AMENDMENT OF DISTRIBUTION AGREEMENT AND
ASSUMPTION OF DUTIES AND RESPONSIBILITIES BY
XXXX
Xxxxxxxx 0, 0000
XXX Xxxxxxxxxxxx, Inc.
PFS Investments Inc.
0000 Xxxxxxxxxxxx Xxxx., Xxxx. 000
Xxxxxx, XX 00000-0000
Dear Sirs:
Reference is made to that certain distribution agreement (the
"Agreement"), dated as of June 5, 2000, between Xxxxx Xxxxxx
Aggressive Growth Fund Inc. (the "Investment Company"),with
respect to one or more separate series listed on Exhibit A (each a
"Fund") and PFS Distributors, Inc. ("PFSD"). This letter agreement
(the "Amendment") incorporates all of the conditions,
responsibilities, representations and other terms of the Agreement,
except as amended or modified in this Amendment.
WHEREAS, PFS Investments Inc. ("PFSI") and PFSD intend
to effect a transaction pursuant to which PFSD will merge with and
into PFSI (the "Merger");
WHEREAS, effective as of the Merger, PFSI, as the successor
of the Merger, is expected to perform all of the responsibilities,
obligations, duties and liabilities of PFSD under that Agreement, as
amended or supplemented by this Amendment, effective December
1, 2005, and
WHEREAS, PFSD, or its successor, PFSI, wishes to serve as
principal underwriter and distributor for each Fund under the terms
of the Agreement, as modified and amended by this Amendment;
THEREFORE, the Investment Company, on behalf of each
Fund, PFSD and PFSI agree that (i) as of the date hereof, PFSD shall
discharge, perform and be liable for such obligations and
responsibilities of PFSD under the Agreement, as amended by this
Amendment and (ii) in the event that the Merger is consummated,
from and after the effective time of the Merger, PFSI shall discharge,
perform and be liable for such obligations and responsibilities of
PFSD under the Agreement, as amended by this Amendment.
Except as expressly amended hereby, the provisions of the
Agreement (after giving effect to the foregoing substitution of
parties) will remain in full force and effect between PFSI and the
Investment Company. Capitalized terms not defined in this
Amendment shall have the meanings given to them in the
Agreement.
We acknowledge that Xxxx Xxxxx Inc. ("Xxxx Xxxxx") and
Citigroup Inc. ("Citigroup") have entered into that certain Global
Distribution Agreement (the "Global Distribution Agreement"),
dated as of June 23, 2005, which provides, for a period of three years
from December 1, 2005, for the distribution by Citigroup
distributors of Citigroup investment products and Xxxx Xxxxx
investment products within the United States and internationally and
for Citigroup's access to certain Xxxx Xxxxx investment products
pursuant to the terms of the Global Distribution Agreement.
1. Services as a Non-Exclusive Principal Underwriter and
Distributor
Notwithstanding anything to the contrary contained in
the Agreement:
1.1 You shall be, for the period of the Agreement as
amended by this Amendment, a non-exclusive principal underwriter
and distributor of each Fund.
1.2 You may perform any services for any entity,
including investment companies that are not advised or administered
by Citigroup or its subsidiaries.
1.3 You shall retain all rights to the information of your
customers, including, but not limited to, the names, addresses,
telephone numbers and social security numbers of applicants for,
purchasers of, and other customers of each Fund as well as other
identity and private information in respect of your customers,
employees, registered representatives and agents ("Confidential
Information"); provided, however, that Confidential Information
shall not include any customer information that: (x) was previously
known by us from a source other than you without obligations of
confidence; (y) was or is rightfully received by us from a third party
without obligations of confidence to you or from publicly available
sources without obligations of confidence to you; or (z) was or is
developed by means independent of information obtained from you.
2. Termination
In addition to the termination rights already contained in the
Agreement, (i) at any time prior to the second anniversary hereof, at
your option you may terminate the Agreement at any time in order
for you to enter into a mutually satisfactory mutual fund dealer
agreement with the principal underwriter that is an affiliate of Xxxx
Xxxxx for the Investment Company (a "Dealer Agreement") and (ii)
at any time following the second anniversary of the date hereof,
either party may at its option terminate the Agreement at any time in
order for you to enter into a Dealer Agreement ; provided, that any
such termination shall only be effective upon execution and delivery
of a Dealer Agreement which shall be, unless the parties thereto
otherwise agree, in substantially the form presented to the Board of
the Investment Company and attached hereto as Exhibit B with such
additional changes as may be appropriate to reflect changes in
applicable laws, regulations or industry practice.
3. Dealer and Other Agreements
You may not enter into dealer or similar agreements with
unaffiliated brokers, dealers, banks or other similar firms or
recordkeeping, shareholder servicing and sub-accounting services
with unaffiliated intermediaries without the written consent of the
Investment Company or its authorized designee. No such
unaffiliated intermediary is authorized to act as agent for the Fund in
connection with the offering or sale of Shares of the Fund to the
public or otherwise, except for the limited purpose of determining
the time as of which transactions in Shares are deemed to have been
received.
4. Compliance Matters
(a) You shall act as a distributor and principal
underwriter of Shares in compliance in all material respects with all
applicable laws, rules and regulations, including, without limitation,
all rules and regulations made or adopted pursuant to (i) the 1940
Act, (ii) the Securities Exchange Act of 1934 ("1934 Act"), (iii) any
securities association registered under the 1934 Act, including
without limitation the NASD Conduct Rules or rules of any other
applicable self-regulatory organization. You shall offer the Shares,
and accept purchases, redemptions and exchanges for Shares, in
compliance with the Fund's registration statement (including its
prospectus and statement of additional information), as it may be
amended or supplemented from time to time ("Registration
Statement"). You will comply with and abide by the terms of a
Fund's Plan, as it may be amended from time to time.
