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EXHIBIT 99.B6(a)
UNDERWRITING AND DISTRIBUTION SERVICES AGREEMENT
AGREEMENT made this 4th day of January, 1996, between XXXXXX
SMALL CAPITALIZATION EQUITY FUND, a Massachusetts business trust
(the "Fund"), and XXXXXX DISTRIBUTORS, INC., a Delaware
corporation ("KDI").
In consideration of the mutual covenants hereinafter
contained, it is hereby agreed by and between the parties hereto
as follows:
1. The Fund hereby appoints KDI to act as agent for the
distribution of shares of beneficial interest (hereinafter called
"shares") of the Fund in jurisdictions wherein shares of the Fund
may legally be offered for sale; provided, however, that the Fund
in its absolute discretion may (a) issue or sell shares directly
to holders of shares of the Fund upon such terms and conditions
and for such consideration, if any, as it may determine, whether
in connection with the distribution of subscription or purchase
rights, the payment or reinvestment of dividends or
distributions, or otherwise; or (b) issue or sell shares at net
asset value to the shareholders of any other investment company,
for which KDI shall act as exclusive distributor, who wish to
exchange all or a portion of their investment in shares of such
other investment company for shares of the Fund. KDI shall
appoint various financial service firms ("Firms") to provide
distribution services to investors. The Firms shall provide such
office space and equipment, telephone facilities, personnel,
literature distribution, advertising and promotion as is
necessary or beneficial for providing information and
distribution services to existing and potential clients of the
Firms. KDI may also provide some of the above services for the
Fund.
KDI accepts such appointment as distributor and principal
underwriter and agrees to render such services and to assume the
obligations herein set forth for the compensation herein
provided. KDI shall for all purposes herein provided be deemed
to be an independent contractor and, unless expressly provided
herein or otherwise authorized, shall have no authority to act
for or represent the Fund in any way. KDI, by separate agreement
with the Fund, may also serve the Fund in other capacities. The
services of KDI to the Fund under this Agreement are not to be
deemed exclusive, and KDI shall be free to render similar
services or other services to others so long as its services
hereunder are not impaired thereby.
In carrying out its duties and responsibilities hereunder,
KDI will, pursuant to separate written contracts, appoint various
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Firms to provide advertising, promotion and other distribution
services contemplated hereunder directly to or for the benefit of
existing and potential shareholders who may be clients of such
Firms. Such Firms shall at all times be deemed to be independent
contractors retained by KDI and not the Fund.
KDI shall use its best efforts with reasonable promptness to
sell such part of the authorized shares of the Fund remaining
unissued as from time to time shall be effectively registered
under the Securities Act of 1933 ("Securities Act"), at prices
determined as hereinafter provided and on terms hereinafter set
forth, all subject to applicable federal and state laws and
regulations and to the Agreement and Declaration of Trust of the
Fund.
2. KDI shall sell shares of the Fund to or through qualified
Firms in such manner, not inconsistent with the provisions hereof
and the then effective registration statement (and related
prospectus) of the Fund under the Securities Act, as KDI may
determine from time to time, provided that no Firm or other
person shall be appointed or authorized to act as agent of the
Fund without the prior consent of the Fund. In addition to sales
made by it as agent of the Fund, KDI may, in its discretion, also
sell shares of the Fund as principal to persons with whom it does
not have selling group agreements.
Shares of any class of any series of the Fund offered for
sale or sold by KDI shall be so offered or sold at a price per
share determined in accordance with the then current prospectus.
The price the Fund shall receive for all shares purchased from it
shall be the net asset value used in determining the public
offering price applicable to the sale of such shares. Any excess
of the sales price over the net asset value of the shares of the
Fund sold by KDI as agent shall be retained by KDI as a
commission for its services hereunder. KDI may compensate Firms
for sales of shares at the commission levels provided in the
Fund's prospectus from time to time. KDI may pay other
commissions, fees or concessions to Firms, and may pay them to
others in its discretion, in such amounts as KDI shall determine
from time to time. KDI shall be entitled to receive and retain
any applicable contingent deferred sales charge as described in
the Fund's prospectus. KDI shall also receive any distribution
services fee payable by the Fund as provided in Section 8 hereof.
KDI will require each Firm to conform to the provisions
hereof and the Registration Statement (and related prospectus) at
the time in effect under the Securities Act with respect to the
public offering price or net asset value, as applicable, of the
Fund's shares, and neither KDI nor any such Firms shall withhold
the placing of purchase orders so as to make a profit thereby.
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3. The Fund will use its best efforts to keep effectively
registered under the Securities Act for sale as herein
contemplated such shares as KDI shall reasonably request and as
the Securities and Exchange Commission shall permit to be so
registered. Notwithstanding any other provision hereof, the Fund
may terminate, suspend or withdraw the offering of shares
whenever, in its sole discretion, it deems such action to be
desirable.
4. The Fund will execute any and all documents and furnish
any and all information that may be reasonably necessary in
connection with the qualification of its shares for sale
(including the qualification of the Fund as a dealer where
necessary or advisable) in such states as KDI may reasonably
request (it being understood that the Fund shall not be required
without its consent to comply with any requirement which in its
opinion is unduly burdensome). The Fund will furnish to KDI from
time to time such information with respect to the Fund and its
shares as KDI may reasonably request for use in connection with
the sale of shares of the Fund.
5. KDI shall issue and deliver or shall arrange for various
Firms to issue and deliver on behalf of the Fund such
confirmations of sales made by it pursuant to this agreement as
may be required. At or prior to the time of issuance of shares,
KDI will pay or cause to be paid to the Fund the amount due the
Fund for the sale of such shares. Certificates shall be issued
or shares registered on the transfer books of the Fund in such
names and denominations as KDI may specify.
6. KDI shall order shares of the Fund from the Fund only to
the extent that it shall have received purchase orders therefor.
KDI will not make, or authorize Firms or others to make (a) any
short sales of shares of the Fund; or (b) any sales of such
shares to any trustee or officer of the Fund or to any officer or
director of KDI or of any corporation or association furnishing
investment advisory, managerial or supervisory services to the
Fund, or to any corporation or association, unless such sales are
made in accordance with the then current prospectus relating to
the sale of such shares. KDI, as agent of and for the account of
the Fund, may repurchase the shares of the Fund at such prices
and upon such terms and conditions as shall be specified in the
current prospectus of the Fund. In selling or reacquiring shares
of the Fund for the account of the Fund, KDI will in all respects
conform to the requirements of all state and federal laws and the
Rules of Fair Practice of the National Association of Securities
Dealers, Inc., relating to such sale or reacquisition, as the
case may be, and will indemnify and save harmless the Fund from
any damage or expense on account of any wrongful act by KDI or
any employee, representative or agent of KDI. KDI will observe
and be bound by all the provisions of the Agreement and
Declaration of Trust of the Fund (and of any fundamental policies
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adopted by the Fund pursuant to the Investment Company Act of
1940, notice of which shall have been given to KDI) which at the
time in any way require, limit, restrict, prohibit or otherwise
regulate any action of the part of KDI hereunder.
7. The Fund shall assume and pay all charges and expenses of
its operations not specifically assumed or otherwise to be
provided by KDI under this Agreement. The Fund will pay or cause
to be paid expenses (including the fees and disbursements of its
own counsel) of any registration of the Fund and its shares under
the United States securities laws and expenses incident to the
issuance of shares of beneficial interest, such as the cost of
share certificates, issue taxes, and fees of the transfer agent.
KDI will pay all expenses (other than expenses which one or more
Firms may bear pursuant to any agreement with KDI) incident to
the sale and distribution of the shares issued or sold hereunder,
including, without limiting the generality of the foregoing, all
(a) expenses of printing and distributing any prospectus and of
preparing, printing and distributing or disseminating any other
literature, advertising and selling aids in connection with the
offering of the shares for sale (except that such expenses need
not include expenses incurred by the Fund in connection with the
preparation, typesetting, printing and distribution of any
registration statement or prospectus, report or other
communication to shareholders in their capacity as such), (b)
expenses of advertising in connection with such offering and (c)
expenses (other than the Fund's auditing expenses) of qualifying
or continuing the qualification of the shares for sale and, in
connection therewith, of qualifying or continuing the
qualification of the Fund as a dealer or broker under the laws of
such states as may be designated by KDI under the conditions
herein specified. No transfer taxes, if any, which may be
payable in connection with the issue or delivery of shares sold
as herein contemplated or of the certificates for such shares
shall be borne by the Fund, and KDI will indemnify and hold
harmless the Fund against liability for all such transfer taxes.
8. For the services and facilities described herein in
connection with Class B shares and Class C shares of each series
of the Fund, the Fund will pay to KDI at the end of each calendar
month a distribution services fee computed at the annual rate of
.75% of average daily net assets attributable to the Class B
shares and Class C shares of each such series. For the month and
year in which this Agreement becomes effective or terminates,
there shall be an appropriate proration on the basis of the
number of days that the Agreement is in effect during the month
and year, respectively. The foregoing fee shall be in addition
to and shall not be reduced or offset by the amount of any
contingent deferred sales charge received by KDI under Section 2
hereof.
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The net asset value shall be calculated in accordance with
the provisions of the Fund's current prospectus. On each day
when net asset value is not calculated, the net asset value of a
share of any class of any series of the Fund shall be deemed to
be the net asset value of such a share as of the close of
business on the last previous day on which such calculation was
made. The distribution services fee for any class of a series of
the Fund shall be based upon average daily net assets of the
series attributable to the class and such fee shall be charged
only to such class.
9. KDI shall prepare reports for the Board of Trustees of
the Fund on a quarterly basis in connection with the Fund's
distribution plan for Class B shares and Class C shares showing
amounts paid to the various Firms and such other information as
from time to time shall be reasonably requested by the Board of
Trustees.
10. To the extent applicable, this Agreement constitutes the
plan for the Class B shares and Class C shares of each series of
the Fund pursuant to Rule 12b-1 under the Investment Company Act
of 1940; and this Agreement and plan shall be approved and
renewed in accordance with Rule 12b-1 for such Class B shares and
Class C shares separately.
This Agreement shall become effective on the date hereof and
shall continue until March 1, 1996; and shall continue from year
to year thereafter only so long as such continuance is approved
in the manner required by the Investment Company Act of 1940.
This Agreement shall automatically terminate in the event of
its assignment and may be terminated at any time without the
payment of any penalty by the Fund or by KDI on sixty (60) days
written notice to the other party. The Fund may effect
termination with respect to any class of any series of the Fund
by a vote of (i) a majority of the Board of Trustees, (ii) a
majority of the trustees who are not interested persons of the
Fund and who have no direct or indirect financial interest in
this Agreement or in any agreement related to this Agreement, or
(iii) a majority of the outstanding voting securities of the
class. Without prejudice to any other remedies of the Fund, the
Fund may terminate this Agreement at any time immediately upon
KDI's failure to fulfill any of its obligations hereunder.
This Agreement may not be amended to increase the amount to
be paid to KDI by the Fund for services hereunder with respect to
a class of any series of the Fund without the vote of a majority
of the outstanding voting securities of such class. All material
amendments to this Agreement must in any event be approved by a
vote of the Board of Trustees of the Fund including the trustees
who are not interested persons of the Fund and who have no direct
or indirect financial interest in this Agreement or in any
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agreement related to this Agreement, cast in person at a meeting
called for such purpose.
The terms "assignment", "interested" and "vote of a majority
of the outstanding voting securities" shall have the meanings set
forth in the Investment Company Act of 1940 and the rules and
regulations thereunder.
Termination of this Agreement shall not affect the right of
KDI to receive payments on any unpaid balance of the compensation
described in Section 8 earned prior to such termination.
11. KDI will not use or distribute, or authorize the use,
distribution or dissemination by Firms or others in connection
with the sale of Fund shares any statements other than those
contained in the Fund's current prospectus, except such
supplemental literature or advertising as shall be lawful under
federal and state securities laws and regulations. KDI will
furnish the Fund with copies of all such material.
12. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the
remainder shall not be thereby affected.
13. Any notice under this Agreement shall be in writing,
addressed and delivered or mailed, postage prepaid, to the other
party at such address as such other party may designate for the
receipt of such notice.
14. All parties hereto are expressly put on notice of the
Fund's Agreement and Declaration of Trust, and all amendments
thereto, all of which are on file with the Secretary of The
Commonwealth of Massachusetts, and the limitation of shareholder
and trustee liability contained therein. This Agreement has been
executed by and on behalf of the Fund by its representatives as
such representatives and not individually, and the obligations of
the Fund hereunder are not binding upon any of the Trustees,
officers or shareholders of the Fund individually but are binding
upon only the assets and property of the Fund. With respect to
any claim by KDI for recovery of any liability of the Fund
arising hereunder allocated to a particular series or class,
whether in accordance with the express terms hereof or otherwise,
KDI shall have recourse solely against the assets of that series
or class to satisfy such claim and shall have no recourse against
the assets of any other series or class for such purpose.
15. This Agreement shall be construed in accordance with
applicable federal law and (except as to Section 14 hereof which
shall be construed in accordance with the laws of The
Commonwealth of Massachusetts) the laws of the State of Illinois.
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16. This Agreement is the entire contract between the parties
relating to the subject matter hereof and supersedes all prior
agreements between the parties relating to the subject matter
hereof.
IN WITNESS WHEREOF, the Fund and KDI have caused this
Agreement to be executed as of the day and year first above
written.
XXXXXX SMALL CAPITALIZATION EQUITY FUND
By: /s/ Xxxx X. Xxxxxx
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Title: Vice President
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ATTEST:
/s/ Xxxxxx X. Xxxxxxx
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Title: Secretary
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XXXXXX DISTRIBUTORS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Title: Chief Financial Officer
and Treasurer
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ATTEST:
/s/ Xxxxx X. Xxxxxxxxxxx
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Title: Secretary
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