EXHIBIT 5(a)
MERCURY GLOBAL HOLDINGS, INC.
CLASS I SHARES
DISTRIBUTION AGREEMENT
AGREEMENT made as of the ____ day of _____, 2000, between MERCURY GLOBAL
HOLDINGS, INC., a Maryland corporation (the "Fund"), and PRINCETON FUNDS
DISTRIBUTOR, INC., a Delaware 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 "Investment Company Act"), as an open-end investment company,
and it is affirmatively in the interest of the Fund to offer its shares for sale
continuously; and
WHEREAS, the Distributor is a securities firm engaged in the business of
selling shares of investment companies either directly to purchasers or through
other securities dealers; and
WHEREAS, the Fund and the Distributor wish to enter into an agreement with
each other with respect to the continuous offering of the Class I shares of
common stock of the Fund.
NOW, THEREFORE, the parties agree as follows:
Section 1. Appointment of the Distributor. The Fund hereby appoints the
Distributor as the principal underwriter and distributor of the Fund to sell
Class I shares of common stock of the Fund (sometimes herein referred to as
"Class I shares") to eligible investors (as defined below) and hereby agrees
during the term of this Agreement to sell Class I shares of the Fund to the
Distributor upon the terms and conditions herein set forth.
Section 2. Exclusive Nature of Duties. The Distributor shall be the
exclusive representative of the Fund to act as principal underwriter and
distributor of Class I shares of the Fund, except that:
(a) The Fund may, upon written notice to the Distributor, from time to
time designate other principal underwriters and distributors of Class I shares
with respect to areas other than the United States as to which the Distributor
may have expressly waived in writing its right to act as such. If such
designation is deemed exclusive, the right of the Distributor under this
Agreement to sell Class I shares in the areas so designated shall terminate, but
this Agreement shall remain otherwise in full effect until terminated in
accordance with the other provisions hereof.
(b) The exclusive right granted to the Distributor to purchase Class I
shares from the Fund shall not apply to Class I shares of the Fund 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 Class I
shares of any such company by the Fund.
(c) Such exclusive right also shall not apply to Class I shares issued by
the Fund pursuant to reinvestment of dividends or capital gains distributions.
(d) Such exclusive right also shall not apply to Class I shares issued by
the Fund pursuant to any conversion, exchange or reinstatement privilege
afforded redeeming shareholders or to any other Class I shares as shall be
agreed between the Fund and the Distributor from time to time.
Section 3. Purchase of Class I Shares from the Fund.
(a) During the continuous offering of Class I shares of the Fund, the
Distributor shall have the right to buy from the Fund the Class I shares needed,
but not more than the Class I shares needed (except for clerical errors in
transmission) to fill unconditional orders for Class I shares of the Fund placed
with the Distributor by eligible investors or securities dealers. Investors
eligible to purchase Class I shares shall be those persons so identified in the
currently effective prospectus and statement of additional information of the
Fund (the "prospectus" and "statement of additional information," respectively)
under the Securities Act of 1933, as amended (the "Securities Act"), relating to
such Class I shares ("eligible investors"). The price which the Distributor
shall pay for the Class I shares so purchased from the Fund shall be the net
asset value, determined as set forth in Section 3(d) hereof, used in determining
the public offering price on which such orders were based.
(b) The Class I shares are to be resold by the Distributor to eligible
investors at the public offering price, as set forth in Section 3(c) hereof, or
to securities dealers having agreements with the Distributor upon the terms and
conditions set forth in Section 7 hereof.
(c) The public offering price(s) of the Class I shares, i.e., the price
per share at which the Distributor or selected dealers may sell Class I shares
to eligible investors, shall be the public offering price as set forth in the
prospectus and statement of additional information relating to such Class I
shares, but not to exceed the net asset value at which the Distributor is to
purchase the Class I shares, plus a sales charge not to exceed 5.25% of the
public offering price (5.54% of the net amount invested), subject to reductions
for volume purchases. Class I shares may be sold to certain Directors, officers
and employees of the Fund, directors and employees of Xxxxxxx Xxxxx & Co., Inc.
and its subsidiaries, and to certain other persons described in the prospectus
and statement of additional information, without a sales charge or at a reduced
sales charge, upon terms and conditions set forth in the prospectus and
statement of additional information. If the public offering price does not equal
an even cent, the public offering price may be adjusted to the nearest cent. All
payments to the Fund hereunder shall be made in the manner set forth in Section
3(f).
