Exhibit (e)(14)
Mutual Fund Distribution Agreement dated as of June 7, 2002 between X. Xxxx
Price Brokerage and One Group Dealer Services, Inc.
MUTUAL FUND DISTRIBUTION AGREEMENT
One Group Dealer Services, Inc.
0000 Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxx 00000-0000
Gentlemen:
You serve as principal underwriter to certain open-end investment companies
(each, a "Fund" and collectively, the "Funds"), registered under the Investment
Company Act of 1940, as amended (the "Investment Company Act"). Shares of the
Funds are registered with the Securities and Exchange Commission ("SEC") under
the Securities Act of 1933, as amended (the "Securities Act") and offered to the
public through a prospectus ("Prospectus") and statement of additional
information ("SAI"). You hereby appoint X. Xxxx Price Brokerage, a division of
X. Xxxx Price Investment Services, Inc. ("X. Xxxx Price") and X. Xxxx Price
hereby agrees to serve as your agent in providing distribution assistance
pertaining to the Funds under the following terms and conditions, which you
accept as evidenced by your signature below.
Section 1 - Capacity in Which Services Will be Provided
In the Sales of Fund Shares, X. Xxxx Price shall act as agent for its customers.
In no transaction shall X. Xxxx Price act as your agent or as agent for any Fund
or the Fund's Transfer Agent. In no event will X. Xxxx Price act in a principal
capacity or as a principal underwriter to the Funds as defined in the Investment
Company Act. X. Xxxx Price will rely solely and conclusively on the
representations contained in the Prospectus and SAI for each Fund, as well as
any other written marketing or other materials you provide and assumes no
responsibility for the accuracy of such materials.
Section 2 - Processing of Customer Orders
Orders for the purchase of Fund shares shall be executed at the then current
public offering price per share (i.e., the net asset value per share ("NAV")
plus sales charge, if applicable) and all orders for the redemption of any Fund
shares shall be executed at the net asset value per share less any applicable
deferred sales charge, redemption fee or similar charge or fee. Specifically, X.
Xxxx Price will accept purchase and redemption orders from its customers
("Customers") no later than the time each business day (typically, 4:00 p.m.
Eastern Time) that the Fund calculates its NAV per share in accordance with the
procedure(s) contained in the Prospectus (the "Pricing Deadline"). Customer
orders that are accepted by X. Xxxx Price each business day prior to the Pricing
Deadline will be priced at the Fund's NAV as of the Pricing Deadline.
Section 3 - Compensation
(a) In return for providing the services set forth in this Agreement,
X. Xxxx Price shall be entitled to a reallowance in an amount up to that set
forth in the Prospectus of the applicable Fund. This reallowance may take the
form of a front-end, deferred or asset-based sales charge, as defined in
National Association of Securities Dealers Inc. ("NASD") Conduct Rule 2830(b).
(b) In accordance with the terms in the Prospectus of the applicable
Fund, X. Xxxx Price acknowledges that a reduced sales charge or no sales charge
may be available to Customers.
Section 4 - Representations
(a) You represent and warrant as of the date hereof and throughout the
term of this Agreement that:
(i) You are a broker-dealer registered with the SEC under the
Securities Exchange Act of 1934, as amended, a member in good standing of the
NASD and qualified to conduct business as a broker-dealer in each of the states
in which the Funds may be sold;
(ii) You serve as "principal underwriter" to the Funds within the
meaning of the Investment Company Act under one or more written agreements that
are validly executed, comply fully with applicable provisions of the Investment
Company Act and other applicable laws and regulations, and will remain in full
force and in effect throughout the term of this Agreement;
(iii) The amount and form of compensation payable to X. Xxxx Price
under Section 3 of this Agreement as well as any other cash and non-cash
compensation payable to X. Xxxx Price complies fully with applicable provisions
of the NASD Conduct Rules, including without limitation NASD Conduct Rules 2820
and 2830, as well as other applicable laws and regulations and such compensation
is accurately and adequately disclosed in compliance with all applicable laws
and regulations;
(iv) The Prospectus and SAI for each Fund and any additional written
materials that you make available to Customers comply in all material respects
with applicable regulatory and disclosure requirements;
(v) You and the Funds are duly organized and validly existing under
the laws of the jurisdiction in which you and the Funds were organized;
(vi) All authorizations (if any) required for your lawful execution
of this Agreement and your performance hereunder have been obtained;
(vii) The shares of the Funds are registered under the Securities Act
and have been qualified for sale under, or are exempt from the qualification
requirements of, the respective securities laws of every state or territory in
the United States (including the District of Columbia and Puerto Rico). If
shares of the Funds are only offered in a single state or territory, the shares
of the Funds have been qualified for sale in such state or territory, or are
exempt from such qualification requirements, and the permissible state or
territory shall be made clear to X. Xxxx Price. You will notify X. Xxxx Price
immediately in the event shares of the Funds cease to be qualified for sale
under, or cease to qualify for an exemption from the requirements of, any such
state or jurisdiction; and
(viii) You agree to provide X. Xxxx Price or its agent with sufficient
quantities of Fund Prospectuses, proxy materials and other shareholder
communications to send to Customers at no cost to X. Xxxx Price or its agent.
