DISTRIBUTION AGREEMENT
BACK BAY FUNDS, INC.
(the "Fund")
Total Return Bond Fund
(the "Portfolio")
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
October 30, 2000
Xxxxx & Xxxx Distributors, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We hereby confirm our agreement with you as follows:
1. In consideration of the agreements on your part herein
contained and of the payment by us to you of a fee of $1 per year and on the
terms and conditions set forth herein we have agreed that you shall be, for the
period of this agreement, a distributor, as our agent, for the unsold portion of
such number of shares of common stock, $.001 par value per share, as may be
effectively registered from time to time under the Securities Act of 1933, as
amended (the "1933 Act"). This agreement is being entered into pursuant to the
Distribution and Service Plan (the "Plan") adopted by us in accordance with Rule
12b-1 under the Investment Company Act of 1940, as amended (the "1940 Act").
2. We hereby agree that you will act as our agent, and hereby
appoint you our agent, to offer, and to solicit offers to subscribe to, the
unsold balance of shares of our common stock as shall then be effectively
registered under the Act. All subscriptions for shares of our common stock
obtained by you shall be directed to us for acceptance and shall not be binding
on us until accepted by us. You shall have no authority to make binding
subscriptions on our behalf. We reserve the right to sell shares of our common
stock through other distributors or directly to investors through subscriptions
received by us at our principal office in New York, New York. The right given to
you under this agreement shall not apply to shares of our common stock issued in
connection with (a) the merger or consolidation of any other investment company
with us,(b) our acquisition by purchase or otherwise of all or substantially all
of the assets or
stock of any other investment company, or (c) the reinvestment in shares of our
common stock by our shareholders of dividends or other distributions or any
other offering by us of securities to our shareholders.
3. You will use your best efforts to obtain subscriptions to
shares of our Common Stock upon the terms and conditions contained herein and in
our Prospectus, as in effect from time to time. You will send to us promptly all
subscriptions placed with you. We shall furnish you from time to time, for use
in connection with the offering of shares of our common stock, such other
information with respect to us and shares of our common stock as you may
reasonably request. We shall supply you with such copies of our Registration
Statement and Prospectus, as in effect from time to time, as you may request.
Except as we may authorize in writing, you are not authorized to give any
information or to make any representation that is not contained in the
Registration Statement or Prospectus, as then in effect. You may use employees,
agents and other persons, at your cost and expense, to assist you in carrying
out your obligations hereunder, but no such employee, agent or other person
shall be deemed to be our agent or have any rights under this agreement. You may
sell our shares to or through qualified brokers, dealers and financial
institutions under selling and servicing agreements provided that no dealer,
financial institution or other person shall be appointed or authorized to act as
our agent without our written consent.
With respect to the Class B and C Shares of the Portfolio, you
will arrange for organizations whose customers or clients are shareholders of
our Fund ("Participating Organizations") to enter into agreements with you for
the performance of shareholder servicing and related administrative functions
not performed by you or the Transfer Agent. Pursuant to each of our Shareholder
Servicing Agreements with you with respect to the Class B and C Shares, you may
make payments to Participating Organizations for performing shareholder
servicing and related administrative functions with respect to the Class B and C
Shares, respectively. Such payments will be made only pursuant to written
agreements approved in form and substance by our Board of Directors to be
entered into by you and the Participating Organizations. It is recognized that
we shall have no obligation or liability to you or any Participating
Organization for any such payments under the agreements with Participating
Organizations. Our obligation is solely to make payments to you under each
Shareholder Servicing Agreement (with respect to the Class B and C Shares) and
to the Manager under the Investment Management Contract and the Administrative
Services Contract. All sales of our shares effected through you will be made in
compliance with all applicable federal securities laws and regulations and the
Constitution, rules and regulations of the National Association of Securities
Dealers, Inc. ("NASD").
4. We reserve the right to suspend the offering of shares of
our common stock at any time, in the absolute discretion of our Board of
Directors, and upon notice of such suspension you shall cease to offer shares of
our common stock hereunder.
5. Both of us will cooperate with each other in taking such
action as may be necessary to qualify shares of our common stock for sale under
the securities laws of such states
2
as we may designate, provided, that you shall not be required to register as a
broker-dealer or file a consent to service of process in any such state where
you are not now so registered. Pursuant to the Investment Management Contract in
effect between us and the Manager, we will pay all fees and expenses of
registering shares of our common stock under the Act and of qualification of
shares of our beneficial interests, and to the extent necessary, our
qualification under applicable state securities laws. You will pay all expenses
relating to your broker-dealer qualification.
6. We represent to you that our Registration Statement and
Prospectus have been carefully prepared to date in conformity with the
requirements of the 1933 Act and the 1940 Act and the rules and regulations of
the Securities and Exchange Commission (the "SEC") thereunder. We represent and
warrant to you, as of the date hereof, that our Registration Statement and
Prospectus contain all statements required to be stated therein in accordance
with the 1933 Act and the 1940 Act and the SEC's rules and regulations
thereunder; that all statements of fact contained therein are or will be true
and correct at the time indicated or the effective date as the case may be; and
that neither our Registration Statement nor our Prospectus, when they shall
become effective or be authorized for use, will include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading to a purchaser of shares
of our common stock. We will from time to time file such amendment or amendments
to our Registration Statement and Prospectus as, in the light of future
development, shall, in the opinion of our counsel, be necessary in order to have
our Registration Statement and Prospectus at all times contain all material
facts required to be stated therein or necessary to make any statements therein
not misleading to a purchaser of shares of our common stock. If we shall not
file such amendment or amendments within fifteen days after our receipt of a
written request from you to do so, you may, at your option, terminate this
agreement immediately. We will not file any amendment to our Registration
Statement or Prospectus without giving you reasonable notice thereof in advance;
provided, however, that nothing in this agreement shall in any way limit our
right to file such amendments to our Registration Statement or Prospectus, of
whatever character, as we may deem advisable, such right being in all respects
absolute and unconditional. We represent and warrant to you that any amendment
to our Registration Statement or Prospectus hereafter filed by us will be
carefully prepared in conformity within the requirements of the 1933 Act and the
1940 Act and the SEC's rules and regulations thereunder and will, when it
becomes effective, contain all statements required to be stated therein in
accordance with the 1933 Act and the 1940 Act and the SEC's rules and
regulations thereunder; that all statements of fact contained therein will, when
the same shall become effective, be true and correct; and that no such
amendment, when it becomes effective, will include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading to a purchaser of our
shares.
7. We agree to indemnify, defend and hold you, and any person
who controls you within the meaning of Section 15 of the 1933 Act, free and
harmless from and against any and all claims, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which you
3
or any such controlling person may incur, under the 1933 Act or the 1940 Act, or
under common law or otherwise, arising out of or based upon any alleged untrue
statement of a material fact contained in our Registration Statement or
Prospectus in effect from time to time or arising out of or based upon any
alleged omission to state a material fact required to be stated in either of
them or necessary to make the statements in either of them not misleading;
provided, however, that in no event shall anything herein contained be so
construed as to protect you against any liability to us or our security holders
to which you would otherwise be subject by reason of willful misfeasance, bad
faith, or gross negligence in the performance of your duties, or by reason of
your reckless disregard of your obligations and duties under this agreement. Our
agreement to indemnify you and any such controlling person is expressly
conditioned upon our being notified of any action brought against you or any
such controlling person, such notification to be given by letter or by telegram
addressed to us at our principal office in New York, New York, and sent to us by
the person against whom such action is brought within ten days after the summons
or other first legal process shall have been served. The failure so to notify us
of any such action shall not relieve us from any liability which we may have to
the person against whom such action is brought other than on account of our
indemnity agreement contained in this paragraph 7. We will be entitled to assume
the defense of any suit brought to enforce any such claim, and to retain counsel
of good standing chosen by us and approved by you. In the event we do elect to
assume the defense of any such suit and retain counsel of good standing approved
by you, the defendant or defendants in such suit shall bear the fees and
expenses of any additional counsel retained by any of them; but in case we do
not elect to assume the defense of any such suit, or in case you, in good faith,
do not approve of counsel chosen by us, we will reimburse you or the controlling
person or persons named as defendant or defendants in such suit, for the fees
and expenses of any counsel retained by you or them. Our indemnification
agreement contained in this paragraph 7 and our representations and warranties
in this agreement shall remain in full force and effect regardless of any
investigation made by or on behalf of you or any controlling person and shall
survive the sale of any shares of our common stock made pursuant to
subscriptions obtained by you. This agreement of indemnity will inure
exclusively to your benefit, to the benefit of your successors and assigns, and
to the benefit of any of your controlling persons and their successors and
assigns. We agree promptly to notify you of the commencement of any litigation
or proceeding against us in connection with the issue and sale of any shares of
our common stock.
