GENERAL DISTRIBUTOR'S AGREEMENT
BETWEEN
XXXXXXXXXXX SELECT MANAGERS
AND
XXXXXXXXXXX FUNDS DISTRIBUTOR, INC.
Date: January 1, 2001
XXXXXXXXXXX FUNDS DISTRIBUTOR, INC.
Xxx Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Dear Sirs:
XXXXXXXXXXX SELECT MANAGERS, a Massachusetts business trust (the "Trust"),
is registered as an investment company under the Investment Company Act of 1940
(the "1940 Act"), and an indefinite number of one or more classes of shares of
beneficial interest ("Shares") of the following funds: (1) Mercury Advisors S&P
500 Index Fund; (2) Mercury Advisors Focus Growth Fund; (3) Xxxxxxxx Growth
Fund; (4) QM Active Balanced Fund; (5) Salomon Brothers Capital Fund and (6)
Gartmore Millennium Growth Fund, each of which is a series of the Trust and each
of which is individually referred to herein as a "Fund", have been registered
under the Securities Act of 1933 (the "1933 Act") to be offered for sale to the
public in a continuous public offering in accordance with the terms and
conditions set forth in the Prospectus and Statement of Additional Information
("SAI") included in the Trust's Registration Statement as it may be amended from
time to time (the "current Prospectus and/or SAI").
In this connection, the Trust desires that your firm (the "General
Distributor") act in a principal capacity as General Distributor for the sale
and distribution of Shares which have been registered as described above and of
any additional Shares which may become registered during the term of this
Agreement. You have advised the Trust that you are willing to act as such
General Distributor, and it is accordingly agreed by and between us as follows:
7
1. Appointment of the Distributor. The Trust hereby appoints you as the
sole General Distributor, pursuant to the aforesaid continuous public offering
of its Shares, and the Trust further agrees from and after the date of this
Agreement, that it will not, without your consent, sell or agree to sell any
Shares otherwise than through you, except (a) the Trust may itself sell shares
without sales charge as an investment to the officers, trustees or directors and
bona fide present and former full-time employees of the Trust, the Trust's
Investment Adviser and affiliates thereof, and to other investors who are
identified in the current Prospectus and/or SAI as having the privilege to buy
Shares at net asset value; (b) the Trust may issue shares in connection with a
merger, consolidation or acquisition of assets on such basis as may be
authorized or permitted under the 1940 Act; (c) the Trust may issue shares for
the reinvestment of dividends and other distributions of the Trust or of any
other Trust if permitted by the current Prospectus and/or SAI; and (d) the Trust
may issue shares as underlying securities of a unit investment trust if such
unit investment trust has elected to use Shares as an underlying investment;
provided that in no event as to any of the foregoing exceptions shall Shares be
issued and sold at less than the then-existing net asset value.
2. Sale of Shares. You hereby accept such appointment and agree to use
your best efforts to sell Shares, provided, however, that when requested by the
Trust at any time because of market or other economic considerations or abnormal
circumstances of any kind, or when agreed to by mutual consent of the Trust and
the General Distributor, you will suspend such efforts. The Trust may also
withdraw the offering of Shares at any time when required by the provisions of
any statute, order, rule or regulation of any governmental body having
jurisdiction. It is understood that you do not undertake to sell all or any
specific number of Shares.
3. Sales Charge. Shares shall be sold by you at net asset value plus a
front-end sales charge not in excess of 8.5% of the offering price, but which
front-end sales charge shall be proportionately reduced or eliminated for larger
sales and under other circumstances, in each case on the basis set forth in the
Trust's current Prospectus and/or SAI. The redemption proceeds of shares offered
and sold at net asset value with or without a front-end sales charge may be
subject to a contingent deferred sales charge ("CDSC") under the circumstances
described in the current Prospectus and/or SAI. You may reallow such portion of
the front-end sales charge to dealers or cause payment (which may exceed the
front-end sales charge, if any) of commissions to brokers through which sales
are made, as you may determine, and you may pay such amounts to dealers and
brokers on sales of shares from your own resources (such dealers and brokers
shall collectively include all domestic or foreign institutions eligible to
offer and sell the Shares), and in the event the Fund has more than one class of
Shares outstanding, then you may impose a front-end sales charge and/or a CDSC
on Shares of one class that is different from the charges imposed on Shares of
the Fund's other class(es), in each case as set forth in the current Prospectus
and/or SAI, provided the front-end sales charge and CDSC to the ultimate
purchaser do not exceed the respective levels set forth for such category of
purchaser in the Trust's current Prospectus and/or SAI.
