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DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT, dated as of _________, 1996, by and between
UBS Private Investor Funds, Inc., a Maryland corporation (the "Company"),
and Signature Broker-Dealer Services, Inc., a Delaware corporation (the
"Distributor").
W I T N E S S E T H:
WHEREAS, the Company has been organized to operate as an open-end
investment company registered under the Investment Company Act of 1940, as
amended (collectively with the rules and regulations promulgated
thereunder, the "1940 Act") and under the Securities Act of 1933, as
amended (the "1933 Act");
WHEREAS, the shares of Common Stock (par value $.001 per share) of
the Company (the "Shares") are divided into current and future series (the
"Series"), which are subject to this Agreement;
WHEREAS, the Company wishes to engage the Distributor to provide
certain services with respect to the distribution of Shares of each Series,
and the Distributor is willing to provide such services to the Company on
the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements of the parties hereto as herein set forth, the parties covenant
and agree as follows:
1. The Company grants to the Distributor the right, as agent of the
Company, to solicit and accept orders for the purchase of Shares of each
Series upon the terms hereinbelow set forth during the term of this
Agreement. While this Agreement is in force, the Distributor agrees to use
its best efforts to find purchasers for Shares of each Series.
The Distributor shall have the right, as agent of the Company, to
order from the Company the Shares needed, but not more than the Shares
needed (except for clerical errors and errors of transmission), to fill
unconditional orders for Shares of each Series placed with the Distributor,
all such orders to be made in the manner set forth in such Series'
then-current prospectus (the "Prospectus") and then-current statement of
additional information (the "Statement of Additional Information") relating
to such Series. The price which shall be paid to the Company for the
Shares of each Series so purchased shall be the net asset value per Share
as determined in accordance with the provisions of the Company's Articles
of Incorporation and By-Laws and the respective Series' then-current
Prospectus and Statement of Additional Information, as they may from time
to time be amended (collectively, the "Governing Instruments"). The
Distributor shall notify the custodian of the Company with respect to each
Series as of the time, as disclosed in the respective Series' then-current
Prospectus, that the net asset value of such Series is determined (or such
other time as is agreed to in writing by the Distributor and the Company)
(a "Valuation Time"), on each business day, or as soon thereafter as the
orders placed with the Distributor
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have been compiled, of the number of Shares of each Series which have been
ordered through the Distributor since the last respective Valuation Time.
The right granted to the Distributor to place orders for Shares with
the Company shall be exclusive, except that this right shall not apply to
Shares issued in the event that an investment company (whether a regulated
or private investment company or a personal holding company) is merged with
and into or consolidated with the Company or in the event that the Company
acquires, by purchase or otherwise, all (or substantially all) the assets
or the outstanding shares of any such company; nor shall it apply to Shares
issued by the Company as a dividend or stock split or in connection with
the reinvestment of dividends and other distributions. The exclusivity of
the right to place orders for Shares granted to the Distributor may be
waived by the Distributor by notice to the Company in writing, either
unconditionally or subject to such conditions and limitations as may be set
forth in such notice to the Company. The Company hereby acknowledges that
the Distributor may render distribution and other services to other
parties, including other investment companies. In connection with its
duties hereunder, the Distributor shall also arrange for computation of
performance statistics with respect to each Series and arrange for
publication of current price information in newspapers and other
publications.
2. The Shares may be sold by the Distributor on behalf of the
Company, to any investor or to or through any broker-dealer or bank having
a sales agreement with the Distributor, upon the following terms and
conditions:
The public offering price of Shares of each Series, i.e., the price
per Share at which the Distributor or any dealer purchasing Shares through
the Distributor may sell shares to the public, shall be calculated as
disclosed in the respective Series' then-current Prospectus.
The Company shall have the right to suspend the sale of Shares of any
Series if, because of some extraordinary condition, the New York Stock
Exchange (the "Exchange") shall be closed, or if conditions existing during
the hours when the Exchange is open render such action advisable or for any
other reason deemed adequate by the Company.
3. The Company agrees that it will, from time to time, but subject
to the necessary approval, if any, of its shareholders and Directors, take
all necessary action to register such number of Shares of each Series under
the 1933 Act as the Distributor may reasonably be expected to sell.
The Distributor shall be an independent contractor and neither the
Distributor nor any of its directors, officers or employees as such, is or
shall be, solely by reason of this Agreement, an employee of the Company.
