XXXXXX XXXXXXX XXXX XXXXXX VARIABLE INVESTMENT SERIES
DISTRIBUTION AGREEMENT
AGREEMENT made as of the 31st day of May, 1997, and amended as of February
24, 2000, between Xxxxxx Xxxxxxx Xxxx Xxxxxx Variable Investment Series, an
unincorporated business trust organized under the laws of the Commonwealth of
Massachusetts (the "Trust"), and Xxxxxx Xxxxxxx Xxxx Xxxxxx Distributors Inc.,
a Delaware corporation (the "Distributor"):
W I T N E S S E T H:
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as a diversified open-end investment company and
it is in the interest of the Trust to offer its shares for sale continuously,
and
WHEREAS, the Trust and the Distributor wish to enter into an agreement
with each other with respect to the continuous offering of each Portfolio of
the Trust's transferable shares of beneficial interest, of $.01 par value (the
"Shares"), in order to promote the growth of the Trust and facilitate the
distribution of its shares.
NOW, THEREFORE, the parties agree as follows:
SECTION 1. (a) APPOINTMENT OF THE DISTRIBUTOR. The Trust hereby appoints
the Distributor as the principal underwriter of the Trust to sell Shares to
Northbrook Life Insurance Company ("Northbrook") for allocation to Northbrook
Variable Annuity Account and Northbrook Variable Annuity Account II, to
Allstate Life Insurance Company of New York ("Allstate New York") for
allocation to Allstate Life Insurance Company of New York Variable Annuity
Separate Account and Allstate Life Insurance Company of New York Variable
Annuity Separate Account II, and such other separate accounts and affiliated
entities of Northbrook or Allstate New York as may be determined, in accordance
with the Trust's Prospectus (defined below), and to Paragon Life Insurance
Company ("Paragon") for allocation to Separate Account B of Paragon Life
Insurance Company, on the terms set forth in this Agreement and the Trust's
Prospectus, and the Distributor hereby accepts such appointment and agrees to
act hereunder. The Trust, during the term of this Agreement, shall sell Shares
to the Distributor upon the terms and conditions set forth herein.
(b) The Distributor agrees to purchase Shares, as principal for its own
account, from the Trust and to sell Shares as principal to Northbrook, Allstate
New York and Paragon, upon the terms described herein and in the Trust's
prospectus (the "Prospectus") included in the Trust's registration statement
(the "Registration Statement") most recently filed from time to time with the
Securities and Exchange Commission (the "SEC") and effective under the
Securities Act of 1933, as amended (the "1933 Act"), and 1940 Act or as said
Prospectus may be otherwise amended or supplemented and filed with the SEC
pursuant to Rule 424 under the 1933 Act.
SECTION 2. EXCLUSIVE NATURE OF DUTIES. The Distributor shall be the
exclusive principal underwriter and distributor of the Trust, except that the
exclusive rights granted to the Distributor to sell the Shares shall not apply
to Shares issued by the Trust: (i) in connection with the merger or
consolidation of any other investment company or personal holding company with
the Trust or the acquisition by purchase or otherwise of all (or substantially
all) the assets or the outstanding shares of any such company by the Trust; or
(ii) pursuant to reinvestment of dividends or capital gains distributions; or
(iii) pursuant to the reinstatement privilege afforded redeeming shareholders.
SECTION 3. PURCHASE OF SHARES FROM THE TRUST. (a) The Distributor shall
have the right to buy from the Trust the Shares needed, but not more than the
Shares needed (except for clerical errors in transmission), to fill
unconditional orders for Shares placed with the Distributor by Northbrook,
Allstate New York and Paragon. The price which the Distributor shall pay for
the Shares so purchased from the Trust shall be the net asset value, determined
as set forth in the Prospectus.
(b) The Shares are to be resold by the Distributor at the same net asset
value to Northbrook, Allstate New York and Paragon for which the Distributor
paid to the Trust for such Shares and at cost, as set forth in the Prospectus.
