DISTRIBUTION CONTRACT
DISTRIBUTION CONTRACT, dated as of [ ], 2003 between Fixed Income
Shares (the "Trust"), a Massachusetts business trust, and PIMCO Advisors
Distributors LLC (the "Distributor" or "PAD"), a limited liability company
organized under the laws of Delaware.
WITNESSETH:
WHEREAS, the Trust is registered with the Securities and Exchange
Commission (the "SEC") as an open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust is authorized to issue shares of beneficial interest
in separate series, with each such series representing interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Trust has established multiple series, including FISH:
Series C, FISH: Series M and Allianz Dresdner Daily Asset Fund (the "Fund"); and
WHEREAS, the Trust has entered into a Distribution Contract with PAD
dated March 15, 2000 relating to FISH: Series C and FISH: Series M; and
WHEREAS, the Trust wishes to retain PAD to provide distribution and
shareholder account management services to the Fund and its shareholders
pursuant to a separate agreement applicable only to the Fund; and
WHEREAS, PAD is willing to furnish and/or arrange for such services in
the manner and on the terms hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties agree as follows:
1. Appointment and Acceptance. The Trust hereby appoints the Distributor as a
distributor of shares of beneficial interest in the Fund (the "shares") which
may from time to time be registered under the 1933 Act and as servicing agent of
shareholders and shareholder accounts of the Fund, and the Distributor hereby
accepts such appointment in accordance with the terms and conditions set forth
herein. As the Fund's agent, the Distributor shall, except to the extent
provided in Section 3 hereof, be the exclusive distributor for the unsold
portion of the shares.
2. Sale of Shares to Distributor and Sales by Distributor. The Fund shall sell
through the Distributor, as the Fund's agent, shares to eligible investors as
described in the prospectus for the Fund as filed with the Securities and
Exchange Commission ("SEC") (the "Prospectus"). All orders through the
Distributor shall be subject to acceptance and confirmation by the Fund. The
Fund shall have the right, at its election, to deliver either shares issued upon
original issue or treasury shares.
Prior to the time of transfer of any shares by the Fund to, or on the
order of, the Distributor or any introducing broker, participating broker or
other financial intermediary, the Distributor shall pay or cause to be paid to
the Fund or to its order an amount in New York clearing house funds equal to the
applicable net asset value of the shares. Upon receipt of registration
instructions in proper form, the Distributor will transmit or cause to be
transmitted such instructions to the Fund or its agent for registration of the
shares purchased.
On every sale, the Fund shall receive the net asset value of the
shares. The net asset value of the shares shall be determined in the manner
provided in by the procedures adopted by the Trustees of the Trust for the Fund.
3. Sales of Shares by the Trust. In addition to sales by the Distributor, the
Fund reserves the right to issue shares at any time directly to its shareholders
as a stock dividend or stock split or to sell shares to its shareholders or
other persons at not less than net asset value to the extent that the Fund, its
officers, or other persons associated with the Fund participate in the sale, or
to the extent that the Fund or the transfer agent for its shares receive
purchase requests for shares.
4. Fees. The Distributor shall receive no fees for the services provided under
this agreement.
5. Reservation of Right Not to Sell. The Fund reserves the right to refuse at
any time or times to sell any of its shares for any reason deemed adequate by
it.
6. Use of Sub-Agents; Non-exclusivity. The Distributor may employ such
sub-agents, including one or more participating brokers or introducing brokers,
for the purposes of selling shares of the Fund as the Distributor, in its sole
discretion, shall deem advisable or desirable. The Distributor may enter into
similar arrangements with other issuers and, except to the extent necessary to
perform its obligations hereunder, nothing herein shall be deemed to limit or
restrict the right of the Distributor, or any affiliate of the Distributor, or
any employee of the Distributor, to engage in any other business or to devote
time and attention to the management or other aspects of any other business,
whether of a similar or dissimilar nature, or to render services of any kind to
any other corporation, firm, individual or association.
7. Repurchase of Shares. The Distributor will act as agent for the Fund in
connection with the repurchase and redemption of shares by the Fund upon the
terms and conditions set forth in the Prospectus or as the Fund acting through
its Trustees may otherwise direct. The Distributor may employ such sub-agents,
including one or more participating brokers or introducing brokers, for such
purposes as the Distributor, in its sole discretion, shall deem to be advisable
or desirable.