(d) The net asset value of Class I shares of the Fund shall be determined
by the Fund or any agent of the Fund in accordance with the method set forth in
the prospectus and statement of additional information of the Fund and
guidelines established by the Board of Directors.
(e) The Fund shall have the right to suspend the sale of the Class I
shares at times when redemption is suspended pursuant to the conditions set
forth in Section 4(b) hereof. The Fund shall also have the right to suspend the
sale of the Class I shares if trading on the New York
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Stock Exchange shall have been suspended, if a banking moratorium shall have
been declared by Federal or New York authorities, or if there shall have been
some other event, which, in the judgment of the Fund, makes it impracticable or
inadvisable to sell the Class I shares.
(f) The Fund, or any agent of the Fund designated in writing by the Fund,
shall be promptly advised of all purchase orders for Class I shares received by
the Distributor. Any order may be rejected by the Fund; provided, however, that
the Fund will not arbitrarily or without reasonable cause refuse to accept or
confirm orders for the purchase of Class I shares from eligible investors. The
Fund (or its agent) will confirm orders upon their receipt, will make
appropriate book entries and, upon receipt by the Fund (or its agent) of payment
therefor, will deliver deposit receipts or certificates for such Class I shares
pursuant to the instructions of the Distributor. Payment shall be made to the
Fund by wire transfer of immediately available funds. The Distributor agrees to
cause such payment and such instructions to be delivered promptly to the Fund
(or its agent).
Section 4. Repurchase or Redemption of Class I shares by the Fund.
(a) Any of the outstanding Class I shares may be tendered for redemption
at any time, and the Fund agrees to repurchase or redeem the Class I shares so
tendered in accordance with its obligations as set forth in Article VII of its
Articles of Incorporation, as amended from time to time, and in accordance with
the applicable provisions set forth in the prospectus and statement of
additional information. The price to be paid to redeem or repurchase the Class I
shares shall be equal to the net asset value calculated in accordance with the
provisions of Section 3(d) hereof, less any contingent deferred sales charge
("CDSC"), redemption fee or other charge(s), if any, set forth in the prospectus
and statement of additional information relating to the Fund. All payments by
the Fund hereunder shall be made in the manner set forth below. The redemption
or repurchase by the Fund of any of the Class I shares purchased by or through
the Distributor will not affect the sales charge secured by the Distributor or
any selected dealer in the course of the original sale, except that if any Class
I shares are tendered for redemption or repurchase within seven business days
after the date of the confirmation of the original purchase, the right to the
sales charge shall be forfeited by the Distributor and the selected dealer which
sold such Class I shares.
The Fund shall pay the total amount of the redemption price as defined in
the above paragraph pursuant to the instructions of the Distributor on or before
the seventh business day subsequent to its having received the notice of
redemption in proper form. The proceeds of any redemption of shares shall be
paid by the Fund as follows: (i) any applicable CDSC shall be paid to the
Distributor, and (ii) the balance shall be paid to or for the account of the
stockholder, in each case in accordance with the applicable provisions of the
prospectus and statement of additional information.
(b) Redemption of Class I shares or payment may be suspended at times when
the New York Stock Exchange is closed, when trading on said Exchange is
suspended, when trading on said Exchange is restricted, when an emergency exists
as a result of which disposal by the Fund of securities owned by it is not
reasonably practicable or it is not reasonably practicable for the Fund fairly
to determine the value of the net assets of the Fund, or during any other period
when the Securities and Exchange Commission, by order, so permits.