(c) The Trust shall have the right to suspend the sale of the Shares at
times when redemption is suspended pursuant to the conditions set forth in
Section 4(b) hereof. The Trust shall also have the right to suspend the sale of
the Shares if trading on the New York Stock Exchange shall have been suspended,
if a banking moratorium shall have been declared by federal or New York
authorities, or if there shall have been some other extraordinary event which,
in the judgment of the Trust, makes it impracticable to sell the Shares.
(d) The Trust, or any agent of the Trust designated in writing by the
Trust, shall be promptly advised of all purchase orders for Shares received by
the Distributor. The Distributor will confirm orders upon their receipt, and
the Trust (or its agent) upon receipt of payment therefor and instructions will
deliver such Shares or a statement confirming the issuance of Shares. Payment
shall be made to the Trust in New York Clearing House funds. The Distributor
agrees to cause such payment and such instructions to be delivered promptly to
the Trust (or its agent).
SECTION 4. REPURCHASE OR REDEMPTION OF SHARES. (a) Any of the outstanding
Shares may be tendered for redemption at any time, and the Trust agrees to
redeem the Shares so tendered in accordance with the applicable provisions set
forth in the Prospectus. The price to be paid to redeem the Shares shall be
equal to the net asset value determined as set forth in the Prospectus. All
payments by the Trust hereunder shall be made in the manner set forth below.
The proceeds of any redemption of Shares shall be paid to Northbrook,
Allstate New York or Paragon in accordance with applicable provisions of the
Prospectus in New York Clearing House funds.
(b) Redemption of Shares or payment by the Trust may be suspended at times
when the New York Stock Exchange is closed, when trading on said Exchange is
restricted, when an emergency exists as a result of which disposal by the Trust
of securities owned by it is not reasonably practicable or it is not reasonably
practicable for the Trust fairly to determine the value of its net assets, or
during any other period when the Securities and Exchange Commission, by order,
so permits.
SECTION 5. DUTIES OF THE TRUST. (a) The Trust shall furnish to the
Distributor copies of all information, financial statements and other papers
which the Distributor may reasonably request for use in connection with the
distribution of the Shares, including one certified copy, upon request by the
Distributor, of all financial statements prepared by the Trust and examined by
independent accountants. The Trust shall, at the expense of the Distributor,
make available to the Distributor such number of copies of the Prospectus as
the Distributor shall reasonably request.
(b) The Trust shall take, from time to time, but subject to the necessary
approval of its shareholders, all necessary action to fix the number of its
authorized Shares and to register Shares under the 1933 Act, to the end that
there will be available for sale such number of shares as investors may
reasonably be expected to purchase.
(c) The Trust shall, at the expense of the Distributor, furnish, in
reasonable quantities upon request by the Distributor, copies of annual and
interim reports of the Trust.
SECTION 6. DUTIES OF THE DISTRIBUTOR. (a) The Distributor shall sell
shares of the Trust to Northbrook, Allstate New York and Paragon as orders from
Northbrook, Allstate New York and Paragon are received, but shall not be
obligated to sell any specific number of Shares. The services of the
Distributor hereunder are not exclusive and it is understood that the
Distributor acts as principal underwriter for other registered investment
companies and intends to do so in the future.
(b) The Distributor shall not give any information or make any
representations, other than those contained in the Registration Statement or
related Prospectus and any sales literature specifically approved by the Trust.
(c) The Distributor agrees that it will comply with the terms and
limitations of the Rules of Fair Practice of the National Association of
Securities Dealers, Inc.
SECTION 7. PAYMENT OF EXPENSES. (a) The Distributor shall bear all
expenses incurred by it in connection with its duties and activities under this
Agreement (except such expenses as are specifically
2
undertaken herein by the Trust). It is understood and agreed that, so long as
the Trust's Plan of Distribution pursuant to Rule 12b-1 under the 1940 Act
("Rule 12b-1 Plan") continues in effect, any expenses incurred by the
Distributor hereunder may be paid in accordance with the terms of such Rule
12b-1 Plan.