(b) X. Xxxx Price represents and warrants that:
(i) X. Xxxx Price is a broker-dealer registered with the SEC under
the Securities Exchange Act of 1934, as amended, a member in good standing of
the NASD and qualified to conduct business as a broker-dealer in each of the
states in which the Funds may be sold;
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(ii) X. Xxxx Price is duly organized and validly existing under the
laws of the State of Maryland;
(iii) All authorizations required for X. Xxxx Price's lawful execution
of this Agreement and X. Xxxx Price's performance hereunder have been obtained;
(iv) Any information X. Xxxx Price provides to Customers concerning
the Funds will be based on information contained in the Prospectus, SAI for the
Funds, promotional materials or sales literature that you furnish to the public,
or on information obtained from third party vendors deemed reliable;
(v) X. Xxxx Price will not effect any transactions (including,
without limitation, any purchases, exchanges and redemptions) in any Fund
shares, registered in the name of, or beneficially owned by, any Customer,
unless to X. Xxxx Price's knowledge, such Customer has granted to X. Xxxx Price
full right, power and authority to effect such transactions on such Customer's
behalf; and
(vi) X. Xxxx Price will obtain from each Customer for whom it acts as
agent for the purchase of Fund shares any taxpayer identification number
certification and such other information as may be required from time to time
under the Internal Revenue Code of 1986, as amended (the "Code"), and the
regulations thereunder.
Section 5 - Marketing Materials
You represent that all written and electronic advertisements and sales materials
pertaining to the Funds that you provide to X. Xxxx Price, its affiliates, and
their employees, agents and representatives are your responsibility and will be
accurate and up-to-date as of the time they are provided to X. Xxxx Price. In
addition, you represent, warrant and covenant that all advertisements and sales
literature as defined in NASD Conduct Rule 2210(a) will comply with all
applicable NASD requirements and other applicable laws, rules and regulations
and that you will take all reasonable actions to prevent the distribution to X.
Xxxx Price personnel of any materials that are inconsistent with these
representations.
Section 6 - Indemnification
(a) X. Xxxx Price will indemnify and hold harmless you and each of your
directors, officers, employees, and agents and each person who is or may be
deemed to be controlling, controlled by or under common control with you, from
and against any and all direct and indirect claims, damages, losses,
liabilities, or expenses (including the reasonable costs of investigation and
reasonable attorney's and other legal fees) resulting from (i) the willful
misconduct or negligence, as measured by industry standards, of X. Xxxx Price,
its agents and employees, in the performance of, or failure to perform, its
obligations under this Agreement; or (ii) any untrue statement, or alleged
untrue statement, of a material fact contained in offering documents, sales
literature, or marketing materials regarding the funds that X. Xxxx Price or any
of its affiliates produces and provides to customers who are Fund shareholders,
or any omission, or alleged omission, to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.
Notwithstanding the foregoing in this subsection (a), X. Xxxx Price will not be
liable for indemnification hereunder to the extent that any claim, damage, loss,
liability, or expense results from the willful misconduct or negligence, as
measured by industry standards, of you or your affiliates. This right of
indemnification will survive the termination of this Agreement.
(b) You will indemnify and hold harmless X. Xxxx Price, each director,
officer, employee, and agent of X. Xxxx Price, and each person who is or may be
deemed to be controlling, controlled by or under common control with X. Xxxx
Price from and against any and all direct and indirect claims,
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damages, losses, liabilities, or expenses (including the reasonable costs of
investigation and reasonable attorney's and other legal fees) resulting from:
(i) the willful misconduct or negligence, as measured by industry standards, of
you, your agents and employees, in the performance of, or failure to perform,
your obligations under this Agreement; provided, however, that you will not be
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liable for indemnification under this subparagraph to the extent that any claim,
damage, loss, liability, or expense results from the willful misconduct or
negligence, as measured by industry standards, of X. Xxxx Price; (ii) any
violation of any law, rule, or regulation relating to the registration or
qualification of shares of a Fund, except to the extent such violation results
from the willful misconduct or negligence, as measured by industry standards, of
X. Xxxx Price; (iii) any untrue statement, or alleged untrue statement, of a
material fact contained in any Fund's registration statement or any offering
documents, sales literature, or marketing materials that you, a Fund or any
affiliates provide to X. Xxxx Price, or any omission, or alleged omission, to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; or (iv) any breach or violation of the
representations, warranties, or covenants set forth in this Agreement. Such
right of indemnification will survive the termination of this Agreement.
(c) In no case shall the indemnification provided in this Section 6 be
available to protect any person against any liability to which any such person
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its or his obligations or duties hereunder, or
by reason of its or his reckless disregard of its or his obligations and duties
hereunder.
