DISTRIBUTION AGREEMENT
This Distribution Agreement is made as of March 19, 1998 between The
OFFITBANK Investment Fund, Inc., a Maryland corporation (herein called the
"Company"), and OFFIT Funds Distributor, Inc. (herein called "Distributor"), a
wholly-owned subsidiary of Provident Distributors, Inc.
WHEREAS, the Company is an open-end, management investment company and is
so registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Company will offer and maintain multiple investment
portfolios as specified in its Registration Statement on Form N-1A (each
individually a "Fund" and collectively the "Funds"); and
WHEREAS, the Company desires to retain Distributor as distributor for the
Funds to provide for the sale, distribution and redemption of shares of common
stock of the Funds (herein collectively called "Shares"), and Distributor is
willing to render such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein the parties hereto agree as follows:
I. DELIVERY OF DOCUMENTS
The Company has delivered to Distributor copies of each of the following
documents and shall deliver to it all future amendments and supplements
thereto, if any:
(a) The Company's Charter and all amendments thereto (such Charter, as
presently in effect and as it shall from time to time be amended,
herein called the "Company's Charter");
(b) Bylaws of the Company (such Bylaws, as presently in effect and as
they shall from time to time be amended, herein called the
"Bylaws");
(c) Resolutions of the Board of Directors of the Company authorizing the
execution and delivery of this Agreement;
(d) The Company's registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and the 1940 Act, on Form N-1A as
filed with the Securities and Exchange Commission (the "Commission")
relating to the Shares, and all subsequent amendments thereto (said
registration statement, as presently in effect and as amended or
supplemented from time to time, is herein called the "Registration
Statement");
(e) Notification of Registration of the Company under the 1940 Act on
Form N-8A as
filed with the Commission; and
(f) Prospectuses and statements of additional information of the Company
and of the Funds (such prospectuses and statements of additional
information, as presently in effect and as they shall from time to
time be amended and supplemented, herein called individually the
"Prospectus" and collectively the "Prospectuses").
II. DISTRIBUTION
1. APPOINTMENT OF DISTRIBUTOR.
The Company hereby appoints Distributor as distributor of the Funds'
Shares and Distributor hereby accepts such appointment and agrees to
render the services and duties set forth in this Section II. The
Distributor shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided herein or
authorized by the Board of Directors of the Company from time to time,
have no authority to act for or represent the Company in any way or
otherwise be deemed its agent. The services furnished by the Distributor
hereunder are not deemed exclusive, and the Distributor shall be free to
furnish similar services to others so long as its services under this
agreement are not impaired thereby.
2. SERVICES AND DUTIES.
(a) The Company agrees to sell through Distributor, as agent, from
time to time during the term of this Agreement, Shares of the
Funds upon the terms and at the current offering price as
described in the applicable Prospectus. Distributor shall act
only on its own behalf as principal in making agreements for
the sale and redemption of Shares, and shall sell Shares only
at the offering price thereof as set forth in the applicable
Prospectus. Distributor shall devote its best efforts to
effect sales of Shares of each of the Funds, but shall not be
obligated to sell any certain number of Shares.
(b) In all matters relating to the sale and redemption of Shares,
Distributor shall act in conformity with the Company's
Charter, Bylaws and Prospectuses and with the instructions and
directions of the Board of Directors of the Company, and shall
conform to and comply with the requirements of the 1933 Act,
the 1940 Act, the regulations of the NASD Regulation, Inc. and
all other applicable federal or state laws and regulations. In
connection with such sales, Distributor acknowledges and
agrees that it is not authorized to provide any information or
make any representations other than as contained in the
Company's Registration Statement and Prospectuses and any
sales literature specifically approved by the Company. The
Company shall furnish from time to time, for use in connection
with the sale of the Shares, such information with respect to
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the Funds and the Shares as Distributor may reasonably
request.
(c) Except to the extent permitted by a plan adopted by the
Company under Rule 12b-1 of the 1940 Act, Distributor shall
bear the cost of (i) printing and distributing any Prospectus
(including any supplement thereto), and (ii) preparing,
printing and distributing any literature, advertisement or
material which is primarily intended to result in the sale of
the Shares; provided, however, that Distributor shall not be
obligated to bear the expenses incurred by the Company in
connection with (1) the preparation and printing of any
supplement or amendment to any Registration Statement or
Prospectus necessary for the continued effective registration
of the Shares under the 1933 Act or any state securities laws;
and (2) the printing and distribution of any Prospectus,
supplement or amendment thereto for existing shareholders of
the Fund described therein.
