DISTRIBUTION AGREEMENT
This DISTRIBUTION AGREEMENT, dated as of February 25, 1998
by and between EACH XXXXXXX FUND LISTED IN THE SCHEDULE OF FUNDS
ATTACHED HERETO AS SCHEDULE I (each a "Fund" and together the
"Funds"), as such schedule may, from time to time be amended, and
XXXXXXX DISTRIBUTORS, INC., a Delaware corporation (the
"Distributor").
WHEREAS, each Fund is registered as an open-end investment
company under the Investment Company Act of 1940 (the "1940 Act") and
has registered its shares, including shares of its series portfolios
(the "Series"), for sale to the public under the Securities Act of
1933 (the "1933 Act") and various state securities laws;
WHEREAS, each Fund wishes to retain the Distributor as the
principal underwriter in connection with the offer and sale of shares
of the Series (the "Shares") and to furnish certain other services to
the Series as specified in this Agreement;
WHEREAS, this contract has been approved by the
Trustees/Directors of each Fund in anticipation of the Distributor's
transfer of its rights to receive the Class B Distribution Fees ( as
defined in the Distribution Plan for Class B and C Shares (the
"Distribution Plan")) and/or Class B contingent deferred sales
charges to a financing party in order to raise funds to cover
distribution expenditures; and
WHEREAS, the Distributor is willing to act as principal
underwriter and to furnish such services on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and mutual
covenants herein contained, it is agreed as follows:
1. Each Fund hereby appoints the Distributor as
principal underwriter in connection with the offer and sale of its
Shares. The Distributor shall, as agent for each Fund, subject to
applicable federal and state law and the Declaration of Trust or
Articles of Incorporation, and By-laws of the applicable Fund and in
accordance with the representations in the applicable Fund's
Registration Statement and Prospectus, as such documents may be
amended from time to time: (a) promote the Series; (b) enter into
appropriate dealer agreements with other registered broker-dealers to
further distribution of the Shares; (c) solicit orders for the
purchase of the Shares subject to such terms and conditions as the
applicable Fund may specify; (d) transmit promptly orders and
payments for the purchase of Shares and orders for redemption of
Shares to the applicable Fund's transfer agent; and (e) provide
services agreed upon by the applicable Fund to Series shareholders;
provided, however, that the Distributor may sell no Shares pursuant
to this Agreement until the Distributor is notified that a Fund's
Registration Statement under the 1933 Act, authorizing the sale of
such Shares through the Distributor, has become effective. The
Distributor shall comply with all applicable federal and state laws
and offer the Shares on an agency or "best efforts" basis under which
a Fund shall only issue such Shares as are actually sold.
2. The public offering price of the Shares shall be
the net asset value ("NAV") per share (as determined by the
applicable Fund) of the outstanding Shares of the Series, plus the
applicable sales charge, if any, as set forth in the Fund's then
current Prospectus. Each Fund shall furnish the Distributor with a
statement of each computation of NAV and of the details entering into
such computation.
3. Compensation.
a. Distribution Fee.
i. Class A. In consideration of the Distributor's services
as distributor for the Class A Shares of a Fund, each Fund may pay to
the Distributor the Distribution Fee as set forth in Schedule II to
this Agreement that is payable pursuant to the Fund's Distribution
Plan.
ii. Class B. In consideration of the Distributor's services
as distributor for the Class B Shares of a Fund, each Fund shall pay
to the Distributor (or its designee or transferee) the Distributor's
Allocable Portion of the Distribution Fee; (as set forth in Schedule
II to this Agreement) that is payable pursuant to the Fund's
Distribution Plan in respect of the Class B Shares of a Fund. For
purposes of this Agreement, the Distributor's "Allocable Portion" of
the Distribution Fee shall be 100% of such Distribution Fee unless or
until the Fund uses a principal underwriter other than the
Distributor and thereafter the Allocable Portion shall be the portion
of the Distribution Fee attributable to (i) Class B Shares of a Fund
sold by the Distributor ("Commission Shares"), (ii) Class B Shares of
the Fund issued in connection with the exchange of Commission Shares
of another Fund, and (iii) Class B Shares of the Fund issued in
connection with the reinvestment of dividends and capital gains.