8. You agree to indemnify, defend and hold us, our several
officers and directors, and any person who controls us within the meaning of
Section 15 of the 1933 Act, free and harmless from and against any and all
claims, demands, liabilities, and expenses (including the cost of investigating
or defending such claims, demands or liabilities and any reasonable counsel fees
incurred in connection therewith) which we, our officers or directors, or any
such controlling person may incur under the 1933 Act or under common law or
otherwise, but only to the extent that such liability or expense incurred by us,
our officers or directors or such controlling person shall arise out of or be
based upon any alleged untrue statement of a material fact contained in
information furnished in writing by you to us for use in our Registration
Statement or Prospectus as in effect from time to time, or shall arise out of or
be based upon any alleged omission to state a material fact in connection with
such information required to be stated
4
in the Registration Statement or Prospectus or necessary to make such
information not misleading. Your agreement to indemnify us, our officers and
directors, and any such controlling person is expressly conditioned upon your
being notified of any action brought against us, our officers or directors or
any such controlling person, such notification to be given by letter or telegram
addressed to you at your principal office in New York, New York, and sent to you
by the person against whom such action is brought, within ten days after the
summons or other first legal process shall have been served. You shall have a
right to control the defense of such action, with counsel of your own choosing,
satisfactory to us, if such action is based solely upon such alleged
misstatement or omission on your part, and in any other event you and we, our
officers or directors or such controlling person shall each have the right to
participate in the defense or preparation of the defense of any such action. The
failure so to notify you of any such action shall not relieve you from any
liability which you may have to us, to our officers or directors, or to such
controlling person other than on account of your indemnity agreement contained
in this paragraph 8.
9. We agree to advise you immediately:
a. of any request by the SEC for amendments to our
Registration Statement or Prospectus or for additional information,
b. of the issuance by the SEC of any stop order suspending
the effectiveness of our Registration Statement or Prospectus or the initiation
of any proceedings for that purpose,
c. of the happening of any material event which makes untrue
any statement made in our Registration Statement or Prospectus or which requires
the making of a change in either of them in order to make the statements therein
not misleading, and
d. of all action of the SEC with respect to any amendments
to our Registration Statement or Prospectus.
10. This Agreement will become effective on the date hereof
and shall continue in effect until September 30, 2001, and thereafter for
successive twelve-month periods (computed from each October 1st), provided that
such continuation is specifically approved at least annually by vote of our
Board of Directors and of a majority of those of our directors who are not
interested persons (as defined in the 0000 Xxx) and have no direct or indirect
financial interest in the operation of the Plan or in any agreements related to
the Plan, cast in person at a meeting called for the purpose of voting on this
agreement. This agreement may be terminated at any time, without the payment of
any penalty, (a) on sixty days' written notice to you (i) by vote of a majority
of our entire Board of Directors, and by a vote of a majority of our Directors
who are not interested persons (as defined in the 0000 Xxx) and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreement related to the Plan, or (ii) by vote of a majority of our outstanding
voting securities, as defined in the Act, or (b) by you on sixty days' written
notice to us.
5
11. This Agreement may not be transferred, assigned, sold or
in any manner hypothecated or pledged by you and this Agreement shall terminate
automatically in the event of any such transfer, assignment, sale, hypothecation
or pledge by you. The terms "transfer", "assignment" and "sale" as used in this
paragraph shall have the meanings ascribed thereto by governing law and in
applicable rules or regulations of the SEC thereunder.
12. Except to the extent necessary to perform your obligations
hereunder, nothing herein shall be deemed to limit or restrict your right, the
right of any of your employees, officers or directors who may also be a
director, officer or employee of ours, or of a person affiliated with us, as
defined in the 1940 Act, to engage in any other business or to devote time and
attention to the management or other aspects of any other business, whether of a
similar or dissimilar nature, or to render services of any kind to another
corporation, firm, individual or association.
If the foregoing is in accordance with your understanding,
will you kindly so indicate by signing and returning to us the enclosed copy
hereof.
Very truly yours,
BACK BAY FUNDS, INC.
By: /s/ Xxxxxxxxxx X. Xxxx
------------------------------
Name: Xxxxxxxxxx X. Xxxx
Title:Secretary
Accepted: October 30, 2000
XXXXX & XXXX DISTRIBUTORS, INC.
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Executive Vice President
7