(d) The Company, or any agent of the Company designated in writing
by the Company, shall be promptly advised of all purchase
orders for Shares received by the Distributor.
(e) The Distributor shall provide the services of certain persons
who may be appointed as officers of the Company by the
Company's Board of Directors.
(f) It is understood that certain expenses to be incurred in
connection with the shares may be paid as provided in a
shareholder service plan or similar plan adopted by the
Company. The Distributor agrees to be responsible for the
operation of such plan in accordance with the terms thereof.
(g) The Company shall have the right at any time to inspect the
records of the Company (including work papers and other
related documents) in the possession of the Distributor.
3. SALES AND REDEMPTIONS.
(a) Shares of the Company are to be sold by the Distributor to
shareholders at the offering price as set forth in the
Prospectuses then in effect.
(b) The Company shall pay all costs and expenses in connection
with the registration of the Shares under the 1933 Act, and
all expenses in connection with maintaining facilities for the
issue and transfer of the Shares and for supplying
information, prices and other data to be furnished by the
Company hereunder, and all expenses in connection with
preparing, printing and distributing the Prospectuses except
as set forth in subsection 2(c) of Section II hereof or in any
other agreement entered into by the Company.
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(c) The Company shall execute all documents, furnish all
information and otherwise take all actions which may be
reasonably necessary in the discretion of the Company's
officers in connection with the qualification of the Shares
for sale in such states as Distributor may designate to the
Company and the Company may approve, and the Company shall pay
all filing fees which may be incurred in connection with such
qualification. Distributor shall pay all expenses connected
with its qualification as a dealer under state or federal laws
and, except as otherwise specifically provided in this
Agreement, all other expenses incurred by Distributor in
connection with the sale of the Shares as contemplated in this
Agreement.
(d) Any of the outstanding Shares of the Company may be tendered
for redemption at any time, and the Company agrees to
repurchase or redeem the Shares so tendered in accordance with
the Company's Charter, Bylaws and Prospectuses. The price to
be paid to redeem or repurchase the Shares shall be equal to
the net asset value per Share determined as set forth in the
applicable Prospectus (the "redemption price"). All payments
by the Company hereunder shall be made in the manner set forth
in Section 3(e) below.
(e) The proceeds of any redemption of shares shall be paid by the
Company (or its agent) in accordance with the applicable
provisions of the applicable Prospectus.
(f) The Company shall have the right to suspend the sale of Shares
of any Fund at any time in response to conditions in the
securities markets or otherwise, and to suspend the redemption
of Shares of any Fund at any time as permitted by the 1940 Act
or the rules of the Commission (the "Rules").
(g) The Company reserves the right to reject in its discretion any
order for Shares.
III. LIMITATIONS OF LIABILITY
Distributor shall not be liable for any error of judgement or mistake of
law or for any loss suffered by the Company or any Fund in connection with
the matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or negligence on its part in the
performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
IV. CONFIDENTIALITY
Distributor shall treat confidentially and as proprietary information of
the Company all
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records and other information relative to the Company and the Funds and
prior or present shareholders or those persons or entities who respond to
Distributor"s inquiries concerning investment in the Company, and shall
not use such records and information for any purpose other than the
performance of its responsibilities and duties hereunder or under any
other agreement with the Company, except after prior notification to and
approval in writing by the Company, which approval shall not be
unreasonably withheld and may not be withheld where Distributor may be
exposed to civil or criminal contempt proceedings for failure to comply,
when Distributor is requested to divulge such information by duly
constituted authorities, or when Distributor is so requested by the
Company.
V. INDEMNIFICATION
1. COMPANY REPRESENTATIONS.
The Company represents and warrants to Distributor that (a) it is
duly organized as a Maryland corporation and is and at all times
will remain duly authorized to enter into and perform this
Agreement, and (b) at all times the Registration Statement and
Prospectuses will in all material respects conform to the applicable
requirements of the 1933 Act and the Rules and will not include any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading, except that no representation or warranty
in this subsection shall apply to statements or omissions made in
reliance upon and in conformity with written information furnished
to the Company by or on behalf of and with respect to Distributor
expressly for use in the Registration Statement or Prospectuses.