(b) You agree to submit sales literature and marketing
materials (including memorandums, bulletins, and/or information or
related materials) prepared by you intended for public distribution
("PFSI Marketing Materials") to the co-principal underwriter of the
Investment Company which is an affiliate of Xxxx Xxxxx prior to
distribution or publication for written approval. Such PFSI
Marketing Materials shall be for review in accordance with
procedures to be agreed upon by the parties. You shall be
responsible for reviewing and making such filings with the NASD,
as required, of PFSI Marketing Materials relating to each Fund.
(c) You shall adopt and follow procedures for the
confirmation of sales to investors and qualified securities dealers,
banks and other intermediaries (collectively "Intermediaries")
timeliness of orders, the collection of amounts payable by investors
and Intermediaries on such sales, the correction of errors related to
distribution of Shares, the cancellation of unsettled transactions, and
assisting with the solicitation of proxies, and any other matters
governed by Rule 38a-1 under the 1940 Act (as may apply to a
distributor or principal underwriter for a registered investment
company), each as may be necessary to comply with the
requirements of the NASD, any other self-regulatory organization,
and the federal securities laws. You shall provide reports or other
information to the Investment Company at the Investment
Company's reasonable request, including, without limitation,
reports related to the operation and implementation of the
Investment Company's policies related to customer privacy,
safeguarding of customer information, anti-money-laundering, sales
and marketing practices, the operation of your code of ethics or other
policies and procedures of the Investment Company.
(d) You represent, warrant and agree that you have
adopted and implemented: (i) an anti-money-laundering program in
compliance with the USA Patriot Act of 2001, the regulations
thereunder and NASD Conduct Rules, including, without limitation,
customer identification program procedures, monitoring for
suspicious activity, and (ii) procedures to comply with applicable
law and regulation related to cash transaction reporting requirements,
as well as monitoring and reporting under FinCEN, OFAC and other
government watch lists.
(e) The Investment Company agrees that the
information exchanged under the Agreement and information about
the respective customers and potential customers of each is
confidential and as such shall not be disclosed by the Fund, sold or
used by the Fund in any way except to carry out the terms of this
Agreement. Notwithstanding the foregoing, such customer
information may be disclosed by the Investment Company on a
"need to know" basis as set forth in applicable privacy rules and
regulations. The obligations regarding confidentiality hereunder
shall not apply to any information which is (i) otherwise publicly
available, (ii) already possessed by the entity to whom the
information was disclosed prior to disclosure hereunder, (iii)
independently developed by the entity, or (iv) disclosed pursuant to
law, rule, regulation or court or administrative order. The
Investment Company shall have the right to use any list of
shareholders of the Fund or any other list of investors which it
obtains in connection with its provision of services under this
Agreement, provided that such use is consistent with applicable law
and your privacy policies and those of the Fund, including the
provision of information to the Fund's transfer agent or to agents
used for the solicitation of proxies. You agree that you will comply
with all of the foregoing obligations of this paragraph to the extent
that information is treated as customer information of the Fund
under applicable law or regulation, including without limitation
Regulation S-P. Each party further agrees to take commercially
reasonable steps, in accordance with applicable law, to safeguard
customer information. The provisions of this paragraph will survive
termination of the Agreement.
(f) From time to time, each Fund may implement
policies, procedures or charges in an effort to avoid the potential
adverse effects on the Fund of short-term trading by market timers.
You agree to provide other assistance reasonably designed to
achieve compliance with these policies. You will maintain and
enforce policies with respect to frequent trading and share
redemption as are reasonable and customary in the industry. To the
extent that accounts are held in street name, you agree to cooperate
with the Investment Company and the Investment Company's Chief
Compliance Officer (including, to the extent practicable, providing
account level sales and redemption information) to assist in
compliance with the frequent trading and redemption fee provisions
as set forth in the Fund's prospectus and other policies set forth in the
Fund's Registration Statement.
(g) Purchases, exchanges and redemptions of Shares
through you will be at the public offering price of such Shares (the net
asset value of the Shares, with appropriate adjustments for any
applicable sales charge), as determined in accordance with the then
effective Registration Statement used in connection with the offer and
sale of the Shares. The public offering price will reflect scheduled
variations in or the elimination of sales charges on sales of Shares
either generally to the public or in connection with special purchase
plans, as described in the Registration Statement. You agree to apply
any scheduled variation in or waivers of sales charges uniformly to all
customers meeting the qualifications therefor as specified in the
Registration Statement. With respect to Funds sold with an initial
sales charge, your customers will be entitled to reduced sales charges
on purchases made under any letter of intent or right of accumulation
as described in the Registration Statement. In such case, the
concession from the public offering price retained by you will be
based upon such reduced sales charge. When placing wire trades,
your agree to advise the Funds of any letter of intent executed by its
customer or any available right of accumulation. The minimum
initial purchase and the minimum subsequent purchase of any Shares
shall be as set forth in the applicable Registration Statement. All
orders are subject to acceptance or rejection by the applicable Fund
in its sole discretion for any reason.
