8
DISTRIBUTION AGREEMENT
[DATE]
PFS Distributors
0000 Xxxxxxxxxxxx Xxxx., Xxxx 000
Xxxxxx, Xxxxxxx 00000-0000
Dear Sirs:
This is to confirm that, in consideration of the agreements
hereinafter contained, the undersigned, [Name of Fund] a
[business trust/Corporation] organized under the laws of the
[Commonwealth of Massachusetts/State of Maryland] has agreed that
PFS Distributors ("PFS") shall be, for the period of this
Agreement, the distributor of shares (the "Shares") of the Fund.
1. Services as Distributor
1.1 PFS will act as agent for the distribution of
Shares covered by the registration statement, prospectus and
statement of additional information then in effect under the
Securities Act of 1933, as amended (the "1933 Act"), and the
Investment Company Act of 1940, as amended (the "1940 Act").
1.2 PFS agrees to use its best efforts to solicit
orders for the sale of Shares and will undertake such advertising
and promotion as it believes is reasonable in connection with
such solicitation.
1.3 All activities by PFS as distributor of the Shares
shall comply with all applicable laws, rules, and regulations,
including, without limitation, all rules and regulations made or
adopted by the Securities and Exchange Commission (the "SEC") or
by any securities association registered under the Securities
Exchange Act of 1934.
1.4 PFS will provide one or more persons during normal
business hours to respond to telephone questions concerning the
Fund.
1.5 PFS will transmit any orders received by it for
purchase or redemption of Shares to PFS Shareholder Service (the
"Sub-Transfer Agent"), the Fund's sub-transfer and dividend
agent, or any successor Sub-Transfer Agent of which the Fund has
notified PFS in writing.
1.6 Whenever in their judgment such action is
warranted for any reason, including, without limitation, market,
economic or political conditions, the Fund'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 PFS will act only on its own behalf as principal
should it choose to enter into selling agreements with selected
dealers or others.
(For Funds with Plans adopted pursuant to Rule 12b-1)
1.8 The Fund will pay to PFS an annual fee in
connection with the offering and sale of the Shares under this
Agreement. The annual fee paid to PFS, will be calculated daily
and paid monthly by the Fund at an annual rate set forth in the
[Services and Distribution/Shareholder Servicing] Plan (the
"Plan") based on the average daily net assets of [each
portfolio/series of the Fund which has adopted a Plan/the Fund];
provided that payment shall be made in any month only to the
extent that such payment shall not exceed the sales charge
limitations established by the National Association of Securities
Dealers, Inc.
The annual fee paid to PFS under this Section 1.8 maybe used
by PFS to cover any expenses primarily intended to result in the
sale of Shares, including, but not limited to, the following:
(a) cost of payments made to PFS Investments
Representatives and other employees of PFS or other broker-
dealers that engage in the distribution of the Fund's
Shares;
(b) payments made to, and expenses of, persons who
provide support services in connection with the distribution
of the Fund's Shares, including, but not limited to, office
space and equipment, telephone facilities, answering routine
inquiries regarding the Fund, processing shareholder
transactions and providing any other shareholder services;
(c) costs relating to the formulation and
implementation of marketing and promotional activities,
including, but not limited to, direct mail promotions and
television, radio, newspaper, magazine and other mass media
advertising;
(d) costs of printing and distributing prospectuses
and reports of the Fund to prospective shareholders of the
Fund;
(e) costs involved in preparing, printing and
distributing sales literature pertaining to the Fund; and
(f) costs involved in obtaining whatever information,
analyses and reports with respect to marketing and
promotional activities that the Fund may, from time to time,
deem advisable;
except that distribution expenses shall not include any
expenditures in connection with services which PFS, any of its
affiliates, or any other person have agreed to bear without
reimbursement.
1.9 PFS shall prepare and deliver reports to the Treasurer
of the Fund and to the sub-investment advisor and/or
administrator of the Fund on a regular, at least quarterly,
basis, showing the distribution expenses incurred pursuant to
this Agreement and the Plan and the purposes therefor, as well as
any supplemental reports as the Trustees, from time to time, may
reasonably request.
2. Duties of the Fund
2.1 The Fund agrees at its own expense to execute any
and all documents, to furnish any and all information and to take
any other actions that may be reasonably necessary in connection
with the qualification of the Shares for sale in those states
that PFS may designate.
2.2 The Fund shall furnish from time to time for use
in connection with the sale of the Shares, such information
reports with respect to the Fund and its Shares as PFS may
reasonably request, all of which shall be signed by one or more
of the Fund's duly authorized officers; and the Fund warrants
that the statements contained in any such reports, when so signed
by the Fund's officers, shall be true and correct. The Fund
shall also furnish PFS upon request with (a) annual audits of the
Fund's books and accounts made by independent certified public 1
accountants regularly retained by the Fund; (b) semi-annual
unaudited financial statements pertaining to the Fund; (c)
quarterly earnings statements prepared by the Fund; (d) a monthly
itemized list of the securities in the Fund's portfolio; (e)
monthly balance sheets as soon as practicable after the end of
each month; and (f) from time to time such additional information
regarding the Fund's financial condition as PFS may reasonably
request.
3. Representations and Warranties
The Fund represents to PFS that all registration statements,
prospectuses and statements of additional information filed by
the Fund with the SEC under the 1933 Act and the 1940 Act with
respect to the Shares have been carefully prepared in conformity
with the requirements of the 1933 Act, the 1940 Act and the rules
and regulations of the SEC thereunder. As used in this
Agreement, the terms "registration statement", "prospectus" and
"statement of additional information" shall mean any registration
statement, prospectus and statement of additional information
filed by the Fund with the SEC and any amendments and supplements
thereto which at any time shall have been filed with the SEC.
The Fund represents and warrants to PFS that any registration
statement, prospectus and statement of additional information,
when such registration statement becomes effective, will include
all statements required to be contained therein in conformance
with the 1933 Act, the 1940 Act and the rules and regulations of
the SEC; that all statements of fact contained in any
registration statement, prospectus or statement of additional
information will be true and correct when such registration
statement becomes effective; and that neither any registration
statement nor any prospectus or statement of additional
information when such registration statement becomes effective
will include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading to a purchaser of
the Fund's Shares. The Fund 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 or statement of additional information as, in the
light of future developments, may, in the opinion of the Fund's
counsel, be necessary or advisable. If the Fund shall not
propose such amendment or amendments and/or
supplement or supplements within fifteen days after receipt by
the Fund of a written request from PFS to do so, PFS may, at its
option, terminate this Agreement. The Fund shall not file any
amendment to any registration statement or supplement to any
prospectus or statement of additional information without giving
PFS reasonable notice thereof in advance; provided, however, that
nothing contained in this Agreement shall in any way limit the
Fund's right to file at any time such amendments to any
registration statement and/or supplements to any prospectus or
statement of additional information, of whatever character, as
the Fund may deem advisable, such right being in all respects
absolute and unconditional.