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Section 5. Duties of the Fund.
(a) The Fund 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 Class I shares of the
Fund, and this shall include, upon request by the Distributor, one certified
copy of all financial statements prepared for the Fund by independent public
accountants. The Fund shall make available to the Distributor such number of
copies of the prospectus and statement of additional information relating to the
Fund as the Distributor shall reasonably request.
(b) The Fund shall take, from time to time, but subject to the necessary
approval of the Class I stockholders, all necessary action to fix the number of
authorized Class I shares and such steps as may be necessary to register the
same under the Securities Act, to the end that there will be available for sale
such number of Class I shares as the Distributor may reasonably be expected to
sell.
(c) The Fund shall use its best efforts to qualify and maintain the
qualification of an appropriate number of Class I shares for sale under the
securities laws of such states as the Distributor and the Fund may approve. Any
such qualification may be withheld, terminated or withdrawn by the Fund at any
time in its discretion. As provided in Section 8(c) hereof, the expense of
qualification and maintenance of qualification shall be borne by the Fund. 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
qualification.
(d) The Fund will furnish, in reasonable quantities upon request by the
Distributor, copies of annual and interim reports relating to the Fund.
Section 6. Duties of the Distributor.
(a) The Distributor shall devote reasonable time and effort to effect
sales of Class I shares of the Fund but shall not be obligated to sell any
specific number of Class I shares. The services of the Distributor to the Fund
hereunder are not to be deemed exclusive and nothing herein contained shall
prevent the Distributor from entering into like arrangements with other
investment companies so long as the performance of its obligations hereunder is
not impaired thereby.
(b) In selling the Class I shares of the Fund, the Distributor shall use
its best efforts in all respects duly to conform with the requirements of all
Federal and state laws relating to the sale of such securities. Neither the
Distributor nor any selected dealer, as defined in Section 7 hereof, nor any
other person is authorized by the Fund to give any information or to make any
representations, other than those contained in the registration statement or
related prospectus and statement of additional information and any sales
literature specifically approved by the Fund.
(c) The Distributor shall adopt and follow procedures, as approved by the
officers of the Fund, for the confirmation of sales to eligible investors and
selected dealers, the collection of amounts payable by eligible investors and
selected dealers on such sales, and the cancellation of unsettled transactions,
as may be necessary to comply with the requirements of the National
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Association of Securities Dealers, Inc. (the "NASD"), as such requirements may
from time to time exist.
Section 7. Selected Dealers Agreements.
(a) The Distributor shall have the right to enter into selected dealers
agreements with securities dealers of its choice ("selected dealers") for the
sale of Class I shares and fix therein the portion of the sales charge which may
be allocated to the selected dealers; provided that the Fund shall approve the
forms of agreements with dealers and the dealer compensation set forth therein.
Class I shares sold to selected dealers shall be for resale by such dealers only
at the public offering price(s) set forth in the prospectus and statement of
additional information. The initial form of agreement with selected dealers to
be used in the continuous offering of the Class I shares is attached hereto as
Exhibit A.
(b) Within the United States, the Distributor shall offer and sell Class I
shares only to such selected dealers as are members in good standing of the
NASD.
Section 8. Payment of Expenses.
(a) The Fund shall bear all costs and expenses of the Fund, including fees
and disbursements of counsel and auditors, in connection with the preparation
and filing of any required registration statements and/or prospectuses and
statements of additional information under the Investment Company Act, the
Securities Act, and all amendments and supplements thereto, and preparing and
mailing annual and interim reports and proxy materials to Class I stockholders
(including but not limited to the expense of setting in type any such
registration statements, prospectuses, statements of additional information,
annual or interim reports or proxy materials).