(h) The handling and settlement of purchase, exchange
and redemption orders will be subject to the provisions of the
Registration Statement and such further procedures as the
Investment Company and you may determine to be appropriate from
time-to-time, consistent with this Amendment. Citigroup Global
Markets' internal systems are suitably designed to handle such
orders. Each Fund shall notify you of the states or jurisdictions in
which its Shares are currently available for sale to the public. The
Investment Company shall have no obligation to register or make
available Fund shares in any state or jurisdiction. You will be
responsible for the accuracy, timeliness and completeness of
purchase, redemption or exchange orders accepted by you.
(i) PFSI may print current Fund prospectuses and
statements of additional information for PFSI's use, which may not
vary in any material respect from the relevant Fund's then-current
prospectus and statement of additional information. PFSI's printing
will comply in all material respects with all applicable legal and
regulatory standards. The Board of the Investment Company may
terminate these printing services at any time upon written notice to
PFSI.
(j) The Investment Company acknowledges that the
co-principal underwriter which is affiliated with Xxxx Xxxxx shall
be responsible for reviewing the Registration Statement of each
Fund, as applicable, for the accuracy and completeness of all
disclosure concerning the distribution of Shares and that you shall
not have such responsibility, except, in each case, to the extent the
disclosure information is provided by you or pertains to information
concerning your operations. Notwithstanding the foregoing, nothing
in this paragraph shall alter your responsibilities for complying with
the terms of the Registration Statement in your offering of Shares.
5. Records. Upon the Investment Company's reasonable
request, you will provide access to or make copies of any such
records the Investment Company does not possess in order to: (a)
comply with a request from a government body or self-regulatory
organization; (b) verify compliance by the other party of the terms of
this Agreement; or (c) make required regulatory reports.
6. Section 9 of the 1940 Act. You agree to promptly notify
the Investment Company should you cease to be such a member of
the NASD through expulsion or otherwise or if its membership is
suspended or should you be subject to any limitations on your
conduct under Section 9 of the 1940 Act.
7. Indemnification
You agree to indemnify, defend and hold the Investment
Company, its several officers and Board members, and any person
who controls the Investment Company 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 counsel fees incurred in connection therewith) which the
Investment Company, its officers or Board members, or any such
controlling person may incur, under the 1933 Act or under common
law or otherwise, on account of (i) any act of yours or any of your
employees constituting willful misfeasance, bad faith, or gross
negligence in the performance of your duties, (ii) by reason of your
reckless disregard of your obligations and duties under the
Agreement or this Amendment; or (iii) any act of yours or any of
your employees constituting negligence with respect to any services
performed related to printing prospectuses or statements of
additional information for a Fund, as described in Paragraph 4(i) of
this Amendment. The foregoing indemnification provisions
supplement the indemnification provisions of the Agreement. The
indemnifications provisions of this Amendment and the Agreement
shall survive the termination of the Agreement and/or this
Amendment.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
If the foregoing is in accordance with your understanding,
kindly indicate your acceptance of this Amendment by signing and
returning to us the enclosed copy, whereupon this Amendment will
become binding on you.
Very truly yours,
Xxxxx Xxxxxx Aggressive
Growth Fund Inc.
By: /s/ R. Xxx Xxxxxx
Name: R. Xxx Xxxxxx
Title: Chief Executive
Officer
Agreed to as of the date first above written:
PFS Distributors, Inc.
By: _____________________________
Name:
Title:
PFS Investments Inc.
By: _____________________________
Name:
Title:
EXHIBIT A
Fund
Date Added:
Xxxxx Xxxxxx Aggressive
Growth Fund Inc.
December 1, 2005
EXHIBIT B
DEALER AGREEMENT
SELECTED DEALER CONTRACT
Xxxx Xxxxx Investor Services LLC
[Name & address of dealer]
Ladies and Gentlemen:
We, Xxxx Xxxxx Investors Services, LLC ("LMIS"), have
agreements with certain investment companies (each a "Distribution
Agreement") for which [name of asset management entity] or an
affiliate serves as investment adviser (each a "Fund") or series
thereof (each a "Series") provided on Schedule A, as it may be
amended from time to time pursuant to which we act as the principal
underwriter and distributor for the sale of common shares of the
Funds or Series ("Shares"), and as such have the right to distribute
Shares for resale. Each Fund is an open-end investment company
registered under the Investment Company Act of 1940, as amended
(the "1940 Act") and the Shares being offered to the public are
registered under the Securities Act of 1933, as amended (the "1933
Act"). The term "Prospectus", as used herein, refers to the
prospectus and related statement of additional information (the
"Statement of Additional Information") incorporated therein by
reference (each as amended or supplemented) on file with the
Securities and Exchange Commission at the time in question. We
understand that you wish to act as a dealer with respect to the Shares.
You have represented that you are either a broker-dealer registered
with the Securities and Exchange Commission ("SEC") under the
Securities Exchange Act of 1934, as amended, ("1934 Act") and a
member in good standing of the National Association of Securities
Dealers, Inc. ("NASD"), or a "bank" as defined in Section 3(a)(6) of
the 1934 Act ("Bank") and are not required to register as a
broker-dealer under the 1934 Act, at the time of each transaction
subject to this Agreement. As a broker in the capacity of principal
underwriter and distributor for the Series, we authorize you, and you
hereby agree, to sell or to arrange for the sale of Shares of each Fund
or Series upon the following terms and conditions, and you agree to
perform certain other services set forth in this Selected Dealer
Contract ("Contract"):
1. In all sales to the public you shall act as broker-dealer for
your customers or as dealer for your own account, and in no
transaction shall you have any authority to act as agent for the Funds
or any Series, for us or for any other dealer except for the limited
purpose of determining the time as of which transactions in Shares
are deemed to have been received, in compliance with the provisions
of this Selected Dealer Agreement.
