EXHIBIT (e)(1)
FORM OF DISTRIBUTION AGREEMENT
This Distribution Agreement is made as of this 30th day of April, 1999
by and between Xxxxxx Insight(R) Funds Trust, a Massachusetts Business Trust
(the "Trust"), and PROVIDENT DISTRIBUTORS, INC., a Delaware corporation
("Provident" or "Distributor").
WHEREAS, the Trust is an open-end management investment company and is
so registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Trust desires to retain Provident as Distributor for the
Trust's separate portfolios - Xxxxxx Insight Emerging Markets Fund, Xxxxxx
Insight International Fund, Xxxxxx Insight Small-Cap Opportunity Fund, Xxxxxx
Insight Small-Cap Value Fund, Xxxxxx Insight Growth Fund, Xxxxxx Insight Equity
Income Fund, Xxxxxx Insight Index Fund, Xxxxxx Insight Balanced Fund, Xxxxxx
Insight Convertible Securities Fund, Xxxxxx Insight Tax-Exempt Bond Fund, Xxxxxx
Insight Bond Fund, Xxxxxx Insight Intermediate Tax-Exempt Bond Fund, and Xxxxxx
Insight Intermediate Government Bond Fund (individually, a "Fund" and
collectively, the "Funds") to provide for the sale and distribution of shares of
the Funds (the "Shares"), and Provident is willing to render such services;
NOW THEREFORE, in consideration of the premises and mutual covenants
set forth herein and intending to be legally bound hereby, the parties hereto
agree as follows:
I. DELIVERY OF DOCUMENTS
The Trust has delivered to Provident copies of each of the following
documents and will deliver to it all future amendments and supplements thereto,
if any:
(a) The Trust's most recent Prospectus(es) and Statement(s) of
Additional Information and all amendments and supplements
thereto (collectively, the "Prospectuses").
II. DISTRIBUTION
1. APPOINTMENT OF DISTRIBUTOR. The Trust hereby appoints Provident as
Distributor of the Funds' Shares and Provident hereby accepts such appointment
and agrees to render the services and duties set forth in this Section II. In
the event that the Trust establishes one or more portfolios other than the Funds
with respect to which it desires to retain Provident to act as distributor
hereunder, the Trust shall notify Provident in writing. If Provident is willing
to render such services, it shall notify the Trust whereupon such portfolio
shall become one of the "Funds" hereunder and such portfolios shall be listed on
an addendum acknowledged in writing by the parties hereto.
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2. SERVICES AND DUTIES.
(a) The Trust agrees to sell through Provident, as agent, from time to
time during the term of this Agreement, Shares upon the terms and at the current
offering price as described in the applicable Prospectus. Provident will act
only in its own behalf as principal in making agreements with selected dealers
or others for the sale and redemption of Shares, and shall sell Shares only at
the offering price thereof as set forth in the applicable Prospectus. Prior to
making any payments from its own resources to financial institutions, securities
dealers or other industry professionals for shareholder services, administration
or distribution assistance for a Fund, Provident will enter into written
agreements in a form satisfactory to the Trust's Board of Trustees. Provident
shall devote appropriate efforts to effect sales of Shares of each of the Funds,
but shall not be obligated to sell any certain number of Shares.
(b) In all matters relating to the sale and redemption of Shares,
Provident will act in conformity with the Trust's Declaration of Trust, By-Laws
and applicable Prospectuses and with the instructions and directions of the
Board of Trustees of the Trust and will conform to and comply with the
requirements of the 1933 Act, the 1940 Act, the regulations of the National
Association of Securities Dealers, Inc. and all other applicable Federal or
state laws and regulations.
(c) All Shares of the Funds and future funds covered by this Agreement
offered for sale by Provident shall be offered for sale to the public at a price
per share (the "offering price") equal to (i) their net asset value (determined
in the manner set forth in the applicable Prospectuses), plus (ii) any sales
charge applicable to a class of Shares which shall be the percentage of the
offering price of such Shares as set forth in the applicable Prospectuses. The
offering price, if not an exact multiple of one cent, shall be adjusted to the
nearest cent. Concessions paid by Provident to broker-dealers and other persons
shall be set forth in either the selling agreements between Provident and such
broker-dealers and persons or, if such concessions are described in the
applicable Prospectuses, shall be as so set forth. No broker-dealer or other
person who enters into a selling or distribution and servicing agreement with
Provident shall be authorized to act as agent for the Trust in connection with
the offering or sale of Shares to the public or otherwise.
(d) If any Shares sold by Provident under the terms of this Agreement
are redeemed or repurchased by the Trust or by Provident as agent or are
tendered for redemption within seven business days after the date of
confirmation of the original purchase of said Shares, Provident shall forfeit
the amount above the net asset value received by it with respect to such Shares,
provided that the portion, if any, of such amount re-allowed by Provident to
broker-dealers or other persons shall be repayable to the Trust only to the
extent recovered by Provident from the broker-dealer or other persons concerned.
Provident shall include in the form of agreement with such broker-dealers and
other persons a corresponding provision for the forfeiture by them of their
concession with respect to Shares sold by them or their principals and redeemed
or repurchased by the Trust or by Provident as agent (or tendered for
redemption) within seven business days after the date of confirmation of such
initial purchases.
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3. SERVICE PLAN REPORTS.
So long as the Trust has one or more service plans in effect for one or
more classes of shares (the "Service Plans"), the Distributor shall provide the
Trust's Board of Trustees at least quarterly, a written report of the amounts
expended by the Distributor pursuant to the Service Plans and the purpose for
which such expenditures were made.
4. SALES AND REDEMPTIONS.
(a) The Trust shall pay all costs and expenses in connection with the
registration of the Shares under the 1933 Act, and all expenses in connection
with maintaining facilities for the issue and transfer of the Shares and for
supplying information, prices and other data to be furnished by the Trust
hereunder, and all expenses in connection with preparing, printing and
distributing the Prospectuses except as set forth in subsection 2(c) of Section
II hereof.
(b) The Trust shall execute all documents, furnish all information and
otherwise take all actions which may be reasonably necessary in the discretion
of the Trust's officers in connection with the qualification of the Shares for
sale in such states as Provident may designate to the Trust and the Trust may
approve, and the Trust shall pay all filing fees which may be incurred in
connection with such qualification. Provident shall pay all other expenses
incurred by Provident in connection with the sale of the Shares, except as
otherwise specifically provided in this Agreement.
(c) The Trust shall have the right to suspend the sale of Shares at any
time in response to conditions in the securities markets or otherwise, and to
suspend the redemption of Shares of any Fund at any time permitted by the 1940
Act or the rules of the SEC ("Rules").
(d) The Trust reserves the right to reject any order for Shares,
but will not do so arbitrarily or without reasonable cause.
III. CONFIDENTIALITY
Provident will treat confidentially and as proprietary information of
the Trust all records and other information relative to the Trust, to the
Trust's prior or current shareholders and to those persons or entities who
respond to Provident's inquiries concerning investment in the Trust, and, except
as provided below, will not use such records and information for any purpose
other than the performance of its responsibilities and duties hereunder. Any
other use by Provident of the information and records referred to above may be
made only after prior notification to and approval in writing by the Trust. Such
approval shall not be unreasonably withheld and may not be withheld where: (i)
Provident may be exposed to civil or criminal contempt proceedings for failure
to divulge such information; (ii) Provident is requested to divulge such
information by duly constituted authorities; or (iii) Provident is so requested
by the Trust.
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IV. INDEMNIFICATION
1. TRUST REPRESENTATION. The Trust represents and warrants to Provident
that at all times the Registration Statement and Prospectuses will in all
material respects conform to the applicable requirements of the 1933 Act and the
Rules thereunder and will not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they are
made, not misleading, except that no representation or warranty in this
subsection shall apply to statements or omissions made in reliance upon and in
conformity with written information furnished to the Trust by or on behalf of
and with respect to Provident expressly for use in the Registration Statement or
Prospectuses.
2. PROVIDENT REPRESENTATION. Provident represents and warrants to the
Trust that it is duly organized as a Delaware corporation and is and at all
times will remain registered as a broker/dealer under the Securities Exchange
act of 1934 and a member in good standing with the National Association of
Securities Dealers and is otherwise duly authorized and licensed to carry out
its services as contemplated herein.
