DISTRIBUTION AGREEMENT
OF
HERITAGE CONVERTIBLE INCOME-GROWTH TRUST
This Distribution Agreement is made this 31st day of October,
1986, by and between Heritage Convertible Income-Growth Trust, a
Massachusetts business trust (the "Trust"), and Xxxxxxx, Xxxxx &
Associates, Inc. ("Xxxxxxx, Xxxxx").
WHEREAS, the Trust is registered as an open-end, diversified
investment company under the Investment Company Act of 1940, as amended
(the "1940 Act"), and has registered its shares of beneficial interest
(the "Shares") for sale to the public under the Securities Act of 1933, as
amended (the "1933 Act"), and various state securities laws; and
WHEREAS, the Trust wishes to retain Raymond, James, as the
Trust's Distributor in connection with the offering and sale of the Shares
and to furnish certain other services to the Trust as specified in this
Agreement; and
WHEREAS, this Agreement has been approved by a vote of the
Trust's Board of Trustees and certain disinterested Trustees in conformity
with Paragraph (b)(2) of Rule 12b-1 under the 1940 Act; and
WHEREAS, Xxxxxxx, Xxxxx is willing to act as Distributor and to
furnish such services on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as
follows:
1. The Trust hereby appoints Xxxxxxx, Xxxxx as Distributor
in connection with the offering and sale of the shares. The Trust
authorizes Xxxxxxx, Xxxxx as exclusive agent for the Trust, subject to
applicable federal and state law and the Declaration of Trust, Bylaws and
current Prospectus and Statement of Additional Information of the Trust:
(a) to promote the Trust; (b) to solicit orders for the purchase of the
Shares subject to such terms and conditions as the Trust may specify; and
(c) to accept orders for the purchase of the shares on behalf of the
Trust. Xxxxxxx, Xxxxx shall offer the Shares on an agency or "best
efforts" basis under which the Trust shall only issue such Shares as are
actually sold.
2. The public offering price of the Shares shall be the net
asset value per share (as determined by the Trust) of the outstanding
Shares of the Trust plus a sales charge as set forth in the Trust's
current Prospectus. The Trust shall make available to Xxxxxxx, Xxxxx a
statement of each computation of net asset value and of the details
entering into such computation.
3. As compensation for the services performed and the
expenses assumed by Xxxxxxx, Xxxxx under this Agreement including, but not
limited to, any commissions paid for sales of Shares, the Trust shall pay
Raymond, James, as promptly as possible after the last day of each month,
a fee, accrued daily, of .25% per annum of the Trust's average daily net
assets. The first payment of the fee shall be made as promptly as
possible at the end of the month in which the Trust commences operations
and shall constitute a full payment of the fee due Xxxxxxx, Xxxxx for all
services prior to that date. If this Agreement is terminated as of any
date not the last of a month, such fee shall be paid as promptly as
possible after such date of termination, shall be based on the average
daily net assets of the Trust in that period from the beginning of such
month to such date of termination, and shall be that portion of such
average daily net assets as the number of days in such period bears to the
number of days in such month. Each such payment shall be accompanied by a
report of the Trust prepared either by the Trust or its transfer agent
that shall show the amount properly payable to Xxxxxxx, Xxxxx under this
Agreement and the detailed computation thereof. Xxxxxxx, Xxxxx shall also
receive the sales load set forth in the Trust's current prospectus.
4. As used in this Agreement, the term "Registration
Statement" shall mean the Registration Statement most recently filed by
the Trust with the Securities and Exchange Commission and effective under
the 1933 Act, as such Registration Statement is amended by any amendments
thereto at the time in effect, and the terms "Prospectus" and "Statement
of Additional Information" shall mean the form of Prospectus and Statement
of Additional Information filed by the Trust as part of the Registration
Statement.
5. Xxxxxxx, Xxxxx shall finance activity which is intended
to result in the sale and retention of Trust shares including, but not
limited to, advertising, salaries and other expenses of the Distributor
relating to selling or servicing efforts, expenses or organizing and
conducting sales seminars, printing of Prospectuses and reports for other
than existing shareholders, preparation and distribution of advertising
material and sales literature and payments to dealers whose customers
purchase Trust shares. In connection with such sales and offers of sale,
the Trust shall not be responsible in any way for any other information,
statements or representations given or made by Xxxxxxx, Xxxxx or its
representatives or agents, except such information and make only such
statements or representations as are contained in the Prospectus or in
information furnished in writing to Xxxxxxx, Xxxxx by the Trust. Except
as specifically provided in this Agreement, the Trust shall bear none of
the expenses of Xxxxxxx, Xxxxx in connection with its offer and sale of
the Shares.
6. The Trust agrees, at its own expense, to register the
Shares with the Securities and Exchange Commission, state and other
regulatory bodies, and to prepare and file from time to time such
Prospectuses, amendments, reports and other documents as may be necessary
to maintain the Registration Statement. The Trust shall bear all expenses
related to preparing and typesetting such Prospectuses, Statements of
Additional Information and other materials required by law and such other
expenses, including printing and mailing expenses, related to the Trust's
communications with persons who are shareholders of the Trust.
