(Form of)
DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT, made this day of
, 1997, by and between Vontobel Funds, Inc., a Maryland corporation
(the "Fund") and First Dominion Capital Corporation ("FDCC"), a
Virginia corporation.
WITNESSETH:
1. DISTRIBUTION SERVICES
The Fund hereby engages FDCC as national distributor to
assist the Fund in promoting the sale and distribution to investors
of shares of common stock of each series of the Fund ("Shares").
In connection therewith, FDCC shall (i) promote the sale of shares,
(ii) act as principal underwriter of shares of various series of
the Fund, (iii) otherwise assist the Fund in the distribution of
shares directly to investors through dealers or otherwise. For
this purpose the Fund agrees to offer shares for sale at all times
when, and in such places as, such shares are to be made available
for sale and may lawfully be offered for sale and sold. As and
when necessary in connection therewith FDCC may act as principal or
agent for the sale of such shares.
2. SALE OF FUND SHARES
Such shares are to be sold only on the following terms:
(a) All subscriptions, offers, or sales shall be subject
to acceptance or rejection by the Fund. Any offer or sale shall be
conclusively presumed to have been accepted by the Fund if the Fund
shall fail to notify FDCC of the rejection of such offer or sale
prior to the computation of the net asset value of the Fund's
shares next following receipt by the Fund of notice of such offer
or sale.
(b) No share of the Fund shall be sold for any
consideration other than cash or, except in instances otherwise
provided for by the Fund's currently effective Prospectus, for any
amount less than the public offering price per share, which shall
be determined in accordance with the Fund's currently effective
Prospectus. No shares may be sold for less than the net asset
value thereof.
3. REGISTRATION OF SHARES
The Fund agrees to make prompt and reasonable efforts to
effect and to keep in effect the registration or qualification of
its shares for sale in such jurisdictions as the Fund may
designate. FDCC may serve as dealer of record to assist the Fund
in connection with any such registration or qualification. The
Fund acknowledges that FDCC may incur expenses in connection with
assisting in the registration or qualification of Fund shares which
are sold at net asset value and the Fund will pay or reimburse
expenses of FDCC which are incurred in connection with such
registration or qualification.
4. INFORMATION TO BE FURNISHED TO FDCC
The Fund agrees that it will furnish FDCC with such
information with respect to the affairs and accounts of the Fund as
FDCC may from time to time reasonably require, and further agrees
that FDCC, at all reasonable times, shall be permitted to inspect
the books and records of the Fund.
5. ALLOCATION OF EXPENSES
During the period of this contract, the Fund shall pay or
cause to be paid all expenses, costs, and fees incurred by the Fund
which are not assumed by FDCC or any investment manager or
investment advisor to the Fund. FDCC shall pay advertising and
promotional expenses incurred by FDCC in connection with the
distribution of the Fund's shares which are sold subject to the
imposition of a sales charge including paying for prospectuses for
delivery to prospective shareholders.
6. COMPENSATION TO FDCC
It is understood and agreed by the parties hereto that
FDCC will receive compensation for services it performs hereunder
in accordance with Schedule A hereto.
7. LIMITATION OF FDCC'S AUTHORITY
FDCC shall be deemed to be an independent contractor and,
except as specifically provided or authorized herein, shall have no
authority to act for or represent the Fund. In the performance of
its duties hereunder, FDCC may solicit and enter into selling
dealer agreements with other broker-dealers in a form approved by
the Fund. Such selling dealer agreements shall provide for the
sale of shares of the Fund (or any series of the Fund) on terms
consistent with the registration statement of the Fund as then if
effect. Unless otherwise provided in a selling dealer agreement,
any selling dealer agreement of FDCC in effect as of the date of
this agreement shall be deemed to continue hereunder upon delivery
to the selling dealer of any amendment required by the terms of the
Fund's action eliminating the sales load on sales of affected Fund
shares.
8. SUBSCRIPTION FOR SHARES - REFUND FOR CANCELED ORDERS
If FDCC elects to act as a principal, and not as agent,
for a sale of Fund shares, FDCC shall subscribe for the shares of
the Fund only for the purpose of covering purchase orders already
received by it or for the purpose of investment for its own
account. Whether acting as principal or agent, in the event that
an order for the purchase of shares of the Fund is placed with FDCC
by a customer or dealer and subsequently canceled, FDCC shall
forthwith cancel the subscription for such shares entered on the
books of the Fund, and, if FDCC has paid the Fund for such shares,
shall be entitled to receive from the Fund in refund of such
payments the lesser of:
(a) the consideration received by the Fund for said shares;
or
(b) the net asset value of such shares at the time of
cancellation by FDCC.
