place of
business in Boston in the Commonwealth of Massachusetts, hereinafter called the
"Trust", on behalf of Xxxxx Xxxxx Greater China Growth Fund (the "Fund") and
XXXXX XXXXX DISTRIBUTORS, INC., a Massachusetts corporation having its principal
place of business in said Boston, hereinafter sometimes called the "Principal
Underwriter";
Now, therefore, in consideration of the mutual promises and
undertakings herein contained, the parties hereto agree:
1. The Trust grants to the Principal Underwriter the right to purchase
shares of the Fund upon the terms hereinbelow set forth during the term of this
Agreement. While this Agreement is in force, the Principal Underwriter agrees to
use all reasonable efforts (consistent with the other business of the Principal
Underwriter) to secure purchasers for shares of the Fund.
The Principal Underwriter shall have the right to buy from the Fund the
shares needed, but not more than the shares needed (except for clerical errors
and errors of transmission) to fill unconditional orders for shares of the Fund
placed with the Principal Underwriter by financial service firms or investors as
set forth in the current Prospectus relating to shares of the Fund. The price
which the Principal Underwriter shall pay for the shares so purchased from the
Fund shall be the net asset value used in determining the public offering price
on which such orders were based. The Principal Underwriter shall notify
Investors Bank & Trust Company and The Shareholder Services Group, Inc.,
Custodian and Transfer Agent of the Fund, respectively, at the end of each
business day, or as soon thereafter as the orders placed with it have been
compiled, of the number of shares and the prices thereof which the Principal
Underwriter is to purchase as principal for resale. The Principal Underwriter
shall take down and pay for shares ordered from the Fund on or before the tenth
business day (excluding Saturdays) after the shares have been so ordered.
The right granted to the Principal Underwriter to buy shares from the
Fund shall be exclusive, except that said exclusive right shall not apply to
shares issued in connection with the merger or consolidation of any other
investment company or personal holding company with the Fund or the acquisition
by purchase or otherwise of all (or substantially all) the assets or the
outstanding shares of any such company, by the Fund; nor shall it apply to
shares issued by the Fund in distribution of realized capital gains of the Fund
payable in shares or in cash at the option of the shareholder.
2. The shares may be resold by the Principal Underwriter to financial
service firms having agreements with the Principal Underwriter, and to
investors, upon the following terms and conditions:
The public offering price, i.e., the price per share at which the
Principal Underwriter or financial service firm purchasing shares from the
Principal Underwriter may sell shares to the public, shall be the public
offering price as set forth in the current Prospectus relating to said shares,
but not to exceed the net asset value at which the Principal Underwriter is to
purchase the shares, plus a sales charge not to exceed 8.50% of the public
offering price (the net asset value divided by .915). If the resulting public
offering price does not come out to an even cent, the public offering price
shall be adjusted to the nearer cent.
The Principal Underwriter may also sell shares of the Fund to the
Trustees and officers of the Trust, and to the directors and officers of its
investment adviser and of the Principal Underwriter, and to the bona fide,
full-time employees or sales representatives of any of the foregoing who have
acted as such for not less than 90 days, and to any trust, pension,
profit-sharing or other benefit plan for such person, at the net asset value at
which the Principal Underwriter is to purchase such shares, provided such sales
are made upon the written assurance of the purchaser that the purchase is made
for investment purposes and that the shares will not be resold except through
redemption or repurchase by or on behalf of the Fund. The term "employees" as
used in this paragraph includes an employee's spouse and minor children and
retired employees.
The net asset value of shares of the Fund shall be determined by the
Trust or Investors Bank & Trust Company, as the agent of the Fund, as of the
close of the New York Stock Exchange on each business day on which said Exchange
is open, in accordance with the method referred to in Article XII of the
Declaration of Trust of the Trust. The Trust may also cause the net asset value
to be determined in substantially the same manner or estimated in such manner
and as of such other time or times as may from time to time be agreed upon by
the Trust and Principal Underwriter. The Trust will notify the Principal
Underwriter each time the net asset value of the Fund's shares is determined and
when such value is so determined it shall be applicable to transactions as set
forth in the current Prospectus relating to the Fund's shares.
