N:\SHAREDAT\CORP_ACT\CONTRACT\XXXXXX\CEF\UNDER97.DOC 6
ADMINISTRATION, SHAREHOLDER SERVICES AND
DISTRIBUTION AGREEMENT
AGREEMENT made this 7th day of September, 1998, by and between
CASH EQUIVALENT
FUND, a Massachusetts business trust (the "Fund"), and XXXXXX
DISTRIBUTORS, INC., a
Delaware corporation ("KDI").
In consideration of the mutual covenants hereinafter contained,
it is hereby agreed by and between the parties hereto as follows:
1. The Fund hereby appoints KDI to act as administrator,
distributor and principal underwriter for the distribution
of shares of beneficial interest (hereinafter called
"shares") of the Fund in jurisdictions wherein shares of the
Fund may legally be offered for sale; provided, however,
that the Fund in its absolute discretion may (a) issue or
sell shares directly to holders of shares of the Fund upon
such terms and conditions and for such consideration, if
any, as it may determine, whether in connection with the
distribution of subscription or purchase rights, the payment
or reinvestment of dividends or distributions, or otherwise;
or (b) issue or sell shares at net asset value to the
shareholders of any other investment company, for which KDI
shall act as exclusive distributor, who wish to exchange all
or a portion of their investment in shares of such other
investment company for shares of the Fund.
KDI shall appoint various broker-dealers and other
financial services firms ("Firms") to provide a cash
management service for their clients through the Fund. The
Finns shall provide such office space and equipment,
telephone facilities, personnel, literature distribution,
advertising and promotion as is necessary or beneficial for
providing information and services to potential and existing
shareholders of the Fund and to assist the Fund's
shareholder service agent in servicing accounts of the
Firm's clients who own Fund shares ("clients"). Such
services and assistance may include, but are not limited to,
establishment and maintenance of shareholder accounts and
records, processing purchase and redemption transactions,
automatic investment in Fund shares of client account cash
balances, answering routine client inquiries regarding the
Fund, assistance to clients in changing dividend options,
account designations and addresses, and such other services
as the Fund or KDI may reasonably request. KDI may also
provide some of the above services for the Fund directly.
KDI accepts such appointment and agrees during the term
hereof to render such services and to assume the obligations
herein set forth for the compensation herein provided. KDI
shall for all purposes herein provided be deemed to be an
independent contractor and, unless otherwise expressly
provided or authorized, shall have no authority to act for
or represent the Fund in any way or otherwise be deemed an
agent of the Fund. It is understood and agreed that KDI, by
separate agreement with the Fund, may also serve the Fund in
other capacities. The services of KDI to the Fund under this
Agreement are not to be deemed exclusive, and KDI shall be
free to render similar services or other services to others
so long as its services hereunder are not impaired thereby.
In carrying out its duties and responsibilities
hereunder, KDI will, pursuant to separate administration
services and selling group agreements ("services
agreements"), appoint various Firms to provide
administrative, distribution and other services contemplated
hereunder directly to or for the benefit of existing and
potential shareholders who may be clients of such Firms Such
Firms shall at all times be deemed to be independent
contractors retained by KDI and not the Fund. KDI and not
the Fund will be responsible for the payment of compensation
to such Firms for such services.
KDI will use its best efforts with reasonable
promptness to sell such part of the authorized shares of the
Fund remaining unissued as from time to time shall be
effectively registered under the Securities Act of 1933
("Securities Act"), at prices determined as hereinafter
provided and on terms hereinafter set forth, all subject to
applicable federal and state laws and regulations and to the
Fund's Agreement and Declaration of Trust. The price the
Fund shall receive for all shares purchased from the Fund
shall be the net asset value used in determining the public
offering price applicable to the sale of such shares.