3. TRUST INDEMNIFICATION. The Trust, on behalf of each Fund, will
indemnify, defend and hold harmless Provident, its several officers and Trustees
and any person who controls Provident within the meaning of Section 15 of the
1933 Act, from and against any losses, claims, damages or liabilities, joint or
several, to which any of them may become subject under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Prospectuses or in any application or other document
executed by the Trust, or arise out of, or are based upon, information furnished
on behalf of a Fund, filed in any state in order to qualify the Shares under the
securities or blue sky laws thereof ("Blue Sky Application"), or arise out of,
or are based upon, the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse Provident, its several officers and Trustees,
and any person who controls Provident within the meaning of Section 15 of the
1933 Act, for any legal or other expenses reasonably incurred by any of them in
investigating, defending or preparing to defend any such action, proceeding or
claim; PROVIDED, HOWEVER, that the Trust shall not be liable in any case to the
extent that such loss, claim, damage or liability arises out of, or is based
upon, any untrue statement, alleged untrue statement, or omission or alleged
omission made in the Registration Statement, the Prospectuses, any Blue Sky
Application or any application or other document executed by or on behalf of the
Trust in reliance upon and in conformity with written information furnished to
the Trust by or on behalf of and with respect to Provident specifically for
inclusion therein.
The Trust shall not indemnify any person pursuant to this subsection 3
unless the court or other body before which the proceeding was brought has
rendered a final decision on the merits that such person was not liable by
reason of his willful misfeasance, bad faith or gross negligence in the
performance of his duties, or his reckless disregard of his obligations and
duties, under this Agreement ("disabling conduct") or, in the absence of such a
decision, a reasonable determination (based upon a review of the facts) that
such person was not liable by reason of disabling conduct has been made by the
vote of a majority of a quorum of Trustees of the Trust who are neither
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"interested persons" of the Trust (as defined in the 0000 Xxx) nor parties to
the proceeding, or by an independent legal counsel in a written opinion.
The Company shall advance attorneys' fees and other expenses incurred
by any person in defending any claim, demand, action or suit which is the
subject of a claim for indemnification pursuant to this subsection 3, so long
as: (i) such person shall undertake to repay all such advances unless it is
ultimately determined that he is entitled to indemnification hereunder; and (ii)
such person shall provide security for such undertaking, or the Company shall be
insured against losses arising by reason of any lawful advances, or a majority
of a quorum of the disinterested, non-party directors of the Company (or an
independent legal counsel in a written opinion) shall determine based on a
review of readily available facts (as opposed to a full trial-type inquiry) that
there is reason to believe that such person ultimately will be found entitled to
indemnification hereunder.
4. PROVIDENT INDEMNIFICATION. Provident will indemnify, defend and hold
harmless the Trust, the Trust's several officers and Trustees and any person who
controls the Trust within the meaning of Section 15 of the 1933 Act, from and
against any losses, claims, damages or liabilities, joint or several, to which
any of them may become subject under the 1933 Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of, or are based upon any breach of its representations,
warranties and agreements herein, or which arise out of, or are based upon, any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Prospectuses, any Blue Sky Application or any
application or other documents executed by or on behalf of the Trust or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, which
statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Trust by or on behalf of and with
respect to Provident specifically for inclusion therein, and will reimburse the
Trust, the Trust's several officers and Trustees, and any person who controls
the Trust within the meaning of Section 15 of the 1933 Act, for any legal or
other expenses reasonably incurred by any of them in investigating, defending or
preparing to defend any such action, proceeding or claim, as such expenses are
incurred.
