Exhibit (e)(2)
ADMINISTRATION, SHAREHOLDER SERVICES AND
DISTRIBUTION AGREEMENT
AGREEMENT made this 1st day of October, 1999, by and between TAX-EXEMPT
CALIFORNIA MONEY MARKET 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 administrator, distributor and
principal underwriter 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; (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; or (c) issue shares in
connection with the merger or consolidation of any other investment company with
the Fund or the Fund's acquisition, by purchase or otherwise, of all or
substantially all of the assets of any other investment company or all or
substantially all of the outstanding shares of any such company.
KDI shall appoint various broker-dealers and other financial services firms
("Firms") to provide a cash management service for their clients through the
Fund. 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 services to potential and
existing shareholders of the Fund and to assist the Fund's shareholder service
agent in servicing accounts of the Firm's clients who own Fund shares
("clients"). Such services and assistance may include, but are not limited to,
establishment and maintenance of shareholder accounts and records, processing
purchase and redemption transactions, automatic investment in Fund shares of
client account cash balances, answering routine client inquiries regarding the
Fund, assistance to clients in changing dividend options, account designations
and addresses, and such other services as the Fund or KDI may reasonably
request. KDI may also provide some of the above services for the Fund directly.
KDI accepts such appointment and agrees during the term hereof 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 otherwise expressly provided or authorized,
shall have no authority to act for or represent the Fund in any way or otherwise
be deemed an agent of the Fund. It is understood and agreed that 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 administration services and selling group agreements ("services
agreements"), appoint various Firms to provide administrative, distribution and
other 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 and not the Fund will be responsible for the payment of compensation
to such Firms for such services.
KDI will 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
Fund's organizational documents, provided, however, that KDI may in its
discretion refuse to accept orders for shares from any particular applicant. The
price the Fund shall receive for all shares purchased from the Fund shall be the
net asset value used in determining the public offering price applicable to the
sale of such shares.
2. KDI shall sell shares of the Fund to or through qualified Firms in such
manner, not inconsistent with the provisions hereof and the Fund's currently
effective registration statement, including the prospectus and statement of
additional information and any supplements or amendments thereto ("Registration
Statement"), as KDI may determine from time to time, provided that no Firm or
other person shall be appointed and 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 services agreements.
Shares 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
Registration Statement except as departure from such prices shall be permitted
by the rules and regulations of the Securities and Exchange Commission;
provided, however, that any public offering price for shares of the Fund shall
be the net asset value per share. The net asset value per share of the Fund
shall be determined in the manner and at the times set forth in the Registration
Statement.
KDI will require each Firm to conform to the provisions hereof and the
Registration Statement with respect to the public offering price 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.
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.
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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, any short sales of shares of the Fund. 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
Registration Statement. 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 Conduct Rules of the National Association of
Securities Dealers, Inc., relating to such sale or reacquisition, as the case
may be. KDI will observe and be bound by all the provisions of the Fund's
organizational documents (and of any fundamental policies adopted by the Fund
pursuant to the Investment Company Act of 1940 (the "Investment Company Act"),
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 on the part
of KDI hereunder.
KDI agrees to indemnify and hold harmless the Fund and each of its Board members
and officers and each person, if any, who controls the Fund within the meaning
of Section 15 of the Securities Act, against any and all losses, claims,
damages, liabilities or litigation (including legal and other expenses) to which
the Fund or such Board members, officers, or controlling persons may become
subject under such Act, under any other statute, at common law or otherwise,
arising out of the acquisition of any shares by any person which (i) may be
based upon any wrongful act by KDI or any of KDI's employees or representatives,
or (ii) may be based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statement therein not misleading if such statement or
omission was made in reliance upon information furnished to the Fund by KDI, or
(iii) may be incurred or arise by reason of KDI's acting as the Fund's agent
instead of purchasing and reselling shares as principal in distributing the
shares to the public, provided, however, that in no case (i) is KDI's indemnity
in favor of a Board member or officer or any other person deemed to protect such
Board member or officer or other person against any liability to which any such
person would otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence in the performance of his duties or by reason of his
reckless disregard of obligations and duties under this Agreement or (ii) is KDI
to be liable under the indemnity agreement
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contained in this paragraph with respect to any claim made against the Fund or
any person indemnified unless the Fund or such person, as the case may be, shall
have notified KDI in writing within a reasonable time after the summons or other
first legal process giving information of the nature of the claims shall have
been served upon the Fund or upon such person (or after the Fund or such person
shall have received notice of such service on any designated agent), but failure
to notify KDI of any such claim shall not relieve KDI from any liability which
KDI may have to the Fund or any person against whom such action is brought
otherwise than on account of KDI's indemnity agreement contained in this
paragraph. KDI shall be entitled to participate, at KDI's own expense, in the
defense, or, if KDI so elects, to assume the defense of any suit brought to
enforce any such liability, but if KDI elects to assume the defense, such
defense shall be conducted by counsel chosen by KDI and satisfactory to the
Fund, to its officers and Board members, or to any controlling person or
persons, defendant or defendants in the suit. In the event that KDI elects to
assume the defense of any such suit and retain such counsel, the Fund, such
officers and Board members or 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 KDI does not elect to assume the defense
of any such suit, KDI will reimburse the Fund, such officers and Board members
or controlling person or persons, defendant or defendants in such suit for the
reasonable fees and expenses of any counsel retained by them. KDI agrees to
notify the Fund promptly of the commencement of any litigation or proceedings
against it in connection with the issue and sale of any shares. The Fund shall
not, without the prior written consent of KDI, effect any settlement of any
pending or threatened action, suit or proceeding in respect of which the Fund is
or could have been a party and indemnity has or could have been sought hereunder
by the Fund, unless such settlement includes an unconditional release of KDI
from all liability on claims that are the subject matter of such action, suit or
proceeding.
The Fund agrees to indemnify and hold harmless KDI and each of KDI's directors
and officers and each person, if any, who controls KDI within the meaning of
Section 15 of the Securities Act, against any and all losses, claims, damages,
liabilities or litigation (including legal and other expenses) to which KDI or
such directors, officers or controlling persons may become subject under such
Act, under any other statute, at common law or otherwise, arising out of the
acquisition of any shares by any person which (i) may be based upon any wrongful
act by the Fund or any of its employees or representatives, or (ii) may be based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement 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 if such statement or omission was not made
in reliance upon information furnished to KDI by the Fund; provided, however,
that in no case (i) is the Fund's indemnity in favor of a director or officer or
any other person deemed to protect such director or officer or other person
against any liability to which any such person would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the performance
of his duties or by reason of his reckless disregard of obligations and duties
under this Agreement or (ii) is the Fund to be liable under its indemnity
agreement contained in this paragraph with respect to any claims made against
KDI or any such director, officer or controlling person unless KDI or such
director, officer or controlling person, as the case may be, shall have notified
the Fund 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 KDI or
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upon such director, officer or controlling person (or after KDI or such
director, officer or controlling person shall have received notice of such
service on any designated agent), but failure to notify the Fund 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 Fund 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 Fund elects to assume
the defense, such defense shall be conducted by counsel chosen by it and
satisfactory to KDI, its directors, officers, or controlling person or persons,
defendant or defendants in the suit. In the event that the Fund elects to assume
the defense of any such suit and retain such counsel, KDI, its directors,
officers or 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 Fund does not elect to assume the defense of any such suit, it
will reimburse KDI or such directors, officers or controlling person or persons,
defendant or defendants in the suit, for the reasonable fees and expenses of any
counsel retained by them. The Fund agrees to notify KDI promptly of the
commencement of any litigation or proceedings against it or any of its officers
or directors in connection with the issuance or sale of any shares. KDI shall
not, without the prior written consent of the Fund, effect any settlement of any
pending or threatened action, suit or proceeding in respect of which either KDI
is or could have been a party and indemnity has or could have been sought
hereunder by KDI, unless such settlement includes an unconditional release of
the Fund from all liability on claims that are the subject matter of such
action, suit or proceeding.
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 or
the Fund's Amended and Restated 12b-1 Plan (the "Plan"). The Fund will pay or
cause to be paid expenses (including the fees and disbursements of its own
counsel) and all taxes and fees payable to the federal, state or other
governmental agencies on account of the registration or qualification of
securities issued by the Fund or otherwise. The Fund will also pay or cause to
be paid 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 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, prospectus or report or other communication to
shareholders in their capacity as such) and expenses of advertising in
connection with such offering.
8. This Agreement shall become effective on the date hereof and shall continue
until September 30, 2000 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.
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 (60) days' written notice to the other party. The Fund may effect
termination by a vote of (i) a majority of
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the trustees who are not interested persons of the Fund and who have no direct
or indirect financial interest in the operation of the Plan, this Agreement or
in any other agreement related to the Plan, or (ii) a majority of the
outstanding voting securities of the Fund.
All material amendments to this Agreement must be approved by a vote of a
majority 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 the operation of the Plan, this Agreement or in any other agreement
related to the Plan, cast in person at a meeting called for such purpose.
The terms "assignment," "interested person" and "vote of a majority of the
outstanding voting securities" shall have the meanings set forth in the
Investment Company Act and the rules and regulations thereunder.
KDI shall receive such compensation for its distribution services as set forth
in the Plan. Termination of this Agreement shall not affect the right of KDI to
receive payments on any unpaid balance of the compensation earned prior to such
termination, as set forth in the Plan.
Notwithstanding anything in this Agreement to the contrary, KDI shall be
contractually bound hereunder by the terms of any publicly announced waiver of
or cap on the compensation received for its distribution services under the Plan
or by the terms of any written document provided to the Board of the Fund
announcing a waiver or cap, as if such waiver or cap were fully set forth
herein.
9. 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 Registration Statement, 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.
10. 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.
11. 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.
12. 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, whether in accordance with the
express terms hereof or otherwise, KDI shall have no recourse against the assets
of any other series for such purpose.
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13. This Agreement shall be construed in accordance with applicable federal law
and with the laws of The Commonwealth of Massachusetts.
14. 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.
TAX-EXEMPT CALIFORNIA MONEY ATTEST:
MARKET FUND
By:
/s/Xxxx X. Xxxxxx /s/Xxxxxxx X. Xxxx
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Xxxx X. Xxxxxx Xxxxxxx X. Xxxx
President Assistant Secretary
XXXXXX DISTRIBUTORS, INC. ATTEST:
By: /s/Xxxxx X. Xxxxxxxxxx /s/Xxxxxx X. Xxxxxxx
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Title: Title: Ass't. Sec.
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