4. Purchase of Shares.
(a) As General Distributor, you shall have the right to accept or
reject orders for the purchase of Shares at your discretion. Any
consideration which you may receive in connection with a
rejected purchase order will be returned promptly.
(b) You agree promptly to issue or to cause the duly appointed
transfer or shareholder servicing agent of the Trust to issue
as your agent confirmations of all accepted purchase orders
and to transmit a copy of such confirmations to the Trust.
The net asset value of all Shares which are the subject of
such confirmations, computed in accordance with the applicable
rules under the 1940 Act, shall be a liability of the General
Distributor to the Trust to be paid promptly after receipt of
payment from the originating dealer or broker (or investor, in
the case of direct purchases) and not later than eleven
business days after such confirmation even if you have not
actually received payment from the originating dealer or
broker or investor. In no event shall the General Distributor
make payment to the Trust later than permitted by applicable
rules of the National Association of Securities Dealers, Inc.
(c) If the originating dealer or broker shall fail to make timely
settlement of its purchase order in accordance with applicable
rules of the National Association of Securities Dealers, Inc.,
or if a direct purchaser shall fail to make good payment for
shares in a timely manner, you shall have the right to cancel
such purchase order and, at your account and risk, to hold
responsible the originating dealer or broker, or investor.
You agree promptly to reimburse the Fund for losses suffered
by it that are attributable to any such cancellation, or to
errors on your part in relation to the effective date of
accepted purchase orders, limited to the amount that such
losses exceed contemporaneous gains realized by the Fund for
either of such reasons with respect to other purchase orders.
(d) In the case of a canceled purchase for the account of a
directly purchasing shareholder, the Trust agrees that if such
investor fails to make you whole for any loss you pay to the
Fund on such canceled purchase order, the Fund will reimburse
you for such loss to the extent of the aggregate redemption
proceeds of any other shares of the Fund owned by such
investor, on your demand that the Fund exercise its right to
claim such redemption proceeds. The Trust shall register or
cause to be registered all Shares sold to you pursuant to the
provisions hereof in such names and amounts as you may request
from time to time and the Trust shall issue or cause to be
issued certificates evidencing such Shares for delivery to you
or pursuant to your direction if and to the extent that the
shareholder account in question contemplates the issuance of
such certificates. All Shares when so issued and paid for,
shall be fully paid and non-assessable by the Trust (which
shall not prevent the imposition of any CDSC that may apply)
to the extent set forth in the current Prospectus and/or SAI.
5. Repurchase of Shares.
(a) In connection with the repurchase of Shares, you are appointed
and shall act as Agent of the Trust. You are authorized, for
so long as you act as General Distributor of the Trust, to
repurchase, from authorized dealers, certificated or
uncertificated shares of the Fund ("Shares") on the basis of
orders received from each dealer ("authorized dealer") with
which you have a dealer agreement for the sale of Shares and
permitting resales of Shares to you, provided that such
authorized dealer, at the time of placing such resale order,
shall represent (i) if such Shares are represented by
certificate(s), that certificate(s) for the Shares to be
repurchased have been delivered to it by the registered owner
with a request for the redemption of such Shares executed in
the manner and with the signature guarantee required by the
then-currently effective prospectus of the Fund, or (ii) if
such Shares are uncertificated, that the registered owner(s)
has delivered to the dealer a request for the redemption of
such Shares executed in the manner and with the signature
guarantee required by the then-currently effective prospectus
of the Fund.
(b) You shall (a) have the right in your discretion to accept or
reject orders for the repurchase of Shares; (b) promptly
transmit confirmations of all accepted repurchase orders; and
(c) transmit a copy of such confirmation to the Trust, or, if
so directed, to any duly appointed transfer or shareholder
servicing agent of the Trust. In your discretion, you may
accept repurchase requests made by a financially responsible
dealer which provides you with indemnification in form
satisfactory to you in consideration of your acceptance of
such dealer's request in lieu of the written redemption
request of the owner of the account; you agree that the Trust
shall be a third party beneficiary of such indemnification.