8. Basis of Purchases and Sales of Shares. The Distributor's obligation to sell
shares hereunder shall be on a best efforts basis only and the Distributor shall
not be obligated to sell any specific number of shares. Shares will be sold by
the Distributor only against
orders therefor. The Distributor will not purchase shares from anyone other than
the Fund except in accordance with Section 7 hereof, and will not take "long" or
"short" positions in shares contrary to any applicable provisions of the Trust's
Amended and Restated Agreement and Declaration of Trust (the "Declaration of
Trust").
9. Rules of Securities Associations, etc. As the Fund's agent, the Distributor
may sell and distribute shares in such manner not inconsistent with the
provisions hereof and the Fund's Prospectus as the Distributor may determine
from time to time. In this connection, the Distributor shall comply with all
laws, rules and regulations applicable to it, including, without limiting the
generality of the foregoing, all applicable rules or regulations under the 1940
Act and of any securities association registered under the Securities Exchange
Act of 1934, as amended (together with the rules and regulations thereunder, the
"1934 Act"). The Distributor will conform to the Conduct Rules of the National
Association of Securities Dealers, Inc. and the securities laws of any
jurisdiction in which it sells, directly or indirectly, any shares. The
Distributor also agrees to furnish to the Fund sufficient copies of any
agreement or plans it intends to use in connection with any sales of shares in
adequate time for the Fund to file and clear them with the proper authorities
before they are put in use, and not to use them until so filed and cleared.
10. Independent Contractor. The Distributor shall be an independent contractor
and neither the Distributor nor any of its officers or employees as such, is or
shall be an employee of the Fund. The Distributor is responsible for its own
conduct and the employment, control and conduct of its agents and employees and
for injury to such agents or employees or to others through its agents or
employees. The Distributor assumes full responsibility for its agents and
employees under applicable statutes and agrees to pay all employer taxes
thereunder.
11. Registration and Qualification of Shares. The Trust agrees to execute such
papers and to do such acts and things as shall from time to time be reasonably
requested by the Distributor for the purpose of qualifying and maintaining
qualification of the shares for sale under the so-called "Blue Sky" Laws of any
state or for maintaining the registration of the Fund and the Trust under the
1933 Act and the 1940 Act, to the end that there will be available for sale from
time to time such number of shares as the Distributor may reasonably be expected
to sell. The Trust shall advise the Distributor promptly of (a) any action of
the SEC or any authorities of any state or territory, of which it may be
advised, affecting registration or qualification of the Trust, the Fund or the
shares thereof, or rights to offer such shares for sale and (b) the happening of
any event which makes untrue any statement or which requires the making of any
change in the registration statement of the Trust or the Fund as filed with the
SEC (the "Registration Statement") or Prospectus in order to make the statements
therein not misleading.
12. Securities Transactions. The Trust agrees that the Distributor may effect a
transaction on any national securities exchange of which it is a member for the
account of the Trust and the Fund which is permitted by Section 11(a) of the
1934 Act.
13. Expenses.
(a) The Distributor shall from time to time employ or associate with it such
persons as it believes necessary to assist it in carrying out its obligations
under this Contract. The compensation of such persons shall be paid by the
Distributor.
(b) The Distributor shall pay all expenses incurred in connection with its
qualification as a dealer or broker under Federal or state law.
(c) The Distributor will pay all expenses of preparing, printing and
distributing advertising and sales literature that the Distributor prepares and
uses, if any (apart from expenses of registering shares under the 1933 Act and
the 1940 Act and the preparation and printing of prospectuses and reports for
shareholders as required by said Acts and the direct expenses of the issue of
shares, except that the Distributor will pay the cost of the preparation and
printing of prospectuses and shareholders' reports used by it in the sale of
Fund shares).
(d) The Fund shall pay or cause to be paid all expenses incurred in connection
with (i) the preparation, printing and distribution to shareholders of the
Prospectus and reports and other communications to existing shareholders, (ii)
future registrations of shares under the 1933 Act and the 0000 Xxx, (xxx)
amendments of the Registration Statement subsequent to the initial public
offering of shares, (iv) qualification of shares for sale in jurisdictions
designated by the Distributor, including under the securities or so-called "Blue
Sky" laws of any State, (v) qualification of the Trust as a dealer or broker
under the laws of jurisdictions designated by the Distributor, (vi)
qualification of the Trust as a foreign corporation authorized to do business in
any jurisdiction if the Distributor determines that such qualification is
necessary or desirable for the purpose of facilitating sales of shares, (vii)
maintaining facilities for the issue and transfer of shares, (viii) supplying
information, prices and other data to be furnished by the Trust under this
Contract.
(e) The Fund shall pay any original issue taxes or transfer taxes applicable to
the sale or delivery of shares or certificates therefor.