2. Orders received from you will be accepted through us only
at the public offering price per share (i.e. the net asset value per share
plus the applicable front-end sales charge, if any) applicable to each
order, and all orders for redemption of any Shares shall be executed
at the net asset value per share less any applicable deferred sales
charge, if any, in each case as set forth in the applicable Prospectus.
A Fund or Series may additionally impose redemption fees, as
described in the applicable Prospectus. Any contingent deferred
sales charge amounts received or retained by you shall be paid over
by you directly to us or our designated delegate in partial
consideration of our payment to you of any commission amounts
provided by us at the time of sale. The procedure relating to the
handling of orders shall be subject to provisions of this Agreement
and instructions that we or the Fund shall forward from time to time
to you. All orders are subject to acceptance or rejection by the
applicable Fund or us in the sole discretion of either. The minimum
initial purchase and the minimum subsequent purchase of any Shares
shall be as set forth in the applicable Prospectus. You agree to
comply with provisions of Rule 22c-2 under the 1940 Act as
applicable to each Fund (including reporting procedures adopted to
comply with the Rule).
3. You shall not place orders for any Shares unless you have
already received purchase orders for those Shares at the applicable
public offering price and subject to the terms hereof. You agree that
you will not offer or sell any Shares except under circumstances that
will result in compliance with the applicable Federal and state
securities or banking laws (including, without limitation, applicable
provisions of the 1933 Act, 1934 Act, 1940 Act and the rules and
regulations of the NASD), any applicable banking laws, the
applicable rules and regulations thereunder and the rules and
regulations of applicable regulatory agencies or authorities
(collectively, "Law and Regulation") and that in connection with
sales and offers to sell Shares you will furnish to each person to
whom any such sale or offer is made, a copy of the Prospectus as and
when required under applicable laws, rules and regulations and,
upon request, the Statement of Additional Information, and will not
furnish to any person any information relating to Shares which is
inconsistent in any respect with the information contained in the
Prospectus or Statement of Additional Information (as then amended
or supplemented). You shall not furnish or cause to be furnished to
any person or display or publish any information or materials
relating to the Shares (including, without limitation, promotional
materials and sales literature, advertisements, press releases,
announcements, statements, posters, signs or other similar material),
except such information and materials as may be furnished to you
by, or on behalf of, us or the Funds, and such other information and
materials as may be approved in writing by, or on behalf of, us or the
Funds.
4. If you are a broker dealer, you are hereby authorized (i) to
place orders directly with the applicable Fund or Series for Shares
subject to the applicable terms and conditions governing the
placement of orders by us set forth in the Prospectus and (ii) to
tender Shares directly to each Fund or Series or its agent for
redemption subject to the applicable terms and conditions governing
the redemption of Shares applicable to us set forth in the Prospectus.
5. If you are a Bank, with respect to any and all transactions
in Shares of the Funds or Series pursuant to this Agreement, it is
understood and agreed in each case that unless otherwise agreed to
by us in writing: (i) you shall be acting solely as agent for the
account of your customer; (ii) each transaction shall be initiated
solely upon the order of your customer; (iii) we shall execute
transactions only upon receiving instructions from you acting as
agent for your customer; (iv) as between you and your customer,
your customer will have full beneficial ownership of all Shares; (v)
each transaction shall be for the account of your customer and not for
your account; (vi) we will serve as a clearing broker for you on a
fully disclosed basis, and you shall serve as the introducing agent for
your customers' accounts; and (vii) order will comply with the
applicable terms and conditions governing the placement of orders
as set forth in the Prospectus including frequent trading redemption
fee provisions.
6. You shall not withhold placing orders received from your
customers so as to profit yourself as a result of such withholding,
e.g., by a change in the "net asset value" from that used in
determining the offering price to your customers.
7. You shall provide ongoing shareholder liaison services to
the shareholders of each Fund or Series, including responding to
shareholder inquiries, providing shareholders with information on
their investments, and any other services now or hereafter deemed to
be appropriate subjects for the payment of "service fees" under
NASD Conduct Rule 2830.
8. Transactions in the Shares of a Fund or Series may be
effected through the Fund/SERV service of the National Securities
Clearing Corporation (the "NSCC") and, if applicable, account
records may be maintained through the networking service of the
NSCC, provided that each party hereto will comply with all
applicable rules of the NSCC and the schedules thereto.
Furthermore, you hereby represent that all of your representations
set forth in your agreement with respect to participating in the NSCC
network or in any schedules thereto are accurate and true as of the
date hereof and will remain accurate and true insofar as the
transactions in the Shares of the Fund or Series are effected through
the Fund/SERV service of the NSCC and, if applicable, the account
records are maintained through the networking service of the NSCC.
You will be solely responsible for the accuracy of each instruction
through the Fund/SERV service, and the issuance of a Fund/SERV
instruction will constitute your representation and warranty to us and
a Fund's transfer agent that the instruction is accurate, complete, and
issued as duly authorized by the client whose Shares are the subject
of the instruction.
9. In determining the amount of any sales concession payable
to you hereunder, we reserve the right to exclude any sales which we
reasonably determine are not made in accordance with the terms of
the Prospectus and the provisions of this Agreement. Unless at the
time of transmitting an order we advise you or the transfer agent to
the contrary, the Shares ordered will be deemed to be the total
holdings of the specified investor.
