AMENDMENT TO DISTRIBUTION AGREEMENT
December 1, 2005
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Sirs:
Reference is made to that certain distribution agreement (the
"Agreement"), dated as of June 5, 2000, between Xxxxx Xxxxxx Small Cap Core
Fund, Inc. (the "Investment Company"),with respect to one or more separate
series listed on Exhibit A (each a "Fund") and Citigroup Global Markets Inc.
This letter agreement (the "Amendment") amends or supplements certain terms of
the Agreement as set forth below. Except as expressly amended hereby, the
provisions of the Agreement are and shall remain in full force and effect.
Capitalized terms not defined in this Amendment shall have the meanings given to
them in the Agreement.
We acknowledge that Xxxx Xxxxx Inc. ("Xxxx Xxxxx") and Citigroup Inc.
("Citigroup") have entered into that certain Amended and Restated Global
Distribution Agreement (the "Global Distribution Agreement"), dated as of
October 3, 2005, which provides, for a period of three years from December 1,
2005, for the distribution by Citigroup distributors of Citigroup investment
products and Xxxx Xxxxx investment products within the United States and
internationally and for Citigroup's access to certain Xxxx Xxxxx investment
products pursuant to the terms of the Global Distribution Agreement.
1. Services as a Non-Exclusive Principal Underwriter and Distributor
Notwithstanding anything to the contrary contained in the Agreement:
1.1 You shall be, for the period of the Agreement as amended by this
Amendment, a non-exclusive principal underwriter and distributor of the Fund.
1.2 You may perform any services for any entity, including
investment companies that are not advised or administered by Citigroup or its
subsidiaries.
1.3 You shall retain all rights to the information of your
customers, including, but not limited to, the names, addresses, telephone
numbers and social security numbers of applicants for, purchasers of, and other
customers of the Fund as well as other identity and private information in
respect of your customers, employees, registered representatives and agents
("Confidential Information"); provided, however, that
Confidential Information shall not include any customer information that: (x)
was previously known by us from a source other than you without obligations of
confidence; (y) was or is rightfully received by us from a third party without
obligations of confidence to you or from publicly available sources without
obligations of confidence to you; or (z) was or is developed by means
independent of information obtained from you.
2. Termination
In addition to the termination rights already contained in the Agreement,
(i) at any time prior to the second anniversary hereof, at your option you may
terminate the Agreement at any time in order for you to enter into a mutually
satisfactory mutual fund dealer agreement with the principal underwriter that is
an affiliate of Xxxx Xxxxx for the Investment Company (a "Dealer Agreement") and
(ii) at any time following the second anniversary of the date hereof, either
party may at its option terminate the Agreement at any time in order for you to
enter into a Dealer Agreement ; provided, that any such termination shall only
be effective upon execution and delivery of a Dealer Agreement which shall be,
unless the parties thereto otherwise agree, in substantially the form presented
to the Board of the Investment Company and attached hereto as Exhibit B with
such additional changes as may be appropriate to reflect changes in applicable
laws, regulations or industry practice.
3. Dealer and Other Agreements
You may not enter into dealer or similar agreements with unaffiliated
brokers, dealers, banks or other similar firms or recordkeeping, shareholder
servicing and sub-accounting services with unaffiliated intermediaries without
the written consent of the Investment Company or its authorized designee. No
such unaffiliated intermediary is authorized to act as agent for the Investment
Company in connection with the offering or sale of Shares of the Fund to the
public or otherwise, except for the limited purpose of determining the time as
of which transactions in Shares are deemed to have been received.
4. Compliance Matters
(a) You shall act as a distributor and principal underwriter of Shares in
compliance in all material respects with all applicable laws, rules and
regulations, including, without limitation, all rules and regulations made or
adopted pursuant to (i) the 1940 Act, (ii) the Securities Exchange Act of 1934
("1934 Act"), (iii) any securities association registered under the 1934 Act,
including without limitation the NASD Conduct Rules or rules of any other
applicable self-regulatory organization. You shall offer the Shares, and accept
purchases, redemptions and exchanges for Shares, in compliance with the Fund's
registration statement (including its prospectus and statement of additional
information), as it may be amended or supplemented from time to time
("Registration Statement"). You will comply with and abide by the terms of a
Fund's Plan, as it may be amended from time to time.