4. Indemnification
4.1 The Fund authorizes PFS and dealers to use any
prospectus or statement of additional information furnished by
the Fund from time to time, in connection with the sale of the
Shares. The Fund agrees to indemnify, defend and hold PFS, its
several officers and directors, and any person who controls PFS
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 such
counsel fees incurred in connection therewith) which PFS, its
officers and 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, or alleged untrue
statement, of a material fact contained in any registration
statement, any prospectus or any statement of additional
information or arising out of or based upon any omission, or
alleged omission, to state a material fact required to be stated
in any registration statement, any prospectus or any statement of
additional information or necessary to make the statements in any
thereof not misleading; provided, however, that the Fund's
agreement to indemnify PFS, its officers or directors, and any
such controlling person shall not be deemed to cover any claims,
demands, liabilities or expenses arising out of any statements or
representations made by PFS or its representatives or agents
other than such statements and representations as are contained
in any prospectus or statement of additional information and in
such financial and other statements as are furnished to PFS
pursuant to paragraph 2.2 of this Agreement; and further provided
that the Fund's agreement to indemnify PFS and the Fund's
representations and warranties herein before set forth in
paragraph 3 of this Agreement shall not be deemed to cover any
liability to the Fund or its shareholders to which PFS would
otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of its duties, or by
reason of PFS's reckless disregard of its obligations and duties
under this Agreement. The Fund's agreement to indemnify PFS, its
officers and directors, and any such controlling person, as
aforesaid, is expressly conditioned upon the Fund's being
notified of any action brought against PFS, its officers or
directors, or any such controlling person, such notification to
be given by letter or by telegram addressed to the Fund at its
principal office in New York, New York and sent to the Fund by
the person against whom such action is brought, within ten days
after the summons or other first legal process shall have been
served. The failure so to notify the Fund of any such action
shall not relieve the Fund from any liability that the Fund may
have to the person against whom such action is brought by reason
of any such untrue, or alleged untrue, statement or omission, or
alleged omission, otherwise than on account of the Fund's
indemnity agreement contained in this paragraph 4.1. The Fund
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 Fund and approved by PFS. In the event the Fund
elects to assume the defense of any such suit and retains counsel
of
good standing approved by PFS, the defendant or defendants in
such suit shall bear the fees and expenses of any additional
counsel retained by any of them; but if the Fund does not elect
to assume the defense of any such suit, or if PFS does not
approve of counsel chosen by the Fund, the Fund will reimburse
PFS, its officers and directors, or the controlling person or
persons named as defendant or defendants in such suit, for the
fees and expenses of any counsel retained by PFS or them. The
Fund's indemnification agreement contained in this paragraph 4.1
and the Fund'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 PFS, its officers and
directors, or any controlling person, and shall survive the
delivery of any of the Fund's Shares. This agreement of
indemnity will inure exclusively to PFS's benefit, to the benefit
of its several officers and directors, and their respective
estates, and to the benefit of the controlling persons and their
successors. The Fund agrees to notify PFS promptly of the
commencement of any litigation or proceedings against the Fund or
any of its officers or trustees in connection with the issuance
and sale of any of the Fund's Shares.
4.2 PFS agrees to indemnify, defend and hold the Fund,
its several officers and [Directors/Trustees], and any person who
controls the Fund 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 costs of
investigating or defending such claims, demands or liabilities
and any counsel fees incurred in connection therewith) that the
Fund, its officers or [Directors/Trustees] 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 officers or
[Directors/Trustees], 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 PFS to the Fund and used
in the answers to any of the items of the registration statement
or in the corresponding statements made in the prospectus or
statement of additional information, 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
PFS to the Fund and required to be stated in such answers or
necessary to make such information not misleading. PFS's
agreement to indemnify the Fund, its officers or
[Directors/Trustees], and any such controlling person, as
aforesaid, is expressly conditioned upon PFS being notified of
any action brought against the Fund, its officers or
[Directors/Trustees], or any such controlling person, such
notification to be given by letter or telegram addressed to PFS
at its principal office in New York, New York and sent to PFS by
the person against whom such action is brought, within ten days
after the summons or other first legal process shall have been
served. PFS shall have the right to control the defense of such
action, with counsel of its own choosing, satisfactory to the
Fund, if such action is based solely upon such alleged
misstatement or omission on PFS's part, and in any other event
the Fund, its officers or [Directors/Trustees] 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 PFS of any such action shall not relieve
PFS from any liability that PFS may have to the Fund, its
officers or [Directors/Trustees], 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 PFS's
indemnity agreement contained in this paragraph 4.2. PFS agrees
to notify the Fund promptly of the commencement of any litigation
or proceedings against PFS or any of its officers or directors in
connection with the issuance and sale of any of the Fund's
Shares.
