AMENDMENT TO DISTRIBUTION AGREEMENT
December 1, 2005
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
Reference is made to that certain distribution agreement (the
"Agreement"), dated as of June 5, 2000, between Xxxxx Xxxxxx Oregon Municipals
Fund (the "Investment Company"), with respect to one or more separate series
listed on Exhibit A (each a "Fund") and Citigroup Global Markets Inc. This
letter agreement (the "Amendment") amends or supplements certain terms of the
Agreement as set forth below. Except as expressly amended hereby, the provisions
of the Agreement are and shall remain in full force and effect. 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 Amended and Restated Global
Distribution Agreement (the "Global Distribution Agreement"), dated as of
October 3, 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 the 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 the 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 Investment
Company 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)
intended for public distribution ("CGMI 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 CGMI Marketing Materials shall be
submitted 15 days in advance for review. You shall be responsible for reviewing
and making such filings with the NASD, as required, of CGMI 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 of the Investment Company,
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 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.
(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 the Fund 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 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 any act of yours or any
of your employees constituting willful misfeasance, bad faith, or gross
negligence in the performance of its duties, or by reason of your reckless
disregard of your obligations and duties under the Agreement or 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.
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 Oregon Municipals Fund
By: _______________________
Name: R. Xxx Xxxxxx
Title: Chief Executive Officer
Agreed to as of the date first above written:
Citigroup Global Markets Inc.
By: _____________________________
Name:
Title:
EXHIBIT A
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Fund | Date Added:
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Xxxxx Xxxxxx Oregon Municipals Fund | December 1, 2005
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EXHIBIT B
SELECTED DEALER CONTRACT
Xxxx Xxxxx Investor Services LLC
[Name & address of dealer]
Ladies and Gentlemen:
We, Xxxx Xxxxx Investors Services, LLC ("LMIS"), have agreements with certain
investment companies (each a "Distribution Agreement") for which [name of asset
management entity] or an affiliate serves as investment adviser (each a "Fund")
or series thereof (each a "Series") provided on Schedule A, as it may be amended
from time to time pursuant to which we act as the principal underwriter and
distributor for the sale of common shares of the Funds or Series ("Shares"), and
as such have the right to distribute Shares for resale. Each Fund is an open-end
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act") and the Shares being offered to the public are
registered under the Securities Act of 1933, as amended (the "1933 Act"). The
term "Prospectus", as used herein, refers to the prospectus and related
statement of additional information (the "Statement of Additional Information")
incorporated therein by reference (each as amended or supplemented) on file with
the Securities and Exchange Commission at the time in question. We understand
that you wish to act as a dealer with respect to the Shares. You have
represented that you are either a broker-dealer registered with the Securities
and Exchange Commission ("SEC") under the Securities Exchange Act of 1934, as
amended, ("1934 Act") and a member in good standing of the National Association
of Securities Dealers, Inc. ("NASD"), or a "bank" as defined in Section 3(a)(6)
of the 1934 Act ("Bank") and are not required to register as a broker-dealer
under the 1934 Act, at the time of each transaction subject to this Agreement.
As a broker in the capacity of principal underwriter and distributor for the
Series, we authorize you, and you hereby agree, to sell or to arrange for the
sale of Shares of each Fund or Series upon the following terms and conditions,
and you agree to perform certain other services set forth in this Selected
Dealer Contract ("Contract"):
1. In all sales to the public you shall act as broker-dealer for your
customers or as dealer for your own account, and in no transaction shall you
have any authority to act as agent for the Funds or any Series, for us or for
any other dealer except for the limited purpose of determining the time as of
which transactions in Shares are deemed to have been received, in compliance
with the provisions of this Selected Dealer Agreement.