(c) Upon receipt by the Trust or its duly appointed transfer or
shareholder servicing agent of any certificate(s) (if any has
been issued) for repurchased Shares and a written redemption
request of the registered owner(s) of such Shares executed in
the manner and bearing the signature guarantee required by the
then-currently effective Prospectus or SAI of the Fund, the
Fund will pay or cause its duly appointed transfer or
shareholder servicing agent promptly to pay to the originating
authorized dealer the redemption price of the repurchased
Shares (other than repurchased Shares subject to the
provisions of part (d) of Section 5 of this Agreement) next
determined after your receipt of the dealer's repurchase order.
(d) Notwithstanding the provisions of part (c) of Section 5 of
this Agreement, repurchase orders received from an authorized
dealer after the determination of the Fund's redemption price
on a regular business day will receive that day's redemption
price if the request to the dealer by its customer to arrange
such repurchase prior to the determination of the Fund's
redemption price that day complies with the requirements
governing such requests as stated in the current Prospectus
and/or SAI.
(e) You will make every reasonable effort and take all reasonably
available measures to assure the accurate performance of all
services to be performed by you hereunder within the
requirements of any statute, rule or regulation pertaining to
the redemption of shares of a regulated investment company and
any requirements set forth in the then-current Prospectus
and/or SAI of the Fund. You shall correct any error or
omission made by you in the performance of your duties
hereunder of which you shall have received notice in writing
and any necessary substantiating data; and you shall hold the
Fund harmless from the effect of any errors or omissions which
might cause an over- or under-redemption of the Fund's Shares
and/or an excess or non-payment of dividends, capital gains
distributions, or other distributions.
(f) In the event an authorized dealer initiating a repurchase
order shall fail to make delivery or otherwise settle such
order in accordance with the rules of the National Association
of Securities Dealers, Inc., you shall have the right to
cancel such repurchase order and, at your account and risk, to
hold responsible the originating dealer. In the event that
any cancellation of a Share repurchase order or any error in
the timing of the acceptance of a Share repurchase order shall
result in a gain or loss to the Fund, you agree promptly to
reimburse the Fund for any amount by which any loss shall
exceed then-existing gains so arising.
6. 1933 Act Registration. The Trust has delivered to you a copy of its
current Prospectus and SAI. The Trust agrees that it will use its best efforts
to continue the effectiveness of the Registration Statement under the 1933 Act.
The Trust further agrees to prepare and file any amendments to its Registration
Statement as may be necessary and any supplemental data in order to comply with
the 1933 Act. The Trust will furnish you at your expense with a reasonable
number of copies of the Prospectus and SAI and any amendments thereto for use in
connection with the sale of Shares.
7. 1940 Act Registration. The Trust has already registered under the 1940
Act as an investment company, and it will use its best efforts to maintain such
registration and to comply with the requirements of the 1940 Act.
8. State Blue Sky Qualification. At your request, the Trust will take such
steps as may be necessary and feasible to qualify Shares for sale in states,
territories or dependencies of the United States, the District of Columbia, the
Commonwealth of Puerto Rico and in foreign countries, in accordance with the
laws thereof, and to renew or extend any such qualification; provided, however,
that the Trust shall not be required to qualify shares or to maintain the
qualification of shares in any jurisdiction where it shall deem such
qualification disadvantageous to the Trust.
9. Duties of Distributor. You agree that:
(a) Neither you nor any of your officers will take any long or short
position in the Shares, but this provision shall not prevent you
or your officers from acquiring Shares for investment purposes
only; and
(b) You shall furnish to the Trust any pertinent information
required to be inserted with respect to you as General
Distributor within the purview of the Securities Act of 1933 in
any reports or registration required to be filed with any
governmental authority; and
(c) You will not make any representations inconsistent with the
information contained in the current Prospectus and/or SAI; and
(d) You shall maintain such records as may be reasonably required
for the Trust or its transfer or shareholder servicing agent to
respond to shareholder requests or complaints, and to permit the
Trust to maintain proper accounting records, and you shall make
such records available to the Trust and its transfer agent or
shareholder servicing agent upon request; and
(e) In performing under this Agreement, you shall comply with all
requirements of the Fund's current Prospectus and/or SAI and all
applicable laws, rules and regulations with respect to the
purchase, sale and distribution of Shares.
10. Duties of the Trust. The Trust agrees that:
(a) It shall promptly furnish to you, at least ten (10) days prior to
use, any description of you or the services you perform hereunder
which the Trust intends to use in the Prospectus, SAI, in sales
literature, reports or otherwise. Such description may not be
utilized if you object thereto in writing;
(b) It shall promptly furnish to you for your approval and filing with
the National Association of Securities Dealers, Inc. any proposed
sales literature relating to, or referring to the Trust or the
shares;
(c) It shall promptly advise you of any information concerning the
Trust or the Shares, which may affect your ability to properly
discharge your obligations hereunder; and
(d) It shall not use the word "Xxxxxxxxxxx" other than merely
identifying the General Distributor as such unless such use is
specifically approved by you.
11. Allocation of Costs. The Trust shall pay the cost of composition and
printing of sufficient copies of its Prospectus and SAI as shall be required for
periodic distribution to its shareholders and the expense of registering Shares
for sale under federal securities laws. You shall pay the expenses normally
attributable to the sale of Shares, other than as paid under the Fund's
Distribution Plan under Rule 12b-1 of the 1940 Act, including the cost of
printing and mailing of the Prospectus (other than those furnished to existing
shareholders) and any sales literature used by you in the public sale of the
Shares and for registering such shares under state blue sky laws pursuant to
paragraph 8.
12. Duration. This Agreement shall take effect on the date first written
above, and shall supersede any and all prior General Distributor's Agreements by
and among the Trust and you. Unless earlier terminated pursuant to paragraph 12
hereof, this Agreement shall remain in effect until December 31, 2002. This
Agreement shall continue in effect from year to year thereafter, provided that
such continuance shall be specifically approved at least annually: (a) by the
Trust's Board of Trustees or by vote of a majority of the voting securities of
the Trust; and (b) by the vote of a majority of the Trustees, who are not
parties to this Agreement or "interested persons" (as defined the 0000 Xxx) of
any such person, cast in person at a meeting called for the purpose of voting on
such approval.
13. Termination. This Agreement may be terminated (a) by the General
Distributor at any time without penalty by giving sixty days' written notice
(which notice may be waived by the Trust); (b) by the Trust at any time without
penalty upon sixty days' written notice to the General Distributor (which notice
may be waived by the General Distributor); or (c) by mutual consent of the Trust
and the General Distributor, provided that such termination by the Trust shall
be directed or approved by the Board of Trustees of the Trust or by the vote of
the holders of a "majority" of the outstanding voting securities of the Trust.
In the event this Agreement is terminated by the Trust, the General Distributor
shall be entitled to be paid the CDSC under paragraph 3 hereof on the redemption
proceeds of Shares sold prior to the effective date of such termination.
14. Assignment. This Agreement may not be amended or changed except in
writing and shall be binding upon and shall enure to the benefit of the parties
hereto and their respective successors; however, this Agreement shall not be
assigned by either party and shall automatically terminate upon assignment.
15. Disclaimer of Shareholder Liability. The General Distributor
understands and agrees that the obligations of the Trust under this Agreement
are not binding upon any Trustee or shareholder of the Trust personally, but
bind only the Trust and the Trust's property; the General Distributor represents
that it has notice of the provisions of the Declaration of Trust of the Trust
disclaiming Trustee and shareholder liability for acts or obligations of the
Trust.
16. Section Headings. The heading of each section is for descriptive
purposes only, and such headings are not to be construed or interpreted as part
of this Agreement.
If the foregoing is in accordance with your understanding, so indicate by
signing in the space provided below.
XXXXXXXXXXX SELECT MANAGERS
By: ________________________________
Xxxxxx X. Xxxxxxx
Secretary
Accepted:
XXXXXXXXXXX FUNDS DISTRIBUTOR, INC.
By: ________________________________
Xxxxxxxxx X. Xxxx
Vice President & Secretary
Select.Managers.Gen.Dist.Agmt.Jan.2001
