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MAINSTAY CALIFORNIA TAX FREE FUND
MAINSTAY NEW YORK TAX FREE FUND
DISTRIBUTION AGREEMENT
AGREEMENT made as of this 1st day of January, 0000, xxxxxxx
XXXXXXXX XXXXXXXXXX TAX FREE FUND and MAINSTAY NEW YORK TAX FREE FUND (the
"Funds"), series of THE MAINSTAY FUNDS, a Massachusetts business trust (the
"Trust"), and NYLIFE DISTRIBUTORS INC., a New York corporation (the
"Distributor").
W I T N E S S E T H :
WHEREAS, the Funds are registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as non-diversified mutual
funds and it is in the interest of each Fund to offer its shares of beneficial
interest (the "Shares") for sale in a public offering;
WHEREAS, the Funds and the Distributor wish to enter into an
agreement with each other with respect to the initial offering of the Shares of
each Fund, to commence after the effectiveness of the Funds' initial
registration statement filed pursuant to the Securities Act of 1933, as amended
(the "1933 Act"), and the 1940 Act.
NOW, THEREFORE, the parties agree as follows:
Section 1. Appointment of the Distributor.
The Funds hereby appoint the Distributor as the Funds'
exclusive agent to sell and to arrange for the sale of the Shares of each Fund,
on the terms and for the period set forth in this Agreement, and the
Distributor hereby accepts such appointment and agrees to act hereunder.
Section 2. Services and Duties of the Distributor.
(a) The Distributor agrees to sell, as agent for the Funds,
during the term of this Agreement, the Shares of each Fund upon the terms
described in the Prospectus. As used in this Agreement, the term "Prospectus"
shall mean the Prospectus and the Statement of Additional Information included
as part of the Funds Registration Statement, as such Prospectus and Statement
of Additional Information may be amended or supplemented from time to time, and
the term "Registration Statement" shall mean the Registration Statement most
recently filed from time to time by the Funds with the Securities and Exchange
Commission and effective under the 1933 Act and the 1940 Act, as such
Registration Statement is amended by any amendments thereto at the tie in
effect.
(b) Upon commencement of each Fund's operations, the
Distributor will hold itself available to receive orders, satisfactory to the
Distributor, for the purchase of the Shares of each Fund and will accept such
orders on behalf of each Fund as of the time of receipt of such orders and will
transmit such orders as are so accepted to the Funds' transfer and dividend
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disbursing agent as promptly as practicable. Purchase orders shall be deemed
effective at the times and in the manner set forth in the Prospectus.
(c) The Distributor in its discretion may purchase from each
Fund as principal and may sell Shares of each Fund to such registered and
qualified retail dealers as it may select. In making agreements with such
dealers, the Distributor shall act only as principal and not as agent for the
Funds.
(d) The Distributor shall not be obligated to sell any
certain number of Shares and nothing herein contained shall prevent the
Distributor from entering into like distribution arrangements with other
investment companies so long as the performance of its obligations hereunder is
not impaired thereby.
(e) The Distributor is authorized on behalf of the Funds to
purchase Shares of the Funds presented to it by dealers at the price determined
in accordance with, and in the manner set forth in, the Prospectus.
Section 3. Duties of Each Fund.
(a) Each Fund agrees to sell its Shares so long as it has
Shares available for sale except for such times at which the sale of Shares of
that Fund has been suspended by order of the Trustees or order of the
Securities and Exchange Commission; and to deliver certificates (if any) for,
or cause the Funds' transfer and dividend disbursing agent to issue
confirmations evidencing, such Shares registered in such names and amounts as
the Distributor has requested in writing, as promptly as practicable after
receipt by that Fund of payment therefor at the net asset value thereof and
written request of the Distributor therefor.
(b) Each Fund shall keep the Distributor fully informed with
regard to its affairs and shall furnish to the Distributor copies of all
information, financial statement and other papers which the Distributor may
reasonably request for use in connection with the distribution of Shares of
that Fund, and this shall include one certified copy, upon request by the
distributor, of all financial statements prepared by the Fund and audited by
its independent accountants and such reasonable number of copies of its most
current Prospectus ad annual and interim reports as the Distributor may request,
and shall cooperate fully in the efforts of the Distributor to sell and arrange
for the sale of the Shares of the Fund and in the performance of the
Distributor under this Agreement.
(c) Each Fund shall take, from time to time, all such steps,
including payment of the related filing fee, as may be necessary to register
the Shares under the 1933 Act and to make available for sale such number of
Shares as the Distributor may be expected to sell. Each Fund agrees to file
from time to time such amendments, reports and other documents as may be
necessary in order that there may be no untrue statement of a material fact in
the Registration Statement or Prospectus, or necessary in order that there may
be no omission to state a material fact in the Registration Statement or
Prospectus which omission would make the statements therein misleading.
(d) Each Fund shall use its best efforts to qualify and
maintain the qualification of an appropriate number of Shares of that Fund for
sale under the securities laws of
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such states as the Distributor and the Fund may approve, and, if necessary or
appropriate in connection therewith, to qualify and maintain the qualification
of the Trust as broker or dealer in such states; provided that the Trust shall
not be required to amend its Declaration of Trust or By-laws to comply with the
laws of any state, to maintain an office in any state, to change the terms of
the offering of its Shares in any state from the terms set forth in its
Registration Statement and Prospectus, to qualify as a foreign corporation in
any state or to consent to service of process in any state other than with
respect to claims arising out of the offering of its Shares. The Distributor
shall furnish such information and other material relating to its affairs and
activities as may be required by the Funds in connection with such
qualifications.
Section 4. Expenses.
(a) Each Fund shall bear all costs and expenses of the
initial offering of its Shares in connection with: (i) fees and disbursements
of its counsel and independent accountants; (ii) the preparation, filing and
printing of any registration statements and/or prospectuses required by and
under the federal securities laws; (iii) the preparation and mailing of annual
and interim reports, prospectuses and proxy materials to shareholders; and (iv)
the qualifications of the Shares for sale and of the Trust pursuant to Section
3(d) hereof and the cost and expenses payable to each such state for continuing
qualification therein.
(b) The Distributor shall bear: (i) the costs and expenses or
preparing, printing and distributing any materials not prepared by the Funds
and other materials used by the Distributor in connection with its offering of
Shares of the Funds for sale to the public, including the additional cost of
printing copies of the Prospectus and of annual and interim reports to
shareholders, other than copies thereof required for distribution to existing
shareholders or for filing with any federal securities authorities; (ii) any
expenses of advertising incurred by the Distributor in connection with such
offering; and (iii) the expenses of registration or qualification of the
Distributor as a dealer or broker under federal or state laws and the expenses
of continuing such registration or qualification.
Section 5. Fees.
As compensation for the services it agrees to perform
hereunder, the Distributor shall be entitled to retain its portion of the sales
charge imposed on sales of the Shares on such terms and subject to such
conditions as are described in the Prospectus and the Statement of Additional
Information of the Funds.
Section 6. Indemnification.
Each Fund agrees to indemnify, defend and hold the
Distributor, its officers and directors and any person who controls the
Distributor 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
Distributor, its officers, directors or any such controlling person may incur
under the 1933 Act, or under common law or otherwise, arising out of or based
upon any alleged untrue statement of a material fact contained in the
Registration Statement or Prospectus or arising out of or based upon any alleged
omission to
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state a material fact required to be stated in either thereof or
necessary to make the statements in either thereof not misleading, except
insofar as such claims, demands, liabilities or expenses arising out of or are
based upon any such untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with information furnished in
writing by the Distributor to the Funds for use in the Registration Statement
or Prospectus; provided, however, that this indemnity agreement, to the extent
that it might require indemnity of any person who is also an officer or Trustee
of the Trust or who controls the Funds within the meaning of Section 15 of the
1933 Act, shall not inure to the benefit of such officer, Trustee or
controlling person unless a court of competent jurisdiction shall determine, or
it shall have been determined by controlling precedent, that such result would
not be against public policy as expressed in the 1933 Act; and further
provided, that in no event shall anything contained herein be so construed as
to protect the Distributor against any liability to the Funds or to its
security holders to which the Distributor would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of its reckless disregard of its obligations under this
Agreement. The Funds' agreement to indemnify the Distributor, its officers and
directors and any such controlling person as aforesaid is expressly conditioned
upon the Funds being promptly notified of any action brought against the
Distributor, its officers or directors, or any such controlling person, such
notification to be given by letter or telegram addressed to each Fund at its
principal business office. Each Fund agrees promptly to notify the Distributor
of the commencement of any litigation or proceedings against the Trust or any
of its officers or Trustees in connection with the issue and sale of the Shares
of the Fund.
The Distributor agrees to indemnify, defend and hold each
Fund, its officers and Trustees and any person who controls that Fund, if any,
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 against such claims, demands or liabilities
and any counsel fees incurred in connection therewith) which the Fund, its
Trustees or officers 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 the Fund, its Trustees or officers or such
controlling person resulting from such claims or demands shall arise out of or
be based upon any alleged untrue statement of a material fact contained in
information furnished in writing by the Distributor to that Fund for use in the
Registration Statement or Prospectus 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 in the Registration Statement or Prospectus or necessary
to make such information not misleading. The Distributor's agreement to
indemnify each Ind, its Trustees and officers, and any such controlling person
as aforesaid is expressly conditioned upon the Distributor's being promptly
notified of any action brought against that Fund, its officers or Trustees or
any such controlling person, such notification being given to the Distributor
at its principal business office.
Section 7. Compliance with Securities Law.
Each Fund represents that it is registered as a open-end,
non-diversified mutual fund under the 1940 Act, and agrees that it will comply
with all of the provisions of the 1940 Act and of the rules and regulations
thereunder. The Funds and the Distributor each agree to comply with all of the
applicable terms and provisions of the 1940 Act, the 1933 Act and, subject to
the
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provisions of Section 3(d) hereof, all applicable state Blue Sky laws,
including but not limited to the broker-dealer registration requirements. The
Distributor agrees to comply with all of the applicable terms and provisions of
the Securities Exchange Act of 1934, as amended, including but not limited to
the broker-dealer registration requirements.
Section 8. Term of Agreement; Termination.
This Agreement shall commence on the date first set forth
above. This Agreement shall continue in effect for a period more than two years
from the date hereof only so long as such continuance is specifically approved
at least annually in conformity with the requirements of the 1940 Act.
This Agreement shall terminate automatically in the event of
its assignment (as defined by the 1940 Act). In addition, this Agreement may be
terminated by either party at any time, without penalty, on not more than sixty
(60) days' nor less than thirty (30) days' written notice to the other party.
Section 9. Notices.
Any notice required to be given pursuant to this Agreement
shall be deemed duly given if delivered or mailed by registered mail, postage
prepaid, (1) to the Distributor at 00 Xxxxxxx Xxxxxx, Xxx Xxxx, X.X. 00000, or
(2) to the Funds at 00 Xxxxxxx Xxxxxx, Xxx Xxxx, X.X. 00000.
Section 10. Governing Law.
This Agreement shall be governed and construed in accordance
with the laws of the State of New York.
Section 11. Liability of Shareholders. Trustees. etc.
It is understood and expressly stipulated that none of the
Trustees, officers, agents or shareholders in the Fund shall be personally
liable hereunder. The name The Mainstay Funds is the designation of the Trust
for the time being under a declaration of Trust dated January 9, 1986, as
amended, and all persons dealing with the Trust must look solely to the
property of the Trust for the enforcement of any claims against the Trust as
neither the Trustees, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of the Trust. The Trust was
formerly designated the XxxXxx-Xxxxxxx MainStay Series Fund. No series of the
Trust shall be liable for any claims against any other series of the Trust.
MAINSTAY CALIFORNIA TAX FREE FUND
MAINSTAY NEW YORK TAX FREE FUND
series of The MainStay Funds
By:
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President and Chief Executive Officer
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NYLIFE DISTRIBUTORS INC.
By:
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President and Chief Executive Officer
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