(b) You agree to submit sales literature and marketing materials
(including memorandums, bulletins, and/or information or related materials)
intended for public distribution ("CGMI Marketing Materials") to the
co-principal underwriter of the Investment Company which is an affiliate of Xxxx
Xxxxx prior to distribution or publication for written approval. Such CGMI
Marketing Materials shall be submitted 15 days in advance for review. You shall
be responsible for reviewing and making such filings with the NASD, as required,
of CGMI Marketing Materials relating to each Fund.
(c) You shall adopt and follow procedures for the confirmation of sales to
investors and qualified securities dealers, banks and other intermediaries
(collectively "Intermediaries") timeliness of orders, the collection of amounts
payable by investors and Intermediaries on such sales, the correction of errors
related to distribution of Shares, the cancellation of unsettled transactions,
and assisting with the solicitation of proxies, and any other matters governed
by Rule 38a-1 under the 1940 Act (as may apply to a distributor or principal
underwriter for a registered investment company), each as may be necessary to
comply with the requirements of the NASD, any other self-regulatory
organization, and the federal securities laws. You shall provide reports or
other information to the Investment Company at the Investment Company's
reasonable request, including, without limitation, reports related to the
operation and implementation of the Investment Company's policies related to
customer privacy, safeguarding of customer information, anti-money-laundering,
sales and marketing practices, the operation of your code of ethics or other
policies and procedures of the Investment Company.
(d) You represent, warrant and agree that you have adopted and
implemented: (i) an anti-money-laundering program in compliance with the USA
Patriot Act of 2001, the regulations thereunder and NASD Conduct Rules,
including, without limitation, customer identification program procedures,
monitoring for suspicious activity, and (ii) procedures to comply with
applicable law and regulation related to cash transaction reporting
requirements, as well as monitoring and reporting under FinCEN, OFAC and other
government watch lists.
(e) The Investment Company agrees that the information exchanged under the
Agreement and information about the respective customers and potential customers
of each is confidential and as such shall not be disclosed by the Fund, sold or
used by the Fund in any way except to carry out the terms of this Agreement.
Notwithstanding the foregoing, such customer information may be disclosed by the
Investment Company on a "need to know" basis as set forth in applicable privacy
rules and regulations. The obligations regarding confidentiality hereunder shall
not apply to any information which is (i) otherwise publicly available, (ii)
already possessed by the entity to whom the information was disclosed prior to
disclosure hereunder, (iii) independently developed by the entity, or (iv)
disclosed pursuant to law, rule, regulation or court or administrative order.
The Investment Company shall have the right to use any list of shareholders of
the Fund or any other list of investors which it obtains in connection with its
provision of services under this Agreement, provided that such use is consistent
with applicable law and your privacy policies of the Investment Company,
including the provision of information to the Fund's transfer agent or to agents
used for the solicitation of proxies. You agree that you will comply with all of
the foregoing obligations of this to the extent that information is treated as
customer information of the Fund under applicable law or regulation, including
without limitation Regulation S-P. Each party further agrees to take
commercially reasonable steps, in accordance with applicable law, to safeguard
customer information. The provisions of this paragraph will survive termination
of the Agreement.
(f) From time to time, each Fund may implement policies, procedures or
charges in an effort to avoid the potential adverse effects on the Fund of
short-term trading by market timers. You agree to provide other assistance
reasonably designed to achieve compliance with these policies. You will maintain
and enforce policies with respect to frequent trading and share redemption as
are reasonable and customary in the industry. To the extent that accounts are
held in street name, you agree to cooperate with the Investment Company and the
Investment Company's Chief Compliance Officer (including, to the extent
practicable, providing account level sales and redemption information) to assist
in compliance with the frequent trading and redemption fee provisions as set
forth in the Fund's prospectus and other policies set forth in the Fund's
Registration Statement.