2. DISTRIBUTOR REPRESENTATIONS.
Distributor represents and warrants to the Company that (a) it is
duly organized as a Delaware corporation and is and at all times
will remain duly authorized and licensed to carry out its services
as contemplated herein (b) at all times any written information
furnished to the Company by or on behalf of Distributor expressly
for use in the Registration Statement or Prospectuses will not
include any untrue statement of material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading and (d) Distributor is at all times during
the term of this Agreement a registered broker-dealer under the
Securities Exchange Act of 1934.
3. COMPANY INDEMNIFICATION.
The Company shall indemnify, defend and hold harmless Distributor,
its several officers and directors, and any person who controls
Distributor within the
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meaning of Section 15 of the 1933 Act, from and against any losses,
claims, damages or liabilities, joint or several, to which any of
them may become subject under the 1933 Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, the Prospectuses or any
application or other document executed by or on behalf of the
Company, or arise out of, or are based upon, information furnished
by or on behalf of the Company filed in any state in order to
qualify the Shares under the securities or blue sky laws thereof
("Blue Sky Applications"), or arise out of, or are based upon, 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, and shall reimburse Distributor, its several
officers and partners, and any person who controls Distributor
within the meaning of Section 15 of the 1933 Act, for any legal or
other expenses reasonably incurred by any of them in investigating,
defending or preparing to defend any such action, proceeding or
claim; provided, however, that the Company shall not be liable in
any case to the extent that such loss, claim, damage or liability
arises out of, or is based upon, any untrue statement, alleged
untrue statement, or omission or alleged omission made or
information in the Registration Statement, the Prospectuses, any
Blue Sky Application or any application or other document executed
by or on behalf of the Company in reliance upon and in conformity
with written information furnished to the Company by or on behalf of
and with respect to Distributor specifically for inclusion therein.
The Company shall not indemnify any person pursuant to this
subsection 3 of Section V hereof unless the court or other body
before which the proceeding was brought has rendered a final
decision on the merits that such person was not liable by reason of
his willful misfeasance, bad faith or negligence in the performance
of his duties, or his reckless disregard of obligations and duties,
under this Agreement ("disabling conduct") or, in the absence of
such a decision, a reasonable determination (based upon a review of
the facts) that such person was not liable by reason of disabling
conduct has been made by the vote of a majority of a quorum of
directors of the Company who are neither "interested persons" of the
Company (as defined in the 0000 Xxx) nor parties to the proceeding,
or by an independent legal counsel in a written opinion.
Each Fund shall advance attorneys' fees and other expenses incurred
by any person in defending any claim, demand, action or suit which
is the subject of a claim for indemnification pursuant to this
subsection 3 of Section V hereof, so long as:
(a) such person shall undertake to repay all such advances unless
it is ultimately determined that he is entitled to
indemnification hereunder; and
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(b) such person shall provide security for such undertaking, or
the Fund shall be insured against losses arising by reason of
any lawful advances, or a majority of a quorum of the
disinterested, non-party directors of the Company (or an
independent legal counsel in a written opinion) shall
determine based on a review of readily available facts (as
opposed to a full trial-type inquiry) that there is reason to
believe that such person ultimately will be found entitled to
indemnification hereunder.
4. DISTRIBUTOR INDEMNIFICATION
Distributor shall indemnify, defend and hold harmless the Company, each
Fund, the Company's several officers and directors and any person who
controls the Company or any Fund within the meaning of Section 15 of the
1933 Act, from and against any losses, claims, damages or liabilities,
joint or several, to which any of them may become subject under the 1933
Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions or proceedings in respect thereof) arise out of, or are based
upon, any breach of its representations and warranties in subsection 2 of
Section V or its agreements in subsection 2 of the Section II hereof, or
which arise out of, or are based upon, any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement, the Prospectuses, or any application or other document executed
by or on behalf of the Company, or arise out of, or are based upon
information furnished by the Distributor filed in any Blue Sky
Application, or arise out of, or are based upon, 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, which statement
or omission was made in reliance upon and in conformity with information
furnished to the Company or any of its several officers and directors by
or on behalf of and with respect to Distributor specifically for inclusion
therein, and shall reimburse the Company, each Fund, the Company's several
officers and directors, and any person who controls the Company or any
Fund within the meaning of Section 15 of the 1933 Act, for any legal or
other expenses reasonable incurred by any of them in investigating,
defending or preparing to defend any such action, proceeding or claim.