14. Indemnification of Distributor. The Trust shall prepare and furnish to the
Distributor from time to time such number of copies of the most recent form of
the Prospectus filed with the SEC as the Distributor may reasonably request. The
Trust authorizes the Distributor to use the Prospectus, in the form furnished to
the Distributor from time to time, in connection with the sale of shares. The
Trust shall indemnify, defend and hold harmless the Distributor, its officers
and trustees and any person who controls the Distributor within the meaning of
the 1933 Act, 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
Distributor, its officers and trustees or any such controlling person may incur
under the 1933 Act, the 1940 Act, the common law or otherwise, arising out of or
based upon any alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus or arising out of or based upon any
alleged omission to state a material fact required to be stated in either or
necessary to make the statements in either not misleading. This Contract shall
not be construed to protect the Distributor against
any liability to the Trust or its shareholders to which the Distributor would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Contract. This indemnity
agreement is expressly conditioned upon the Trust being notified of any action
brought against the Distributor, its officers or directors or any such
controlling person, which notification shall be given by letter or by telegram
addressed to the Trust at its principal office, and sent to the Trust by the
person against whom such action is brought within 10 days after the summons or
other first legal process shall have been served. The failure to notify the
Trust of any such action shall not relieve the Trust from any liability which it
may have to the person against whom such action is brought by reason of any such
alleged untrue statement or omission otherwise than on account of the indemnity
agreement contained in this Section 14. The Trust shall be entitled to assume
the defense of any suit brought to enforce any such claim, demand or liability,
but, in such case, the defense shall be conducted by counsel chosen by the Trust
and approved by the Distributor. If the Trust elects to assume the defense of
any such suit and retain counsel approved by the Distributor, 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 Trust does not elect to assume
the defense of any such suit, or in the case the Distributor does not approve of
counsel chosen by the Trust, the Trust will reimburse the Distributor, its
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
the Distributor or them. In addition, the Distributor shall have the right to
employ counsel to represent it, its officers and directors and any such
controlling person who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Distributor against the Trust
hereunder if in the reasonable judgment of the Distributor it is advisable for
the Distributor, its officers and directors or such controlling person to be
represented by separate counsel, in which event the fees and expenses of such
separate counsel shall be borne by the Trust. This indemnity agreement and the
Trust's representations and warranties in this Contract shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of the Distributor, its officers and directors or any such controlling
person. This indemnity agreement shall inure exclusively to the benefit of the
Distributor and its successors, the Distributor's officers and directors and
their respective estates and any such controlling persons and their successors
and estates. The Trust shall promptly notify the Distributor of the commencement
of any litigation or proceedings against it in connection with the issue and
sale of any shares.
15. Indemnification of Trust. The Distributor agrees to indemnify, defend and
hold harmless the Trust, its officers and Trustees and any person who controls
the Trust within the meaning of the 1933 Act, 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 Trust, its officers or Trustees or any such
controlling person, may incur under the 1933 Act, the 1940 Act, the common law
or otherwise, but only to the extent that such liability or expense incurred by
the Trust, its officers or Trustees or such controlling person resulting from
such claims or demands shall arise out of or be based upon (a) any alleged
untrue statement of a material fact contained in information furnished in
writing by the
Distributor to the Trust specifically for use in the Registration Statement or
the Prospectus or shall arise out of or be based upon any alleged omission to
state a material fact in connection with such information required to be stated
in the Registration Statement or the Prospectus or necessary to make such
information not misleading, (b) any alleged act or omission on the Distributor's
part as the Trust's agent that has not been expressly authorized by the Trust in
writing, and (c) any claim, action, suit or proceeding which arises out of or is
alleged to arise out of the Distributor's failure to exercise reasonable care
and diligence with respect to its services rendered in connection with
investment, reinvestment, employee benefit and other plans for shares. The
foregoing rights of indemnification shall be in addition to any other rights to
which the Trust or a Trustee may be entitled as a matter of law. This indemnity
agreement is expressly conditioned upon the Distributor being notified of any
action brought against the Trust, its officers or Trustees or any such
controlling person, which notification shall be given by letter or telegram
addressed to the Distributor at its principal office, and sent to the
Distributor by the person against whom such action is brought, within 10 days
after the summons or other first legal process shall have been served. The
failure to notify the Distributor of any such action shall not relieve the
Distributor from any liability which it may have to the Trust, its officers or
Trustees or such controlling person by reason of any alleged misstatement,
omission, act or failure on the Distributor's part otherwise than on account of
