ADMINISTRATION, SHAREHOLDER SERVICES AND
DISTRIBUTION AGREEMENT
AGREEMENT made this 7th day of September, 1998, by and between CASH EQUIVALENT
FUND, a Massachusetts business trust (the "Fund"), and XXXXXX DISTRIBUTORS,
INC., a Delaware corporation ("KDI").
In consideration of the mutual covenants hereinafter contained, it is hereby
agreed by and between the parties hereto as follows:
1. The Fund hereby appoints KDI to act as administrator,
distributor and principal underwriter for the distribution of shares of
beneficial interest (hereinafter called "shares") of the Fund in
jurisdictions wherein shares of the Fund may legally be offered for
sale; provided, however, that the Fund in its absolute discretion may
(a) issue or sell shares directly to holders of shares of the Fund upon
such terms and conditions and for such consideration, if any, as it may
determine, whether in connection with the distribution of subscription
or purchase rights, the payment or reinvestment of dividends or
distributions, or otherwise; or (b) issue or sell shares at net asset
value to the shareholders of any other investment company, for which
KDI shall act as exclusive distributor, who wish to exchange all or a
portion of their investment in shares of such other investment company
for shares of the Fund.
KDI shall appoint various broker-dealers and other financial
services firms ("Firms") to provide a cash management service for their
clients through the Fund. The Finns shall provide such office space and
equipment, telephone facilities, personnel, literature distribution,
advertising and promotion as is necessary or beneficial for providing
information and services to potential and existing shareholders of the
Fund and to assist the Fund's shareholder service agent in servicing
accounts of the Firm's clients who own Fund shares ("clients"). Such
services and assistance may include, but are not limited to,
establishment and maintenance of shareholder accounts and records,
processing purchase and redemption transactions, automatic investment
in Fund shares of client account cash balances, answering routine
client inquiries regarding the Fund, assistance to clients in changing
dividend options, account designations and addresses, and such other
services as the Fund or KDI may reasonably request. KDI may also
provide some of the above services for the Fund directly.
KDI accepts such appointment and agrees during the term hereof
to render such services and to assume the obligations herein set forth
for the compensation herein provided. KDI shall for all purposes herein
provided be deemed to be an independent contractor and, unless
otherwise expressly provided or authorized, shall have no authority to
act for or represent the Fund in any way or otherwise be deemed an
agent of the Fund. It is understood and agreed that KDI, by separate
agreement with the Fund, may also serve the Fund in other capacities.
The services of KDI to the Fund under this Agreement are not to be
deemed exclusive, and KDI shall be free to render similar services or
other services to others so long as its services hereunder are not
impaired thereby.
In carrying out its duties and responsibilities hereunder, KDI
will, pursuant to separate administration services and selling group
agreements ("services agreements"), appoint various Firms to provide
administrative, distribution and other services contemplated hereunder
directly to or for the benefit of existing and potential shareholders
who may be clients of such Firms Such Firms shall at all times be
deemed to be independent contractors retained by KDI and not the Fund.
KDI and not the Fund will be responsible for the payment of
compensation to such Firms for such services.
KDI will use its best efforts with reasonable promptness to
sell such part of the authorized shares of the Fund remaining unissued
as from time to time shall be effectively registered under the
Securities Act of 1933 ("Securities Act"), at prices determined as
hereinafter provided and on terms hereinafter set forth, all subject to
applicable federal and state laws and regulations and to the Fund's
Agreement and Declaration of Trust. The price the Fund shall receive
for all shares purchased from the Fund shall be the net asset value
used in determining the public offering price applicable to the sale of
such shares.
2. KDI shall sell shares of the Fund to or through qualified
Firms in such manner, not inconsistent with the provisions hereof and
the then effective registration statement of the Fund under the
Securities Act (and related prospectus), as KDI may determine from time
to time, provided that no Firm or other person shall be appointed and
authorized to act as agent of the Fund without the prior consent of the
Fund. In addition to sales made by it as agent of the Fund, KDI may, in
its discretion, also sell shares of the Fund as principal to persons
with whom it does not have services agreements.
Shares of any series of the Fund offered for sale or sold by
KDI shall be so offered or sold at a price per share determined in
accordance with the then current prospectus relating to the sale of
such shares except as departure from such prices shall be permitted by
the rules and regulations of the Securities and Exchange Commission;
provided, however, that any public offering price for shares of the
Fund shall be the net asset value per share. The net asset value per
share of the Fund shall be determined in the manner and at the times
set forth in the then current prospectus of the Fund relating to such
shares.
KDI will require each Xxxx to conform to the provisions hereof
and the Registration Statement (and related prospectus) at the time in
effect under the Securities Act with respect to the public offering
price of the Fund's shares, and neither KDI nor any such Firms shall
withhold the placing of purchase orders so as to make a profit thereby.
3. The Fund will use its best efforts to keep effectively
registered under the Securities Act for sale as herein contemplated
such shares as KDI shall reasonably request and as the Securities and
Exchange Commission shall permit to be so registered. Notwithstanding
any other provision hereof, the Fund may terminate, suspend or withdraw
the offering of shares whenever, in its sole discretion, it deems such
action to be desirable.
4. The Fund will execute any and all documents and furnish any
and all information that may be reasonably necessary in connection with
the qualification of its shares for sale (including the qualification
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of the Fund as a dealer where necessary or advisable) in such states as
KDI may reasonably request (it being understood that the Fund shall not
be required without its consent to comply with any requirement which in
its opinion is unduly burdensome). The Fund will furnish to KDI from
time to time such information with respect to the Fund and its shares
as KDI may reasonably request for use in connection with the sale of
shares of the Fund.
5. KDI shall issue and deliver or shall arrange for various Firms
to issue and deliver on behalf of the Fund such confirmations of sales
made by it pursuant to this Agreement as may be required. At or prior
to the time of issuance of shares, KDI will pay or cause to be paid to
the Fund the amount due the Fund for the sale of such shares.
Certificates shall be issued or shares registered on the transfer books
of the Fund in such names and denominations as KDI may specify.
6. KDI shall order shares of the Fund from the Fund only to the
extent that it shall have received purchase orders therefor. KDI will
not make, or authorize Firms or others to make, any short sales of
shares of the Fund. KDI, as agent of and for the account of the Fund,
may repurchase the shares of the Fund at such prices and upon such
terms and conditions as shall be specified in the current prospectus of
the Fund. In selling or reacquiring shares of the Fund for the account
of the Fund, KDI will in all respects conform to the requirements of
all state and federal laws and the Rules of Fair Practice of the
National Association of Securities Dealers, Inc., relating to such sale
or reacquisition, as the case may be, and will indemnify and save
harmless the Fund from any damage or expense on account of any wrongful
act by KDI or any employee, representative or agent of KDI. KDI will
observe and be bound by all the provisions of the Fund's Agreement and
Declaration of Trust (and of any fundamental policies adopted by the
Fund pursuant to the Investment Company Act of 1940 (the "Investment
Company Act"), notice of which shall have been given to KDI) which at
the time in any way require, limit, restrict, prohibit or otherwise
regulate any action on the part of KDI hereunder.
7. The Fund shall assume and pay all charges and expenses of its
operations not specifically assumed or otherwise to be provided by KDI
under this Agreement or the Fund's Amended and Restated 12b- I Plan
(the "Plan"). The Fund will pay or cause to be paid expenses (including
the fees and disbursements of its own counsel) and all taxes and fees
payable to the federal, state or other governmental agencies on account
of the registration or qualification of securities issued by the Fund
or otherwise. The Fund will also pay or cause to be paid expenses
incident to the issuance of shares of beneficial interest, such as the
cost of share certificates, issue taxes, and fees of the transfer
agent. KDI will pay all expenses (other than expenses which one or more
Firms may bear pursuant to any agreement with KDI) incident to the sale
and distribution of the shares issued or sold hereunder including,
without limiting the generality of the foregoing, all expenses of
printing and distributing any prospectus and of preparing, printing and
distributing or disseminating any other literature, advertising and
selling aids in connection with the offering of the shares for sale
(except that such expenses need not include expenses incurred by the
Fund in connection with the preparation, typesetting, printing and
distribution of any registration statement, prospectus or report or
other
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communication to shareholders in their capacity as such) and expenses
of advertising in connection with such offering.
8. This Agreement shall become effective on the date hereof and
shall continue until December 1, 1998 and shall continue from year to
year thereafter only so long as such continuance is approved in the
manner required by the Investment Company Act.
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 the Fund or by KDI on (60) days' written notice to the
other party. The Fund may effect termination by a vote of (i) a
majority of the trustees who are not interested persons of the Fund and
who have no direct or indirect financial interest in the operation of
the Plan, this Agreement or in any other agreement related to the Plan,
or (ii) a majority of the outstanding voting securities of the Fund.
All material amendments to this Agreement must be approved by
a vote of a majority of the Board of Trustees of the Fund, including
the trustees who are not interested persons of the Fund and who have no
direct or indirect financial interest in the operation of the Plan,
this Agreement or in any other agreement related to the Plan, cast in
person at a meeting called for such purpose.
The terms "assignment," "interested person" and "vote of a
majority of the outstanding voting securities" shall have the meanings
set forth in the Investment Company Act and the rules and regulations
thereunder.
KDI shall receive such compensation for its distribution
services as set forth in the Plan. Termination of this Agreement shall
not affect the right of KDI to receive payments on any unpaid balance
of the compensation earned prior to such termination, as set forth in
the Plan.
9. KDI will not use or distribute or authorize the use,
distribution or dissemination by Firms or others in connection with the
sale of Fund shares any statements, other than those contained in the
Fund's current prospectus, except such supplemental literature or
advertising as shall be lawful under federal and state securities laws
and regulations. KDI will furnish the Fund with copies of all such
material.
10. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder
shall not be thereby affected.
11. Any notice under this Agreement shall be in writing, addressed
and delivered or mailed, postage prepaid, to the other party at such
address as such other party may designate for the receipt of such
notice.
12. All parties hereto are expressly put on notice of the Fund's
Agreement and Declaration of Trust and all amendments thereto, all of
which are on file with the Secretary of The Commonwealth of
Massachusetts, and the limitation of shareholder and
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trustee liability contained therein. This Agreement has been executed
by and on behalf of the Fund by its representatives as such
representatives and not individually, and the obligations of the Fund
hereunder are not binding upon any of the trustees, officers or
shareholders of the Fund individually but are binding upon only the
assets and property of the Fund. With respect to any claim by KDI for
recovery of any liability of the Fund arising hereunder allocated to a
particular series, whether in accordance with the express terms hereof
or otherwise, KDI shall have no recourse against the assets of any
other series for such purpose.
13. This Agreement shall be construed in accordance with
applicable federal law and with the laws of The Commonwealth of
Massachusetts.
14. This Agreement is the entire contract between the parties
relating to the subject matter hereof and supersedes all prior
agreements between the parties relating to the subject matter hereof.
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IN WITNESS WHEREOF, the Fund and KDI have caused this Agreement to be executed
as of the day and year first above written.
CASH EQUIVALENT FUND
By: /s/Xxxx X. Xxxxxx
-------------------------------
Title: President
----------------------------
ATTEST:
By: /s/Xxxxxxx Xxxx
-----------------------------
Title: Assistant Secretary
--------------------------
XXXXXX DISTRIBUTORS, INC.
By: /s/Xxxxx X. Xxxxxxxxxx
-------------------------------
Title: President
----------------------------
ATTEST:
By: /s/Xxxx X. Xxxxxxx
-----------------------------
Title: Executive Assistant
--------------------------
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