5. GENERAL INDEMNITY PROVISIONS.
No indemnifying party shall be liable under its indemnity agreement
contained in subsection 3 or 4 of Section V hereof with respect to any
claim made against such indemnifying party unless the indemnified party
shall have notified the indemnifying party in writing within a reasonable
time after the summons or other first legal process giving information of
the nature of the claim shall have been served upon the indemnified party
(or after the indemnified party shall have received notice of such service
on any designated agent), but failure to notify the indemnifying party of
any such claim shall not relieve it from any liability which it may
otherwise have to the indemnified party. The indemnifying party shall be
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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, and if the indemnifying party elects to assume the defense,
such defense shall be conducted by counsel chosen by it and reasonably
satisfactory to the indemnified party. In the event the indemnifying party
elects to assume the defense of any such suit and retain such counsel, the
indemnified party shall bear the fees and expenses of any additional
counsel retained by the indemnified party.
VI. DURATION AND TERMINATION
This Agreement shall become effective as of the date hereof and, unless
sooner terminated as provided herein, shall continue in effect with
respect to each Fund until February 27, 2000. Thereafter, if not
terminated, this Agreement shall continue automatically for successive
terms of one year, provided that such continuance is specifically approved
at least annually (a) by a vote of a majority of those members of the
Board of Directors of the Company who are not parties to this Agreement or
"interested persons" of any such party, cast in person at a meeting called
for the purpose of voting on such approval, and (b) by the Board of
Directors of the Company or by vote of a "majority of the outstanding
voting securities" of the Funds as to which the Agreement is effective;
provided, however, that this Agreement may be terminated by the Company at
any time, without the payment of any penalty, by vote of a majority of the
entire Board of Directors of the Company or by a vote of a "majority of
the outstanding voting securities" of such Funds on sixty (60) days' prior
written notice to Distributor, or by Distributor at any time, without the
payment of any penalty, on ninety (90) days' prior written notice to the
Company. This Agreement shall automatically and immediately terminate in
the event of its "assignment". As used in this Agreement, the terms
"majority of the outstanding voting securities," "interested person" and
"assignment" shall have the same meanings as such terms have in the 1940
Act. Any documents, records or work papers prepared by Distributor on
behalf of the Company in order to maintain the regulatory records of the
Funds shall become the property of the Company. In the event of
termination, Distributor shall promptly, upon written request, turn over
such documents, records or work papers to the Company.
VII. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived, discharged or
terminated except by an instrument in writing signed by the party against
whom an enforcement of the change, waiver, discharge or termination is
sought.
VIII. NOTICES
Notices of any kind to be given to the Company hereunder by Distributor
shall be in writing and shall be duly given if mailed or delivered to the
Company at:
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The OFFITBANK Investment Fund, Inc.
c/o OFFITBANK
520 Madison Avenue, 27th floor
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxx Xxxxx
or such other address or to such individual as shall be so specified by
the one party to the other party.
Notices of any kind to be given to Distributor hereunder by the Company
shall be in writing and shall be duly given if mailed or delivered to
Distributor at:
Xxxxxx Xxxxxxx
Provident Distributors, Inc.
Four Falls Corporate Center, 0xx Xxxxx
Xxxx Xxxxxxxxxxxx, XX 00000-0000
or such other address or to such individual as shall be so specified by
the one party to the other party.
IX. MISCELLANEOUS
The obligations of each Fund under this Agreement shall be the several
(and not joint or joint and several) obligations of each Fund. The
captions in this Agreement are included for convenience of reference only
and in no way define or delimit any of the provisions hereof or otherwise
affect their construction or effect. If any provision of the Agreement
shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby.
Subject to the provisions of Section VI hereof, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors and shall be governed by Delaware law (without
regard to principles of conflicts of law); provided, however, that nothing
herein shall be construed in a manner inconsistent with the 1940 Act or
any rule or regulation of the Commission thereunder. This Agreement may be
executed in two or more parts which together shall constitute a single
agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
The OFFITBANK Investment Fund, Inc.
By: /s/ Xxxxxxx Xxxxx Xxxxx
-----------------------
Provident Distributors, Inc.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------
Chief Executive Officer
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