THE XXXXXXXX FUNDS
DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT, made as of this 1st day of August, 1996, between
THE XXXXXXXX FUNDS, an unincorporated business trust organized under the laws of
the Commonwealth of Massachusetts (the "Trust"), and FUNDS DISTRIBUTOR, INC.,
a Massachusetts corporation (the "Distributor").
WITNESSETH:
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end management investment company;
WHEREAS, the Shares of Beneficial Interest (par value $0.001 per share) of
the Trust (the "Shares") are divided into multiple series (such series together
with any other series which may in the future be established, the "Funds");
WHEREAS, it is in the interest of the Trust to be able to offer Shares of
each Fund for sale continuously and to appoint a broker registered under the
Securities Exchange Act of 1934 and various state broker registration statutes
for the purpose of facilitating such offers and sales;
WHEREAS, the Trust and the Distributor wish to enter into an agreement with
each other with respect to the continuous offering of Shares of the Funds; NOW,
THEREFORE, the parties agree as follows:
Section 1. Appointment of the Distributor. The Trust hereby appoints the
Distributor its exclusive agent in connection with the offering and sale of the
Shares on the terms set forth in this Agreement and the Distributor hereby
accepts such appointment and agrees to act hereunder.
Section 2. Services and Duties of the Distributor.
(a) The Distributor agrees to offer and sell, as agent for the Trust, from
time to time during the term of this Agreement, Shares upon the terms described
in the Prospectus relating to such Shares. As used in this Agreement, the term
"Prospectus" shall mean the prospectus, including any information incorporated
by reference therein, relating to such Shares included as part of the Trust's
Registration Statement, as such prospectus may be amended or supplemented from
time to time, and the term "Registration Statement" shall mean the Registration
Statement most recently filed from time to time by the Trust with the Securities
and Exchange Commission
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and effective under the Securities Act of 1933, as amended (the "1933 Act")
and the 1940 Act, as such Registration Statement may be amended by any
amendments thereto at the time in effect.
(b) The Distributor will hold itself available to receive orders,
satisfactory to the Distributor, for the purchase of Shares and will establish
procedures for the acceptance and transmission of orders on behalf of the Trust,
which procedures shall be reasonably acceptable to the Trust. The Distributor
shall promptly forward to the Trust's custodian funds received in respect of
purchases of Shares. Purchase orders shall be deemed effective at the time and
in the manner set forth in the Prospectus relating to such Shares.
(c) The offering price of the Shares shall be the net asset value per Share
(as defined in or pursuant to the Declaration of Trust of the Trust and
determined as set forth in the Prospectus relating to such Shares) next
determined following receipt of an order. The shall furnish the Distributor,
with all possible promptness, an advice of each computation of net asset value
of Shares of each Fund.
(d) The Distributor shall not be obligated to sell any certain number of
Shares and nothing herein contained shall prevent the Distributor from entering
into like distribution arrangements with other investment companies.
Section 3. Duties of the Trust.
(a) The Trust agrees to sell Shares of each Fund so long as it has Shares
available for sale and to cause the Trust's transfer agent to record on its
books the ownership of (or deliver certificates, if any, for) such Shares
registered in such names and amounts as the Distributor has requested in writing
or other means of data transmission, as promptly as practicable after receipt by
the Trust of the net asset value thereof and written request of the Distributor
therefor.
(b) The Trust shall keep the Distributor fully informed with regard to the
Trust's affairs and shall furnish to the Distributor copies of all information,
financial statements and other papers which may be necessary for use in
connection with the sale of Shares of the Funds, and this shall include one
certified copy, upon request by the Distributor, of all financial statements
prepared for the Trust by independent accountants and such number of copies of
its most current Prospectuses as may be necessary to accompany confirmation of
sales and annual and interim reports and Prospectuses for delivery to existing
shareholders.
(c) The Trust shall take, from time to time, such steps, including payment
of the related filing fee, as may be necessary to register its Shares under the
1933 Act to the end that there will be available for sale such number of Shares
as the Distributor may be expected to sell. The Trust agrees to file from time
to time such amendments, reports and other documents as may be necessary in
order that there may be no untrue statement of a material fact in a Registration
Statement or Prospectuses, or necessary in order that there may be no omission
to state a material fact in the Registration Statement or Prospectuses which
omission would make the statements therein misleading.
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(d) The Trust, through Funds Distributor, Inc. as Co- Administrator, shall
use its best efforts to qualify and maintain the qualification of any
appropriate number of the Shares of each Fund for sale under the securities laws
of such states as the Distributor and the Trust may approve, and, if necessary
or appropriate in connection therewith, to qualify and maintain the
qualification of the Trust as a broker or dealer in such states; provided that
the Trust shall not be required to amend its Declaration of Trust or By-laws to
comply with the laws of any state, to maintain an office in any state, to change
the terms of the offering of the Shares in any state from the terms set forth in
its Registration Statement and Prospectuses, to qualify as a foreign corporation
in any state or to consent to service of process in any state other than with
respect to claims arising out of the offering of the Shares. The Distributor
shall furnish such information and other material relating to its affairs and
activities as may be required by such Co-Administrator in connection with such
qualifications.
Section 4. Expenses. The Trust shall bear all costs and expenses necessary
for the continuous sale of the Shares such as: (i) fees and disbursements of its
counsel and independent accountants; (ii) the preparation, filing and printing
of any registration statements and/or prospectuses required to be filed by and
under the Federal and state securities laws; (iii) the preparation and mailing
of annual and interim reports, prospectuses and proxy materials to shareholders;
and (iv) the qualifications of Shares for sale and of the Trust as a broker or
dealer under the securities laws of such states or other jurisdictions as shall
be selected by the Trust and the Distributor pursuant to Section 3(d) hereof and
the cost and expenses payable to each such state for continuing qualification
therein in connection with such sale. Since the Trust has not adopted a plan
under Rule 12b-1 of the 1940 Act, the Distributor is directed and agrees that it
will not incur any expenses which would require the Trust to adopt a plan under
Rule 12b-1.
Section 5. Indemnification. The Trust agrees to indemnify, defend and hold
the Distributor, its officers and directors and any person who controls the
Distributor 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
Distributor, its officers, directors or any such controlling person may incur
under the 1933 Act, or under common law or otherwise, arising out of or based
upon any untrue statement of a material fact contained in the Registration
Statement or Prospectus or arising out of or based upon any alleged omission to
state a material fact required to be stated in either thereof or necessary to
make the statements in either thereof not misleading, except insofar as such
claims, demands, liabilities or expenses arise out of or are based upon any such
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with information furnished in writing by the
Distributor to the Trust for use in the Registration Statement or Prospectus;
provided, however, that this indemnity agreement, to the extent that it might
require indemnity of any person who is also an officer or Trustee of the Trust
or who controls the Trust within the meaning of Section 15 of the 1933 Act,
shall not inure to the benefit of such officer, Trustee or controlling person
unless a court of competent jurisdiction shall determine, or it shall have been
determined by controlling precedent, that such result would not be against
public policy as expressed in the 1933 Act; and further provided that in no
event
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shall anything contained herein be so construed as to protect the
Distributor against any liability to the Trust or to its securities holders to
which the Distributor 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 under this Agreement. The
Trust's agreement to indemnify the Distributor, its officers and directors and
any such controlling person, as aforesaid is expressly conditioned upon the
Trust's being promptly notified of any action brought against the Distributor,
its officers or directors, or any such controlling person, such notification to
be given to the Trust in accordance with Section 9, with a copy to Xxxxxxx X.
Xxxx, Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The Trust
agrees promptly to notify the Distributor of the commencement of any litigation
or proceedings against it or any of its officers or Trustees in connection with
the issue and sale of any Shares.
The Distributor agrees to indemnify, defend and hold the Trust, its
Trustees and officers and any person who controls the Trust, if any, 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 against such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which the Trust, its Trustees or
officers of any such controlling person may incur under the 1933 Act or under
common law or otherwise, but only the extent that such liability or expense
incurred by the Trust, its Trustees or officers or such controlling person
resulting from such claims or demands shall arise out of or be based upon any
alleged untrue statement of a material fact contained in information furnished
in writing by the Distributor to the Trust for use in the preparation of the
Registration Statement or Prospectus or shall arise out of or be based upon any
alleged omission to state a material fact in such information or a fact
necessary to make such information not misleading, it being understood that the
Trust will rely upon the information provided by the Distributor for use in the
preparation of the Registration Statement and Prospectus. The Distributor's
agreement to indemnify the Trust, its Trustees and officers, and any such
controlling person as aforesaid is expressly conditioned upon the Distributor s
being promptly notified of any action brought against the Trust, its Trustees or
officers or any such controlling person, such notification to be given to the
Distributor in accordance with Section 9.
Section 6. Limitation of Liability. The Distributor shall not be liable for
any error of judgment or for any loss suffered by the Trust in connection with
the matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or for reckless disregard by it of its obligations and
duties under this Agreement.
Section 7. Compliance with Securities Laws. The Trust represents that it is
registered as an open-end management investment company under the 1940 Act, and
agrees that it will comply with the provisions of the 1940 Act and of the rules
and regulations thereunder. The Trust and the Distributor each agree to comply
with the applicable terms and provisions of the 1940 Act, the 1933 Act and,
subject to the provisions of Section 3(d), applicable state securities
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laws. The Distributor agrees to comply with the applicable terms and
provisions of the Securities Exchange Act of 1934.
Section 8. Term of Agreement; Termination. This Agreement shall commence on
the date first set forth above. This Agreement shall continue in effect for a
period more than two years from the date hereof only so long as such continuance
is specifically approved at least annually in conformity with the requirements
of the 1940 Act.
This Agreement shall terminate automatically in the event of its assignment
(as defined the 1940 Act). In addition, this Agreement may be terminated by
either party at any time, without penalty, on not less than sixty (60) days
written notice to the other party.
Section 9. Notices. Any notice required to be given pursuant to this
Agreement shall be deemed duly given if delivered or mailed by registered mail,
postage prepaid: (1) to the Distributor at Funds Distributor, Inc., 00 Xxxxx
Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: President with a
copy to General Counsel; or (2) to the Trust at The Xxxxxxxx Funds, at its
address as set forth in its Prospectuses, Attention: Treasurer, with a copy to
Xxxxxx Guaranty Trust Company, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Funds Management or at such other address as either party may from
time to time specify to the other party pursuant to this
Section 9.
Section 10. Confidentiality. The Distributor agrees on behalf of itself and
its employees to treat confidentially and as proprietary information of the
Trust all records and other information not otherwise publicly available
relative to the Trust and its prior, present or potential shareholders and not
to use such records and information for any purpose other than performance of
its responsibilities and duties hereunder, except after prior notification to
and approval in writing by the Trust, which approval shall not be unreasonably
withheld and may not be withheld where the Distributor may be exposed to civil
or criminal contempt proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities, or when so requested
by the Trust.
Section 11. No Liability of Shareholders, Trustees, etc. The Trustees have
authorized the execution of this Agreement in their capacity as Trustees and not
individually and the Distributor agrees that neither the shareholders nor the
Trustees nor any officer, employee, representative or agent of the Trust shall
be personally liable upon, nor shall resort be had to their private property for
the satisfaction of, obligations given, executed or delivered on behalf of or by
the Trust, that the shareholders, Trustees, officers, employees, representatives
and agents of the Trust shall not be personally liable hereunder, and that it
shall look solely to the property of the Trust for the satisfaction of any claim
hereunder.
Section 12. Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
THE XXXXXXXX FUNDS
By /s/ Xxxx X. Xxxxxxxxx
Xxxx X. Xxxxxxxxx, Vice President
and Secretary
FUNDS DISTRIBUTOR, INC.
By /s/ Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx, President and
Chief Executive Officer
PP272.DOC
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