EXHIBIT (E)
DISTRIBUTION AGREEMENT
This Distribution Agreement is made as of this __th day of June,
2002 between THE XXXXXXX/XXXXXX INVESTMENT GROUP, a Delaware business trust
(herein called the "Trust"), and XXXXXX & RYGEL DISTRIBUTORS, INC., a California
corporation (herein called "the Distributor").
WHEREAS, the Trust is an open-end management investment company
and is so registered under the Investment Company Act of 1940 (the "1940 Act");
and
WHEREAS, the Trust desires to retain the Distributor to provide
for the sale and distribution of shares of beneficial interest (herein
collectively called "Shares") of various series of the Trust (each individually
a "Fund", and collectively the "Funds"), and the Distributor is willing to
render such services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants set forth herein the parties hereto agree as follows:
1. DELIVERY OF DOCUMENTS
The Trust has delivered to the Distributor copies of each of the
following documents and will deliver to it all future amendments and supplements
thereto, if any:
(a) Declaration of Trust dated __________________, 2002 (such
Declaration of Trust, as presently in effect and as it shall from time to time
be amended, herein called the "Trust Agreement");
(b) By-Laws of the Trust (such By-Laws, as presently in effect
and as they shall from time to time be amended, herein called the "By-Laws");
(c) Resolutions of the Board of Trustees of the Trust authorizing
the execution and delivery of this Agreement;
(d) Registration statement under the Securities Act of 1933, as
amended (the "1933 Act"), and the 1940 Act, on Form N-1A (File Nos. ________ and
________) as filed with the Securities and Exchange Commission (the
"Commission") on May __, 2002, relating to the Shares, and all amendments
thereto (the registration statement, as presently in effect
and as amended or supplemented from time to time is herein called the
"Registration Statement");
(e) Notification of Registration of the Trust under the 1940 Act
on Form N-8A as filed with the Commission on May __, 2002; and
(f) Prospectus and statement of additional information of the
Trust and of each Fund dated ________, 2002 (such prospectus and statement of
additional information, as presently in effect and as it shall from time to time
be amended and supplemented, herein called individually the "Prospectus" and
collectively the "Prospectuses").
2. DISTRIBUTION
2.1 Appointment of Distributor. The Trust hereby appoints the
Distributor as exclusive Distributor of the Shares and the Distributor hereby
accepts such appointment and agrees to render the services and duties set forth
in this Section 2.
2.2 Services and Duties.
(a) The Trust agrees to sell through the Distributor, as agent,
from time to time during the term of this Agreement, Shares of the Trust
(whether authorized but unissued or treasury Shares, in the Trust's sole
discretion) upon the terms and at the current offering price as described in the
applicable Prospectus. The Distributor shall act only on its own behalf as
principal in making agreements with selected dealers or others for the sale and
redemption of Shares. The Distributor shall devote its best efforts to effect
sales of Shares of each of the Funds, but not be obligated to sell any certain
number of Shares.
(b) In all matters relating to the sale and redemption of Shares
the Distributor shall act in conformity with the Trust Agreement, By-Laws and
Prospectuses and with the instructions and directions of the Board of Trustees
of the Trust and shall 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. In
connection with such sales, the Distributor acknowledges and agrees that it is
not authorized to provide any information or make any representation other than
as
-2-
contained in the Trust's Registration Statement and Prospectuses and any sales
literature specifically approved by the Trust.
(c) The Distributor shall bear the cost of (i) printing and
distributing any Prospectus (including any supplement thereto) to persons who
are not either shareholders or counsel, independent accountants, administrators
or other persons providing similar services to the Trust, and (ii) preparing,
printing and distributing any literature, advertisement or material which is
primarily intended to result in the sale of the Shares; provided, however, that
the Distributor shall not be obligated to bear the expenses incurred by the
Trust in connection with the preparation and printing of any amendment to any
Registration Statement or Prospectus necessary for the continued effective
registration of the Shares under the 1933 Act.
2.3 Sales and Redemptions.
(a) The Fund 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 Section 2.2(c) 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 the Distributor 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. The Distributor shall pay all
expenses connected with its qualification as a dealer under state or federal
laws and, except as otherwise specifically provided in this agreement, all other
expenses incurred by the Distributor in connection with the sale of the Shares
as contemplated in this Agreement; Provided, however, that certain advertising,
marketing, shareholder servicing, administration and/or distribution expenses to
be incurred in connection with the Shares may be paid as provided in any plan
which may in the sole discretion of the Trust be adopted in accordance with Rule
12b-1 under the 1940 Act.
-3-
(c) The Trust shall have the right to suspend the sale of sales
of any Fund at any time in response to conditions in the securities markets or
otherwise, and to suspend the redemptions of Shares of any Fund at any time
permitted by the 1940 Act or the rules of the Commission ("Rules").
(d) The Trust reserves the right to reject any order for Shares,
but will not do so arbitrarily or without reasonable cause.
2.4 Confirmations. The Distributor shall at its own expense
forward to shareholders confirmation statements received from the Trust's
transfer agent upon the purchase and sale of Trust shares. Such confirmations
shall be sent to shareholders within three days of the purchase or sale of Trust
shares, or within five days of the purchase of Trust shares through reinvestment
of dividends, as the case may be, or within such other times as may be required
from time to time by the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Securities and Exchange Commission thereunder.
3. LIMITATIONS OF LIABILITY
The Distributor shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Trust or any Fund in connection
with the matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement.
4. INDEMNIFICATION
4.1 Trust Representations. The Trust represents and warrants to
the Distributor that the Registration Statement contains, and that the
Prospectuses at all times will contain, all statements required by the 1933 Act
and the Rules, will in all material respects conform to the applicable
requirements of the 1933 Act and the Rules 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 were made, not misleading, except that no
representation or warranty in this Section shall apply to statements or
omissions made in reliance upon and in conformity with written information
furnished to the Trust, or any of its officers, trustees or agents, by or on
behalf of and with respect to the Distributor expressly for use in the
Registration Statement or Prospectuses.
4.2 Distributor Representations. The Distributor represents and
warrants to the Trust that it is duly organized as a California corporation and
is and at all times will remain duly authorized and licensed to carry out its
services as contemplated herein.
-4-
4.3 Fund Indemnification. The Trust shall indemnify, defend and
hold harmless the Distributor and its officers, directors, employees and agents,
and any person who controls the Distributor 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 and warranties in section 4.1 hereof or 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
or on behalf of the Trust, or arise out of, or are based upon, information
furnished by or on behalf of the Trust filed in any state in order to qualify
the Shares under the securities or blue sky laws thereof ("Blue Sky
Applications), 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 shall reimburse the
Distributor, and its officers, directors, employees and agents, and any person
who controls the Distributor 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 any Registration Statement, Prospectus or Blue Sky Application
in reliance upon and in conformity with written information furnished to the
Trust by or on behalf of and with respect to the Distributor specifically for
inclusion therein.
(a) The Trust shall not indemnify any person pursuant to this
Section 4.3 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 wilful misfeasance, bad faith or gross negligence in the
performance of his duties, or his reckless disregard of obligation 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
-5-
"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.
(b) Each Fund 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 Section 4.3, 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 Fund shall be
insured against losses arising by reason of any lawful advances, or a majority
of a quorum of the disinterested, non-party trustees of the Trust (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.
4.4 Distributor Indemnification. The Distributor shall indemnify,
defend and hold harmless the Trust, each Fund, the Trust's several officers,
trustees and agents, and any person who controls the Trust or any Fund within
the meaning of Section 15 of the 1933 Act, from and against any losses, claims,
damages or liabilities, joint and 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 in
Sections 2.2(b) or 4.2 hereof, 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 or any Blue Sky Application, 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 or any of its officers, trustees
or agents by or on behalf of and with respect to the Distributor specifically
for inclusion therein, and will reimburse the Trust, each Fund, the Trust's
officers, trustees and agents, and any person who controls the Trust or any Fund
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.
-6-
4.5 General Indemnity Provisions. No indemnifying party shall be
liable under its indemnity agreement contained in Section 4.3 or 4.4 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 shall 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 no event shall
the indemnifying party be required to bear the expense of more than one counsel
with respect to any matter or series of related matters. 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.
5. DURATION AND TERMINATION
This Agreement shall become effective upon its execution by the
parties hereto and, unless sooner terminated as provided herein, shall continue
until June __, 2004. 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 (a) by a vote of a
majority of those members of the Board of Trustees of the Trust who are not
parties to this Agreement or "interested persons" of any such party, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by the Board of Trustees of the Trust or by vote of a "majority of the
outstanding voting securities" of each Fund; provided, however, that this
Agreement may be terminated by the Trust at any time with respect to any Fund,
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 such Fund on 60 days' written notice to the Distributor, or by
the Distributor at any time, without the
-7-
payment of any penalty, on 90 days' written notice to the Trust. This Agreement
shall automatically and immediately terminate in the event of its "assignment."
6. AMENDMENT OF AGREEMENT
No provision of this Agreement may be changed, waived, discharged
or terminated orally, but only by an instrument in writing signed by the party
against which an enforcement of the change, waiver, discharge or termination is
sought.
7. OBLIGATIONS OF THE TRUST
The Distributor acknowledges that the Trust Agreement is on file
with the Secretary of State of the State of Delaware, and that the obligations
of the Trust under this Agreement are not binding on any officers, trustees or
shareholders of the Trust individually but are binding only upon the assets and
properties of the various Funds.
8. NOTICES
Notices of any kind to be given to the Trust hereunder by the
Distributor shall be in writing and shall be duly given if mailed or delivered
to the Trust at 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx
00000, Attention: President, or at such other address or to such other
individual as shall be so specified by the Trust to the Distributor. Notices of
any kind to be given to the Distributor hereunder by the Trust shall be in
writing and shall be duly given if mailed or delivered to the Distributor at 000
Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention:
President, or at such other address or to such other individual as shall be so
specified by the Distributor to the Trust.
9. 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 of this
Agreement shall be held or made invalid by a court decision,
-8-
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. Subject to the provisions of Section 5 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 Massachusetts law (without
regard to principles of conflicts of law); provided, however, that nothing
herein shall be construed in a manner inconsistent with the 1940 Act or any rule
or regulation of the Commission thereunder. 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.
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.
The XXXXXXX/XXXXXX INVESTMENT GROUP
By
------------------------------------
Attest:
----------------------------
Secretary
XXXXXX & RYGEL DISTRIBUTORS, INC.
By
------------------------------------
Attest:
----------------------------
Secretary
-9-
