DISTRIBUTION AGREEMENT
November __, 1997
Xxxxx & Company
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
This is to confirm that, in consideration of the agreements hereinafter
contained, the undersigned, Cowen Series Funds, Inc. (the "Fund"), a corporation
organized under the laws of the State of Maryland, has agreed that Xxxxx &
Company ("Cowen") shall be, for the period of this Agreement, the distributor of
shares of the Fund.
1. Services as Distributor
-----------------------
1.1 Cowen will act as agent for the distribution of shares of the
Fund covered by the Fund's registration statement on Form N-1A (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"1933 Act"), and the Investment Company Act of 1940, as amended (the "1940
Act").
1.2 Cowen agrees to use its best efforts to solicit orders for
the sale of shares of the Fund at the public offering price, as determined in
accordance with the Registration Statement, and will undertake such advertising
and promotion as it believes is reasonable in connection with such solicitation.
Cowen agrees to bear all selling expenses, including the cost of printing
prospectuses and statements of additional information and distributing them to
prospective shareholders.
1.3 All activities by Cowen as distributor of the Fund's shares
shall comply with all applicable laws, rules and regulations, including, without
limitation, all rules and regulations made or adopted by the Securities and
Exchange Commission (the "SEC") or by any securities association registered
under the Securities Exchange Act of 1934.
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1.4 Cowen will provide one or more persons during normal business
hours to respond to telephone questions concerning the Fund.
1.5 Cowen acknowledges that, whenever in the judgment of the
Fund's officers such action is warranted for any reason, including, without
limitation, market, economic or political conditions, those officers may decline
to accept any orders for, or make any sales of, the Fund's shares until such
time as those officers deem it advisable to accept such orders and to make such
sales.
1.6 Cowen will act only on its own behalf as principal should it
choose to enter into selling agreements with selected dealers or others.
2. Duties of the Fund
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2.1 The Fund agrees at its own expense to execute any and all
documents, to furnish any and all information and to take any other actions that
may be reasonably necessary in connection with the qualification of the Fund's
shares for sale in those states that Cowen may designate.
2.2 The Fund shall furnish from time to time, for use in
connection with the sale of the Fund's shares, such information and reports with
respect to the Fund and its shares as Cowen may reasonably request, all of which
shall be signed by one or more of the Fund's duly authorized officers; and the
Fund warrants that the statements contained in any such reports, when so signed
by one or more of the Fund's officers, shall be true and correct. The Fund shall
also furnish Cowen upon request with: (a) annual audits of the Fund's books and
accounts made by independent public accountants regularly retained by the Fund,
(b) semi-annual unaudited financial statements pertaining to the Fund, (c)
quarterly earnings statements prepared by the Fund, (d) a monthly itemized list
of the securities in the Fund's portfolio, (e) monthly balance sheets as soon as
practicable after the end of each month and (f) from time to time such
additional information regarding the Fund's financial condition as Cowen may
reasonably request.
3. Representations and Warranties
------------------------------
The Fund represents to Cowen that the Registration Statement,
including the prospectuses and statement of additional information forming parts
thereof, has been prepared in conformity with the requirements of the 1933 Act,
the 1940 Act and the rules and regulations of
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the SEC thereunder. As used in this Agreement the terms "Registration
Statement", "prospectus" and "statement of additional information" shall mean
any registration statement, prospectus and statement of additional information
filed by the Fund with the SEC and any amendments and supplements thereto which
at any time shall have been filed with the SEC. The Fund represents and warrants
to Cowen that the Registration Statement, when such becomes effective, will
include all statements required to be contained therein in conformity with the
1933 Act, the 1940 Act and the rules and regulations of the SEC; that all
statements of fact contained in the Registration Statement will be true and
correct when such becomes effective; and that the Registration Statement when
such becomes effective will include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading to a purchaser of the Fund's shares. Cowen
may, but shall not be obligated to, propose from time to time such amendment or
amendments to the Registration Statement and such supplement or supplements to
any prospectus or statement of additional information as, in the light of future
developments, may, in the opinion of Xxxxx'x counsel, be necessary or advisable.
If the Fund shall not propose such amendment or amendments and/or supplement or
supplements within fifteen days after receipt by the Fund of a written request
from Cowen to do so, Cowen may, at its option, terminate this Agreement. The
Fund shall not file any amendment to the Registration Statement or supplement to
any prospectus or statement of additional information without giving Cowen
reasonable notice thereof in advance; provided, however, that nothing contained
in this Agreement shall in any way limit the Fund's right to file at any time
such amendments to the Registration Statement and/or supplements to any
prospectus or statement of additional information, of whatever character, as the
Fund may deem advisable, such right being in all respects absolute and
unconditional.
4. Indemnification
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4.1 The Fund authorizes Cowen and any dealers with whom Cowen has
entered into dealer agreements to use any prospectus or statement of additional
information furnished by the Fund from time to time, in connection with the sale
of the Fund's shares. The Fund agrees to indemnify, defend and hold Cowen, its
several officers and directors, and any person who controls Cowen 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
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counsel fees incurred in connection therewith) which Cowen, its officers and
directors, or any such controlling person, may incur under the 1933 Act, the
1940 Act or common law or otherwise, arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, any prospectus or any statement of additional
information, or arising out of or based upon any omission or alleged omission to
state a material fact required to be stated in the Registration Statement, any
prospectus or any statement of additional information, or necessary to make the
statements in any of them not misleading; provided, however, that the Fund's
agreement to indemnify Cowen, its officers or directors, and any such
controlling person shall not be deemed to cover any claims, demands, liabilities
or expenses arising out of or based upon any statements or representations made
by Cowen or its representatives or agents other than such statements and
representations as are contained in the Registration Statement, prospectus or
statement of additional information and in such financial and other statements
as are furnished to Cowen pursuant to paragraph 2.2 hereof; and further provided
that the Fund's agreement to indemnify Cowen and the Fund's representations and
warranties hereinbefore set forth in paragraph 3 shall not be deemed to cover
any liability to the Fund or its shareholders to which Cowen would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of Xxxxx'x reckless disregard of its
obligations and duties under this Agreement. The Fund's agreement to indemnify
Cowen, its officers and directors, and any such controlling person, as
aforesaid, is expressly conditioned upon the Fund's being notified of any action
brought against Cowen, its officers or directors, or any such controlling
person, such notification to be given by letter or by telegram addressed to the
Fund at its principal office in New York, New York and sent to the Fund by the
person against whom such action is brought, within ten days after the summons or
other first legal process shall have been served. The failure so to notify the
Fund of any such action shall not relieve the Fund from any liability that the
Fund may have to the person against whom such action is brought by reason of any
such untrue or alleged untrue statement or ommission or alleged omission
otherwise than on account of the Fund's indemnity agreement contained in this
paragraph 4.1. The Fund will be entitled to assume the defense of any suit
brought to enforce any such claim, demand or liability, but, in such case, such
defense shall be conducted by counsel of good standing chosen by the Fund and
approved by Cowen. In the event the Fund elects to assume the defense of
any such suit and retain counsel of good standing approved by Cowen, the
defendant or defendants in such suit
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shall bear the fees and expenses of any additional counsel retained by any of
them; but in case the Fund does not elect to assume the defense of any such
suit, or in case Cowen does not approve of counsel chosen by the Fund, the Fund
will reimburse Cowen, its officers and directors, or the controlling person or
persons named as defendant or defendants in such suit, for the fees and expenses
of any counsel retained by Cowen or them. The Fund's indemnification agreement
contained in this paragraph 4.1 and the Fund's representations and warranties in
this Agreement shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of Cowen, its officers and directors, or
any controlling person, and shall survive the delivery of any of the Fund's
shares. This agreement of indemnity will inure exclusively to Xxxxx'x benefit,
to the benefit of its several officers and directors, and their respective
estates, and to the benefit of the controlling persons and their successors. The
Fund agrees to notify Cowen promptly of the commencement of any litigation or
proceedings against the Fund or any of its officers or directors in connection
with the issuance and sale of any of the Fund's shares.