No shares of the Fund shall be sold by the Fund during any period when
the determination of net asset value is suspended pursuant to the Declaration of
Trust of the Trust, except to the Principal Underwriter, in the manner and upon
the terms above set forth to cover contracts of sale made by the Principal
Underwriter with its customers prior to any such suspension, and except as
provided in the last paragraph of paragraph 1 hereof. The Trust shall also have
the right to suspend the sale of the Fund's shares if in the judgment of the
Trust conditions obtaining at any time render such action advisable. The
Principal Underwriter shall have the right to suspend sales at any time, to
refuse to accept or confirm any order from an investor or financial service
firm, or to accept or confirm any such order in part only, if in the judgment of
the Principal Underwriter such action is in the best interests of the Fund.
3. The Trust agrees that it will, from time to time, but subject to the
necessary approval of the Fund's shareholders, take such steps as may be
necessary to register the Fund's shares under the federal Securities Act of
1933, as amended from time to time (the "1933 Act"), to the end that there will
be available for sale such number of shares as the Principal Underwriter may
reasonably be expected to sell. The Trust covenants and agrees that it will use
its best efforts in all respects duly to conform with the requirements of all
federal and state laws relating to the sale of its shares, and will indemnify
and hold harmless the Principal Underwriter and each person, if any, who
controls the Principal Underwriter within the meaning of Section 15 of the 1933
Act against any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages or expense and reasonable counsel fees incurred in connection
therewith), arising by reason of any person acquiring any shares of the Fund,
which may be based upon the 1933 Act or on any other statute or at common law,
on the ground that the Registration Statement or Prospectus, as from time to
time amended and supplemented, includes an untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, unless such statement of
omission was made in reliance upon, and in conformity with information furnished
in writing to the Trust in connection therewith by or on behalf of the Principal
Underwriter; provided, however, that in no case (i) is the indemnity of the
Trust in favor of the Principal Underwriter and any such controlling person to
be deemed to protect such Principal Underwriter or any such controlling person
against any liability to the Trust or the Fund or its security holders to which
such Principal Underwriter or any such controlling person 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 and duties under this Agreement, or (ii) is the Trust or the Fund to
be liable under its indemnity agreement contained in this paragraph with respect
to any claim made against the Principal Underwriter or any such controlling
person unless the Principal Underwriter or any such controlling person, as the
case may be, shall have notified the Trust in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon the Principal Underwriter or upon such
controlling person (or after such Principal Underwriter or such controlling
person shall have received notice of such service on any designated agent), but
failure to notify the Trust of any such claim shall not relieve it from any
liability which the Fund may have to the person against whom such action is
brought otherwise than on account of its indemnity agreement contained in this
paragraph. The Trust shall be entitled to participate, at the expense of the
Fund, in the defense, or, if the Trust so elects, to assume the defense of any
suit brought to enforce any such liability, but if the Trust elects to assume
the defense, such defense shall be conducted by counsel chosen by it and
satisfactory to the Principal Underwriter or controlling person or persons,
defendant or defendants in the suit. In the event the Trust elects to assume the
defense of any such suit and retains such counsel, the Principal Underwriter or
controlling person or persons, defendant or defendants in the suit, shall bear
the fees and expenses of any additional counsel retained by them, but, in case
the Trust does not elect to assume the defense of any such suit, the Fund shall
reimburse the Principal Underwriter or controlling person or persons, defendant
or defendants in the suit, for the reasonable fees and expenses of any counsel
retained by them. The Trust agrees promptly to notify the Principal Underwriter
of the commencement of any litigation or proceedings against it or any of its
officers or Trustees in connection with the issuance or sale of any of the
Fund's shares.