2. KDI shall sell shares of the Fund to or through
qualified Firms in such manner, not inconsistent with the
provisions hereof and the then effective registration
statement of the Fund under the Securities Act (and related
prospectus), as KDI may determine from time to time,
provided that no Firm or other person shall be appointed and
authorized to act as agent of the Fund without the prior
consent of the Fund. In addition to sales made by it as
agent of the Fund, KDI may, in its discretion, also sell
shares of the Fund as principal to persons with whom it does
not have services agreements.
Shares of any series of the Fund offered for sale or
sold by KDI shall be so offered or sold at a price per share
determined in accordance with the then current prospectus
relating to the sale of such shares except as departure from
such prices shall be permitted by the rules and regulations
of the Securities and Exchange Commission; provided,
however, that any public offering price for shares of the
Fund shall be the net asset value per share. The net asset
value per share of the Fund shall be determined in the
manner and at the times set forth in the then current
prospectus of the Fund relating to such shares.
KDI will require each Xxxx to conform to the provisions
hereof and the Registration Statement (and related
prospectus) at the time in effect under the Securities Act
with respect to the public offering price of the Fund's
shares, and neither KDI nor any such Firms shall withhold
the placing of purchase orders so as to make a profit
thereby.
3. The Fund will use its best efforts to keep effectively
registered under the Securities Act for sale as herein
contemplated such shares as KDI shall reasonably request and
as the Securities and Exchange Commission shall permit to be
so registered. Notwithstanding any other provision hereof,
the Fund may terminate, suspend or withdraw the offering of
shares whenever, in its sole discretion, it deems such
action to be desirable.
4. The Fund will execute any and all documents and furnish
any and all information that may be reasonably necessary in
connection with the qualification of its shares for sale
(including the qualification of the Fund as a dealer where
necessary or advisable) in such states as KDI may reasonably
request (it being understood that the Fund shall not be
required without its consent to comply with any requirement
which in its opinion is unduly burdensome). The Fund will
furnish to KDI from time to time such information with
respect to the Fund and its shares as KDI may reasonably
request for use in connection with the sale of shares of the
Fund.
5. KDI shall issue and deliver or shall arrange for
various Firms to issue and deliver on behalf of the Fund
such confirmations of sales made by it pursuant to this
Agreement as may be required. At or prior to the time of
issuance of shares, KDI will pay or cause to be paid to the
Fund the amount due the Fund for the sale of such shares.
Certificates shall be issued or shares registered on the
transfer books of the Fund in such names and denominations
as KDI may specify.
6. KDI shall order shares of the Fund from the Fund only
to the extent that it shall have received purchase orders
therefor. KDI will not make, or authorize Firms or others to
make, any short sales of shares of the Fund. KDI, as agent
of and for the account of the Fund, may repurchase the
shares of the Fund at such prices and upon such terms and
conditions as shall be specified in the current prospectus
of the Fund. In selling or reacquiring shares of the Fund
for the account of the Fund, KDI will in all respects
conform to the requirements of all state and federal laws
and the Rules of Fair Practice of the National Association
of Securities Dealers, Inc., relating to such sale or
reacquisition, as the case may be, and will indemnify and
save harmless the Fund from any damage or expense on account
of any wrongful act by KDI or any employee, representative
or agent of KDI. KDI will observe and be bound by all the
provisions of the Fund's Agreement and Declaration of Trust
(and of any fundamental policies adopted by the Fund
pursuant to the Investment Company Act of 1940 (the
"Investment Company Act"), notice of which shall have been
given to KDI) which at the time in any way require, limit,
restrict, prohibit or otherwise regulate any action on the
part of KDI hereunder.