4.2 Cowen agrees to indemnify, defend and hold the Fund, its
several officers and directors, and any person who controls the Fund 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 costs of
investigating or defending such claims, demands or liabilities and any counsel
fees incurred in connection therewith) that the Fund, its officers or directors
or any such controlling person may incur under the 1933 Act, the 1940 Act or
common law or otherwise, but only to the extent that such liability or expense
incurred by the Fund, its officers or directors or such controlling person
resulting from such claims or demands shall arise out of or be based upon (a)
any unauthorized sales literature, advertisements, information, statements or
representations or (b) any untrue or alleged untrue statement of a material fact
contained in information furnished in writing by Cowen to the Fund and used in
the answers to any of the items of the Registration Statement, or shall arise
out of or be based upon any omission or alleged omission to state a material
fact in connection with such information furnished in writing by Cowen to the
Fund and required to be stated in such answers or necessary to make such
information not misleading. Xxxxx'x agreement to indemnify the Fund, its
officers and directors, and any such controlling person, as aforesaid, is
expressly conditioned upon Xxxxx'x being notified of any action brought against
the Fund, its officers or directors, or any such controlling person, such
notification to be
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given by letter or telegram addressed to Cowen at its principal office in New
York, New York and sent to Cowen by the person against whom such action is
brought, within ten days after the summons or other first legal process shall
have been served. Cowen shall have the right of first control of the defense of
such action, with counsel of its own choosing, satisfactory to the Fund, if such
action is based solely upon such alleged misstatement or omission on Xxxxx'x
part, and in any other event the Fund, its officers or directors or such
controlling person shall each have the right to participate in the defense or
preparation of the defense of any such action. The failure so to notify Cowen of
any such action shall not relieve Cowen from any liability that Cowen may have
to the Fund, its officers or directors, or to such controlling person by reason
of any such untrue or alleged untrue statement or omission or alleged omission
otherwise than on account of Xxxxx'x indemnity agreement contained in this
paragraph 4.2. Cowen agrees to notify the Fund promptly of the commencement of
any litigation or proceedings against Cowen or any of its officers or directors
in connection with the issuance and sale of any of the Fund's shares.
5. Effectiveness of Registration
-----------------------------
None of the Fund's shares shall be offered by either Cowen or the
Fund under any of the provisions of this Agreement and no orders for the
purchase or sale of the shares hereunder shall be accepted by the Fund if and so
long as the effectiveness of the Registration Statement or any necessary
amendments thereto shall be suspended under any of the provisions of the 1933
Act or if and so long as a current prospectus as required by Section 5(b)(2) of
the 1933 Act is not on file with the SEC; provided, however, that nothing
contained in this paragraph 5 shall in any way restrict or have an application
to or bearing upon the Fund's obligation to repurchase its shares from any
shareholder in accordance with the provisions of the Fund's prospectuses,
statement of additional information or articles of incorporation.
6. Notice to Cowen
---------------
The Fund agrees to advise Cowen immediately in writing:
(a) of any request by the SEC for amendments to the registration
statement, prospectus or statement of additional information then in effect or
for additional information;
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(b) in the event of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceeding for that purpose;
(c) of the happening of any event that makes untrue any statement
of a material fact made in the Registration Statement then in effect or that
requires the making of a change in the Registration Statement in order to make
the statements therein not misleading;
(d) of all actions of the SEC with respect to any amendment to
the Registration Statement which may from time to time be filed with the SEC.
7. Term of Agreement
-----------------
This Agreement shall become effective on the date the Fund
commences sales of its shares and shall continue for an initial two year term
and thereafter shall continue automatically, provided such continuance is
specifically approved at least annually by (a) the Fund's Board of Directors or
(b) a vote of a majority (as defined in the 0000 Xxx) of the Fund's outstanding
voting securities, provided that in either event the continuance is also
approved by a majority of the Directors of the Fund who are not interested
persons (as defined in the 0000 Xxx) of any party to this Agreement, by vote
cast in person at a meeting called for the purpose of voting on such approval.
This Agreement is terminable, without penalty, on 60 days' written notice, by
the Fund's Board of Directors or by vote of the holders of a majority of the
Fund's shares, or on 90 days' written notice, by Cowen. This agreement will also
terminate automatically in the event of its assignment (as defined in the 1940
Act).
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Please confirm that the foregoing is in accordance with your
understanding by indicating your acceptance hereof at the place below indicated,
whereupon it shall become a binding agreement between us.
Very truly yours,
COWEN SERIES FUNDS, INC.
By:_____________________
President
Accepted and Agreed:
XXXXX & COMPANY
By:________________________
Authorized Officer
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