4. The Principal Underwriter covenants and agrees that, in selling the
shares of the Fund, it will use its best efforts in all respects duly to conform
with the requirements of all state and federal laws relating to the sale of such
shares, and 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 1933 Act against any loss, liability, damages, claim or
expense (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 by reason of any person acquiring any shares
of the Fund, which may be based upon the 1933 Act or any other statute or at
common law, on account of any wrongful act of the Principal Underwriter or any
of its employees (including any failure to conform with any requirement of any
state or federal law relating to the sale of such shares) or on the ground that
the Registration Statement or Prospectus, as from time to time amended and
supplemented, includes an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading, insofar as any such statement or omission was
made in reliance upon, and in conformity with information furnished in writing
to the Fund in connection therewith by or on behalf of the Principal
Underwriter, provided, however, that in no case (i) is the indemnity of the
Principal Underwriter in favor of any person indemnified to be deemed to protect
the Fund or any such person against any liability to which the Fund or any such
person would otherwise be subject to by reason of willful misfeasance, bad
faith, or gross negligence, in the performance of its or his duties or by reason
of its or his reckless disregard of its obligations and duties under this
Agreement, or (ii) is the Principal Underwriter to be liable under its indemnity
agreement contained in this paragraph with respect to any claim made against the
Fund or any person indemnified unless the Trust or such person, as the case may
be, shall have notified the Principal Underwriter in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon the Trust; the Fund or upon such
person (or after the Trust or such person shall have received notice of such
service on any designated agent), but failure to notify the Principal
Underwriter of any such claim shall not relieve it from any liability which it
may have to the Fund or any person against whom such action is brought otherwise
than on account of its indemnity agreement contained in this paragraph. The
Principal Underwriter 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 liability, but, if the Principal Underwriter elects to assume
the defense, such defense shall be conducted by counsel chosen by it and
satisfactory to the Trust, or to its officers or Trustees, or to any controlling
person or persons, defendant or defendants in the suit. In the event that the
Principal Underwriter elects to assume the defense of any such suit and retains
such counsel, the Fund or such officers or Trustees or controlling person or
persons, defendant or defendants in the suit, shall bear the fee and expenses of
any additional counsel retained by them or the Trust, but, in case the Principal
Underwriter does not elect to assume the defense of any such suit, it shall
reimburse the Fund, any such officers and Trustees or controlling person or
persons, defendant or defendants in such suit, for the reasonable fees and
expenses of any counsel retained by them or the Trust. The Principal Underwriter
agrees promptly to notify the Trust of the commencement of any litigation or
proceedings against it in connection with the issue and sale of any of the
Fund's shares.
Neither the Principal Underwriter nor any financial service firm nor
any other person is authorized by the Trust to give any information or to make
any representations, other than those contained in the Registration Statement or
Prospectus filed with the Securities and Exchange Commission (hereinafter
sometimes called the "Commission") under the 1933 Act, as amended (as said
Registration Statement or Prospectus may be amended or supplemented from time to
time), covering the shares of the Fund. Neither the Principal Underwriter nor
any financial service firm nor any other person is authorized to act as agent
for the Trust or the Fund in connection with the offering or sale of shares of
the Fund to the public or otherwise. All such sales made by the Principal
Underwriter shall be made by it as principal, for its own account. The Principal
Underwriter may, however, act as agent in connection with the repurchase of
shares as provided in paragraph 6 below, or in connection with "exchanges"
between investment companies for which the Principal Underwriter (or an
affiliate thereof) acts as Principal Underwriter or investment adviser.
5. The Fund will pay, or cause to be paid -
(i) all the costs and expenses of the Fund, including fees and
disbursements of its counsel, in connection with the preparation and filing of
any required Registration Statement and/or Prospectus under the 1933 Act or the
Investment Company Act of 1940 and all amendments and supplements thereto, and
preparing and distributing periodic reports and Prospectuses to shareholders
(including the expense of setting up in type any such Registration Statement,
Prospectus or periodic report);
(ii) the cost of preparing temporary and permanent share
certificates (if any) for shares of the Fund;
(iii) the cost and expenses of delivering to the Principal
Underwriter at its office in Boston, Massachusetts, all shares of the Fund
purchased by it as principal hereunder;
(iv) all the federal and state (if any) issue and/or transfer
taxes payable upon the issue by or (in the case of treasury shares) transfer
from Fund to the Principal Underwriter of any and all shares of the Fund
purchased by the Principal Underwriter hereunder;
(v) the fees, costs and expenses of the registration or
qualification of shares of the Fund for sale in the various states, territories
or other jurisdictions (including without limitation the registering or
qualifying the Trust or the Fund as a broker or dealer or any officer of the
Trust as agent or salesman in any state, territory or other jurisdiction); and
(vi) all expenses and payments to be paid by the Fund pursuant
to any written plan approved in accordance with Rule 12b-1 under the Investment
Company Act of 1940 in connection with the distribution of shares of the Fund.