7. The Fund shall assume and pay all charges and expenses
of its operations not specifically assumed or otherwise to
be provided by KDI under this Agreement or the Fund's
Amended and Restated 12b- I Plan (the "Plan"). The Fund will
pay or cause to be paid expenses (including the fees and
disbursements of its own counsel) and all taxes and fees
payable to the federal, state or other governmental agencies
on account of the registration or qualification of
securities issued by the Fund or otherwise. The Fund will
also pay or cause to be paid expenses incident to the
issuance of shares of beneficial interest, such as the cost
of share certificates, issue taxes, and fees of the transfer
agent. KDI will pay all expenses (other than expenses which
one or more Firms may bear pursuant to any agreement with
KDI) incident to the sale and distribution of the shares
issued or sold hereunder including, without limiting the
generality of the foregoing, all expenses of printing and
distributing any prospectus and of preparing, printing and
distributing or disseminating any other literature,
advertising and selling aids in connection with the offering
of the shares for sale (except that such expenses need not
include expenses incurred by the Fund in connection with the
preparation, typesetting, printing and distribution of any
registration statement, prospectus or report or other
communication to shareholders in their capacity as such) and
expenses of advertising in connection with such offering.
8. This Agreement shall become effective on the date
hereof and shall continue until December 1, 1998 and shall
continue from year to year thereafter only so long as such
continuance is approved in the manner required by the
Investment Company Act.
This Agreement shall automatically terminate in the
event of its assignment and may be terminated at any time
without the payment of any penalty by the Fund or by KDI on
(60) days' written notice to the other party. The Fund may
effect termination by a vote of (i) a majority of the
trustees who are not interested persons of the Fund and who
have no direct or indirect financial interest in the
operation of the Plan, this Agreement or in any other
agreement related to the Plan, or (ii) a majority of the
outstanding voting securities of the Fund.
All material amendments to this Agreement must be
approved by a vote of a majority of the Board of Trustees of
the Fund, including the trustees who are not interested
persons of the Fund and who have no direct or indirect
financial interest in the operation of the Plan, this
Agreement or in any other agreement related to the Plan,
cast in person at a meeting called for such purpose.
The terms "assignment," "interested person" and "vote
of a majority of the outstanding voting securities" shall
have the meanings set forth in the Investment Company Act
and the rules and regulations thereunder.
KDI shall receive such compensation for its
distribution services as set forth in the Plan. Termination
of this Agreement shall not affect the right of KDI to
receive payments on any unpaid balance of the compensation
earned prior to such termination, as set forth in the Plan.
9. KDI will not use or distribute or authorize the use,
distribution or dissemination by Firms or others in
connection with the sale of Fund shares any statements,
other than those contained in the Fund's current prospectus,
except such supplemental literature or advertising as shall
be lawful under federal and state securities laws and
regulations. KDI will furnish the Fund with copies of all
such material.
10. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or
otherwise, the remainder shall not be thereby affected.
11. Any notice under this Agreement shall be in writing,
addressed and delivered or mailed, postage prepaid, to the
other party at such address as such other party may
designate for the receipt of such notice.
12. All parties hereto are expressly put on notice of the
Fund's Agreement and Declaration of Trust and all amendments
thereto, all of which are on file with the Secretary of The
Commonwealth of Massachusetts, and the limitation of
shareholder and trustee liability contained therein. This
Agreement has been executed by and on behalf of the Fund by
its representatives as such representatives and not
individually, and the obligations of the Fund hereunder are
not binding upon any of the trustees, officers or
shareholders of the Fund individually but are binding upon
only the assets and property of the Fund. With respect to
any claim by KDI for recovery of any liability of the Fund
arising hereunder allocated to a particular series, whether
in accordance with the express terms hereof or otherwise,
KDI shall have no recourse against the assets of any other
series for such purpose.
13. This Agreement shall be construed in accordance with
applicable federal law and with the laws of The Commonwealth
of Massachusetts.
14. This Agreement is the entire contract between the
parties relating to the subject matter hereof and supersedes
all prior agreements between the parties relating to the
subject matter hereof.
[SIGNATURES APPEAR ON NEXT PAGE]
IN WITNESS WHEREOF, the Fund and KDI have caused this Agreement
to be executed as of the day and year first above written.
CASH EQUIVALENT FUND
By:
____________________________
Title:
President
ATTEST:
By: _______________________________
Title: Assistant Secretary
XXXXXX DISTRIBUTORS, INC.
By:
____________________________
Title:
President
ATTEST:
By: _______________________________
Title: Executive Assistant