2. Orders received from you will be accepted through us only at the
public offering price per share (i.e. the net asset value per share plus the
applicable front-end sales charge, if any) applicable to each order, and all
orders for redemption of any Shares shall be executed at the net asset value per
share less any applicable deferred sales charge, if any, in each case as set
forth in the applicable Prospectus. A Fund or Series may additionally impose
redemption fees, as described in the applicable Prospectus. Any contingent
deferred sales charge amounts received or retained by you shall be paid over by
you directly to us or our designated delegate in partial consideration of our
payment to you of any commission amounts provided by us at the time of sale. The
procedure relating to the handling of orders shall be subject to provisions of
this Agreement and instructions that we or the Fund shall forward from time to
time to you. All orders are subject to acceptance or rejection by the applicable
Fund or us in the sole discretion of either. The minimum initial purchase and
the minimum subsequent purchase of any Shares
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shall be as set forth in the applicable Prospectus. You agree to comply with
provisions of Rule 22c-2 under the 1940 Act as applicable to each Fund
(including reporting procedures adopted to comply with the Rule).
3. You shall not place orders for any Shares unless you have already
received purchase orders for those Shares at the applicable public offering
price and subject to the terms hereof. You agree that you will not offer or sell
any Shares except under circumstances that will result in compliance with the
applicable Federal and state securities or banking laws (including, without
limitation, applicable provisions of the 1933 Act, 1934 Act, 1940 Act and the
rules and regulations of the NASD), any applicable banking laws, the applicable
rules and regulations thereunder and the rules and regulations of applicable
regulatory agencies or authorities (collectively, "Law and Regulation") and that
in connection with sales and offers to sell Shares you will furnish to each
person to whom any such sale or offer is made, a copy of the Prospectus as and
when required under applicable laws, rules and regulations and, upon request,
the Statement of Additional Information, and will not furnish to any person any
information relating to Shares which is inconsistent in any respect with the
information contained in the Prospectus or Statement of Additional Information
(as then amended or supplemented). You shall not furnish or cause to be
furnished to any person or display or publish any information or materials
relating to the Shares (including, without limitation, promotional materials and
sales literature, advertisements, press releases, announcements, statements,
posters, signs or other similar material), except such information and materials
as may be furnished to you by, or on behalf of, us or the Funds, and such other
information and materials as may be approved in writing by, or on behalf of, us
or the Funds.
4. If you are a broker dealer, you are hereby authorized (i) to place
orders directly with the applicable Fund or Series for Shares subject to the
applicable terms and conditions governing the placement of orders by us set
forth in the Prospectus and (ii) to tender Shares directly to each Fund or
Series or its agent for redemption subject to the applicable terms and
conditions governing the redemption of Shares applicable to us set forth in the
Prospectus.
5. If you are a Bank, with respect to any and all transactions in
Shares of the Funds or Series pursuant to this Agreement, it is understood and
agreed in each case that unless otherwise agreed to by us in writing: (i) you
shall be acting solely as agent for the account of your customer; (ii) each
transaction shall be initiated solely upon the order of your customer; (iii) we
shall execute transactions only upon receiving instructions from you acting as
agent for your customer; (iv) as between you and your customer, your customer
will have full beneficial ownership of all Shares; (v) each transaction shall be
for the account of your customer and not for your account; (vi) we will serve as
a clearing broker for you on a fully disclosed basis, and you shall serve as the
introducing agent for your customers' accounts; and (vii) order will comply with
the applicable terms and conditions governing the placement of orders as set
forth in the Prospectus including frequent trading redemption fee provisions.
6. You shall not withhold placing orders received from your customers
so as to profit yourself as a result of such withholding, e.g., by a change in
the "net asset value" from that used in determining the offering price to your
customers.
7. You shall provide ongoing shareholder liaison services to the
shareholders of each Fund or Series, including responding to shareholder
inquiries, providing shareholders with information on their investments, and any
other services now or hereafter deemed to be appropriate subjects for the
payment of "service fees" under NASD Conduct Rule 2830.