It is understood that Directors, officers and shareholders of the Company
are or may become interested in the Distributor, as directors, officers,
employees, or otherwise and that directors, officers and employees of the
Distributor are or may become similarly interested in the Company and that
the Distributor may be or become interested in the Company as a shareholder
or otherwise. The Distributor is responsible for its own conduct and the
employment, control and conduct (but only with respect to the duties and
obligations of the Distributor hereunder) of its agents and employees and
for any injury to any person through
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its agents or employees. The Distributor assumes full responsibility for
its agents and employees under applicable statutes and agrees to pay all
employer taxes thereunder.
4. The Distributor covenants and agrees that, in selling Shares, it
will in all respects conform with the requirements of all state and federal
laws and the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. relating to the sale of Shares, and will indemnify
and hold harmless the Company and each of its Directors and officers and
each person, if any, who controls the Company within the meaning of Section
15 of the 1933 Act or Section 20 of the Securities Exchange Act of 1934
(the "Indemnified Parties") against all losses, liabilities, damages,
claims or expenses (including the reasonable cost of investigating or
defending any alleged loss, liability, damages, claim or expense and
advances for reasonable counsel fees incurred in connection therewith)
arising from any claim, demand, action or suit (collectively, "Claims"),
arising by reason of any person's acquiring any of the Shares through the
Distributor, which may be based upon the 1933 Act or any other statute or
common law, on account of any wrongful act of the Distributor or any of its
employees (including any failure to conform with any requirement of any
state or federal law or the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. relating to the sale of Shares) or
on the ground that the registration statement of the Company under the 1933
Act, including all amendments thereto (the "Registration Statement"), or
Prospectus or previous prospectus or Statement of Additional Information or
previous statement of additional information, with respect to such Shares,
includes or included an untrue statement of a material fact or omits or
omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein not misleading, if and only if any
such act, statement or omission was made in reliance upon information
furnished by the Distributor to the Company; provided, however, that in no
case is the indemnity by the Distributor in favor of any Indemnified Party
to be deemed to protect any such Indemnified Party against liability to
which such Indemnified Party would otherwise be subject by reason of his or
its willful misfeasance, bad faith or gross negligence in the performance
of its or his duties or by reason of its or his reckless disregard of its
or his obligations and duties under this Agreement. The Indemnified Party
shall notify the Distributor in writing within 10 calendar days after the
summons or other first legal process giving information of the nature of
any Claim shall have been served upon such Indemnified Party (or after such
Indemnified Party shall have received notice of such service on any
designated agent), but failure to notify the Distributor of any such Claim
shall not relieve it (a) from its obligations to provide such indemnity
except to the extent, if at all, that such failure shall have prejudiced
the Distributor or (b) from any liability which it may have to any
Indemnified Party otherwise than on account of its indemnity agreement
contained in this Section 4. The Distributor shall be 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 Claim, and, if
the Distributor elects to assume the defense, such defense shall be
conducted by counsel chosen by it and satisfactory to each Indemnified
Party. In the event that the Distributor elects to assume the defense of
any such suit and retain such counsel, each Indemnified Party shall bear
the fees and expenses of any additional counsel retained by it but, in case
the Distributor does not elect to assume the defense of any such suit, it
shall reimburse the Indemnified Parties
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for the reasonable fees and expenses of any counsel retained by them.
Except with the prior written consent of the Distributor (not to be
unreasonably withheld or delayed), no Indemnified Party shall confess any
Claim or make any compromise in any case in which the Distributor will be
asked to indemnify such Indemnified Party. The Distributor agrees promptly
to notify the Company of the commencement of any litigation or proceeding
against it in connection with the issuance and sale of any of the Shares.
The indemnity provisions of this Agreement shall survive the termination of
this Agreement with respect to events occurring prior to such termination.
Neither the Distributor nor any dealer nor any other person is
authorized to give any information or to make any representation on behalf
of the Company in connection with the sale of Shares of any Series, other
than those contained in the Registration Statement or Prospectus or
Statement of Additional Information relating to such Series, and the
Company shall not be responsible in any way for any other information,
statements or representations given or made by the Distributor, any dealer
or any of their respective representatives or agents, or any other person.
5. The Company will pay, or cause to be paid--
(i) all costs and expenses of the Company, including, but not limited
to, fees and disbursements of its counsel, in connection with the
preparation and filing of the Registration Statement, each Prospectus and
Statement of Additional Information, and preparing and mailing to
shareholders Prospectuses, Statements of Additional Information with
respect to Shares of each Series, all costs and expenses of the holding of
meetings of the Company's Board of Directors and materials related thereto,
statements and confirmations and periodic reports (including the expense of
setting in type the Registration Statement, Prospectus and Statement of
Additional Information or any periodic report with respect to Shares of
each Series), and all costs and fees associated with registering the
Company or its Shares under federal or state securities laws;
(ii) the cost of preparing temporary or permanent certificates for
Shares;
(iii) the cost and expenses of delivering to the Distributor at its
office all Shares purchased through it as agent hereunder;
(iv) all fees and disbursements of the Company's transfer agent and
custodian or depository with respect to each Series, subject to the
Company's transfer agent and custody or depository agreements;
(v) a fee to the administrator and the fund accounting agent of the
Company, if any, pursuant to an administrative services and fund accounting
agreement; and
(vi) a fee to the investment adviser of the Company, if any, pursuant
to an investment advisory agreement with such investment adviser.