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7. The Trust agrees to indemnify, defend and hold harmless
Raymond, James, its several officers and directors, and any person who
controls Xxxxxxx, Xxxxx within the meaning of Section 15 of the 1933 Act
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
Raymond, James, its officers or Trustees, 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, Prospectus or Statement of Additional
Information or arising out of or based upon any alleged omission to state
a material fact required to be stated in either thereof or necessary to
make the statements in either thereof not misleading, provided that in no
event shall anything contained in this Agreement be construed so as to
protect Xxxxxxx, Xxxxx against any liability to the Trust or its
shareholder to which Xxxxxxx, Xxxxx 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
and duties under this Agreement.
8. Xxxxxxx, Xxxxx agrees to indemnify, defend and hold
harmless the Trust, its several officers and directors, and any person who
controls the Trust within the meaning of Section 15 of the 1933 Act 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 Trust, its officers or Trustees, 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
information furnished in writing by Xxxxxxx, Xxxxx to the Trust for use in
the Registration Statement, Prospectus or Statement of Additional
Information or arising out of or 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.
9. The Trust reserves the right at any time to withdraw all
offerings of the Shares by written notice to the Distributor at its
principal office.
10. The Trust shall not issue certificates representing
Shares unless requested by a shareholder. If such request is transmitted
through Raymond, James, the Trust will cause certificates evidencing the
shares owned to be issued in such names and denominations as Xxxxxxx,
Xxxxx shall from time to time direct.
11. Xxxxxxx, Xxxxx at its sole discretion may repurchase
Shares offered for sale by the shareholders. Repurchase of Shares by
Xxxxxxx, Xxxxx shall be at the net asset value next determined after a
repurchase order has been received. On each business day, Xxxxxxx, Xxxxx
shall notify by telex or in writing the Trust and the Trust's transfer
agent of the orders for repurchase of shares received by Xxxxxxx, Xxxxx
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since the last such report, the amount to be paid for such Shares, and the
identity of shareholders offering Shares for repurchase. Upon such
notice, the Trust shall pay Xxxxxxx, Xxxxx such amounts as are required by
Xxxxxxx, Xxxxx for the repurchase of such shares cash or in the form of a
credit against moneys due the Trust from Xxxxxxx, Xxxxx as proceeds from
the sale of Shares. Xxxxxxx, Xxxxx will receive no commission or other
remuneration for repurchasing Shares other than the compensation set forth
in paragraph 3 hereof or service fees charged to its customers for
processing a redemption order. The Trust reserves the right to suspend
such purchases upon written notice to Xxxxxxx, Xxxxx. Xxxxxxx, Xxxxx
further agrees to act as agent for the Trust to receive and transmit
promptly to the Trust's transfer agent shareholder requests for redemption
of Shares.
12. Xxxxxxx, Xxxxx is an independent contractor and shall be
agent for the Trust only with respect to the sale and repurchase of the
Shares.
13. The services of Xxxxxxx, Xxxxx to the Trust under this
Agreement are not to be deemed exclusive, and the Distributor shall be
free to render similar services or other services to others so long as its
services hereunder are not impaired thereby.
14. Xxxxxxx, Xxxxx shall prepare reports for the Board of
Trustees of the Trust upon request showing information concerning
expenditures related to this Agreement.
15. As used in this Agreement, the term "net asset value"
shall have the meaning ascribed to it in the Trust's Declaration of Trust;
and the terms "assignment," "interested person," and "majority of the
outstanding voting securities" shall have the meanings given to them by
Section 2(a) of the 1940 Act, subject to such exemptions as may be granted
by the Securities and Exchange Commission by any rule, regulation or
order.
16. This Agreement shall automatically terminate in the event
of its assignment and may be terminated at any time without the payment of
any penalty by the Trust or by Xxxxxxx, Xxxxx on 60 days' written notice
to the other party. The Trust may effect such termination by a vote of
(i) a majority of the Trust's Board of Trustees, (ii) a majority of the
Trustees who are not interested persons of the Trust and who have no
direct or indirect financial interest in the operation of the Trust's
Distribution Plan pursuant to Rule 12b-1 under the 1940 Act in this
Agreement or in any agreement related to the Trust's Distribution Plan
(the "Rule 12b-1 Trustees"), or (iii) a majority of the outstanding voting
securities of the Trust.
17. This Agreement will remain in effect for one year from
the date of its execution and from year to year thereafter, provided that
it is specifically approved annually (i) by a majority vote of the Trust's
Board of Trustees, and (ii) by the vote of a majority of the Rule 12b-1
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Trustees of the Trust, cast in person at a meeting called for the purpose
of voting on such approval.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their officers thereunto duly authorized.
Dated: December 5, 1986
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Attest: HERITAGE CONVERTIBLE-GROWTH TRUST
By: /s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxxxxx X. Xxxxx
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Attest: XXXXXXX, XXXXX & ASSOCIATES, INC.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxx
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