5. GENERAL INDEMNITY PROVISION. No indemnifying party shall be liable
under its indemnity agreement contained in subsection 3 or 4 hereof with respect
to any claim made against such indemnifying party unless the indemnified party
shall have notified the indemnifying party in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon the indemnified party (or after the
indemnified party shall have received notice of such service on any designated
agent), but failure to notify the indemnifying party of any such claim shall not
relieve it from any liability which it may otherwise have to the indemnified
party. The indemnifying party will be entitled to participate at its own expense
in the defense or, if it so elects to assume the defense of any suit brought to
enforce any such liability, and if the indemnifying party elects to assume the
defense, such defense shall be conducted by counsel chosen by it and reasonably
satisfactory to the indemnified party. In the event the indemnifying party
elects to assume the defense of any such suit and retain such counsel, the
indemnified party shall bear the fees and expenses of any additional counsel
retained by the indemnified party, provided that the indemnified party shall
have the right to employ one separate counsel to represent it in such suit if in
the reasonable judgment of the indemnified party it is advisable because of an
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actual or potential conflict of interest between it and the indemnifying party
in the conduct of the defense of such action, in which event the fees and
expenses of such separate counsel will be borne by the indemnifying party.
6. LIMITATION OF LIABILITY. The names "Xxxxxx Insight Fund Trust" and
Trustees of "Xxxxxx Insight Fund Trust" refer respectively to the Trust created
and the Trustees as trustees but not individually or personally, acting from
time to time under a Declaration of Trust dated December 6, 1995 which is hereby
referred to and a copy of which is on file at the office of the Secretary of
State of the Commonwealth of Massachusetts and at the principal office of the
Trust. The obligations of "Xxxxxx Insight Fund Trust Funds" entered into in the
name or on behalf thereof by any of the Trustees, officers, representatives or
agents are not made individually, but in such capacities, and are not binding
upon any of the Trustees, shareholders, officers, representatives or agents of
the Trust personally, but bind only the Trust property, and all persons dealing
with any class of shares of the Trust must look solely to the Trust Property
belonging to such class for the enforcement of any claims against the Trust.
V. DURATION AND TERMINATION
This Agreement shall become effective as of the date first above
written, and, unless sooner terminated as provided herein, shall continue until
April 30, 2000. Thereafter, if not terminated, this Agreement shall continue
automatically for successive terms of one year, provided that such continuance
is specifically approved at least annually by a vote of the majority of those
members of the Board of Trustees of the Trust who are not parties to this
Agreement or "interested persons" of the Trust and have no direct or indirect
financial interest in the operation of each Fund's Service Plan or in this
Agreement, or in any agreement relating to the Plan, by vote cast in person at a
meeting called for the purpose of voting on such approval; PROVIDED, HOWEVER,
that this Agreement may be terminated by the Trust at any time, without the
payment of any penalty, by vote of a majority of the entire Board of Trustees of
the Trust or by a vote of a "majority of the outstanding voting securities" of
the Trust on 60 days' written notice to Provident, or by Provident at any time,
without the payment of any penalty, on 60 days' written notice to the Trust.
This Agreement will automatically and immediately terminate in the event of its
"assignment". (As used in this Agreement, the terms "majority of the outstanding
voting securities," "interested person" and "assignment" shall have the same
meanings as such terms have in the 1940 Act.)
VI. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived, discharged or
terminated except by an instrument in writing signed by the party against which
an enforcement of the change, waiver, discharge or termination is sought.
VII. NOTICES
Notices of any kind to be given to the Trust hereunder by Provident
shall be in writing and shall be duly given if mailed or delivered to the Trust
at Four Falls Corporate Center, 6th Floor, West Conshohocken, PA 19428, or at
such other address or to such individual as shall be so specified by the Trust
to Provident. Notices of any kind to be given to Provident hereunder by the
Trust shall be in writing and shall be duly given if mailed or delivered to
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Provident at Four Falls Corporate Center, 6th Floor, West Conshohocken, PA 19428
or at such other address or to such individual as shall be so specified by
Provident to the Trust.
VIII. MISCELLANEOUS
The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. If any provision if this
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby.
Subject to the provisions of Section V hereof, this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and shall be governed by Delaware law; PROVIDED, HOWEVER, that
nothing herein shall be construed in a manner inconsistent with the 1940 Act or
any rule or regulation of the SEC thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
XXXXXX INSIGHT FUNDS TRUST
By: ________________________________
ATTEST: ____________________
PROVIDENT DISTRIBUTORS, INC.
By: ________________________________
Attest: ____________________