10. (a) You agree that payment for orders from you for the
purchase of Shares will be made in accordance with the terms of the
Prospectus. On or before the business day following the settlement
date of each purchase order for Shares, you shall transfer same day
funds to an account designated by us with the transfer agent in an
amount equal to the public offering price on the date of purchase of
the Shares being purchased less your sales concession, if any, with
respect to such purchase order determined in accordance with the
Prospectus. If payment for any purchase order is not received in
accordance with the terms of the Prospectus, we reserve the right,
without notice, to cancel the sale and to hold you responsible for any
loss sustained as a result thereof.
(b) If any Shares sold under the terms of this
Agreement are sold with a sales charge and are redeemed or are
tendered for redemption within seven (7) business days after
confirmation of your purchase order for such Shares, you shall
forthwith refund to us the full sales concession received by you on
the sale.
(c) We will pay or cause to be paid to you any ongoing
distribution fees and/or shareholder service fees with respect to
Shares of the Series purchased through you and held by or for your
customers at such rates and in such manner as may be described in
the Prospectus.
(d) Certificates evidencing Shares generally will not be
available. Upon payment for Shares in accordance with paragraph
10(a) above, the transfer agent will issue and transmit to you or your
customer a confirmation statement evidencing the purchase of such
Shares. Any transaction in uncertificated Shares, including
purchases, transfers, redemptions and repurchases, shall be effected
and evidenced by book-entry on the records of the transfer agent.
(e) We will not accept any conditional orders for Shares
transmitted by you.
(f) Each Fund's Board has adopted a Distribution Plan
pursuant to Rule 12b-1 of the 1940 Act (the "Plans") with respect to
the Shares. Under the terms of the Plans, we may be entitled to
compensation for distribution related services that it provides to the
Investment Companies, and we are permitted to pay all or a portion
of such compensation to entities that engage in or support the
distribution of Shares. For the services to be provided under this
Contract and for so long as this Contract remains in effect, we agree
to pay you in accordance with Schedule B.
(g) In the event we do not receive payment from a
Fund or Series under the relevant Distribution Agreement or plan of
distribution adopted pursuant to the applicable Plan or as otherwise
provided in the Prospectus, or if such Distribution Agreement or
Plan is cancelled, you agree to waive your right to receive
compensation until such time, if ever, we receive payment.
11. No person is authorized to make any representations
concerning Shares except those contained in the current Prospectus
and Statement of Additional Information and in printed information
subsequently issued by us or the Funds as information supplemental
to the Prospectus and the Statement of Additional Information. In
purchasing or offering Shares pursuant to this Contract you shall rely
solely on the representations contained in the Prospectus, the
Statement of Additional Information and the supplemental
information above mentioned.
12. You agree to deliver to each purchaser making a purchase
of Shares from or through you a copy of the Prospectus as required
by applicable Law and Regulation and, upon request, the Statement
of Additional Information. You may instruct the transfer agent to
register Shares purchased in your name and account as nominee for
your customers. You agree thereafter to deliver to any purchaser
whose Shares you or your nominee are holding as record holder
copies of the annual and interim reports and proxy solicitation
materials and any other information and materials relating to the
Funds or Series and prepared by or on behalf of us, the Funds or the
investment adviser, custodian, transfer agent or dividend disbursing
agent for distribution to beneficial holders of Shares. The Funds
shall be responsible for the costs associated with forwarding such
reports, materials and other information and shall reimburse you in
full for such costs. You further agree to make reasonable efforts to
endeavor to obtain proxies from such purchasers whose Shares you
or your nominee are holding as record holder. You further agree to
obtain from each customer to whom you sell Shares any taxpayer
identification number certification required under Section 3406 of
the Internal Revenue Code of 1986, as amended (the "Code"), and
the regulations promulgated thereunder, and to provide us or our
designee with timely written notice of any failure to obtain such
taxpayer identification number certification in order to enable the
implementation of any required backup withholding in accordance
with Section 3406 of the Code and the regulations thereunder.
Additional copies of the Prospectus, Statement of Additional
Information, annual or interim reports, proxy solicitation materials
and any such other information and materials relating to the Funds
will be supplied to you in reasonable quantities upon request.
13. (a) In accordance with the terms of the Prospectus, a
reduced sales charge or no sales charge (collectively, "discounts")
may be available to purchasers of Shares or certain classes of
investors, depending on the amount of the investment or proposed
investment. In each case where a discount is applicable, you agree to
furnish to the transfer agent sufficient information to permit
confirmation of qualification for a discount, and acceptance of the
purchase order is subject to such confirmation. Discounts may be
modified or terminated at any time in the sole discretion of each
Fund.
(b) You agree to advise us promptly as to the amount
of any and all sales by you qualifying for a discount.
(c) Exchanges (i.e., the investment of the proceeds from the
liquidation of Shares of one Series in the Shares of another Series,
each of which is managed by the same or an affiliated investment
adviser) shall, where available, be made in accordance with the
terms of each Prospectus.
(d) You represent that you have, and will maintain
during the term of this Contract, adequate written supervisory
procedures and internal controls to ensure that your customers
receive all available discounts, and you agree: (i) to inform your
customers of applicable discount opportunities and to inquire about
other qualifying holdings that might entitle customers to receive
discounts; (ii) to advise us, contemporaneously with each purchase
order you forward to us as agent for your customers, of the
availability of any discounts; and (iii) that in the event that you fail to
provide us with information concerning the availability of discounts
as provided in (ii) above, you, and not us or the Funds, shall be
responsible for reimbursing your customer any applicable discount
amount.
14. As a result of the necessity to compute the amount of any
contingent deferred sales charge or redemption charge due with
respect to the redemption of Shares, you may hold Shares of a Fund
imposing such a charge in a "street name" account with our consent,
and, in such event, you shall be responsible for computation,
collection and payment to us of such charges, the application of any
discounts, the application of Fund or Series' market-timing policies,
all in accordance with the applicable Prospectus for the Fund or
Series. Except as otherwise permitted by us, Shares owned by a
shareholder must be in a separate identifiable account for such
shareholder.
15. (a) We and each Fund reserve the right in our discretion,
without notice, to suspend sales or withdraw the offering of any
Shares entirely. Each party hereto has the right to terminate this
Contract without penalty upon notice to the other party; provided,
however, that termination shall not affect any party's obligations
hereunder with respect to any transactions or activities occurring
prior to the effective time of termination. Upon termination of this
Contract, ongoing trail commissions and/or shareholder servicing
fees shall no longer accrue or be paid to you. We reserve the right to
amend this Contract in any respect effective on notice to you and
your placing of an order after the effective date of any such
amendment shall constitute your acceptance thereof. Each notice of
amendment required by this paragraph shall be given in writing and
delivered personally or mailed by certified mail or overnight courier
service or sent by facsimile to the address identified herein or such
other address as you may by written notice provide.
(b) Each party hereto agrees to provide prompt notice to
the other party in the event of an assignment to this Contract.
16. We shall have full authority to take such action as we may
deem advisable in respect of all matters pertaining to the continuous
offering of Shares. We shall be under no liability to you except for
lack of good faith and for obligations expressly assumed by us
herein. Nothing contained in this paragraph 16 is intended to operate
as, and the provisions of this paragraph 16 shall not in any way
whatsoever constitute a waiver by you of compliance with, any
provisions of the 1933 Act or of the rules and regulations of the SEC
issued thereunder.
17. You agree that: (a) you shall not effect any transactions
(including, without limitation, any purchases and redemptions) in
any Shares registered in the name of, or beneficially owned by, any
customer unless such customer has granted you full right, power and
authority to effect such transactions on his behalf, (b) we shall have
full authority to act upon your express instructions to sell,
repurchase or exchange Shares through us on behalf of your
customers under the terms and conditions provided in the Prospectus
and (c) you shall indemnify and hold harmless the Funds, us and
both of our respective affiliates, representatives and agents,
successors and assigns, officers and directors, and each person who
controls either us or the Funds (within the meaning of Section 15 of
the 0000 Xxx) from and against any and all direct or indirect costs,
claims, expenses, liabilities or losses, including attorney's fees
resulting from (i) any alleged violation of any statute or regulation or
rule of a self-regulatory organization (including, without limitation,
the securities laws and regulations of the United States or any state
or jurisdiction or the NASD Conduct Rules) or any alleged tort or
breach of contract, related to the offer or sale by you of Shares of the
Funds pursuant to this Contract (except to the extent that our
negligence or failure to follow correct instructions received from
you is the cause of such loss, claim, liability, cost or expense); (ii)
requests, directions, actions or inactions of or by you, your officers,
directors, employees, partners or agents regarding the purchase,
redemption or transfer of registration of Shares of the Funds for your
accounts, your customers and other shareholders or from any
unauthorized or improper use of any on-line computer facilities; (iii)
incorrect investment instructions received by us or a Fund or Fund
agent from you; or (iv) the breach by you of any of your
representations, warranties or agreements specified herein or your
failure to comply with the terms and conditions of this Contract.
We agree to indemnify you and hold you harmless from and
against any and all liabilities and losses resulting directly from (i)
any misstatement of a material fact in the Prospectus of a Fund or
Series or the omission of any material fact required to be stated in the
Prospectus of a Fund or Series or necessary to make the statements
in the Prospectus not misleading; or (ii) our failure to comply with
the terms and conditions of this Contract. The foregoing
indemnification provisions shall survive termination of this
Contract.
18. (a) You shall be permitted to accept orders for the purchase,
exchange or redemption of Shares of the Funds on each business day
that the New York Stock Exchange ("NYSE") is open for business
and a Fund's net asset value is determined ("Business Day").
Instructions received in proper form by you prior to time of
acceptance for orders set forth in the applicable Prospectus ("Close
of Trading") (generally the close of regular trading on the NYSE,
which is generally 4:00 p.m. Eastern Time), and with respect to
which you transmit orders to the Fund via the NSCC Fund/SERV
system up to the latest time accepted by Fund/SERV on a given
Business Day, will be deemed to have occurred, and will be credited
to the respective account, at the per share NAV next calculated after
the Close of Trading on that Business Day. You will not transmit
orders based on Instructions received from Shareholders after the
Close of Trading for that Business Day's NAV.
(b) The offering price ("Offering Price") of Shares of
each Investment Company shall be the net asset value per share as
next determined by the Investment Company following receipt of an
order at Financial Intermediary's principal office, plus any
applicable sales charge.
(c) You agree to maintain records sufficient to identify the
date and time of receipt of all customer transactions or as otherwise
required by applicable Law and Regulation. You further agree to
make such records available upon request for examination by us, or
its designated representative, at the request of the transfer agent or by
appropriate governmental authorities. Under no circumstances shall
you change, alter or manipulate any customer transactions received
by you in good order.
19. Solely for the limited purpose of receiving orders for the
Shares of the Funds by customers prior to the Close of Trading on a
Business Day and communicating such orders after the Close of
Trading on such Business Day, you will be deemed to act as agent of
the Funds. Each communication of orders by you shall constitute a
representation that such orders were received by us prior to the
calculation of net asset value, as described in the applicable
Prospectus on the Business Day on which the order is priced in
accordance with Rule 22c-1 under the Investment Company Act of
1940. You represent and warrant that: (i) there are controls in place
designed to prevent market timing, (ii) you will use your best efforts
to assist us in identifying market timers or investors who engage in a
pattern of short-term trading, and (iii) your internal systems for
processing and transmitting orders are suitably designed to prevent
orders received at or after the Close of Trading from being
aggregated with orders received before the Close of Trading.
20. You agree that, with respect to the compensation you
receive in connection with the offering of Shares or transactions
involving Shares (including payments from us or our affiliates), you
will make or cause to be made disclosure of such payments in
accordance with applicable Law and Regulation.
21. You agree that it is your responsibility to evaluate and
determine that any transaction in Shares (including a transaction in a
specific class of Shares of a Fund or Series) is a suitable transaction
for each client based on the client's objectives and risk profile. If
you are a Bank, you further represent and warrant to us that you will
use your best efforts to ensure that any purchase of Shares by your
customers constitutes a suitable investment for such customers. You
shall not effect any transaction in, or induce any purchase or sale of,
any Shares by means of any manipulative, deceptive or other
fraudulent device or contrivance and shall otherwise deal equitably
and fairly with your customers with respect to transactions in Shares.
22. If you are a Bank, you will not make Shares available to
your customers, including your fiduciary customers, or accept any
fees or compensation hereunder except in compliance with all Law
and Regulation applicable to you, or any of your affiliates engaging
in such activity, including without limitation ERISA and regulated
rules, regulations and interpretations, which may affect your
business practices.
23. In selling Shares you will comply with all applicable
Law and Regulation, including the applicable Law and Regulation
of the jurisdictions in which you sell any Shares directly or
indirectly.
24. You represent and warrant to us and the Funds:
(a) You have in place an anti-money laundering program
("AML program") that does now and will continue to comply with
applicable laws and regulations, including the relevant provisions of
the Bank Secrecy Act and the USA PATRIOT Act (Pub. L. No.
107-56 (2001)), as they may be amended, and the regulations issued
thereunder by duly vested regulatory authority and the conduct the
Rules of the NASD and the New York Stock Exchange, Inc., as
applicable ("Anti-Money Laundering Law and Regulation").
(b) You have, after undertaking reasonable inquiry, no
information or knowledge that (i) any customers that you introduce
to the Funds or on whose behalf you purchase Shares, or (ii) any
person or entity controlling, controlled by or under common control
with such customers is an individual or entity or in a country or
territory that is on an Office of Foreign Assets Control ("OFAC")
list or similar list of sanctioned or prohibited persons maintained by
a U.S. governmental or regulatory body.
(c) You have in place, and have conducted due diligence
pursuant to, policies, procedures and internal controls reasonably
designed (i) to verify the identity of the customers that you introduce
to the Funds or on whose behalf you purchase Shares, and (ii) to
identify those customers' sources of funds, and have no reason to
believe that any of the invested funds were derived from illegal
activities.
(d) You will provide us or the Funds (or their service
providers) upon reasonable request any information regarding
specific accounts that may be reasonably necessary for the Funds
and their service providers to fulfill their responsibilities relating to
their anti-money laundering programs or any other information
reasonably requested by us or the Funds (or their service providers)
to assist with compliance with the Anti-Money Laundering Law and
Regulation, as may be permitted by law or regulation.
(e) You will promptly notify us should you become aware
of any change in the above representations and warranties. In
addition, we on our own behalf and on behalf of the Funds hereby
provide notice to you that we and/or the Funds reserve the right to
make inquires of and request additional information from you
regarding your AML program.
25. (a) You represent and warrant that you have adopted and
implemented procedures to safeguard customer information and
records that are reasonably designed to ensure the security and
confidentiality of customer records and information and to ensure
your compliance with the SEC's Regulation S-P or other applicable
privacy law. Both of us agree on behalf of ourselves, our affiliates
and employees that the terms of this Contract, information
exchanged hereunder and information about our respective
customers and potential customers is confidential and as such shall
not be disclosed, sold or used in any way except to carry out the
terms of this Contract. Notwithstanding the foregoing, such
confidential information may be disclosed on a "need to know" basis
as set forth in applicable privacy rules and regulations. The
obligations regarding confidentiality hereunder shall not apply to
any information which is (i) otherwise publicly available, (ii)
already possessed by the entity to whom the information was
disclosed prior to disclosure hereunder, (iii) independently
developed by the entity, or (iv) disclosed pursuant to law, rule,
regulation or court or administrative order. The provisions of this
paragraph shall survive termination of this Contract.
(b) You represent and warrant that the security of your
computer system is commercially reasonable and reasonably
designed to prevent any illegal or injurious activities of persons
(including persons outside of you) attempting to access a computer
system maintained or operated by or on behalf of us or the Funds
through your computer system.
26. You agree that you will promptly forward any client
complaints or threatened or pending litigation notices specifically
relating to the management of the Funds, whether written or if verbal,
in the form of a written summary, to us or our designated party. We
or our designated party will undertake to investigate and respond to
the complaint or threatened or pending litigation notices in line with
our complaints and litigation procedures. You agree to fully
cooperate with such investigation and response.