(b) The Trust shall bear all costs and expenses of the Trust, including
fees and disbursements of its counsel and independent accountants, in
connection with the preparation and filing of any required Registration
Statements and Prospectuses and all amendments and supplements thereto, and the
expense of preparing, printing, mailing and otherwise distributing
prospectuses, annual or interim reports or proxy materials to contract owners
of the variable annuity contracts issued by Northbrook and Allstate New York
and contract owners of the flexible premium variable life insurance contracts
issued by Paragon.
(c) If deemed necessary or advisable to qualify the Shares for sale under
state securities laws, the Trust shall bear the cost and expenses of
qualification and, if necessary or advisable in connection therewith, of
qualifying the Trust as a broker or dealer, in such states of the United States
or other jurisdictions as shall be selected by the Trust and the Distributor
pursuant to Section 5(c) hereof and the cost and expenses payable to each such
state for continuing qualification therein until the Trust decides to
discontinue such qualification pursuant to Section 5(c) hereof.
SECTION 8. INDEMNIFICATION. (a) The Trust shall indemnify and hold
harmless the Distributor and each person, if any, who controls the Distributor
against any loss, liability, claim, damage or expense (including the reasonable
cost of investigating or defending any alleged loss, liability, claim, damage
or expense and reasonable counsel fees incurred in connection therewith)
arising by reason of any person acquiring any Shares, which may be based upon
the 1933 Act, or on any other statute or at common law, on the ground that the
Registration Statement or related Prospectus, as from time to time amended and
supplemented, or the annual or interim reports to shareholders of the Trust,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading, unless such statement or omission was made in reliance
upon, and in conformity with, information furnished to the Trust in connection
therewith by or on behalf of the Distributor; provided, however, that in no
case (i) is the indemnity of the Trust in favor of the Distributor and any such
controlling persons to be deemed to protect such Distributor or any such
controlling persons thereof against any liability to the Trust or its security
holders to which the Distributor or any such controlling persons would
otherwise be subject by reason of willful misfeasance, bad faith or negligence
in the performance of its duties or by reason of reckless disregard of its
obligations and duties under this Agreement; or (ii) is the Trust to be liable
under its indemnity agreement contained in this paragraph with respect to any
claim made against the Distributor or any such controlling persons, unless the
Distributor or such controlling persons, as the case may be, shall have
notified the Trust 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 Distributor or such controlling persons (or after the
Distributor or such controlling persons shall have received notice of such
service on any designated agent), but failure to notify the Trust of any such
claim shall not relieve it from any liability which it may have to the person
against whom such action is brought otherwise than on account of its indemnity
agreement contained in this paragraph. The Trust 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, but if the
Trust elects to assume the defense, such defense shall be conducted by counsel
chosen by it and satisfactory to the Distributor or such controlling person or
persons, defendant or defendants in the suit. In the event the Trust elects to
assume the defense of any such suit and retain such counsel, the Distributor or
such controlling person or persons, defendant or defendants in the suit, shall
bear the fees and expenses of any additional counsel retained by them, but, in
case the Trust does not elect to assume the defense of any such suit, it will
reimburse the Distributor or such controlling person or persons, defendant or
defendants in the suit, for the reasonable fees and expenses of any counsel
retained by them. The Trust shall promptly notify the Distributor of the
commencement of any litigation or proceedings against it or any of its officers
or trustees in connection with the issuance or sale of the Shares.
(b)(i) The Distributor shall indemnify and hold harmless the Trust and
each of its Trustees and officers and each person, if any, who controls the
Trust against any loss, liability, claim, damage, or expense
3
described in the foregoing indemnity contained in subsection (a) of this
Section, but only with respect to statements or omissions made in reliance
upon, and in conformity with, information furnished to the Trust in writing by
or on behalf of the Distributor for use in connection with the Registration
Statement or related Prospectus, as from time to time amended, or the annual or
interim reports to shareholders; and as the result of willful misfeasance, bad
faith or negligence of the Distributor in the performance of its duties or by
reason of the reckless disregard of its obligations and duties under this
Agreement.
(ii) The Distributor shall indemnify and hold harmless the Trust, the
Trust's transfer agent, individually and in its capacity as the Trust's
transfer agent, and the Trust's investment manager from and against any claims,
damages and liabilities which arise as a result of actions taken pursuant to
instructions from, or on behalf of, the Distributor to: (1) redeem all or a
part of shareholder accounts in the Trust and pay the proceeds to, or as
directed by, the Distributor for the account of each shareholder whose Shares
are so redeemed and (2) register Shares in the names of investors, confirm the
issuance thereof and receive payment therefor.
(iii) In case any action shall be brought against the Trust or any person
so indemnified by this subsection 8(b) in respect of which indemnity may be
sought against the Distributor, the Distributor shall have the rights and
duties given to the Trust, and the Trust and each person so indemnified shall
have the rights and duties given to the Distributor by the provisions of
subsection (a) of this Section 8.
SECTION 9. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement
shall remain in force until April 30, 2000 and from year to year thereafter,
provided such continuance is approved at least annually by (i) the Trustees of
the Trust, or by the vote of a majority of the outstanding voting securities of
the Trust, cast in person or by proxy, and (ii) a majority of those Trustees
who are not parties to this Agreement or interested persons of any such party
and who have no direct or indirect financial interest in this Agreement or in
any agreement related thereto, cast in person at a meeting called for the
purpose of voting upon such approval.
This Agreement may be terminated at any time without the payment of any
penalty, by the Board of Trustees of the Trust, 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 Agreement or any agreement related
thereto, or by vote of a majority of the outstanding voting securities of the
Trust, or by the Distributor, on sixty days' written notice to the other party.
This Agreement shall automatically terminate in the event of its assignment.
The terms "vote of a majority of the outstanding voting securities,"
"assignment" and "interested person," when used in this Agreement, shall have
the respective meanings specified in the 1940 Act.
SECTION 10. AMENDMENTS OF THIS AGREEMENT. This Agreement may be amended by
the parties only if such amendment is specifically approved by (i) the Trustees
of the Trust, or by the vote of a majority of outstanding voting securities of
the Trust, and (ii) a majority of those Trustees of the Trust who are not
parties to this Agreement or interested persons of any such party and who have
no direct or indirect financial interest in this Agreement or in any agreement
related thereto, cast in person at a meeting called for the purpose of voting
on such approval.
SECTION 11. GOVERNING LAW. This Agreement shall be construed in accordance
with the law of the State of New York and the applicable provisions of the 1940
Act. To the extent the applicable law of the State of New York, or any of the
provisions herein, conflicts with the applicable provisions of the 1940 Act,
the latter shall control.
SECTION 12. PERSONAL LIABILITY. The Declaration of Trust establishing
Xxxxxx Xxxxxxx Xxxx Xxxxxx Variable Investment Series, dated February 24, 1983,
a copy of which, together with all amendments thereto (the "Declaration"), is
on file in the office of the Secretary of the Commonwealth of Massachusetts,
provides that the name Xxxxxx Xxxxxxx Xxxx Xxxxxx Variable Investment Series
refers to the Trustees under the Declaration collectively as Trustees but not
as individuals or personally; and no Trustee, shareholder, officer, employee or
agent of Xxxxxx Xxxxxxx Xxxx Xxxxxx Variable Investment Series shall be held to
any personal liability, nor shall resort be had to their private property for
the satisfaction of any obligation or claim or otherwise, in connection with
the affairs of said Xxxxxx Xxxxxxx Xxxx Xxxxxx Variable Investment Series, but
the Trust Estate only shall be liable.
4
IN WITNESS WHEREOF, the parties hereto have caused this Agreement, as
amended, to be duly executed on February 24, 2000.
XXXXXX XXXXXXX XXXX XXXXXX VARIABLE INVESTMENT SERIES
By:
--------------------------------------------------
XXXXXX XXXXXXX XXXX XXXXXX DISTRIBUTORS INC.
By:
--------------------------------------------------
5
