DISTRIBUTION AGREEMENT
NATIONAL INVESTORS CASH MANAGEMENT FUND, INC.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
February 26, 1998
Funds Distributor, Inc.
00 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
Dear Sirs:
This is to confirm that, in consideration of the agreements hereinafter
contained, the above-named investment company (the "Company") has agreed that
you shall be, for the period of this agreement, the distributor of (a) shares of
each Series of the Company set forth on Exhibit A hereto, as such Exhibit may be
revised from time to time (each, a "Series") or (b) if no Series are set forth
on such Exhibit, shares of the Company. For purposes of this agreement, the term
"Shares" shall mean the authorized shares of the relevant Series, if any, and
otherwise shall mean the Company's authorized shares.
1. Services as Distributor
1.1 You will act as agent for the distribution of Shares covered by, and in
accordance with, the registration statement and prospectus of the Company then
in effect under the Securities Act of 1933, as amended, and will transmit
promptly any orders received by you for purchase or redemption of Shares to the
Transfer and Dividend Disbursing Agent for the Company of which the Company has
notified you in writing.
1.2 You agree to use your best efforts to solicit orders for the sale of
Shares in accordance with the terms and conditions of the aforementioned
prospectus. It is contemplated that you may enter into sales or servicing
agreements with securities dealers, financial institutions and other industry
professionals, such as investment advisers, accountants and estate planning
firms, and in so doing you will act only on your own behalf as principal.
1.3 You shall act as distributor of Shares in compliance with all
applicable laws, rules and regulations, including, without limitation, all rules
and regulations made or adopted pursuant to the Investment Company Act of 1940,
as amended (the "1940 Act"), by the Securities and Exchange Commission or any
securities association registered under the Securities Exchange Act of 1934, as
amended, and the Xxxxx-Xxxxxxxx Act to the extent applicable.
1
1.4 Whenever in their judgment such action is warranted by unusual market,
economic or political conditions, or by abnormal circumstances of any kind
deemed by the parties hereto to render sales of a Company's Shares not in the
best interest of the Company, the parties hereto may decline to accept any
orders for, or make any sales of, any Shares until such time as those parties
deem it advisable to accept such orders and to make such sales; and each party
shall advise promptly the other party of any such determination.
1.5 The Company agrees to pay all costs and expenses in connection with the
registration of Shares under the Securities Act of 1933, as amended, and all
expenses in connection with maintaining facilities for the issue and transfer of
Shares and for supplying information, prices and other data to be furnished by
the Company hereunder, and all expenses in connection with the preparation and
printing of the Company's prospectuses and statements of additional information
for regulatory purposes and for distribution to shareholders; provided however,
that the Company shall not pay any of the costs of advertising or promotion for
the sale of Shares.
1.6 The Company agrees to execute any and all documents and to furnish any
and all information and otherwise use its best efforts to take all actions that
may be reasonably necessary in the discretion of the Company' s officers in
connection with the qualification of Shares for sale in such states as you may
designate to the Company and the Company may approve, and the Company agrees to
pay all expenses that may be incurred in connection with such qualification;
provided, however that the Company shall not be required to qualify to do
business as a foreign corporation in any jurisdiction. You shall pay all
expenses connected with your own qualification as a dealer under state or
Federal laws and, except as otherwise specifically provided in this agreement,
all other expenses incurred by you in connection with the sale of Shares as
contemplated in this agreement.
1.7 The Company shall furnish you from time to time, for use in connection
with the sale of Shares, such information with respect to the Company or any
relevant Series and the Shares as you may reasonably request, all of which shall
be signed by one or more of the Company's duly authorized officers; and the
Company warrants that the statements contained in any such information, when so
signed by the Company's officers, shall be true and correct. The Company also
shall furnish you upon request with: (a) semi-annual reports and annual audited
reports of the Company's books and accounts made by independent public
accountants regularly retained by the Company, (b) quarterly earnings statements
prepared by the Company, (c) a monthly itemized list of the securities in the
Company's or, if applicable, each Series portfolio, (d) monthly balance sheets
as soon as practicable after the end of each month, and (e) from time to time
such additional information regarding the Company's financial condition as you
may reasonably request.
1.8 The Company represents to you that all registration statements and
prospectuses filed by the Company with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, and under the 1940 Act, with
respect to the Shares have been carefully prepared in conformity with the
then-current requirements of said Acts and rules and regulations of the
Securities and Exchange Commission thereunder. As used in this agreement the
terms "registration statement" and "prospectus" shall mean any registration
statement and prospectus, including the
2
statement of additional information incorporated by reference therein,
filed with the Securities and Exchange Commission and any amendments and
supplements thereto that at any time shall have been filed with said Commission.
The Company represents and warrants to you that any registration statement and
prospectus, when such registration statement becomes effective, will contain all
statements required to be stated therein in conformity with said Acts and the
rules and regulations of said Commission; that all statements of fact contained
in any such registration statement and prospectus will be true and correct when
such registration statement becomes effective; and that neither any registration
statement nor any prospectus when such registration statement becomes effective
will include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
The Company may, but shall not be obligated to, propose from time to time such
amendment or amendments to any registration statement and such supplement or
supplements to any prospectus as, in the light of future developments, may, in
the opinion of the Company's counsel, be necessary or advisable. If the Company
shall not propose such amendment or amendments and/or supplement or supplements
within fifteen days after receipt by the Company of a written request from you
to do so, you may, at your option, terminate this agreement or decline to make
offers of the Company's securities until such amendments are made. The Company
shall not file any amendment to any registration statement or supplement to any
prospectus without giving you reasonable notice thereof in advance; provided,
however, that nothing contained in this agreement shall in any way limit the
Company's right to file at any time such amendments to any registration
statement and/or supplements to any prospectus, of whatever character, as the
Company may deem advisable, such right being in all respects absolute and
unconditional.
1.9 The Company authorizes you and any dealers with whom you have entered
into dealer agreements to use any prospectus in the then-current form furnished
by the Company in connection with the sale of Shares. The Company agrees to
indemnify, defend and hold you, your several officers and directors, and any
person who controls you within the meaning of Section 15 of the Securities Act
of 1933, as amended, 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 you, your officers and directors, or any such
controlling persons, may incur under the Securities Act of 1933, as amended, the
1940 Act, or common law or otherwise, arising out of or on the basis of any
untrue statement, or alleged untrue statement, of a material fact required to be
stated in either any registration statement or any prospectus or any statement
of additional information, or arising out of or based upon any omission, or
alleged omission, to state a material fact required to be stated in any
registration statement, any prospectus or any statement of additional
information or necessary to make the statements in any of them, in the light of
the circumstances under which they were made, not misleading, except that the
Company's agreement to indemnify you, your officers or directors, and any such
controlling person will not be deemed to cover any such claim, demand, liability
or expense to the extent that it arises out of or is based upon any such untrue
statement, alleged untrue statement, omission or alleged omission made in any
registration statement, any prospectus or any statement of additional
information in reliance upon information furnished by you your officers,
directors or any such controlling person to the Company or its representatives
for use in the
3
preparation thereof, and except that the Company's agreement to indemnify
you and the Company's representations and warranties set out in paragraph 1.8 of
this Agreement will not be deemed to cover any liability to the Company or its
shareholders to which you would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of your duties, or
by reason of your reckless disregard of your obligations and duties under this
Agreement ("Disqualifying Conduct"). The Company's agreement to indemnify you,
your officers and directors, and any such controlling person, as aforesaid, is
expressly conditioned upon the Company being notified of any action brought
against you, your officers or directors, or any such controlling person, such
notification to be given by letter, by facsimile or by telegram addressed to the
Company at its address set forth above within a reasonable period of time after
the summons or other first legal process shall have been served. The failure so
to notify the Company of any such action shall not relieve the Company from any
liability that the Company may have to the person against whom such action is
brought by reason of any such untrue, or alleged untrue, statement or omission,
or alleged omission, (i) except to the extent the Company's ability to defend
such action has been materially adversely affected by such failure, or (ii)
otherwise than on account of the Company's indemnity agreement contained in this
paragraph 1.9. The Company will be entitled to assume the defense of any suit
brought to enforce any such claim, demand or liability, but, in such case, such
defense shall be conducted by counsel of good standing chosen by the Company and
approved by you. In the event the Company elects to assume the defense of any
such suit and retain counsel of good standing approved by you, the defendant or
defendants in such suit shall bear the fees and expenses of any additional
counsel retained by any of them but in case the Company does not elect to assume
the defense of any such suit, the Company will reimburse you, your officers and
directors, or the controlling person or persons named as defendant or defendants
in such suit, for the fees and expenses of any counsel retained by you or them,
subject to the right of the Company to assume the defense of such suit with
counsel of good standing at any time prior to the settlement or final
determination thereof. The Company' s indemnification agreement contained in
this paragraph 1.9 and the Company's representations and warranties in this
Agreement shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of you, your officers and directors, or any
controlling person, and shall survive the delivery of any Shares. This agreement
of indemnity will inure exclusively to your benefit, to the benefit of your
several officers and directors, and their respective estates, and to the benefit
of any controlling persons and their successors. The Company agrees promptly to
notify you of the commencement of any litigation or proceedings against the
Company or any of its officers or Board members in connection with the issue and
sale of Shares.
1.10 You agree to indemnify, defend and hold the Company, its several
officers and Board members, and any person who controls the Company within the
meaning of Section 15 of the Securities Act of 1933, as amended, 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
Company, its officers or Board members, or any such controlling person, may
incur under the Securities Act of 1933, as amended, the 1940 Act, or under
common law or otherwise, but only to the extent that such liability or expense
incurred by the Company, its officers or Board members, or such controlling
person resulting from such claims or demands, (a) shall arise out of or be based
upon
4
any unauthorized sales literature, advertisements, information, statements
or representations or any Disqualifying Conduct in connection with the offering
and sale of any Shares, or (b) shall arise out of or be based upon any untrue,
or alleged untrue, statement of a material fact contained in information
furnished in writing by you to the Company specifically for use in the Company's
registration statement and used in the answers to any of the items of the
registration statement or in the corresponding statements made in the prospectus
or statement of additional information, or shall arise out of or be based upon
any omission, or alleged omission, to state a material fact in connection with
such information furnished in writing by you to the Company and required to be
stated in such answers or necessary to make such information, in the light of
the circumstances under which it was made, not misleading. Your agreement to
indemnify the Company, its officers and Board members, and any such controlling
person, as aforesaid, is expressly conditioned upon your being notified of any
action brought against the Company, its officers or Board members, or any such
controlling person, such notification to be given by letter, by facsimile or by
telegram addressed to you at your address set forth above within a reasonable
period of time after the summons or other first legal process shall have been
served. You shall have the right to control the defense of such action, with
counsel of your own choosing, satisfactory to the Company, if such action is
based solely upon such alleged misstatement or omission on your part, and in any
other event the Company, its officers or Board members, or such controlling
person shall each have the right to participate in the defense or preparation of
the defense of any such action. The failure so to notify you of any such action
shall not relieve you from any liability that you may have to the Company, its
officers or Board members, or to such controlling person by reason of any such
untrue, or alleged untrue, statement or omission, or alleged omission, (i)
except to the extent your ability to defend such action has been materially
adversely affected by such failure, or (ii) otherwise than on account of your
indemnity agreement contained in this paragraph 1.10. This agreement of
indemnity will inure exclusively to the Company's benefit, to the benefit of the
Company' s officers and Board members, and their respective estates, and to the
benefit of any controlling persons and their successors. You agree promptly to
notify the Company of the commencement of any litigation or proceedings against
you or any of your officers or directors in connection with the issue and sale
of Shares.
1.11 No Shares shall be offered by either you or the Company under any of
the provisions of this agreement and no orders for the purchase or sale of such
Shares hereunder shall be accepted by the Company if and so long as the
effectiveness of the registration statement then in effect or any necessary
amendments thereto shall be suspended under any of the provisions of the
Securities Act of 1933, as amended, or if and so long as a current prospectus as
required by Section 10 of said Act, as amended, is not on file with the
Securities and Exchange Commission provided, however, that nothing contained in
this paragraph 1.11 shall in any way restrict or have an application to or
bearing upon the Company's obligation to repurchase any Shares from any
shareholder in accordance with the provisions of the Company's prospectus or
charter documents.
1.12 The Company agrees to advise you immediately in writing:
(a) of any request by the Securities and Exchange Commission for amendments
to the registration statement or prospectus then in effect or for additional
information;
5
(b) in the event of the issuance by the Securities and Exchange Commission
of any stop order suspending the effectiveness of the registration statement or
prospectus then in effect or the initiation of any proceeding for that purpose;
(c) of the happening of any, event that in the judgment of the Company's
Board of Directors makes untrue any statement of a material fact made in the
registration statement or prospectus then in effect or that requires the making
of a change in such registration statement or prospectus in order to make the
statements therein not misleading in any material respect; and
(d) of all declarations of effectiveness and other actions of the
Securities and Exchange Commission with respect to any amendments to the
registration statement or prospectus that may from time to time be filed with
the Securities and Exchange Commission.
2. Offering Price
Shares of any class or series of the Company offered for sale by you shall
be offered at a price per share (the "offering price") equal to (a) the net
asset value (determined in the manner set forth in the Company's charter
documents) plus (b) a sales charge, if any, and except to those persons set
forth in the then-current prospectus, which shall be the percentage of the
offering price of such Shares as set forth in the Company's then-current
prospectus. The offering price, if not an exact multiple of one cent, shall be
adjusted to the nearest cent. In addition, Shares of any class of the Company
offered for sale by you may be subject to a contingent deferred sales charge, to
the extent set forth in the Company's then-current prospectus. You shall be
entitled to receive any sales charge or contingent deferred sales charge in
respect of the Shares. Any payments to dealers shall be governed by a separate
agreement between you and such dealer and the Company's then-current prospectus.
3. Term
This Agreement shall become effective with respect to the Company as of the
date hereof and will continue for an initial two-year term and will continue
thereafter so long as such continuance is specifically approved at least
annually (i) by the Company's Board or (ii) by a vote of a majority (as defined
in the 0000 Xxx) of the Shares of the Company or the relevant Series, as the
case may be, provided that in either event its continuance also is approved by a
majority of the Board members who are not "interested persons" (as defined in
the 0000 Xxx) of any party to this Agreement and who have no direct or indirect
financial interest in this Agreement, by vote cast in person at a meeting called
for the purpose of voting on such approval. This agreement is terminable with
respect to any Series or the Company, without penalty, on not less than sixty
days notice, by the Company's Board of Directors, by vote of a majority (as
defined in the 0000 Xxx) of the outstanding voting securities of such Company,
or by you. This Agreement shall terminate automatically in the event of its
"assignment" (as defined in the 1940 Act).
4. Miscellaneous
6
4.1 The Company recognizes that your directors, officers and employees may
from time to time serve as directors, trustees, officers and employees of
corporations and business trusts (including other investment companies), and
that you or your affiliates may enter into distribution or other agreements with
such other corporations and trusts.
4.2 No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which an enforcement of the change, waiver, discharge or termination is
sought.
4.3 This Agreement shall be governed by the internal laws of the State of
New York without giving effect to principles of conflicts of laws.
4.4 If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors.
4.5 Funds Distributor, Inc. ("FDI") represents and warrants that it is a
member of the National Association of Securities Dealers (NASD) and agrees to
abide by all of the rules and regulations of the NASD, including, without
limitation, its Conduct Rules. FDI agrees to comply with all applicable federal
and state laws, rules and regulations. FDI agrees to notify the Company
immediately in the event of its expulsion or suspension by the NASD. Expulsion
of FDI by the NASD will automatically terminate this Agreement immediately
without notice. Suspension of FDI by the NASD will terminate this Agreement
effective immediately upon written notice of termination to FDI from the
Company.
4.6 All notices or other communications hereunder to either party shall be
in writing and shall be deemed sufficient if mailed to such party at the address
of such party set forth on page 1 of this Agreement or at such other address as
such party may be designated by written notice to the other, or by telex,
telecopier, telegram or similar means of same day delivery (with a confirming
copy by mail as provided herein).
7
Please confirm that the foregoing is in accordance with your understanding
and indicate your acceptance hereof by signing below, whereupon it shall become
a binding agreement between us.
Very truly yours,
NATIONAL INVESTORS CASH
MANAGEMENT FUND INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Accepted:
FUNDS DISTRIBUTOR, INC.
By: /s/ Xxxxxx X. Tower III
-------------------------
8
EXHIBIT A
NATIONAL INVESTORS CASH MANAGEMENT FUND, INC.
Xxxxxxx Cabot Money Market Portfolio
Xxxxxxx Cabot U.S. Government Portfolio
Xxxxxxx Cabot Municipal Portfolio
9