27. (a) If you are a broker-dealer, you represent and warrant
that: (a) you are a member in good standing of the NASD, or, if a
foreign dealer who is not eligible for membership in the NASD, that
(i) you will not make any sales of Shares in, or to nationals of, the
United States of America, its territories or its possessions, and (ii) in
making any sales of Shares you will comply with the NASD's
Conduct Rules and (b) you are a member in good standing of the
Securities Investor Protection Corporation ("SIPC"). You agree to
notify us immediately in the event of (i) your expulsion or
suspension from the NASD or SIPC, or (ii) the institution of an
investigation or proceeding by any federal, state or self-regulatory
organization against you alleging that you have violated any
applicable federal or state law, rule or regulation or any rule of the
NASD or of SIPC arising out of your activities as a broker-dealer or
bank, as appropriate, or in connection with this Contract, or which
may otherwise affect in any material way its ability to act in
accordance with the terms of this Contract. We shall have the right
to terminate immediately upon receipt of such notice.
(b) You represent and warrant that (i) each employee and
agent of yours who shall engage in the offering or sale of Shares is
currently duly licensed under applicable federal and state laws and
regulations, and, if you are a broker-dealer, with the NASD, and (ii)
you shall not permit any employee or agent to offer or sell Shares
unless such person is duly licensed under applicable federal and state
laws and regulations, and with the NASD.
28. If you are a Bank or distributing through a Bank affiliate,
you or the affiliate represent and warrant that you or the affiliate are
not in violation of any banking law, rule or regulations as to which
you are subject and that the transactions contemplated by this
Contract will not result in any violations of any banking law, rule or
regulation.
29. You agree that it is your responsibility to provide proper
instruction, training and supervision of appropriate sales personnel
in order that Shares will be offered and sold in accordance with the
terms and conditions of this Contract and in accordance with all
applicable laws. You also agree that it is your responsibility to
assure that your sales personnel are properly licensed, certified and
familiar with the Funds, Series and any classes thereof.
30. You represent and warrant that you will not offer Shares of
any Fund or Series for sale in any state or jurisdiction where such
Shares may not be legally sold or where you are not qualified to act
as a broker-dealer. We shall inform you as to the states or other
jurisdictions in which the Fund or Series has advised us that Shares
have been qualified for sale under, or are exempt from the
requirements of, the respective securities laws of such states.
31. You agree to distribute or cause to be delivered to your
customers Prospectuses, proxy solicitation materials, shareholder
reports and other materials in compliance with applicable legal
requirements, except to the extent that we undertake to do so.
32. (a) We shall notify you of the states or other jurisdictions
in which Shares are currently available for sale to the public. We
shall have no obligation to register or make available Shares in any
state or other jurisdiction.
(b) [You shall provide to the transfer agent of each Fund or
Series each client's state of residency on each trade record and
registration record so we can monitor trades for blue sky
compliance. The Fund or its agent will reject any ineligible trades
and notify you upon cancellation.]
33. You shall not incur, nor does it have the authority to incur,
any debts or obligations on behalf of us or any Fund or Series.
34. You shall provide any assistance that we or the Funds
reasonably request in connection with a Fund's or Series'
solicitation of proxies.
35. Any claim, controversy, dispute or deadlock arising under
this agreement (collectively, a "Dispute") shall be settled by
arbitration administered in accordance with the rules and regulations
of the NASD. Any arbitration and award of the arbitrators, or a
majority of them, shall be final and the judgment upon the award
rendered may be entered in any state or federal court having
jurisdiction. No punitive damages are to be awarded.
36. All communications to us should be sent, postage prepaid,
to __________________. Any notice to you shall be duly given if
mailed, telegraphed or telecopied to you at the address specified by
you below. Communications regarding placement of orders for
Shares should be sent, postage prepaid, to
________________________________________.
37. This Contract shall be binding upon both parties hereto
when signed by us and accepted by you in the space provided below;
provided, however, that you shall not have any obligations
hereunder other than in respect of the duties and agreements
expressly undertaken and made by you herein.
38. This Contract and the terms and conditions set forth herein
shall be governed by, and construed in accordance with, the laws of
the State of Maryland. To the extent that the applicable laws of the
State of Maryland conflict with the applicable provisions of the
federal securities laws, the latter shall control.
39. To the extent a Fund or Series imposes a redemption fee as
provided in the applicable Prospectus, you agree to abide and
comply with the terms of the attached Redemption Fee Addendum.
40. This Contract shall not be construed to constitute a
partnership, joint venture, or agency between you and us or any
Fund or Series, nor to create an employer-employee relationship
between you and us. You acknowledge that you are an independent
contractor, that your business is its own and entirely separate from
that of ours and the Funds and Series, and that you will not deal with
or represent itself to the public in any other way.
41. You agree to provide us with any assistance or report that
we reasonably request in order to fulfill our duties to assist the Funds
with compliance with Rule 38a-1 under the 1940 Act, in our capacity
as principal underwriter to each Fund.
Xxxx Xxxxx Investor Services,
LLC
By:
Managing Director
Accepted:
Firm Name: _____________________________
NASD Registration
Number: _____________________________
By: _____________________________
Address: _____________________________
_____________________________
Accepted By (signature):
Name (print): Title:
Date:
SCHEDULE A - FUNDS
[insert funds]
SCHEDULE B - COMPENSATION
Beginning on the effective date of this Contract, for each Fund
listed on Schedule A, Xxxx Xxxxx will pay the Financial
Intermediary a quarterly fee equal on an annual basis to [0.25%] of
the average daily net asset value of [Financial Intermediary Shares
of Funds] owned beneficially by clients of the Financial
Intermediary during such period.
*Institutional shares do not pay service fees
Redemption Fee Addendum