(b) The Distributor shall be responsible for any payments made to selected
dealers as reimbursement for their expenses associated with payments of sales
commissions to financial consultants. In addition, after the prospectuses,
statements of additional information and annual and interim reports have been
prepared and set in type, the Distributor shall bear the costs and expenses of
printing and distributing any copies thereof which are to be used in connection
with the offering of Class I shares to selected dealers or eligible investors
pursuant to this Agreement. The Distributor shall bear the costs and expenses of
preparing, printing and distributing any other literature used by the
Distributor or furnished by it for use by selected dealers in connection with
the offering of the Class I shares for sale to eligible investors and any
expenses of advertising incurred by the Distributor in connection with such
offering.
(c) The Fund shall bear the cost and expenses of qualification of the
Class I shares for sale pursuant to this Agreement and, if necessary or
advisable in connection therewith, of qualifying the Fund as a broker or dealer
in such states of the United States or other jurisdictions as shall be selected
by the Fund and the Distributor pursuant to Section 5(c) hereof and the cost and
expenses payable to each such state for continuing qualification therein until
the Fund decides to discontinue such qualification pursuant to Section 5(c)
hereof.
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Section 9. Indemnification.
(a) The Fund shall indemnify and hold harmless the Distributor and each
person, if any, who controls the Distributor against any loss, liability, claim,
damage or expense (including the reasonable cost of investigating or defending
any alleged loss, liability, claim, damage or expense and reasonable counsel
fees incurred in connection therewith), as incurred, arising by reason of any
person acquiring any Class I shares, which may be based upon the Securities Act,
or on any other statute or at common law, on the ground that the registration
statement or related prospectus and statement of additional information of the
Fund, as from time to time amended and supplemented, or an annual or interim
report to stockholders relating to the Fund, 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 or omission was made in reliance upon, and in conformity with,
information furnished to the Fund in connection therewith by or on behalf of the
Distributor; provided, however, that in no case (i) is the indemnity of the Fund
in favor of the Distributor and any such controlling persons to be deemed to
protect such Distributor or any such controlling persons thereof against any
liability to the Fund or its security holders to which the Distributor or any
such controlling persons would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of their duties or
by reason of the reckless disregard of their obligations and duties under this
Agreement; or (ii) is the Fund to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against the
Distributor or any such controlling persons, unless the Distributor or such
controlling persons, as the case may be, shall have notified the Fund 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
Distributor or such controlling persons (or after the Distributor or such
controlling persons shall have received notice of such service on any designated
agent), but failure to notify the Fund of any such claim shall not relieve it
from any liability which it may have to the person against whom such action is
brought otherwise than on account of its indemnity agreement contained in this
paragraph. The Fund will 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 Fund elects to assume the defense, such
defense shall be conducted by counsel chosen by it and satisfactory to the
Distributor or such controlling person or persons, defendant or defendants in
the suit. In the event the Fund elects to assume the defense of any such suit
and retain such counsel, the Distributor or such 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 Fund does not elect to
assume the defense of any such suit, it will reimburse the Distributor or such
controlling person or persons, defendant or defendants in the suit, for the
reasonable fees and expenses of any counsel retained by them. The Fund shall
promptly notify the Distributor of the commencement of any litigation or
proceedings against it or any of its officers or Directors in connection with
the issuance or sale of any of the Class I shares.
(b) The Distributor shall indemnify and hold harmless the Fund and each of
its Directors and officers and each person, if any, who controls the Fund
against any loss, liability, claim, damage or expense described in the foregoing
indemnity contained in subsection (a) of this Section, but only with respect to
statements or omissions made in reliance upon, and in conformity with,
information furnished to the Fund in writing by or on behalf of the Distributor
for use in connection with the registration statement or related prospectus and
statement of
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additional information, as from time to time amended, or the annual or interim
reports to Class I shareholders. In case any action shall be brought against the
Fund or any person so indemnified, in respect of which indemnity may be sought
against the Distributor, the Distributor shall have the rights and duties given
to the Fund, and the Fund and each person so indemnified shall have the rights
and duties given to the Distributor by the provisions of subsection (a) of this
Section 9.
Section 10. Fee-Based Programs Offered by the Fund's Investment Adviser or
Its Affiliates. In connection with certain fee-based programs offered by the
Fund's investment adviser or its affiliates, the Distributor and its affiliates
are authorized to offer and sell shares of the Fund, as agent for the Fund, to
participants in such programs. The terms of this Agreement shall apply to such
sales, including terms as to the offering price of shares, the proceeds to be
paid to the Fund, the duties of the Distributor, the payment of expenses and
indemnification obligations of the Fund and the Distributor.
Section 11. Duration and Termination of this Agreement. This Agreement
shall become effective as of the date first above written and shall remain in
force until _____ ___, 2002, and thereafter, but only for so long as such
continuance is specifically approved at least annually by (i) the Directors or
by the vote of a majority of the outstanding Class I voting securities of the
Fund and (ii) by the vote of a majority of those Directors who are not parties
to this Agreement or interested persons of any such party cast in person at a
meeting called for the purpose of voting on such approval.
This Agreement may be terminated at any time, without the payment of any
penalty, by the Directors or by vote of a majority of the outstanding Class I
voting securities of the Fund, or by the Distributor, on sixty days' written
notice to the other party. This Agreement shall automatically terminate in the
event of its assignment.
The terms "vote of a majority of the outstanding voting securities",
"assignment", "affiliated person" and "interested person", when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act.
Section 12. Amendments of this Agreement. This Agreement may be amended by
the parties only if such amendment is specifically approved by (i) the Directors
or by the vote of a majority of outstanding Class I voting securities of the
Fund and (ii) by the vote of a majority of those Directors who are not parties
to this Agreement or interested persons of any such party cast in person at a
meeting called for the purpose of voting on such approval.
Section 13. Governing Law. The provisions of this Agreement shall be
construed and interpreted in accordance with the laws of the State of New York
as at the time in effect and the applicable provisions of the Investment Company
Act. To the extent that the applicable law of the State of New York, or any of
the provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
MERCURY GLOBAL HOLDINGS, INC.
By
-----------------------------------------
Name:
Title:
PRINCETON FUNDS DISTRIBUTOR, INC.
By
-----------------------------------------
Name:
Title:
8
EXHIBIT A
MERCURY GLOBAL HOLDINGS, INC.
CLASS I SHARES OF COMMON STOCK
SELECTED DEALERS AGREEMENT
Ladies and Gentlemen:
Princeton Funds Distributor, Inc. (the "Distributor"), has an agreement
with Mercury Global Holdings, Inc., (the "Fund") pursuant to which it acts as
the distributor for the sale of Class I shares of common stock, par value $0.10
per share (herein referred to as "Class I shares"), of the Fund and as such has
the right to distribute Class I shares of the Fund for resale. The Fund is an
open-end investment company registered under the Investment Company Act of 1940,
as amended, and its Class I shares are registered under the Securities Act of
1933, as amended (the "Securities Act"). You have received a copy of the Class I
Shares Distribution Agreement (the "Distribution Agreement") between ourselves
and the Fund and reference is made herein to certain provisions of such
Distribution Agreement. The terms "prospectus" and "statement of additional
information" used herein refer to the prospectus and statement of additional
information, respectively, on file with the Securities and Exchange Commission
(the "Commission") which is part of the most recent effective registration
statement pursuant to the Securities Act. We offer to sell to you, as a member
of the Selected Dealers Group, Class I shares of the Fund for resale to
investors identified in the prospectus and statement of additional information
as eligible to purchase Class I shares ("eligible investors") upon the following
terms and conditions:
1. In all sales of these Class I shares to eligible investors, you shall
act as dealer for your own account and in no transaction shall you have any
authority to act as agent for the Fund, for us or for any other member of the
Selected Dealers Group, except in connection with such special programs as we
from time to time agree, in which case you shall have authority to offer and
sell shares, as agent for the Fund, to participants in such programs.