Section 7 - Confidentiality of Customer Information
The names, addresses and other information concerning Customers are and shall
remain the sole property of X. Xxxx Price. Neither you, your affiliates, nor
their officers, directors, employees or agents, or any control person of the
foregoing persons shall use such names, addresses or other information for any
purpose except in connection with the performance of your duties and
responsibilities hereunder and except for shareholder servicing mailings
relating to the Funds. Notwithstanding the foregoing, this Section 8 shall not
prohibit you or any of your affiliates from utilizing for any purpose the names,
addresses or other information concerning any of our Customers if such names,
addresses or other information are obtained in any manner other than from us
pursuant to this Agreement. The provisions of this Section 8 shall survive the
termination of this Agreement. Notwithstanding this Section 8, the parties agree
to comply with any and all regulations promulgated by the SEC or other
applicable laws regarding the confidentiality of customer information.
Section 8 - Non-Exclusivity of Agreement
Neither this Agreement nor the performance of the services of the respective
parties hereunder shall be considered to constitute an exclusive arrangement, or
to create a partnership, association or joint venture between you and X. Xxxx
Price. Except to the extent set forth above in Section 1 of this Agreement,
neither party hereto shall be, act as, or represent itself as, the agent or
representative of the other, nor shall either party have the right or authority
to assume, create or incur any liability or any obligation of any kind, express
or implied, against or in the name of, or on behalf of, the other party. This
Agreement is not intended to, and shall not, create any rights against either
party hereto by any third party solely on account of this Agreement. Neither
party hereto shall use the name of the other party in any manner without the
other party's prior written consent, except: (i) as required by any applicable
federal or state law, rule, regulation or requirement; (ii) pursuant to any
promotional programs mutually agreed upon in writing by the parties hereto; and
(iii) that X. Xxxx Price may supply its Customers with a list of Funds available
under this Agreement.
Section 9 - Notices
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Unless otherwise agreed to by both parties, all notices under this Agreement
will be given in writing and delivered by personal delivery or by postage
prepaid, registered or certified United Sates first class mail, return receipt
requested, or by facsimile, telecopier, telex, telegram or similar means of same
day delivery (with a confirming copy by mail as provided herein). Unless
otherwise notified in writing, all notices to you shall be given or sent to you
at your offices, located at:
Principal Underwriter:
One Group Dealer Services, Inc.
0000 Xxxxxxx Xxxxxxx
Xxxxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxx
Vice President
and all notices to X. Xxxx Price shall be given or sent to:
Xxxxxx X. Xxxxxxxxxx
Vice President
X. Xxxx Price Brokerage
0000 Xxxxxxxx Xxxx Xxxx
Xxxxxx Xxxxx, XX 00000
with a copy to: Xxxxx X. Xxxxxxx
Chief Legal Counsel
X. Xxxx Price Associates, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Section 10 - Termination of Agreement
This Agreement shall become effective on the date accepted and signed by you
below, and may be terminated at any time by either party hereto upon 30 days'
prior written notice to the other party. After the date of termination of this
Agreement (the "Termination Date"), the compensation described in Section 3
hereof will continue to be due with respect to any shares held by Customers on
the Termination Date for so long as such shares are held in a X. Xxxx Price
account and X. Xxxx Price continues to provide the services described in this
Agreement; provided, however, that in the event that you are terminated as
distributor for the Funds or otherwise cease to act as distributor for the
Funds, such payment obligation shall immediately cease. In such event, such
payment shall be made by the Fund Company or the successor distributor that is
appointed by the Fund Company. Therefore, such customers will be permitted to
buy and sell shares in the funds in which they own shares even after the
termination date until their positions in such funds are liquidated in their
entirety, with applicable compensation to X. Xxxx Price. However, no new
customers may establish a position in the funds after such Termination Date. X.
Xxxx Price agrees that in the event of termination of the Agreement as provided
in this Section 11, it shall provide you with such reports and certificates as
you may reasonably request as necessary to determine that the continued payment
of compensation has been calculated in accordance with this Agreement.
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Section 11 - Assignability
This Agreement is not assignable within the meaning of the Investment Company
Act by either party without the other party's prior written consent, and any
attempted assignment in contravention hereof shall be null and void.
Section 12 - Schedules; Entire Agreement
This Agreement constitutes the entire Agreement between the parties as to the
subject matter hereof and supersedes any and all agreements, representations and
warranties, written or oral, regarding such subject matter made prior to the
time at which this Agreement has been executed and delivered by X. Xxxx Price.
Section 13 - Amendment
This Agreement may be amended only by a writing executed by each party.
Section 14 - Governing Law
This Agreement shall be governed by and construed in accordance with the laws of
the State of New York, without giving effect to principles of conflicts of laws.
Very truly yours,
/s/ Xxxxxx X. Xxxxxxxxxx 5/28/02
Xxxxxx X. Xxxxxxxxxx
Vice President
NOTE: Please sign both copies of this Agreement and forward one copy to us.
Accepted:
One Group Dealer Services, Inc.
By (signature): /s/ Xxxxxx X. Xxxxx
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Name (print): Xxxxxx X. Xxxxx
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Title: COO
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Date: 6/7/2002
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One Group Dealer Agreement (T Xxxx)1((e)(14).doc
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