8. Transactions in the Shares of a Fund or Series may be effected
through the Fund/SERV service of the National Securities Clearing Corporation
(the "NSCC") and, if applicable, account records may be maintained through the
networking service of the NSCC, provided that each party hereto will comply with
all applicable rules of the NSCC and the schedules thereto. Furthermore, you
hereby represent that all of your representations set forth in your agreement
with respect to participating in the
B-2
NSCC network or in any schedules thereto are accurate and true as of the date
hereof and will remain accurate and true insofar as the transactions in the
Shares of the Fund or Series are effected through the Fund/SERV service of the
NSCC and, if applicable, the account records are maintained through the
networking service of the NSCC. You will be solely responsible for the accuracy
of each instruction through the Fund/SERV service, and the issuance of a
Fund/SERV instruction will constitute your representation and warranty to us and
a Fund's transfer agent that the instruction is accurate, complete, and issued
as duly authorized by the client whose Shares are the subject of the
instruction.
9. In determining the amount of any sales concession payable to you
hereunder, we reserve the right to exclude any sales which we reasonably
determine are not made in accordance with the terms of the Prospectus and the
provisions of this Agreement. Unless at the time of transmitting an order we
advise you or the transfer agent to the contrary, the Shares ordered will be
deemed to be the total holdings of the specified investor.
10. (a) You agree that payment for orders from you for the purchase of
Shares will be made in accordance with the terms of the Prospectus. On or before
the business day following the settlement date of each purchase order for
Shares, you shall transfer same day funds to an account designated by us with
the transfer agent in an amount equal to the public offering price on the date
of purchase of the Shares being purchased less your sales concession, if any,
with respect to such purchase order determined in accordance with the
Prospectus. If payment for any purchase order is not received in accordance with
the terms of the Prospectus, we reserve the right, without notice, to cancel the
sale and to hold you responsible for any loss sustained as a result thereof.
(b) If any Shares sold under the terms of this Agreement are
sold with a sales charge and are redeemed or are tendered for redemption within
seven (7) business days after confirmation of your purchase order for such
Shares, you shall forthwith refund to us the full sales concession received by
you on the sale.
(c) We will pay or cause to be paid to you any ongoing
distribution fees and/or shareholder service fees with respect to Shares of the
Series purchased through you and held by or for your customers at such rates and
in such manner as may be described in the Prospectus.
(d) Certificates evidencing Shares generally will not be
available. Upon payment for Shares in accordance with paragraph 10(a) above, the
transfer agent will issue and transmit to you or your customer a confirmation
statement evidencing the purchase of such Shares. Any transaction in
uncertificated Shares, including purchases, transfers, redemptions and
repurchases, shall be effected and evidenced by book-entry on the records of the
transfer agent.
(e) We will not accept any conditional orders for Shares
transmitted by you.
(f) Each Fund's Board has adopted a Distribution Plan pursuant
to Rule 12b-1 of the 1940 Act (the "Plans") with respect to the Shares. Under
the terms of the Plans, we may be entitled to compensation for distribution
related services that it provides to the Investment Companies, and we are
permitted to pay all or a portion of such compensation to entities that engage
in or support the distribution of Shares. For the services to be provided under
this Contract and for so long as this Contract remains in effect, we agree to
pay you in accordance with Schedule B.
(g) In the event we do not receive payment from a Fund or Series
under the relevant Distribution Agreement or plan of distribution adopted
pursuant to the applicable Plan or as otherwise provided in the Prospectus, or
if such Distribution Agreement or Plan is cancelled, you agree to waive your
right to receive compensation until such time, if ever, we receive payment.
11. No person is authorized to make any representations concerning
Shares except those contained in the current Prospectus and Statement of
Additional Information and in printed information
B-3
subsequently issued by us or the Funds as information supplemental to the
Prospectus and the Statement of Additional Information. In purchasing or
offering Shares pursuant to this Contract you shall rely solely on the
representations contained in the Prospectus, the Statement of Additional
Information and the supplemental information above mentioned.