4.3 In case any action shall be brought against any
indemnified party under paragraph 4.1 or 4.2, and it shall notify
the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in, and, to
the extent that it shall wish to do so, to assume the defense
thereof with counsel satisfactory to such indemnified party. If
the indemnifying party opts to assume the defense of such action,
the indemnifying party will not be liable to the indemnified
party for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof
other than (a) reasonable costs of investigation or the
furnishing of documents or witnesses and (b) all reasonable fees
and expenses of separate counsel to such indemnified party if (i)
the indemnifying party and the indemnified party shall have
agreed to the retention of such counsel or (ii) the indemnified
party shall have concluded reasonably that representation of the
indemnifying party and the indemnified party by the same counsel
would be inappropriate due to actual or potential differing
interests between them in the conduct of the defense of such
action.
5. Effectiveness of Registration
None of the Fund's Shares shall be offered by either PFS or
the Fund under any of the provisions of this Agreement and no
orders for the purchase or sale of the Shares under this
Agreement shall be accepted by the Fund 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
provision of the 1933 Act or if and so long as a current
prospectus as required by Section 5(b) (2) of the 1933 Act is not
on file with the SEC; provided, that nothing contained in this
paragraph 5 shall in any way restrict or have an application to
or bearing upon the Fund's obligation to repurchase its Shares
from any shareholder in accordance with the provisions of the
Fund's prospectus, statement of additional information or [Master
Trust Agreement/Articles of Incorporation] dated [Date of Master
Trust Agreement/Articles of Incorporation], as amended from time
to time.
6. Notice to PFS
The Fund agrees to advise PFS immediately in writing:
(a) of any request by the SEC for
amendments to the registration
statement, prospectus or statement of
additional information then in effect or
for additional information;
(b) In the event of the issuance
by the SEC of any stop order suspending
the effectiveness of the registration
statement, prospectus or statement of
additional information then in effect or
the initiation of any proceeding for
that purpose;
(c) of the happening of any event
that makes untrue any statement or a
material fact made in the registration
statement, prospectus or statement of
additional information then in effect or
that requires the making of a change in
such registration statement, prospectus
or statement of additional
information in order to make the
statements therein not misleading; and
(d) of all actions of the SEC with
respect to any amendment to any
registration statement, prospectus or
statement of additional information
which may from time to time be filed
with the SEC.
7. Term of the Agreement
This Agreement shall become effective on the date first
written above and shall continue for successive annual periods
thereafter so long as such continuance is specifically approved
at least annually by (a) the Fund's Board of [Directors/Trustees]
or (b) by a vote of a majority (as defined in the 0000 Xxx) of
the Fund's outstanding voting securities, provided that in either
event the continuance is also approved by a majority of the
[Directors/Trustees] of the Fund who are not interested persons
(as defined in the 0000 Xxx) of any party to this Agreement, by
vote cast in person at a meeting called for the purpose of voting
on such approval. This Agreement is terminable, without penalty,
on 60 days' notice by the Fund's Board of [Directors/Trustees],
by vote of the holders of a majority of the Fund's Shares, or on
90 days' notice by PFS. This Agreement will also terminate
automatically in the event of its assignment (as defined in the
1940 Act).
8. Limitation of Liability (Massachusetts business trusts
only)
The Fund and PFS agree that the obligations of the Fund
under this Agreement shall not be binding upon any of the
Trustees, shareholders, nominees, officers, employees or agents,
whether past, present or future, of the Fund, individually, but
are binding only upon the assets and property of the Fund, as
provided in the Master Trust Agreement. The execution and
delivery of this Agreement have been authorized by the Trustees
and signed by an authorized officer of the Fund, acting as such,
and neither such authorization by such Trustees nor such
execution and delivery by such officer shall be deemed to have
been made by any of them individually or to impose any liability
on any of them personally, but shall bind only the trust property
of the Fund as provided in its Master Trust Agreement.
If the foregoing is in accordance with your understanding,
kindly indicate your acceptance
of this Agreement by signing and returning to us the enclosed
copy of this Agreement.
Very truly yours,
[Name of Fund]
By: _____________________
[Title]
Accepted:
PFS DISTRIBUTORS
By: __________________________
Authorized Officer
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