9. INDEMNIFICATION OF THE FUND
FDCC agrees to indemnify the Fund against any and all
litigation and other legal proceedings of any kind or nature and
against any liability, judgment, cost, or penalty imposed as a
result of such litigation or proceedings in any way arising out of
or in connection with the sale or distribution of the shares of the
Fund by FDCC. In the event of the threat or institution of any
such litigation or legal proceedings against the Fund, FDCC shall
defend such action on behalf of the Fund at its own expense, and
shall pay any such liability, judgment, cost, or penalty resulting
therefrom, whether imposed by legal authority on agreed upon by way
of compromise and settlement; provided, however, FDCC shall not be
required to pay or reimburse the Fund for any liability, judgment,
cost, or penalty incurred as a result of information supplied by,
or as the result of the omission to supply information by, the Fund
to FDCC or to FDCC by a director, officer, or employee of the Fund
who is not an interested person of FDCC, unless the information so
supplied or omitted was available to FDCC or the Fund's investment
adviser without recourse to the Fund or any such person referred to
above.
10. FREEDOM TO DEAL WITH THIRD PARTIES
FDCC shall be free to render to others services of a
nature either similar to or different from those rendered under
this contract, except such as may impair its performance of the
services and duties to be rendered by it hereunder.
11. EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT
The effective date of this Agreement shall be the date
first set forth above. Wherever referred to in this Agreement, the
vote or approval of the holders of a majority of the outstanding
voting securities of the Fund (or of any series of the Fund) shall
mean the vote of 67% or more of the securities of the Fund (or of
any affected series of the Fund) if the holders of more than 50% of
such securities are present in person or by proxy or the vote of
more than 50% of the securities of the Fund (or an affected series
of the Fund) whichever is the lesser.
Unless sooner terminated as hereinafter provided, this
Agreement shall continue in effect from year to year but only so
long as such continuance is specifically approved at least annually
by the Board of Directors of the Fund, including the specific
approval of a majority of the directors who are not interested
person of FDCC as defined by the Investment Company Act of 1940, as
amended, cast in person at a meeting called for the purpose of
voting on such approval, or by the vote of the holders of a
majority of the outstanding voting securities of the Fund or an
affected series of the Fund.
This Agreement may be terminated at any time without the
payment of any penalty by the vote of the Board of Directors of the
Fund or by the vote of the holders of a majority of the outstanding
voting securities of the Fund, or by FDCC, upon 60 days' written
notice to the other party.
This Agreement shall automatically terminate in the event
of its assignment (as defined by the provisions of the Investment
Company Act of 1940, as amended).
12. AMENDMENTS TO AGREEMENT
No material amendment to this Agreement shall be
effective until approved by FDCC and by the affirmative vote of a
majority of the Board of Directors of the Fund (including a
majority of the directors who are not interested persons of FDCC or
any affiliate of FDCC).
13. NOTICES
Any notice under this Agreement shall be in writing,
addressed, delivered, or mailed, postage prepaid, to the other
party at such address as such other party may designate in writing
for receipt of such notice.
IN WITNESS WHEREOF, the Fund and FDCC have caused this
Agreement to be executed by their duly authorized officers affixed
hereto all as of the day and year first above written.
VONTOBEL FUNDS, INC.
By
Xxxx Xxxxx, III
Chairman
Attested by
FIRST DOMINION CAPITAL CORP.
By
Xxxx Xxxxx, III
President
Attested by
SCHEDULE A
FDCC shall receive, as compensation for its services pursuant
to this Distribution Agreement:
(a) With respect to any shares of the Fund sold subject to a
sales charge, FDCC shall be entitled to retain the underwriter's
portion of the sales charge for each investment in the Fund's
shares, computed as a percentage of the offering price determined
in accordance with the Fund's currently effective Prospectus and as
otherwise provided in the Fund's registration statement.
(b) With respect to sales of shares of the Fund sold subject
to a sales charge for which FDCC is the selling dealer, FDCC shall
retain the dealer's sales charge for each investment in the Fund's
shares, computed as a percentage of the offering price determined
in accordance with the Fund's currently effective Prospectus and as
otherwise provided in the Fund's registration statement.
(c) With respect to any shares of the Fund sold at net asset
value (without a sales charge), FDCC shall receive from the Fund
reimbursement at the rate of $30 per hour for the cost of personnel
involved with assistance in the promotion of sale of such shares
and for out-of-pocket costs incurred by FDCC.
211030.1