(g) Purchases, exchanges and redemptions of Shares through you will be at
the public offering price of such Shares (the net asset value of the Shares,
with appropriate adjustments for any applicable sales charge), as determined in
accordance with the then effective Registration Statement used in connection
with the offer and sale of the Shares. The public offering price will reflect
scheduled variations in or the elimination of sales charges on sales of Shares
either generally to the public or in connection with special purchase plans, as
described in the Registration Statement. You agree to apply any scheduled
variation in or waivers of sales charges uniformly to all customers meeting the
qualifications therefor as specified in the Registration Statement. With respect
to Funds sold with an initial sales charge, your customers will be entitled to
reduced sales charges on purchases made under any letter of intent or right of
accumulation as described in the Registration Statement.. In such case, the
concession from the public offering price retained by you will be based upon
such reduced sales charge. When placing wire trades, your agree to advise the
Funds of any letter of intent executed by its customer or any available right of
accumulation. The minimum initial purchase and the minimum subsequent purchase
of any Shares shall be as set forth in the applicable Registration Statement.
All orders are subject to acceptance or rejection by the applicable Fund in its
sole discretion for any reason.
(h) The handling and settlement of purchase, exchange and redemption
orders will be subject to the provisions of the Registration Statement and such
further procedures as the Investment Company and you may determine to be
appropriate from time-to-time, consistent with this Amendment. Citigroup Global
Markets' internal systems are suitably designed to handle such orders. Each Fund
shall notify you of the states or jurisdictions in which its Shares are
currently available for sale to the public. The Investment Company shall have no
obligation to register or make available Fund shares in any state or
jurisdiction. You will be responsible for the accuracy, timeliness and
completeness of purchase, redemption or exchange orders accepted by you.
(j) The Investment Company acknowledges that the co-principal underwriter
which is affiliated with Xxxx Xxxxx shall be responsible for reviewing the
Registration Statement of the Fund for the accuracy and completeness of all
disclosure concerning the distribution of Shares and that you shall not have
such responsibility, except, in each case, to the extent the disclosure
information is provided by you or pertains to information concerning your
operations. Notwithstanding the foregoing, nothing in this paragraph shall alter
your responsibilities for complying with the terms of the Registration Statement
in your offering of Shares.
5. Records. Upon the Investment Company's reasonable request, you will
provide access to or make copies of any such records the Investment Company does
not possess in order to: (a) comply with a request from a government body or
self-regulatory organization; (b) verify compliance by the other party of the
terms of this Agreement; or (c) make required regulatory reports.
6. Section 9 of the 1940 Act. You agree to promptly notify the Investment
Company should you cease to be a member of the NASD through expulsion or
otherwise or if its membership is suspended or should you be subject to any
limitations on your conduct under Section 9 of the 1940 Act.
7. Indemnification
You agree to indemnify, defend and hold the Investment Company, its
several officers and Board members, and any person who controls the Investment
Company 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
counsel fees incurred in connection therewith) which the Investment Company, its
officers or Board members, or any such controlling person may incur, under the
1933 Act or under common law or otherwise, on account of any act of yours or any
of your employees constituting willful misfeasance, bad faith, or gross
negligence in the performance of its duties, or by reason of your reckless
disregard of your obligations and duties under the Agreement or this Amendment.
The foregoing indemnification provisions supplement the indemnification
provisions of the Agreement. The indemnifications provisions of this Amendment
and the Agreement shall survive the termination of the Agreement and/or this
Amendment.
If the foregoing is in accordance with your understanding, kindly indicate
your acceptance of this Amendment by signing and returning to us the enclosed
copy, whereupon this Amendment will become binding on you.
Very truly yours,
Xxxxx Xxxxxx Small Cap Core Fund, Inc.
By: _______________________
Name: R. Xxx Xxxxxx
Title: Chief Executive Officer
Agreed to as of the date first above written:
Citigroup Global Markets Inc.
By: _____________________________
Name:
Title:
EXHIBIT A
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Fund | Date Added:
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Xxxxx Xxxxxx Small Cap Core Fund, Inc. | December 1, 2005
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EXHIBIT B
DEALER AGREEMENT