The Distributor shall receive no compensation for its services to the
Company hereunder.
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The Distributor agrees that with respect to the sale of Shares of
each Series, subject to the Company's obligations under clause (iii) above,
(a) after the Prospectus and Statement of Additional Information and
periodic reports with respect to each Series have been set in type, it will
bear the expense of printing and distributing any copies thereof ordered by
it which are to be used in connection with the offering or sale of Shares
of such Series to any dealer or prospective investor and (b) it will bear
the expenses of preparing, printing and distributing any other literature
used by the Distributor or furnished by it for use by any dealer in
connection with the offering of Shares of such Series for sale to the
public and any expense of sending confirmations and statements to any
dealer having a sales agreement with the Distributor.
6. If, at any time during the term of this Agreement, the Company
shall deem it necessary or advisable in the best interests of the Company
that any amendment of this Agreement be made in order to comply with any
recommendation or requirement of the Securities and Exchange Commission or
other governmental authority or to obtain any advantage under state or
federal tax laws, it shall notify the Distributor of the form of amendment
which it deems necessary or advisable and the reasons therefor. If the
Distributor declines to assent to such amendment (after a reasonable time),
the Company may terminate this Agreement forthwith by written notice to the
Distributor without payment of any penalty. If, at any time during the
term of this Agreement, the Distributor requests the Company to make any
change in its Governing Instruments or in its methods of doing business
which are necessary in order to comply with any requirement of federal law
or regulations of the Securities and Exchange Commission or of a national
securities association of which the Distributor is or may become a member,
relating to the sale of Shares, and the Company fails (after a reasonable
time) to make any such change as requested, the Distributor may terminate
this Agreement forthwith by written notice to the Company without payment
of any penalty.
7. The Distributor agrees that it will not take any long or short
position in the Shares of any Series and that, so far as it can control the
situation, it will prevent any of its directors or officers from taking any
long or short position in the Shares of such Series, except as permitted by
the Governing Instruments.
8. This Agreement shall become effective upon its execution and
shall continue in force for a period of one year and indefinitely
thereafter, provided that such continuance is "specifically approved at
least annually" by the vote of a majority of the Directors of the Company
who are not "interested persons" of the Company or of the Distributor at a
meeting specifically called for the purpose of voting on such approval, and
by the Board of Directors of the Company.
This Agreement may be terminated as to any Series at any time by (i)
the Company, (a) by the vote of a majority of the Directors of the Company
who are not "interested persons" of the Company or the Distributor, (b) by
the vote of the Board of Directors of the Company, or (c) by the "vote of a
majority of the outstanding voting securities" of the Company, or (ii) by
the Distributor, in any case without payment of any penalty on 60 days'
written notice to the other party.
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This Agreement shall automatically terminate in the event of its
assignment.
9. SBDS and the Company agree that all books, records, information
and data pertaining to the business of the other party which are exchanged
or received pursuant to the negotiation of or the carrying out of this
Agreement shall remain confidential, and shall not be voluntarily disclosed
to any other person, except as may be required by law.
10. The terms "vote of a majority of the outstanding voting
securities", "interested person", "assignment" and "specifically approved
at least annually" shall have the respective meanings specified in, and
shall be construed in a manner consistent with, the 1940 Act, subject,
however, to such exemptions as may be granted by the Securities and
Exchange Commission thereunder.
11. If any provision of this 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.
12. Each party agrees to perform such further acts and execute such
further documents as are necessary to effectuate the purposes hereof. This
Agreement shall be construed and enforced in accordance with and governed
by the laws of Massachusetts. The captions in this Agreement are included
for convenience only and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered in their names on their behalf by the
undersigned, thereunto duly authorized, all as of the day and year first
above written. Pursuant to the Company's Articles of Incorporation, dated
as of November 16, 1995, as amended from time to time, the obligations of
this Agreement pertaining to a particular Series shall apply only to that
particular Series and to no other Series of the Company.
UBS PRIVATE INVESTOR FUNDS, INC.
By
name:
title:
SIGNATURE BROKER-DEALER SERVICES, INC.
By
name:
title:
