AMENDMENT OF DISTRIBUTION AGREEMENT AND ASSUMPTION OF DUTIES
AND RESPONSIBILITIES BY XXXX
Xxxxxxxx 0, 0000
XXX Xxxxxxxxxxxx, Inc.
PFS Investments Inc.
0000 Xxxxxxxxxxxx Xxxx., Xxxx. 000
Xxxxxx, XX 00000-0000
Dear Sirs:
Reference is made to that certain distribution
agreement (the "Agreement"), dated as of June 5, 2000,
between Xxxxx Xxxxxx Investment Funds Inc. (the "Investment
Company"),with respect to one or more separate series listed
on Exhibit A (each a "Fund") and PFS Distributors, Inc.
("PFSD"). This letter agreement (the "Amendment")
incorporates all of the conditions, responsibilities,
representations and other terms of the Agreement, except as
amended or modified in this Amendment.
WHEREAS, PFS Investments Inc. ("PFSI") and PFSD intend
to effect a transaction pursuant to which PFSD will merge
with and into PFSI (the "Merger");
WHEREAS, effective as of the Merger, PFSI, as the
successor of the Merger, is expected to perform all of the
responsibilities, obligations, duties and liabilities of
PFSD under that Agreement, as amended or supplemented by
this Amendment, effective December 1, 2005, and
WHEREAS, PFSD, or its successor, PFSI, wishes to serve
as principal underwriter and distributor for each Fund under
the terms of the Agreement, as modified and amended by this
Amendment;
THEREFORE, the Investment Company, on behalf of each
Fund, PFSD and PFSI agree that (i) as of the date hereof,
PFSD shall discharge, perform and be liable for such
obligations and responsibilities of PFSD under the
Agreement, as amended by this Amendment and (ii) in the
event that the Merger is consummated, from and after the
effective time of the Merger, PFSI shall discharge, perform
and be liable for such obligations and responsibilities of
PFSD under the Agreement, as amended by this Amendment.
Except as expressly amended hereby, the provisions of
the Agreement (after giving effect to the foregoing
substitution of parties) will remain in full force and
effect between PFSI and the Investment Company. 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
Global Distribution Agreement (the "Global Distribution
Agreement"), dated as of June 23, 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 each 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 each
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 delivery of a Dealer
Agreement which shall be, unless the parties thereto
otherwise agree, in substantially the form presented to the
Board of the Investment Company and attached hereto as
Exhibit B with such additional changes as may be appropriate
to reflect changes in applicable laws, regulations or
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 Fund 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 1940 Act, (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) prepared by you
intended for public distribution ("PFSI 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
PFSI Marketing Materials shall be for review in accordance
with procedures to be agreed upon by the parties. You shall
be responsible for reviewing and making such filings with
the NASD, as required, of PFSI 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 1940 Act (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 and
those of the Fund, 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 paragraph 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.
(i) PFSI may print current Fund prospectuses and
statements of additional information for PFSI's use, which
may not vary in any material respect from the relevant
Fund's then-current prospectus and statement of additional
information. PFSI's printing will comply in all material
respects with all applicable legal and regulatory standards.
The Board of the Investment Company may terminate these
printing services at any time upon written notice to PFSI.
(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 each Fund, as applicable, 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 in this 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 such 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 the Investment Company 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
Investment Company, its officers or Board members, or any
such controlling person may incur, under the 1933 Act or
under common law or otherwise, on account of (i) any act of
yours or any of your employees constituting willful
misfeasance, bad faith, or gross negligence in the
performance of your duties, (ii) by reason of your reckless
disregard of your obligations and duties under the Agreement
or this Amendment; or (iii) any act of yours or any of your
employees constituting negligence with respect to any
services performed related to printing prospectuses or
statements of additional information for a Fund, as
described in Paragraph 4(i) of this Amendment. The
foregoing indemnification provisions supplement 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.
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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 Investment
Funds Inc.
By:
_________________________
Name: R. Xxx Xxxxxx
Title: Chief Executive
Officer
Agreed to as of the date first above written:
PFS Distributors, Inc.
By: _____________________________
Name:
Title:
PFS Investments Inc.
By: _____________________________
Name:
Title:
EXHIBIT A
Fund Date Added:
Xxxxx Xxxxxx Investment Funds December 1, 2005
Inc.
-Xxxxx Xxxxxx Investment Grade
Bond Fund
-Xxxxx Xxxxxx Small Cap Growth
Fund
-Xxxxx Xxxxxx Multiple
Discipline Funds
-All Cap Growth and Value Fund
-Global All Cap Growth and
Value Fund
-Large Cap Growth and Value
Fund
Balanced All Cap Growth and
Value Fund
EXHIBIT B
DEALER AGREEMENT