The Distributor's Allocable Portion of the Distribution Fee
and the contingent deferred sales charges arising in respect of Class
B Shares taken into account in computing the Distributor's Allocable
Portion shall be limited under Rule 2830 of the Conduct Rules or
other applicable regulations of the NASD as if the Class B Shares
taken into account in computing the Distributor's Allocable Portion
themselves constituted a separate class of shares of a Fund.
The services rendered by the Distributor for which the
Distributor is entitled to receive the Distributor's Allocable
Portion of the Distribution Fee shall be deemed to have been
completed at the time of the initial purchase of the Commission
Shares (whether of the Fund or another Fund in the Xxxxxxx Group of
Funds) taken into account in computing the Distributor's Allocable
Portion. Notwithstanding anything to the contrary in this Agreement,
the Distributor shall be paid its Allocable Portion of the
Distribution Fee notwithstanding the Distributor's termination as
principal underwriter of the Class B Shares of a Fund, or any
termination of this Agreement other than in connection with a
Complete Termination (as defined in the Distribution Plan) of the
Class B Distribution Plan as in effect on the date of this Agreement.
Except as provided in the preceding sentence, a Fund's obligation to
pay the Distribution Fee to the Distributor shall be absolute and
unconditional and shall not be subject to any dispute, offset,
counterclaim or defense whatsoever, (it being understood that nothing
in this sentence shall be deemed a waiver by a Fund of its right
separately to pursue any claims it may have against the Distributor
and to enforce such claims against any assets (other than its rights
to be paid its Allocable Portion of the Distribution Fee and to be
paid the contingent deferred sales charges) of the Distributor.
iii. Class C. In consideration of the Distributor's services
as distributor for the Class C Shares of a Fund, each Fund shall pay
to the Distributor the Distribution Fee as set forth in Schedule II
to this Agreement that is payable pursuant to the Fund's Distribution
Plan.
b. Service Fee. As additional compensation, for Class
A, Class B and Class C Shares of each Series, applicable Funds shall
pay the Distributor a service fee (as that term is defined by the
National Association of Securities Dealers, Inc. ("NASD")) as set
forth in Schedule III to this Agreement that is payable pursuant to
the Fund's Distribution Plan.
c. Front-end Sales Charges. As additional compensation
for the services performed and the expenses assumed by the
Distributor under this Agreement, the Distributor may, in conformity
with the terms and conditions set forth in the then current
Prospectus of each Fund, impose and retain for its own account the
amount of the front-end sales charge, if any, and may reallow a
portion of any front-end sales charge to other broker-dealers, all in
accordance with NASD rules.
d. Contingent Deferred Sales Charge. Each Fund will
pay to the Distributor (or its designee or transferee) in addition to
the fees set forth in Section 3 hereof any contingent deferred sales
charge imposed on redemptions of that Fund's Class B and Class C
Shares upon the terms and conditions set forth in the then current
Prospectus of that Fund. Notwithstanding anything to the contrary in
this Agreement, the Distributor shall be paid such contingent
deferred sales charges in respect of Class B Shares taken into
account in computing the Distributor's Allocable Portion of the
Distribution Fee notwithstanding the Distributor's termination as
principal underwriter of the Class B shares of a Fund or any
termination of this Agreement other than in connection with a
Complete Termination of the Class B Distribution Plan as in effect on
the date of this Agreement. Except as provided in the preceding
sentence, a Fund's obligation to remit such contingent deferred sales
charges to the Distributor shall not be subject to any dispute,
offset, counterclaim or defense whatsoever, it being understood that
nothing in this sentence shall be deemed a waiver by a Fund of its
right separately to pursue any claims it may have against the
Distributor and to enforce such claims against any assets (other than
the Distributor's right to be paid its Allocable Portion of the
Distribution Fee and to be paid the contingent deferred sales
charges) of the Distributor. No Fund will waive any contingent
deferred sales charge except under the circumstances set forth in the
Fund's current Prospectus without the consent of the Distributor (or,
if rights to payment have been transferred, the transferee), which
consent shall not be unreasonably withheld.
4. Payments to Distributor's Transferees. The
Distributor may transfer the right to payments hereunder (but not its
obligations hereunder) in order to raise funds to cover distribution
expenditures, and any such transfer shall be effective upon written
notice from the Distributor to the Fund. In connection with the
foregoing, the Fund is authorized to pay all or a part of the
Distribution Fee and/or contingent deferred sales charges in respect
of Class B Shares directly to such transferee as directed by the
Distributor.
5. Changes in Computation of Fee, etc. As long as the
Class B Distribution Plan is in effect, a Fund shall not change the
manner in which the Class B Distribution Fee is computed (except as
may be required by a change in applicable law or a change in
accounting policy adopted by the Investment Companies Committee of
the AICPA and approved by FASB that results in a determination by a
Fund's independent accountants that any of the sales charges in
respect of such Fund, which are not contingent deferred sales charges
and which are not yet due and payable, must be accounted for by such
Fund as a liability in accordance with GAAP).
6. As used in this Agreement, the term "Registration
Statement" shall mean the registration statement most recently filed
by a Fund with the Securities and Exchange Commission and effective
under the 1933 Act, as such Registration Statement is amended by any
amendments thereto at the time in effect, and the term "Prospectus"
shall mean the form of prospectus filed by a Fund as part of the
Registration Statement.
7. The Distributor shall print and distribute to
prospective investors Prospectuses, and may print and distribute such
other sales literature, reports, forms, and advertisements in
connection with the sale of the Shares as comply with the applicable
provisions of federal and state law. In connection with such sales
and offers of sale, the Distributor shall give only such information
and make only such statements or representations, and require
broker-dealers with whom it enters into dealer agreements to give
only such information and make only such statements or
representations, as are contained in the Prospectus or in information
furnished in writing to the Distributor by a Fund. The Funds shall
not be responsible in any way for any other information, statements
or representations given or made by the Distributor, other
broker-dealers, or the representatives or agents of the Distributor
or such broker-dealers. Except as specifically permitted under the
Distribution Plan under Rule 12b-1 under the 1940 Act, as provided in
paragraph 3 of this Agreement, the Funds shall bear none of the
expenses of the Distributor in connection with its offer and sale of
the Shares.
8. Each Fund agrees at its own expense to register the
Shares with the Securities and Exchange Commission, state and other
regulatory bodies, and to prepare and file from time to time such
Prospectuses, amendments, reports and other documents as may be
necessary to maintain the Registration Statement. Each Fund shall
bear all expenses related to preparing and typesetting its
Prospectus(es) and other materials required by law and such other
expenses, including printing and mailing expenses related to the
Fund's communications with persons who are shareholders of such Fund.
9. Each Fund agrees to indemnify, defend and hold the
Distributor, its several officers and directors, and any person who
controls the Distributor 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 counsel fees
incurred in connection therewith) which the Distributor, its officers
or 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 alleged untrue statement of a material fact contained in its
Registration Statement or Prospectus or arising out of or based upon
any alleged omission to state a material fact required to be stated
in either thereof or necessary to make the statements in either
thereof not misleading, provided that in no event shall anything
contained in this Agreement be construed so as to protect the
Distributor against any liability to a Fund or its shareholders to
which the Distributor would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence, in the performance of
its duties, or by reason of its reckless disregard of its obligations
and duties under this Agreement.
10. The Distributor agrees to indemnify, defend and
hold each Fund, their several officers and directors, and any person
who controls a 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 cost of investigating or
defending such claims, demands or liabilities and any counsel fees
incurred in connection therewith) which a Fund, its officers or
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 alleged untrue statement or a material fact contained in
information furnished in writing by the Distributor to the Funds for
use in the Registration Statement or Prospectus(es) or arising out of
or based upon any alleged omission to state a material fact in
connection with such information required to be stated in the
Registration Statement or Prospectus(es) or necessary to make such
information not misleading.
11. Each Fund reserves the right at any time to
withdraw all offerings of the Shares by written notice to the
Distributor at its principal office.
12. The Distributor is an independent contractor and
shall be agent for a Fund only in respect to the offer, sale and
redemption of that Fund's Shares.
13. The services of the Distributor to a Fund under
this Agreement are not to be deemed exclusive, and the Distributor
shall be free to render similar services or other services to others
so long as its services hereunder are not impaired thereby.
14. The Distributor acknowledges that it has received
notice of and accepts the limitations upon the liability of any Fund
organized as a business trust set forth in such Fund's Declaration of
Trust. The Distributor agrees that the obligations of such Funds
hereunder in any case shall be limited to such Funds and to their
assets and that the Distributor shall not seek satisfaction of any
such obligation from the shareholders of such a Fund nor from any
Trustee, officer, employee or agent of such Fund.
15. The Funds shall not use the name of the Distributor
in any Prospectus, sales literature or other material relating to the
Funds in any manner not approved prior thereto by the Distributor;
provided, however, that the Distributor shall approve all uses of its
name which merely refer in accurate terms to its appointment
hereunder or which are required by the Securities and Exchange
Commission or a State Securities Commission; and, provided further,
that in no event shall such approval be unreasonably withheld. The
Distributor shall not use the name of any Fund in any material
relating to the Distributor in any manner not approved prior thereto
by the Fund; provided, however that the Funds shall approve all uses
of their names which merely refer in accurate terms to the
appointment of the Distributor hereunder or which are required by the
Securities and Exchange Commission or a State Securities Commission;
and, provided further, that in no event shall such approval be
unreasonably withheld.
16. The Distributor shall prepare written reports for
the Board of Trustees/Directors of each Fund on a quarterly basis
showing information concerning services provided and expenses
incurred which are related to this Agreement and such other
information as from time to time shall be reasonably requested by a
Fund's Board of Trustees/Directors.
17. As used in this Agreement, the terms "assignment,"
"interested person," and "majority of the outstanding voting
securities" shall have the meaning given to them by Section 2(a) of
the 1940 Act, subject to such exemptions as may be granted by the
Securities and Exchange Commission by any rule, regulation or order;
provided, however that, in order to obtain financing, the Distributor
may assign to a lending institution the payments due to the
Distributor under this Agreement without it constituting an
assignment of the Agreement.
18. Subject to the provisions of sections 19 and 20
below, this Agreement will remain in effect for two years from the
date of is execution and from year to year thereafter, provided that
the Distributor does not notify a Fund in writing at least sixty (60)
days prior to the expiration date in any year that it does not wish
continuance of the Agreement as to such Fund for an additional year.
19. Termination. As to any particular Fund (or Series
thereof), 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 a Fund or by the Distributor on sixty (60)
days' written notice to the other party. A Fund may effect such
termination by a vote of (i) a majority of the Board of
Trustees/Directors of the Fund, (ii) a majority of the
Trustees/Directors who are not interested persons of the Fund, who
are not parties to this Agreement or interested persons of such
parties, and who have no direct or indirect financial interest in the
operation of the Distribution Plan, in this Agreement or in any
agreement related to such Fund's Distribution Plan (the "Rule 12b-1
Trustees/Directors"), or (iii) a majority of the outstanding voting
securities of the relevant Series.
20. This Agreement shall be submitted for renewal to
the Board of Trustees/Directors of each Fund at least annually and
shall continue in effect only so long as specifically approved at
least annually (i) by a majority vote of the Fund's Board of
Trustees/Directors, and (ii) by the vote of the majority of the Rule
12b-1 Trustees/Directors of the Fund, cast in person at a meeting
called for the purpose of voting on such approval.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the date first above written by their
officers thereunto duly authorized.
Attest: EACH FUND LISTED IN THE
ATTACHED SCHEDULE I
By: /s/ Edwidge Saint-Xxxxx By: /s/ Xxxxxxx X.Xxxxxxxxx
Vice President
Attest: XXXXXXX DISTRIBUTORS, INC.
By: /s/ Edwidge Saint-Xxxxx By: /s/ Xxxxxx X. Xxxxxxxxxxx
Senior Vice President
SCHEDULE I
The Xxxxxxx Fund
Xxxxxxx Tax-Free Reserves
Xxxxxxx Municipal Fund
Xxxxxxx Social Investment Fund
Xxxxxxx World Values Fund
Xxxxxxx New World Fund
First Variable Rate Fund
SCHEDULE II
Fees are expressed as a percentage of average annual daily net
assets, and are payable monthly.
Distribution Fee
Class A* Class B Class C Class I
The Xxxxxxx Fund
New Vision Small Cap Fund N/A 0.75 0.75 N/A
Xxxxxxx Income Fund 0.25 0.75 0.75 N/A
Xxxxxxx Tax-Free Reserves
Money Market Portfolio N/A N/A N/A N/A
Limited-Term Portfolio N/A N/A N/A N/A
Long-Term Portfolio 0.10 0.75 0.75 N/A
California Money Market Port. N/A N/A N/A N/A
Vermont Municipal N/A 0.75 0.75 N/A
Xxxxxxx Municipal Fund
National Intermediate Fund N/A 0.75 N/A N/A
California Intermediate Fund N/A 0.75 N/A N/A
Maryland Intermediate Fund N/A 0.75 N/A N/A
Virginia Intermediate Fund N/A 0.75 N/A N/A
Xxxxxxx Social Investment Fund
Managed Growth Portfolio 0.10 0.75 0.75 N/A
Equity Portfolio 0.10 0.75 0.75 N/A
Bond Portfolio 0.10 0.75 0.75 N/A
Managed Index Portfolio N/A 0.75 0.75 N/A
Money Market Portfolio N/A N/A N/A N/A
Xxxxxxx World Values Fund
Capital Accumulation Fund 0.10 0.75 0.75 N/A
International Equity Fund 0.10 0.75 0.75 N/A
Xxxxxxx New World Fund
Xxxxxxx New Africa Fund N/A 0.75 0.75 N/A
First Variable Rate Fund
Xxxxxxx First Gov't
Money Mkt N/A 0.75 N/A N/A
*Distributor reserves the right to waive all or a portion of the
distribution fee from time to time.
DATED: February 1998
SCHEDULE III
Fees are expressed as a percentage of average annual daily net assets
and are payable monthly.
Service Fee
Class A* Class B Class C Class I
The Xxxxxxx Fund
New Vision Small Cap Fund 0.25 0.25 0.25 N/A
Xxxxxxx Income Fund 0.25 0.25 0.25 N/A
Xxxxxxx Tax-Free Reserves
Money Market Portfolio N/A N/A N/A N/A
Limited-Term Portfolio N/A N/A N/A N/A
Long-Term Portfolio 0.25 0.25 0.25 N/A
California Money Market Port. N/A N/A N/A N/A
Vermont Municipal N/A 0.25 0.25 N/A
Xxxxxxx Municipal Fund
National Intermediate Fund 0.25 0.25 N/A N/A
California Intermediate Fund 0.25 0.25 N/A N/A
Maryland Intermediate Fund 0.25 0.25 N/A N/A
Virginia Intermediate Fund 0.25 0.25 N/A N/A
Xxxxxxx Social Investment Fund
Managed Growth Portfolio 0.25** 0.25 0.25 N/A
Equity Portfolio 0.25 0.25 0.25 N/A
Bond Portfolio 0.25 0.25 0.25 N/A
Managed Index Portfolio 0.25 0.25 0.25 N/A
Money Market Portfolio 0.25 N/A N/A N/A
Xxxxxxx World Values Fund
Capital Accumulation Fund 0.25 0.25 0.25 N/A
International Equity Fund 0.25 0.25 0.25 N/A
Xxxxxxx New World Fund
Xxxxxxx New Africa Fund 0.25 0.25 0.25 N/A
First Variable Rate Fund
Xxxxxxx First Gov't Money Mkt N/A 0.25 N/A N/A
DATED: February 1998
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* Distributor reserves the right to waive all or a portion of the
service fees from time to time. For money market portfolios, Class A
shall refer to Class O, or if the portfolio does not have multiple
classes, then to the portfolio itself.
** Distributor charges the service fee only on assets in excess of $30
million.