the indemnity agreement contained in this Section 15. The Distributor shall have
a right to control the defense of such action with counsel of its own choosing
and approved by the Trust if such action is based solely upon such alleged
misstatement, omission, act or failure on the Distributor's part, and in any
other event the Trust, its officers and Trustees or such controlling person
shall each have the right to participate in the defense or preparation of the
defense of any such action at their own expense. If the Distributor elects to
assume the defense of any such suit and retain counsel approved by the Trust,
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 Distributor does not
elect to assume the defense of any such suit, or in the case the Trust does not
approve of counsel chosen by the Distributor, the Distributor will reimburse the
Trust, its officers and Trustees or the controlling person or persons named as
defendant or defendants in such suit, for the fees and expenses of any counsel
retained by the Trust or them. In addition, the Trust shall have the right to
employ counsel to represent it, its officers and Trustees and any such
controlling person who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Trust against the Distributor
hereunder if in the reasonable judgment of the Trust it is advisable for the
Trust, its officers and Trustees or such controlling person to be represented by
separate counsel, in which event the fees and expense of such separate counsel
shall be borne by the Distributor. This indemnity agreement and the
Distributor's representations and warranties in this Contract shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of the Trust, its officers and Trustees or any such controlling
person. This indemnity agreement shall inure exclusively to the benefit of the
Trust and its successors, the Trust's officers and Trustees and their respective
estates and any such controlling persons and their successors and estates. The
Distributor shall promptly notify the Trust of the commencement of any
litigation or proceedings against it in connection with the issue and sale of
any shares.
16. Assignment Terminates this Contract; Amendments of this Contract. This
Contract shall automatically terminate, without the payment of any penalty, in
the event of its assignment. This Contract may be amended by mutual consent of
the parties provided that, if required by law, such amendment may only be
approved either by action of the Trustees of the Trust or at a meeting of the
shareholders of the Fund by the affirmative vote of a majority of the
outstanding shares of the Fund, and by a majority of the Trustees of the Trust
who are not interested persons of the Trust and who have no direct or indirect
financial interest in the operation of this Contract by vote cast in person at a
meeting called for the purpose of voting on such approval.
17. Effective Period and Termination of this Contract. This Contract shall take
effect upon the date first above written and shall remain in full force and
effect continuously (unless terminated automatically as set forth in Section 16
hereof) until terminated:
(a) Either by the Fund or the Distributor by not more than sixty (60)
days' nor less than thirty (30) days' written notice delivered or mailed by
registered mail, postage prepaid, to the other party; or
(b) Automatically at the close of business two years from the date
hereof, or upon the expiration of one year from the effective date of the last
continuance of this Contract, whichever is later, if the continuance of this
Contract is not specifically approved at least annually by the Trustees of the
Trust or the shareholders of the Fund by the affirmative vote of a majority of
the outstanding shares of the Fund, and by a majority of the Trustees of the
Trust who are not interested persons of the Trust and who have no direct or
indirect financial interest in this Contract by vote cast in person at a meeting
called for the purpose of voting on such approval.
Action by the Fund under (a) above may be taken either (i) by vote of
the Trustees of the Trust, or (ii) by the affirmative vote of a majority of the
outstanding shares of the Fund. The requirement under (b) above that the
continuance of this Contract be "specifically approved at least annually" shall
be construed in a manner consistent with the 1940 Act.
Termination of this Contract pursuant to this Section 17 shall be
without the payment of any penalty.
18. Certain Definitions. For the purposes of this Contract, the "affirmative
vote of a majority of the outstanding shares" means the affirmative vote, at a
duly called and held meeting of shareholders, (a) of the holders of 67% or more
of the shares of the Trust or Fund, as the case may be, present (in person or by
proxy) and entitled to vote at such meeting, if the holders of more than 50% of
the outstanding shares of the Trust or Fund, as the case may be, entitled to
vote at such meeting are present in person or by proxy, or (b) of the holders of
more than 50% of the outstanding shares of the Trust or Fund, as the case may
be, entitled to vote at such meeting, whichever is less.
For the purposes of this Contract, the terms "interested persons" and
"assignment" shall have the meanings defined in the 1940 Act, subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
under said Act. Certain other items used herein that are not otherwise defined
have the meaning given in the Trust's Prospectus or constituent agreements or
documents of the Trust.
19. Notice. A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of The Commonwealth of Massachusetts and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually, and that the obligations of or arising
out of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Fund.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below on the day and year first above
written.
FIXED INCOME SHARES
By:
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Name:
Title:
PIMCO ADVSISORS DISTRIBUTORS LLC
By:
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Name:
Title:
