1
EXHIBIT (6)(a)
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of this 1st day of March, 1996, between FMB
Funds, Inc. (the "Company"), a Maryland corporation and SEI Financial Services
Company (the "Distributor"), a Pennsylvania corporation.
WHEREAS, the Company is an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"), whose shares
are registered under the Securities Act of 1933, as amended (the "1933 Act");
and
WHEREAS, the Distributor is registered as a broker-dealer with the
Securities and Exchange Commission (the "SEC") under the Securities Exchange Act
of 1934, as amended;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the Company and Distributor hereby agree as follows:
ARTICLE 1. Sale of Shares. The Company grants to the Distributor the
exclusive right to sell units (the "Shares") of the portfolios (the
"Portfolios") of the Company at the net asset value per Share, plus any
applicable sales charges in accordance with the relevant current prospectus, as
agent and on behalf of the Company, during the term of this Agreement and
subject to the registration requirements of the 1933 Act, the rules and
regulations of the SEC and the laws governing the sale of securities in the
various states ("Blue Sky Laws").
ARTICLE 2. Solicitation of Sales. In consideration of these rights
granted to the Distributor, the Distributor agrees to use all reasonable
efforts, consistent with its other business, in connection with the distribution
of Shares of the Company; provided, however, that the Distributor shall not be
prevented from entering into like arrangements with other issuers. The
provisions of this paragraph do not obligate the Distributor to register as a
broker or dealer under the Blue Sky Laws of any jurisdiction when it determines
it would be uneconomical for it to do so or to maintain its registration in any
jurisdiction in which it is now registered nor obligate the Distributor to sell
any particular number of Shares.
ARTICLE 3. Authorized Representations. The Distributor is not
authorized by the Company to give any information or to make any representations
other than those contained in the current registration statements and
prospectuses of the Company filed with the SEC or contained in Shareholder
reports or other material that may be prepared by or on behalf of the Company
for the Distributor's use. The Distributor may prepare and distribute sales
literature and other material as it may deem appropriate, provided that such
literature and materials have been approved by the Company prior to their use.
ARTICLE 4. Registration of Shares. The Company agrees that it will take
all action necessary to register Shares under the federal and state securities
laws so that there will be available
1
2
for sale the number of Shares the Distributor may reasonably be expected to sell
and to pay all fees associated with said registration. The Company shall arrange
to make available to the Distributor such number of copies of its currently
effective prospectus and statement of additional information as the Distributor
may reasonably request. The Company shall furnish to the Distributor copies of
all information, financial statements and other papers which the Distributor may
reasonably request for use in connection with the distribution of Shares of the
Company.
ARTICLE 5. Compensation. As compensation for providing the services
under this Agreement:
(a) The Distributor shall receive from the Company:
(1) all distribution fees, as applicable, at the rate and
under the terms and conditions set forth in each distribution
plan adopted by the appropriate class of shares of each of the
Portfolios, as such plans may be amended from time to time,
and subject to any further limitations on such fees as the
Board of Directors of the Company may impose; and
(2) all front-end sales charges, if any, on purchases of
Consumer Service Class Shares of each Portfolio sold subject
to such charges as described in the Company's registration
statement and current prospectuses, as amended from time to
time. The Distributor, or brokers, dealers and other financial
institutions and intermediaries that have entered into
sub-distribution agreements with the Distributor, may collect
the gross proceeds derived from the sale of such Shares, remit
the net asset value thereof to the Company upon receipt of the
proceeds and retain the applicable sales charge.
(b) The Distributor may reallow any or all of the distribution fees
and front-end sales charges which it is paid by the Company to such
brokers, dealers and other financial institutions and intermediaries as
the Distributor may from time to time determine.
ARTICLE 6. Indemnification of Distributor. The Company agrees to
indemnify and hold harmless the Distributor and each of its directors and
officers and each person, if any, who controls the Distributor within the
meaning of Section 15 of the 1933 Act against any loss, liability, claim,
damages or expense (including the reasonable cost of investigating or defending
any alleged loss, liability, claim, damages, or expense and reasonable counsel
fees and disbursements incurred in connection therewith), arising by reason of
any person acquiring any Shares, based upon the ground that the registration
statement, prospectus, Shareholder reports or other information filed or made
public by the Company (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact required to be
stated or necessary in order to make the statements made not misleading.
However, the Company does not agree to indemnify the Distributor or hold it
harmless to the extent that the statements or omission was made in reliance
2
3
upon, and in conformity with, information furnished to the Company by or on
behalf of the Distributor.
In no case (a) is the indemnity of the Company in favor of the
Distributor or any other person to be deemed to protect the Distributor or any
such person against any liability to the Company or its Shareholders to which
the Distributor or any such person otherwise would 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, or (b) is the Company to be liable to the Distributor or
any such person under the indemnity agreement contained in this paragraph with
respect to any claim made against the Distributor or any such person indemnified
unless the Distributor or other person shall have notified the Company in
writing of the claim within a reasonable time after the summons or other first
written notification giving information of the nature of the claim shall have
been served upon the Distributor or such other person (or after the Distributor
or the person shall have received notice of service on any designated agent).
