EX-99.E1 3 dex99e1.htm AMENDMENT TO DISTRIBUTION AGREEMENT
Exhibit (e)(1)
AMENDMENT TO DISTRIBUTION AGREEMENT
December 1, 2005
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
Reference is made to that certain distribution agreement
(the "Agreement"),dated as of June 5, 2000, between Xxxxx Xxxxxx
Fundamental Value Fund Inc. (the "Investment Company"), with respect to
one or more separate series listed on Exhibit A (each a "Fund") and Citigroup
Global Markets Inc. This letter agreement (the "Amendment") amends or
supplements certain terms of the Agreement as set forth below. Except as
expressly amended hereby, the provisions of the Agreement are and shall
remain in full force and effect. Capitalized terms not
defined in this Amendment shall have the meanings given to
them in the Agreement.
We acknowledge that Xxxx Xxxxx Inc. ("Xxxx Xxxxx") and Citigroup
Inc. ("Citigroup") have entered into that certain Amended and
Restated Global Distribution Agreement (the "Global Distribution Agreement"),
dated as of October 3, 2005, which provides,
for a period of three years from December 1, 2005, for the distribution by
Citigroup distributors of Citigroup investment products and Xxxx Xxxxx
investment products within the United States and internationally
and for Citigroup's access to certain Xxxx Xxxxx investment products
pursuant to the terms of the Global Distribution Agreement.
1. Services as a Non-Exclusive Principal Underwriter and Distributor
Notwithstanding anything to the contrary contained in the Agreement:
1.1 You shall be, for the period of the Agreement as amended by this
Amendment, a non-exclusive principal underwriter and distributor of
the Fund.
1.2 You may perform any services for any entity, including
investment companies that are not advised or administered by
Citigroup or its subsidiaries.
1.3 You shall retain all rights to the information of your customers,
including,but not limited to, the names, addresses, telephone
numbers and social security numbers of applicants for, purchasers
of, and other customers of the Fund as well as other identity and
private information in respect of your customers, employees, registered
representatives and agents ("Confidential Information"); provided,
however, that Confidential Information shall not include any
customer information that: (x) was previously known by us from a
source other than you without obligations of confidence; (y) was or
is rightfully received by us from a third party without obligations of
confidence to you or from publicly available sources without obligations
of confidence to you; or (z) was or is developed by means independent
of information obtained from you.
2. Termination
In addition to the termination rights already contained in
the Agreement, (i) at any time prior to the second anniversary hereof,
at your option you may terminate the Agreement at any time in order
for you to enter into a mutually satisfactory mutual fund dealer
agreement with the principal underwriter that is an affiliate of
Xxxx Xxxxx for the Investment Company (a "Dealer Agreement") and
(ii) at any time following the second anniversary of the date
hereof, either party may at its option terminate the Agreement at
any time in order for you to enter into a Dealer Agreement ; provided,
that any such termination shall only be effective upon execution
and deliveryof a Dealer Agreement which shall be, unless the
parties thereto otherwiseagree, in substantially the form
presented to the Board of the InvestmentCompany and attached hereto
as Exhibit B with such additional changes asmay be appropriate to
reflect changes in applicable laws, regulationsor industry practice.
3. Dealer and Other Agreements
You may not enter into dealer or similar agreements with
unaffiliated brokers, dealers, banks or other similar firms
or recordkeeping, shareholder servicing and sub-accounting services
with unaffiliated intermediaries without the written consent of the
Investment Company or its authorized designee. No such unaffiliated
intermediary is authorized to act as agent for the Investment Company
in connection with the offering or sale of Shares of the Fund to the
public or otherwise, except for the limited purpose of determining the
time as of which transactions in Shares are deemed to have been received.
4. Compliance Matters
(a) You shall act as a distributor and principal underwriter of
Shares in compliance in all material respects with all applicable laws,
rules and regulations, including, without limitation, all rules and
regulations made or adopted pursuant to (i) the 1940Act, (ii) the
Securities Exchange Act of 1934 ("1934 Act"), (iii) any securities
association registered under the 1934 Act, including without limitation
the NASD Conduct Rules or rules of any other applicable self-regulatory
organization. You shall offer the Shares, and accept purchases, redemptions
and exchanges for Shares, in compliance with the Fund's registration
statement (including its prospectus and statement of additional
information), as it may be amended or supplemented from time to time
("Registration Statement"). You will comply with and abide by the terms
of a Fund's Plan, as it may be amended from time to time.
(b) You agree to submit sales literature and marketing materials
(including memorandums, bulletins, and/or information or related materials)
intended for public distribution ("CGMI Marketing Materials") to the
co-principal underwriter of the Investment Company which is an affiliate
of Xxxx Xxxxx prior to distribution or publication for written approval.
Such CGMI Marketing Materials shall be submitted 15 days in advance for
review. You shall be responsible for reviewing and making such filings
with the NASD, as required, of CGMI Marketing Materials relating to each Fund.
(c) You shall adopt and follow procedures for the confirmation of
sales to investors and qualified securities dealers, banks and
other intermediaries (collectively "Intermediaries") timeliness
of orders, the collection of amounts payable by investors and
Intermediaries on such sales, the correction of errors related to
distribution of Shares, the cancellation of unsettled transactions,
and assisting with the solicitation of proxies, and any other matters
governed by Rule 38a-1 under the 1940Act (as may apply to a
distributor or principal underwriter for a registered
investment company), each as may be necessary to comply with the
requirements of the NASD, any other self-regulatory organization, and
the federal securities laws. You shall provide reports or other
information to the Investment Company at the Investment Company's
reasonable request, including, without limitation, reports related to
the operation and implementation of the Investment Company's policies
related to customer privacy, safeguarding of customer information,
anti-money-laundering, sales and marketing practices, the operation
of your code of ethics or other policies and procedures of the
Investment Company.
(d) You represent, warrant and agree that you have adopted
and implemented: (i) an anti-money-laundering program in
compliance with the USA Patriot Act of 2001, the regulations
thereunder and NASD Conduct Rules, including, without limitation,
customer identification program procedures, monitoring for
suspicious activity, and (ii) procedures to comply with applicable
law and regulation related to cash transaction reporting requirements,
as well as monitoring and reporting under FinCEN, OFAC and other
government watch lists.
(e) The Investment Company agrees that the information
exchanged under the Agreement and information about the
respective customers and potential customers of each is
confidential and as such shall not be disclosed by the Fund,
sold or used by the Fund in any way except to carry out the terms
of this Agreement. Notwithstanding the foregoing, such customer
information may be disclosed by the Investment Company on a
"need to know" basis as set forth in applicable privacy rules
and regulations. The obligations regarding confidentiality hereunder
shall not apply to any information which is (i) otherwise publicly
available, (ii) already possessed by the entity to whom the
information was disclosed prior to disclosure hereunder, (iii)
independently developed by the entity, or (iv) disclosed pursuant to law,
rule, regulation or court or administrative order. The Investment
Company shall have the right to use any list of shareholders of the
Fund or any other list of investors which it obtains in connection
with its provision of services under this Agreement, provided that
such use is consistent with applicable law and your privacy policies
of the Investment Company, including the provision of information
to the Fund's transfer agent or to agents used for the solicitation
of proxies. You agree that you will comply with all of the foregoing
obligations of this to the extent that information is treated as
customer information of the Fund under applicable law or regulation,
including without limitation Regulation S-P. Each party further
agrees to take commercially reasonable steps, in accordance with
applicable law, to safeguard customer information. The
provisions of this paragraph will survive termination of the Agreement.
(f) From time to time, each Fund may implement policies,
procedures or charges in an effort to avoid the potential
adverse effects on the Fund of short-term trading by market
timers. You agree to provide other assistance reasonably
designed to achieve compliance with these policies. You will
maintain and enforce policies with respect to frequent trading
and share redemption as are reasonable and customary in the
industry. To the extent that accounts are held in street name,
you agree to cooperate with the Investment Company and the
Investment Company's Chief Compliance Officer (including, to the
extent practicable, providing account level sales and redemption
information) to assist in compliance with the frequent trading and
redemption fee provisions as set forth in the Fund's prospectus
and other policies set forth in the Fund's Registration Statement.
(g) Purchases, exchanges and redemptions of Shares through
you will be at the public offering price of such Shares
(the net asset value of the Shares, with appropriate adjustments
for any applicable sales charge), as determined in accordance
with the then effective Registration Statement used in connection
with the offer and sale of the Shares. The public offering
price will reflect scheduled variations in or the elimination
of sales charges on sales of Shares either generally to the public
or in connection with special purchase plans, as described in the Registration
Statement. You agree to apply any scheduled
variation in or waivers of sales charges uniformly to all customers
meeting the qualifications therefor as specified in the Registration
Statement. With respect to Funds sold with an initial sales charge,
your customers will be entitled to reduced sales charges on purchases
made under any letter of intent or right of accumulation as described
in the Registration Statement. In such case, the concession from the
public offering price retained by you will be based upon such reduced
sales charge. When placing wire trades, your agree to advise the Funds of
any letter of intent executed by its customer or any available right of
accumulation.
The minimum initial purchase and the minimum subsequent purchase of
any Shares shall be as set forth in the applicable Registration Statement.
All orders are subject to acceptance or rejection by the applicable Fund
in its sole discretion for any reason.
(h) The handling and settlement of purchase, exchange and
redemption orders will be subject to the provisions of the Registration
Statement and such further procedures as the Investment Company
and you may determine to be appropriate from time-to-time, consistent
with this Amendment. Citigroup Global Markets' internal systems are
suitably designed to handle such orders. Each Fund shall notify you
of the states or jurisdictions in which its Shares are currently
available for sale to the public. The Investment Company shall
have no obligation to register or make available Fund shares in any
state or jurisdiction. You will be responsible for
the accuracy, timeliness and completeness of purchase, redemption or
exchange orders accepted by you.
(j) The Investment Company acknowledges that the co-principal
underwriter which is affiliated with Xxxx Xxxxx shall be responsible
for reviewing the Registration Statement of the Fund for the accuracy
and completeness of all disclosure concerning the distribution of Shares
and that you shall not have such responsibility, except, in each case,
to the extent the disclosure information is provided by you or pertains to
information concerning your operations. Notwithstanding the foregoing,
nothing inthis paragraph shall alter your responsibilities for complying
with the terms of the Registration Statement in your offering of Shares.
5. Records. Upon the Investment Company's reasonable request, you will
provide access to or make copies of any such records the Investment
Company does not possess in order to: (a) comply with a request from a
government body or self-regulatory organization; (b) verify compliance
by the other party of the terms of this Agreement; or (c) make required
regulatory reports.
6. Section 9 of the 1940 Act. You agree to promptly notify the
Investment Company should you cease to be a member of the NASD
through expulsion or otherwise or if its membership is suspended or
should you be subject to any limitations on your
conduct under Section 9 of the 1940 Act.
7. Indemnification
You agree to indemnify, defend and hold the Investment Company,
its several officers and Board members, and any person who controls
free and harmless from and against any and all claims, demands, liabilities
and expenses (including the cost of investigating or defending such claims,
demands or liabilities and any counsel fees incurred in connection therewith)
which the Investment Company, its officers or Board members, or any such
controlling person may incur, under the 1933 Act or under common lawor
otherwise, on account of any act of yours or any of your employees
constitutingwillful misfeasance, bad faith, or gross negligence in
the performance of its duties, or by reason of your reckless disregard
of your obligations and dutiesunder the Agreement or this Amendment.
The foregoing indemnification provisionssupplement the indemnification
provisions of the Agreement. The indemnifications provisions of this
Amendment and the Agreement shall survive the termination of the Agreement
and/or this Amendment.
If the foregoing is in accordance with your understanding,
kindly indicate your acceptance of this Amendment by signing
and returning to us the enclosed copy,
whereupon this Amendment will become binding on you.
Very truly yours,
Xxxxx Xxxxxx Fundamental Value Fund Inc.
By:
Name: R. Xxx Xxxxxx
Title: Chief Executive Officer
Agreed to as of the date first above written:
Citigroup Global Markets Inc.
By:
Name:
Title:
EXHIBIT A
Fund Date Added:
Xxxxx Xxxxxx Fundamental Value Fund Inc.
December 1, 2005
EXHIBIT B
DEALER AGREEMENT