12. You agree to deliver to each purchaser making a purchase of Shares
from or through you a copy of the Prospectus as required by applicable Law and
Regulation and, upon request, the Statement of Additional Information. You may
instruct the transfer agent to register Shares purchased in your name and
account as nominee for your customers. You agree thereafter to deliver to any
purchaser whose Shares you or your nominee are holding as record holder copies
of the annual and interim reports and proxy solicitation materials and any other
information and materials relating to the Funds or Series and prepared by or on
behalf of us, the Funds or the investment adviser, custodian, transfer agent or
dividend disbursing agent for distribution to beneficial holders of Shares. The
Funds shall be responsible for the costs associated with forwarding such
reports, materials and other information and shall reimburse you in full for
such costs. You further agree to make reasonable efforts to endeavor to obtain
proxies from such purchasers whose Shares you or your nominee are holding as
record holder. You further agree to obtain from each customer to whom you sell
Shares any taxpayer identification number certification required under Section
3406 of the Internal Revenue Code of 1986, as amended (the "Code"), and the
regulations promulgated thereunder, and to provide us or our designee with
timely written notice of any failure to obtain such taxpayer identification
number certification in order to enable the implementation of any required
backup withholding in accordance with Section 3406 of the Code and the
regulations thereunder. Additional copies of the Prospectus, Statement of
Additional Information, annual or interim reports, proxy solicitation materials
and any such other information and materials relating to the Funds will be
supplied to you in reasonable quantities upon request.
13. (a) In accordance with the terms of the Prospectus, a reduced sales
charge or no sales charge (collectively, "discounts") may be available to
purchasers of Shares or certain classes of investors, depending on the amount of
the investment or proposed investment. In each case where a discount is
applicable, you agree to furnish to the transfer agent sufficient information to
permit confirmation of qualification for a discount, and acceptance of the
purchase order is subject to such confirmation. Discounts may be modified or
terminated at any time in the sole discretion of each Fund.
(b) You agree to advise us promptly as to the amount of any and
all sales by you qualifying for a discount.
(c) Exchanges (i.e., the investment of the proceeds from the
liquidation of Shares of one Series in the Shares of another Series, each of
which is managed by the same or an affiliated investment adviser) shall, where
available, be made in accordance with the terms of each Prospectus.
(d) You represent that you have, and will maintain during the
term of this Contract, adequate written supervisory procedures and internal
controls to ensure that your customers receive all available discounts, and you
agree: (i) to inform your customers of applicable discount opportunities and to
inquire about other qualifying holdings that might entitle customers to receive
discounts; (ii) to advise us, contemporaneously with each purchase order you
forward to us as agent for your customers, of the availability of any discounts;
and (iii) that in the event that you fail to provide us with information
concerning the availability of discounts as provided in (ii) above, you, and not
us or the Funds, shall be responsible for reimbursing your customer any
applicable discount amount.
14. As a result of the necessity to compute the amount of any
contingent deferred sales charge or redemption charge due with respect to the
redemption of Shares, you may hold Shares of a Fund imposing such a charge in a
"street name" account with our consent, and, in such event, you shall be
responsible for computation, collection and payment to us of such charges, the
application of any discounts, the application of Fund or Series' market-timing
policies, all in accordance with the applicable Prospectus for the Fund or
Series. Except as otherwise permitted by us, Shares owned by a shareholder must
be in a separate identifiable account for such shareholder.
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15. (a) We and each Fund reserve the right in our discretion, without
notice, to suspend sales or withdraw the offering of any Shares entirely. Each
party hereto has the right to terminate this Contract without penalty upon
notice to the other party; provided, however, that termination shall not affect
any party's obligations hereunder with respect to any transactions or activities
occurring prior to the effective time of termination. Upon termination of this
Contract, ongoing trail commissions and/or shareholder servicing fees shall no
longer accrue or be paid to you. We reserve the right to amend this Contract in
any respect effective on notice to you and your placing of an order after the
effective date of any such amendment shall constitute your acceptance thereof.
Each notice of amendment required by this paragraph shall be given in writing
and delivered personally or mailed by certified mail or overnight courier
service or sent by facsimile to the address identified herein or such other
address as you may by written notice provide.
(b) Each party hereto agrees to provide prompt notice to the
other party in the event of an assignment to this Contract.
16. We shall have full authority to take such action as we may deem
advisable in respect of all matters pertaining to the continuous offering of
Shares. We shall be under no liability to you except for lack of good faith and
for obligations expressly assumed by us herein. Nothing contained in this
paragraph 16 is intended to operate as, and the provisions of this paragraph 16
shall not in any way whatsoever constitute a waiver by you of compliance with,
any provisions of the 1933 Act or of the rules and regulations of the SEC issued
thereunder.
17. You agree that: (a) you shall not effect any transactions
(including, without limitation, any purchases and redemptions) in any Shares
registered in the name of, or beneficially owned by, any customer unless such
customer has granted you full right, power and authority to effect such
transactions on his behalf, (b) we shall have full authority to act upon your
express instructions to sell, repurchase or exchange Shares through us on behalf
of your customers under the terms and conditions provided in the Prospectus and
(c) you shall indemnify and hold harmless the Funds, us and both of our
respective affiliates, representatives and agents, successors and assigns,
officers and directors, and each person who controls either us or the Funds
(within the meaning of Section 15 of the 0000 Xxx) from and against any and all
direct or indirect costs, claims, expenses, liabilities or losses, including
attorney's fees resulting from (i) any alleged violation of any statute or
regulation or rule of a self-regulatory organization (including, without
limitation, the securities laws and regulations of the United States or any
state or jurisdiction or the NASD Conduct Rules) or any alleged tort or breach
of contract, related to the offer or sale by you of Shares of the Funds pursuant
to this Contract (except to the extent that our negligence or failure to follow
correct instructions received from you is the cause of such loss, claim,
liability, cost or expense); (ii) requests, directions, actions or inactions of
or by you, your officers, directors, employees, partners or agents regarding the
purchase, redemption or transfer of registration of Shares of the Funds for your
accounts, your customers and other shareholders or from any unauthorized or
improper use of any on-line computer facilities; (iii) incorrect investment
instructions received by us or a Fund or Fund agent from you; or (iv) the breach
by you of any of your representations, warranties or agreements specified herein
or your failure to comply with the terms and conditions of this Contract.
We agree to indemnify you and hold you harmless from and against any
and all liabilities and losses resulting directly from (i) any misstatement of a
material fact in the Prospectus of a Fund or Series or the omission of any
material fact required to be stated in the Prospectus of a Fund or Series or
necessary to make the statements in the Prospectus not misleading; or (ii) our
failure to comply with the terms and conditions of this Contract. The foregoing
indemnification provisions shall survive termination of this Contract.
B-5
18. (a) You shall be permitted to accept orders for the purchase,
exchange or redemption of Shares of the Funds on each business day that the New
York Stock Exchange ("NYSE") is open for business and a Fund's net asset value
is determined ("Business Day"). Instructions received in proper form by you
prior to time of acceptance for orders set forth in the applicable Prospectus
("Close of Trading") (generally the close of regular trading on the NYSE, which
is generally 4:00 p.m. Eastern Time), and with respect to which you transmit
orders to the Fund via the NSCC Fund/SERV system up to the latest time accepted
by Fund/SERV on a given Business Day, will be deemed to have occurred, and will
be credited to the respective account, at the per share NAV next calculated
after the Close of Trading on that Business Day. You will not transmit orders
based on Instructions received from Shareholders after the Close of Trading for
that Business Day's NAV.
(b) The offering price ("Offering Price") of Shares of each
Investment Company shall be the net asset value per share as next determined by
the Investment Company following receipt of an order at Financial Intermediary's
principal office, plus any applicable sales charge.
(c) You agree to maintain records sufficient to identify the
date and time of receipt of all customer transactions or as otherwise required
by applicable Law and Regulation. You further agree to make such records
available upon request for examination by us, or its designated representative,
at the request of the transfer agent or by appropriate governmental authorities.
Under no circumstances shall you change, alter or manipulate any customer
transactions received by you in good order.
19. Solely for the limited purpose of receiving orders for the Shares
of the Funds by customers prior to the Close of Trading on a Business Day and
communicating such orders after the Close of Trading on such Business Day, you
will be deemed to act as agent of the Funds. Each communication of orders by you
shall constitute a representation that such orders were received by us prior to
the calculation of net asset value, as described in the applicable Prospectus on
the Business Day on which the order is priced in accordance with Rule 22c-1
under the Investment Company Act of 1940. You represent and warrant that: (i)
there are controls in place designed to prevent market timing, (ii) you will use
your best efforts to assist us in identifying market timers or investors who
engage in a pattern of short-term trading, and (iii) your internal systems for
processing and transmitting orders are suitably designed to prevent orders
received at or after the Close of Trading from being aggregated with orders
received before the Close of Trading.
20. You agree that, with respect to the compensation you receive in
connection with the offering of Shares or transactions involving Shares
(including payments from us or our affiliates), you will make or cause to be
made disclosure of such payments in accordance with applicable Law and
Regulation.
21. You agree that it is your responsibility to evaluate and determine
that any transaction in Shares (including a transaction in a specific class of
Shares of a Fund or Series) is a suitable transaction for each client based on
the client's objectives and risk profile. If you are a Bank, you further
represent and warrant to us that you will use your best efforts to ensure that
any purchase of Shares by your customers constitutes a suitable investment for
such customers. You shall not effect any transaction in, or induce any purchase
or sale of, any Shares by means of any manipulative, deceptive or other
fraudulent device or contrivance and shall otherwise deal equitably and fairly
with your customers with respect to transactions in Shares.
22. If you are a Bank, you will not make Shares available to your
customers, including your fiduciary customers, or accept any fees or
compensation hereunder except in compliance with all Law and Regulation
applicable to you, or any of your affiliates engaging in such activity,
including without limitation ERISA and regulated rules, regulations and
interpretations, which may affect your business practices.
B-6
23. In selling Shares you will comply with all applicable Law and
Regulation, including the applicable Law and Regulation of the jurisdictions in
which you sell any Shares directly or indirectly.
24. You represent and warrant to us and the Funds:
(a) You have in place an anti-money laundering program ("AML
program") that does now and will continue to comply with applicable laws and
regulations, including the relevant provisions of the Bank Secrecy Act and the
USA PATRIOT Act (Pub. L. No. 107-56 (2001)), as they may be amended, and the
regulations issued thereunder by duly vested regulatory authority and the
conduct the Rules of the NASD and the New York Stock Exchange, Inc., as
applicable ("Anti-Money Laundering Law and Regulation").
(b) You have, after undertaking reasonable inquiry, no
information or knowledge that (i) any customers that you introduce to the Funds
or on whose behalf you purchase Shares, or (ii) any person or entity
controlling, controlled by or under common control with such customers is an
individual or entity or in a country or territory that is on an Office of
Foreign Assets Control ("OFAC") list or similar list of sanctioned or prohibited
persons maintained by a U.S. governmental or regulatory body.
(c) You have in place, and have conducted due diligence pursuant
to, policies, procedures and internal controls reasonably designed (i) to verify
the identity of the customers that you introduce to the Funds or on whose behalf
you purchase Shares, and (ii) to identify those customers' sources of funds, and
have no reason to believe that any of the invested funds were derived from
illegal activities.
(d) You will provide us or the Funds (or their service
providers) upon reasonable request any information regarding specific accounts
that may be reasonably necessary for the Funds and their service providers to
fulfill their responsibilities relating to their anti-money laundering programs
or any other information reasonably requested by us or the Funds (or their
service providers) to assist with compliance with the Anti-Money Laundering Law
and Regulation, as may be permitted by law or regulation.
(e) You will promptly notify us should you become aware of any
change in the above representations and warranties. In addition, we on our own
behalf and on behalf of the Funds hereby provide notice to you that we and/or
the Funds reserve the right to make inquires of and request additional
information from you regarding your AML program.
25. (a) You represent and warrant that you have adopted and implemented
procedures to safeguard customer information and records that are reasonably
designed to ensure the security and confidentiality of customer records and
information and to ensure your compliance with the SEC's Regulation S-P or other
applicable privacy law. Both of us agree on behalf of ourselves, our affiliates
and employees that the terms of this Contract, information exchanged hereunder
and information about our respective customers and potential customers is
confidential and as such shall not be disclosed, sold or used in any way except
to carry out the terms of this Contract. Notwithstanding the foregoing, such
confidential information may be disclosed 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 provisions of this paragraph shall survive
termination of this Contract.
(b) You represent and warrant that the security of your computer
system is commercially reasonable and reasonably designed to prevent any illegal
or injurious activities of persons (including
B-7
persons outside of you) attempting to access a computer system maintained or
operated by or on behalf of us or the Funds through your computer system.
26. You agree that you will promptly forward any client complaints or
threatened or pending litigation notices specifically relating to the management
of the Funds, whether written or if verbal, in the form of a written summary, to
us or our designated party. We or our designated party will undertake to
investigate and respond to the complaint or threatened or pending litigation
notices in line with our complaints and litigation procedures. You agree to
fully cooperate with such investigation and response.
27. (a) If you are a broker-dealer, you represent and warrant that: (a)
you are a member in good standing of the NASD, or, if a foreign dealer who is
not eligible for membership in the NASD, that (i) you will not make any sales of
Shares in, or to nationals of, the United States of America, its territories or
its possessions, and (ii) in making any sales of Shares you will comply with the
NASD's Conduct Rules and (b) you are a member in good standing of the Securities
Investor Protection Corporation ("SIPC"). You agree to notify us immediately in
the event of (i) your expulsion or suspension from the NASD or SIPC, or (ii) the
institution of an investigation or proceeding by any federal, state or
self-regulatory organization against you alleging that you have violated any
applicable federal or state law, rule or regulation or any rule of the NASD or
of SIPC arising out of your activities as a broker-dealer or bank, as
appropriate, or in connection with this Contract, or which may otherwise affect
in any material way its ability to act in accordance with the terms of this
Contract. We shall have the right to terminate immediately upon receipt of such
notice.
(b) You represent and warrant that (i) each employee and agent of yours
who shall engage in the offering or sale of Shares is currently duly licensed
under applicable federal and state laws and regulations, and, if you are a
broker-dealer, with the NASD, and (ii) you shall not permit any employee or
agent to offer or sell Shares unless such person is duly licensed under
applicable federal and state laws and regulations, and with the NASD.
28. If you are a Bank or distributing through a Bank affiliate, you or
the affiliate represent and warrant that you or the affiliate are not in
violation of any banking law, rule or regulations as to which you are subject
and that the transactions contemplated by this Contract will not result in any
violations of any banking law, rule or regulation.
29. You agree that it is your responsibility to provide proper
instruction, training and supervision of appropriate sales personnel in order
that Shares will be offered and sold in accordance with the terms and conditions
of this Contract and in accordance with all applicable laws. You also agree that
it is your responsibility to assure that your sales personnel are properly
licensed, certified and familiar with the Funds, Series and any classes thereof.
30. You represent and warrant that you will not offer Shares of any
Fund or Series for sale in any state or jurisdiction where such Shares may not
be legally sold or where you are not qualified to act as a broker-dealer. We
shall inform you as to the states or other jurisdictions in which the Fund or
Series has advised us that Shares have been qualified for sale under, or are
exempt from the requirements of, the respective securities laws of such states.
31. You agree to distribute or cause to be delivered to your customers
Prospectuses, proxy solicitation materials, shareholder reports and other
materials in compliance with applicable legal requirements, except to the extent
that we undertake to do so.
32. (a) We shall notify you of the states or other jurisdictions in
which Shares are currently available for sale to the public. We shall have no
obligation to register or make available Shares in any state or other
jurisdiction.
B-8
(b) [You shall provide to the transfer agent of each Fund or
Series each client's state of residency on each trade record and registration
record so we can monitor trades for blue sky compliance. The Fund or its agent
will reject any ineligible trades and notify you upon cancellation.]
33. You shall not incur, nor does it have the authority to incur, any
debts or obligations on behalf of us or any Fund or Series.
34. You shall provide any assistance that we or the Funds reasonably
request in connection with a Fund's or Series' solicitation of proxies.
35. Any claim, controversy, dispute or deadlock arising under this
agreement (collectively, a "Dispute") shall be settled by arbitration
administered in accordance with the rules and regulations of the NASD. Any
arbitration and award of the arbitrators, or a majority of them, shall be final
and the judgment upon the award rendered may be entered in any state or federal
court having jurisdiction. No punitive damages are to be awarded.
36. All communications to us should be sent, postage prepaid, to
__________________. Any notice to you shall be duly given if mailed, telegraphed
or telecopied to you at the address specified by you below. Communications
regarding placement of orders for Shares should be sent, postage prepaid, to
___________________________________________.
37. This Contract shall be binding upon both parties hereto when signed
by us and accepted by you in the space provided below; provided, however, that
you shall not have any obligations hereunder other than in respect of the duties
and agreements expressly undertaken and made by you herein.
38. This Contract and the terms and conditions set forth herein shall
be governed by, and construed in accordance with, the laws of the State of
Maryland. To the extent that the applicable laws of the State of Maryland
conflict with the applicable provisions of the federal securities laws, the
latter shall control.
39. To the extent a Fund or Series imposes a redemption fee as provided
in the applicable Prospectus, you agree to abide and comply with the terms of
the attached Redemption Fee Addendum.
40. This Contract shall not be construed to constitute a partnership,
joint venture, or agency between you and us or any Fund or Series, nor to create
an employer-employee relationship between you and us. You acknowledge that you
are an independent contractor, that your business is its own and entirely
separate from that of ours and the Funds and Series, and that you will not deal
with or represent itself to the public in any other way.
B-9
41. You agree to provide us with any assistance or report that we
reasonably request in order to fulfill our duties to assist the Funds with
compliance with Rule 38a-1 under the 1940 Act, in our capacity as principal
underwriter to each Fund.
Xxxx Xxxxx Investor Services, LLC
By:
-----------------------------------
Managing Director
Accepted:
Firm Name: _____________________________
NASD Registration
Number: _____________________________
By: _____________________________
Address: _____________________________
_____________________________
Accepted By (signature):
____________________________________________
Name (print): Title:
___________________________ ______________________
Date:
___________________________
B-10
SCHEDULE A - FUNDS
[insert funds]
B-11
SCHEDULE B - COMPENSATION
Beginning on the effective date of this Contract, for each Fund listed
on Schedule A, Xxxx Xxxxx will pay the Financial Intermediary a quarterly fee
equal on an annual basis to [0.25%] of the average daily net asset value of
[Financial Intermediary Shares of Funds] owned beneficially by clients of the
Financial Intermediary during such period.
*Institutional shares do not pay service fees
X-00
Xxxxxxxxxx Xxx Xxxxxxxx
X-00