However, failure to notify the Company of any claim shall not relieve the
Company from any liability which it may have to the Distributor or any person
against whom such action is brought otherwise than on account of its indemnity
agreement contained in this paragraph.
The Company 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 claims subject to this indemnity provision. If the Company elects to
assume the defense of any such claim, the defense shall be conducted by counsel
chosen by the Company and satisfactory to the indemnified defendants in the suit
whose approval shall not be unreasonably withheld. In the event that the Company
elects to assume the defense of any suit and retain counsel, the indemnified
defendants shall bear the fees and expenses of any additional counsel retained
by them. If the Company does not elect to assume the defense of a suit, it will
reimburse the indemnified defendants for the reasonable fees and expenses of any
counsel retained by the indemnified defendants.
The Company agrees to notify the Distributor promptly of the
commencement of any litigation or proceedings against it or any of its officers
or Directors in connection with the issuance or sale of any of its Shares.
ARTICLE 7. Indemnification of Company. The Distributor covenants and
agrees that it 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, against any loss, liability, damages,
claim or expense (including the reasonable cost of investigating or defending
any alleged loss, liability, damages, claim or expense and reasonable counsel
fees incurred in connection therewith) based upon the 1933 Act or any other
statute or common law and arising by reason of any person acquiring any Shares,
and alleging a wrongful act of the Distributor or any of its employees or
alleging that the registration statement, prospectus, Shareholder reports or
other information filed or made public by the Company (as from time to time
amended) included an untrue statement of a material fact or omitted to state a
material fact required to be stated or necessary in order to make the statements
not misleading, insofar as the statement or omission was
3
4
made in reliance upon and in conformity with information furnished to the
Company by or on behalf of the Distributor.
In no case (a) is the indemnity of the Distributor in favor of the
Company or any other person indemnified to be deemed to protect the Company or
any other person against any liability to which the Company or such other person
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, or (b) is the
Distributor to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Company or any person
indemnified unless the Company or person, as the case may be, shall have
notified the Distributor in writing of the claim within a reasonable time after
the summons or other first written notification giving information of the nature
of the claim shall have been served upon the Company or upon any person (or
after the Company or such person shall have received notice of service on any
designated agent). However, failure to notify the Distributor of any claim shall
not relieve the Distributor from any liability which it may have to the Company
or any person against whom the action is brought otherwise than on account of
its indemnity agreement contained in this paragraph.
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 the claim, but if the Distributor elects to assume the defense, the
defense shall be conducted by counsel chosen by the Distributor and satisfactory
to the indemnified defendants whose approval shall not be unreasonably withheld.
In the event that the Distributor elects to assume the defense of any suit and
retain counsel, the defendants in the suit shall bear the fees and expenses of
any additional counsel retained by them. If the Distributor does not elect to
assume the defense of any suit, it will reimburse the indemnified defendants in
the suit for the reasonable fees and expenses of any counsel retained by them.
The Distributor agrees to notify the Company promptly of the
commencement of any litigation or proceedings against it in connection with the
issue and sale of any of the Company's Shares.
ARTICLE 8. Effective Date. This Agreement shall be effective upon its
execution, and unless terminated as provided, shall continue in force for two
years from the date of this agreement and thereafter from year to year, provided
that such annual continuance is approved by (a) either the vote of a majority of
the Directors of the Company, or the vote of a majority of the outstanding
voting securities of the Company, and (b) the vote of a majority of those
Directors of the Company who are not parties to this Agreement or any
distribution plan with respect to the Company or interested persons of any such
party ("Qualified Directors"), cast in person at a meeting called for the
purpose of voting on the approval. This Agreement shall automatically terminate
in the event of its assignment. As used in this paragraph the terms "vote of a
majority of the outstanding voting securities", "assignment" and "interested
person" shall have the respective meanings specified in the 1940 Act. In
addition, this Agreement may at any time be terminated without penalty by the
Distributor, by a vote of a majority of Qualified Directors or by vote of a
majority of the
4
5
outstanding voting securities of the Company upon not less than sixty days prior
written notice to the other party.
ARTICLE 9. Notices. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the last address furnished by the other party to the party giving
notice: if to the Company, at c/o Xxxxx X. Xxxxxx, 000 Xxxx Xxxxxxxxxx Xxxx,
Xxxxx, Xxxxxxxxxxxx 00000 , and if to the Distributor, 000 Xxxx Xxxxxxxxxx Xxxx,
Xxxxx, Xxxxxxxxxxxx 00000.
ARTICLE 10. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Maryland and the applicable provisions
of the 1940 Act. To the extent that the applicable laws of the State of
Maryland, or any of the provisions herein, conflict with the applicable
provisions of the 1940 Act, the latter shall control.
ARTICLE 11. Multiple Originals. This Agreement may be executed in two
or more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
IN WITNESS, the Company and Distributor have each duly executed this
Agreement, as of the day and year above written.
FMB FUNDS, INC.
By:
---------------------------
Attest:
-----------------------
SEI FINANCIAL SERVICES COMPANY
By:
---------------------------
Attest:
-----------------------
5