2. Orders received from you will be accepted through us only at the public
offering price applicable to each order, as set forth in the current prospectus
and statement of additional information relating to the Fund subject in each
case to the delivery prior to or at the time of such sales of the then current
prospectus. The procedure relating to the handling of orders shall be subject to
Section 5 hereof and instructions which we or the Fund shall forward from time
to time to you. All orders are subject to acceptance or rejection by the
Distributor or the Fund in the sole discretion of either and become effective
only upon confirmation by the Distributor. The minimum initial and subsequent
purchase requirements are as set forth in the current prospectus and statement
of additional information relating to the Fund and no order for less than such
amounts will be accepted unless such purchase shall be expressly approved by the
Fund in accordance with the then current prospectus of the Fund. No conditional
order will be accepted on any basis other than a definitive one.
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3. The sales charges for sales to eligible investors, computed as
percentages of the public offering price and the amount invested, and the
related discount to Selected Dealers are as follows:
Discount to
Selected
Sales Charge Dealers as
Sales Charge as Percentage* Percentage
As Percentage of the Net of the
of the Amount Offering
Amount of Purchase Offering Price Invested Price
------------------ -------------- -------- --------
Less than $25,000 .............. 5.25% 5.54% 5.00%
$25,000 but less than
$50,000 ........................ 4.75 4.99 4.50
$50,000 but less than
$100,000 ....................... 4.00 4.17 3.75
$100,000 but less than
$250,000 ....................... 3.00 3.09 2.75
$250,000 but less than
$1,000,000 ..................... 2.00 2.04 1.80
$1,000,000 and over** .......... 0.00 0.00 0.00
-------------------
* Rounded to the nearest one-hundredth percent.
** Initial sales charges may be waived for certain classes of offerees as set
forth in the current prospectus and statement of additional information of the
Fund. Such purchases may be subject to a contingent deferred sales charge as set
forth in the current prospectus and statement of additional information.
The term "purchase" refers to a single purchase by an individual, or to
concurrent purchases, which in the aggregate are at least equal to the
prescribed amounts, by an individual, his spouse and their children under the
age of 21 years purchasing Class I shares for his or their own account and to
single purchases by a trustee or other fiduciary purchasing Class I shares for a
single trust estate or single fiduciary account although more than one
beneficiary is involved. The term "purchase" also includes purchases by any
"company" as that term is defined in the Investment Company Act but does not
include purchases by any such company which has not been in existence for at
least six months or which has no purpose other than the purchase of Class I
shares of the Fund or Class I shares of other registered investment companies at
a discount; provided, however, that it shall not include purchases by any group
of individuals
A-2
whose sole organizational nexus is that the participants therein are credit
cardholders of a company, policyholders of an insurance company, customers of
either a bank or broker-dealer or clients of an investment adviser.
The reduced sales charges are applicable through a right of accumulation
under which certain eligible investors are permitted to purchase Class I shares
of the Fund at the offering price applicable to the total of (a) the dollar
amount then being purchased plus (b) an amount equal to the then current net
asset value or cost, whichever is higher, of the purchaser's combined holdings
of Class I, Class A, Class B and Class C shares of the Fund and of any other
open-end investment company advised by Fund Asset Management, L.P. or an
affiliate thereof (together "FAM-advised mutual funds"). For any such right of
accumulation to be made available, the Distributor must be provided at the time
of purchase, by the purchaser or you, with sufficient information to permit
confirmation of qualification, and acceptance of the purchase order is subject
to such confirmation.
The reduced sales charges are applicable to purchases aggregating $25,000
or more of Class I shares or of Class A shares of any other FAM-advised mutual
fund made through you within a thirteen-month period starting with the first
purchase pursuant to a Letter of Intent in the form provided in the prospectus.
A purchase not originally made pursuant to a Letter of Intent may be included
under a subsequent letter executed within 90 days of such purchase if the
Distributor is informed in writing of this intent within such 90-day period. If
the intended amount of shares is not purchased within the thirteen-month period,
an appropriate price adjustment will be made pursuant to the terms of the Letter
of Intent.
You agree to advise us promptly at our request as to amounts of any sales
made by you to eligible investors qualifying for reduced sales charges. Further
information as to the reduced sales charges pursuant to the right of
accumulation or a Letter of Intent is set forth in the prospectus and statement
of additional information.
4. As an authorized agent to sell shares of the Fund, you agree to
purchase shares of the Fund only through us or from your customers. You shall
not place orders for any of the Class I shares except for your own investment
purposes or unless you have already received purchase orders for such Class I
shares at the applicable public offering prices, and subject to the terms hereof
and of the Distribution Agreement. We agree that we will not place orders for
the purchase of shares from the Fund except to cover purchase orders already
received by us. You agree that you will not offer or sell any of the Class I
shares except under circumstances that will result in compliance with the
applicable Federal and state securities laws and that in connection with sales
and offers to sell Class I shares you will furnish to each person to whom any
such sale or offer is made a copy of the prospectus and, if requested, the
statement of additional information (as then amended or supplemented) and will
not furnish to any person any information relating to the Class I shares of the
Fund which is inconsistent in any respect with the information contained in the
prospectus and statement of additional information (as then amended or
supplemented) or cause any advertisement to be published in any newspaper or
posted in any public place without our consent and the consent of the Fund.
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5. As a selected dealer, you are hereby authorized (i) to place orders
directly with the Fund for Class I shares of the Fund to be resold by us to you
subject to the applicable terms and conditions governing the placement of orders
by us set forth in Section 3 of the Distribution Agreement and subject to the
compensation provisions of Section 3 hereof and (ii) to tender Class I shares
directly to the Fund or its agent for redemption subject to the applicable terms
and conditions set forth in Section 4 of the Distribution Agreement.
6. You agree to place orders received from your customers as soon as
practicable after your receipt of such orders. You further agree that you shall
not withhold placing orders received from your customers so as to profit
yourself as a result of such withholding, e.g., by a change in the "net asset
value" from that used in determining the offering price to your customers.
7. Settlement shall be made promptly, but in no case later than the time
customary for such payments after our acceptance of the order or, if so
specified by you, we will make delivery by draft on you, the amount of which
draft you agree to pay on presentation to you. If payment is not so received or
made, the right is reserved forthwith to cancel the sale or at our option to
resell the shares to the Fund at the then prevailing net asset value in which
latter case you agree to be responsible for any loss resulting to the Fund or to
us from your failure to make payment as aforesaid.
8. If any Class I shares sold to you under the terms of this Agreement are
repurchased by the Fund or by us for the account of the Fund or are tendered for
redemption within seven business days after the date of the confirmation of the
original purchase by you, it is agreed that you shall forfeit your right to, and
refund to us, any discount received by you on such Class I shares.
9. No person is authorized to make any representations concerning Class I
shares of the Fund except those contained in the current prospectus and
statement of additional information relating to the Fund and in such printed
information subsequently issued by us or the Fund as information supplemental to
such prospectus and statement of additional information. In purchasing Class I
shares through us you shall rely solely on the representations contained in the
prospectus and statement of additional information and supplemental information
above mentioned. Any printed information which we furnish you other than the
prospectus, statement of additional information, periodic reports and proxy
solicitation material of the Fund is our sole responsibility and not the
responsibility of the Fund, and you agree that the Fund shall have no liability
or responsibility to you in these respects unless expressly assumed in
connection therewith.
10. You agree to deliver to each of the purchasers making purchases from
you a copy of the then current prospectus and, if requested, the statement of
additional information at or prior to the time of offering or sale and you agree
thereafter to deliver to such purchasers copies of the annual and interim
reports and proxy solicitation materials of the Fund. You further agree to
endeavor to obtain proxies from such purchasers. Additional copies of the
prospectus and statement of additional information, annual or interim reports
and proxy solicitation materials of the Fund will be supplied to you in
reasonable quantities upon request.
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11. All sales will be subject to receipt of shares by us from the Fund. We
reserve the right in our discretion, without notice, to suspend sales or
withdraw the offering of Class I shares entirely or to certain persons or
entities in a class or classes specified by us or to modify or cancel this
Agreement.
12. We, our affiliates and the Fund (and its officers and directors) shall
not be liable for any loss, expenses, damages, costs or other claims arising out
of any redemption or exchange pursuant to telephone instructions from any
person, or our refusal to execute such instructions for any reason.
13. You and we understand and agree that you are solely responsible for
the recommendation by your sales personnel to your customers of the purchase or
sale of Class I shares of the Fund and the suitability of such purchase or sale
for the customer involved.
14. We shall have full authority to take such action as we may deem
advisable in respect of all matters pertaining to the continuous offering. We
shall be under no liability to you except for lack of good faith and for
obligations expressly assumed by us herein. Nothing contained in this paragraph
is intended to operate as, and the provisions of this paragraph shall not in any
way whatsoever constitute, a waiver by you of compliance with any provision of
the Securities Act of 1933, as amended, or of the rules and regulations of the
Commission issued thereunder.
15. By accepting this Agreement, you represent that you are registered as
a broker-dealer under the Securities Exchange Act of 1934, are qualified to act
as a broker or dealer in the states or other jurisdictions where you transact
business, and are a member in good standing of the National Association of
Securities Dealers, Inc. (the "NASD") and you agree that you will maintain such
registrations, qualifications, and membership in good standing and in full force
and effect throughout the term of this Agreement. You further agree to comply
with all applicable Federal laws, the laws of the states or other jurisdictions
concerned, and the rules and regulations promulgated thereunder and with the
Constitution, By-Laws and Conduct Rules of the NASD, and that you will not offer
or sell shares of the Fund in any state or jurisdiction where they may not
lawfully be offered and/or sold.
If you are offering and selling shares of the Fund in jurisdictions
outside the several states, territories, and possessions of the United States
and are not otherwise required to be registered, qualified, or a member of the
NASD, as set forth above, you nevertheless agree to observe the applicable laws
of the jurisdiction in which such offer and/or sale is made, to comply with the
full disclosure requirements of the Securities Act and the regulations
promulgated thereunder, and to conduct your business in accordance with the
spirit of the Conduct Rules of the NASD. You agree to indemnify and hold the
Fund, its investment adviser, and us harmless from loss or damage resulting from
any failure on your part to comply with applicable laws.
16. Upon application to us, we will inform you as to the states in which
we believe the Class I shares have been qualified for sale under, or are exempt
from the requirements of, the respective securities laws of such states, but we
assume no responsibility or obligation as to your right to sell Class I shares
in any jurisdiction. We will file with the Department of State in New York a
Further State Notice with respect to the Class I shares, if necessary.
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17. All communications to us should be sent to the address below. Any
notice to you shall be duly given if mailed or telegraphed to you at the address
specified by you below.
18. You agree to maintain records of all sales of shares made through you
and to furnish us with copies of each record on request.
19. You and we understand and agree that, except as expressly provided in
this Agreement, in no transaction will you have any authority to take any action
or make any representation binding upon the Fund, us or any other member of the
Selected Dealers Group.
20. This Agreement may be amended by us from time to time by the following
procedure. We will mail a copy of the amendment to you at your address as
specified below. If you do not object to the amendment within fifteen (15) days
after its receipt, the amendment will become a part of the Agreement. Your
objection must be in writing and be received by us within such fifteen days.
21. This Agreement may be terminated upon written notice by either party
at any time, and shall automatically terminate upon its attempted assignment by
you, whether by operation of law or otherwise, or by us otherwise than by
operation of law.
22. Your first order placed pursuant to this Agreement or any amendment
thereto for the purchase of Class I shares of the Fund will represent your
acceptance of this Agreement or any such amendment.
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PRINCETON FUNDS DISTRIBUTOR, INC.
By
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(Authorized Signature)
Please return one signed copy of this agreement to:
PRINCETON FUNDS DISTRIBUTOR, INC.
X.X. Xxx 0000
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Accepted:
Firm Name:
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By:
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Address:
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Date:
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