The Principal Underwriter agrees that, after the Prospectus and
periodic reports of the Fund have been set up in type, it will bear the expense
of printing and distributing any copies thereof which are to be used in
connection with the offering of shares to financial service firms or investors
(other than to existing shareholders of the Fund). The Principal Underwriter
further agrees that it will bear the expenses of preparing, printing and
distributing any other literature used by the Principal Underwriter or furnished
by it for use by financial service firms in connection with the offering of the
shares of the Fund for sale to the public, and any expenses of advertising in
connection with such offering.
6. The Trust hereby authorizes the Principal Underwriter to repurchase,
upon the terms and conditions set forth in written instructions given by the
Trust to the Principal Underwriter from time to time, as agent of the Fund and
for its account, such shares of the Fund as may be offered for sale to the Fund
from time to time.
(a) The Principal Underwriter shall notify in writing
Investors Bank and Trust Company and The Shareholder Services Group, Inc.,
Custodian and Transfer Agent of the Fund, respectively, at the end of each
business day, or as soon thereafter as the repurchases in each pricing period
have been compiled, of the number of shares repurchased for the account of the
Fund since the last previous report, together with the prices at which such
repurchases were made, and upon the request of any officer or Trustee of the
Trust shall furnish similar information with respect to all repurchases made up
to the time of the request on any day.
(b) The Trust reserves the right to suspend or revoke the
foregoing authorization at any time; unless otherwise stated, any such
suspension or revocation shall be effective forthwith upon receipt of notice
thereof by an officer of the Principal Underwriter, by telegraph or by written
instrument from an officer of the Trust duly authorized by its Trustees. In the
event that the authorization of the Principal Underwriter is, by the terms of
such notice, suspended for more that twenty-four hours or until further notice,
the authorization given by this paragraph 6 shall not be revived except by
action of a majority of the Trustees of the Trust.
(c) The Principal Underwriter shall have the right to
terminate the operation of this paragraph 6 upon giving to the Trust thirty (30)
days' written notice thereof.
(d) The Trust agrees to authorize and direct the Fund's
custodian or transfer agent, to pay, for the account of the Fund, the purchase
price of any shares so repurchased against delivery of the certificates in
proper form for transfer to the Fund or for cancellation by the Fund.
(e) The Principal Underwriter shall receive no commission in
respect of any repurchase of shares under the foregoing authorization and
appointment as agent.
(f) The Trust agrees that the Fund will reimburse the
Principal Underwriter, from time to time upon demand, for any reasonable
expenses incurred in connection with the repurchase of shares of the Fund
pursuant to this paragraph 6.
7. If, at any time during the existence of this Agreement, the Trust
shall deem it necessary or advisable in the best interests of the Fund that any
amendment of this Agreement be made in order to comply with the recommendations
or requirements of the Securities and Exchange Commission or other governmental
authority or to obtain any advantage under Massachusetts or federal tax laws,
and shall notify the Principal Underwriter of the form of amendment which it
deems necessary or advisable and the reasons therefor, and, if the Principal
Underwriter declines to assent to such amendment, the Trust may terminate this
Agreement forthwith by written notice to the Principal Underwriter. If, at any
time during the existence of this Agreement, upon request by the Principal
Underwriter, the Trust fails (after a reasonable time) to make any changes in
its Declaration of Trust, as amended, or in its methods of doing business which
are necessary in order to comply with any requirements of federal law or
regulations of the Securities and Exchange Commission or of a national
securities association of which the Principal Underwriter is or may be a member,
relating to the sale of the shares of the Fund, the Principal Underwriter may
terminate this agreement forthwith by written notice to the Trust.
8. In connection with purchase or sales of portfolio securities for the
account of the Fund, neither the Principal Underwriter nor any officer or
director of the Principal Underwriter shall act as a principal. The Principal
Underwriter covenants that it and its officers and directors shall comply with
the provisions of the Trust's By-Laws applicable to them.
9. The Principal Underwriter agrees that it will not take any long or
short positions in the shares of the Fund except as permitted by paragraphs 1
and 6 hereof, and that, so far as it can control the situation, it will prevent
any officer, director or owner of voting common stock of the Principal
Underwriter from taking any long or short position in the shares of the Fund,
except as permitted by the By-Laws of the Trust as from time to time in effect.
10. (a) The Principal Underwriter is a corporation in the United
States, organized under the laws of Massachusetts holding membership in the
National Association of Securities Dealers, Inc., a securities association
registered under Section 15A of the Securities Exchange Act of 1934, and during
the life of this Agreement will continue to be so resident in the United States,
so organized and a member in good standing of said Association. The Principal
Underwriter will comply with the Trust's Declaration of Trust and By-Laws, and
the Investment Company Act of 1940 and the rules promulgated thereunder, insofar
as they are applicable to the Principal Underwriter.
(b) The Principal Underwriter shall maintain in the United
States and preserve therein for such period or periods as the Commission shall
prescribe by rules and regulations applicable to it as a Principal Underwriter
of an open-end investment company registered under the Investment Company Act of
1940 such accounts, books and other documents as are necessary or appropriate to
record its transactions with the Fund. Such accounts, books and other documents
shall be subject at any time and from time to time to such reasonable periodic,
special and other examinations by the Commission or any member or representative
thereof as the Commission may prescribe. The Principal Underwriter shall furnish
to the Commission within such reasonable time as the Commission may prescribe
copies of or extracts from such records which may be prepared without effort,
expense or delay as the Commission may by order require.
11. This Agreement shall continue in force indefinitely until
terminated as in this Agreement above provided, except:
(a) that this Agreement shall remain in full force and effect
through and including April 28, 1993, and shall continue in full force and
effect indefinitely thereafter, but only so long as such continuance after April
28, 1993 is specifically approved at least annually (i) by the vote of a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of the Principal Underwriter cast in person at a meeting called for the
purpose of voting on such approval, and (ii) by the Board of Trustees of the
Trust or by vote of a majority of the outstanding voting securities of the Fund;
and
(b) that either party shall have the right to terminate this
Agreement on six (6) months' written notice thereof given in writing to the
other.
(c) the Trust shall have the right to terminate this Agreement
forthwith in the event that it shall have been established by a court of
competent jurisdiction that the Principal Underwriter or any director or officer
of the Principal Underwriter has taken any action which results in a breach of
the covenants set out in paragraph 8 hereof.
12. In the event of the assignment of this Agreement by the Principal
Underwriter, this Agreement shall automatically terminate.
13. 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 record address of the Trust, and that
of the Principal Underwriter, shall be 00 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000.
14. The services of the Principal Underwriter to the Fund hereunder are
not to be deemed to be exclusive, the Principal Underwriter being free to (a)
render similar services to, and to act as principal underwriter in connection
with the distribution of shares of, other series of the Trust or investment
companies, and (b) engage in other businesses and activities from time to time.
15. The terms "vote of a majority of the outstanding voting
securities," "assignment" and "interested persons," when used herein, shall have
the respective meanings specified in the Investment Company Act of 1940 as now
in effect or as hereafter amended, subject, however, to such exemptions as may
be granted by the Securities and Exchange Commission by any rule, regulation or
order.
16. The Principal Underwriter expressly acknowledges the provision in
the Trust's Declaration of Trust limiting the personal liability of the
shareholders of the Fund or the Trustees of the Trust, and the Principal
Underwriter hereby agrees that it shall have recourse to the Trust or the Fund
for payment of claims or obligations as between the Trust or the Fund and the
Principal Underwriter arising out of this Agreement and shall not seek
satisfaction from the shareholders or any shareholder of the Fund or from the
Trustees or any Trustee of the Trust. The Fund shall not be responsible for
obligations of any other series of the Trust.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
XXXXX XXXXX GROWTH TRUST
(on behalf of Xxxxx Xxxxx Greater China Growth Fund)
By /s/ Xxxxx X. Xxxxxx
-------------------------------------------------
President
XXXXX XXXXX DISTRIBUTORS, INC.
By /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------------------
President
