DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT, dated as of October 4, 1996, by and between
DOMINI INSTITUTIONAL TRUST, a Massachusetts business trust (the "Trust"), and
SIGNATURE BROKER-DEALER SERVICES, INC., a Delaware corporation ("SBDS" or the
"Distributor").
W I T N E S S E T H:
WHEREAS, the Trust is engaged in business as an open-end investment
company registered under the Investment Company Act of 1940 (collectively with
the rules and regulations promulgated thereunder, the "1940 Act");
WHEREAS, the Trust wishes to engage SBDS to provide certain services
with respect to the distribution of Shares of the Trust, and SBDS is willing to
provide such services to the Trust on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. The Trust grants to the Distributor the right, as agent of the Trust,
to sell Shares of Beneficial Interest ("Shares") of the Trust upon the terms
hereinbelow set forth during the term of this Agreement. While this Agreement is
in force, the Distributor agrees to use its best efforts to find purchasers for
Shares of the Trust.
The Distributor shall have the right, as agent of the Trust, to order
from the Trust the Shares needed, but not more than the Shares needed (except
for clerical errors and errors of transmission), to fill unconditional orders
for Shares placed with the Distributor, all such orders to be made in the manner
set forth in the Trust's then-current prospectus (the "Prospectus") and
then-current statement of additional information (the "Statement of Additional
Information"). The price which shall be paid to the Trust for the Shares so
purchased shall be the net asset value per Share as determined in accordance
with the provisions of the Declaration of Trust and By-Laws, as each may from
time to time be amended (collectively, the "Governing Instruments"). The
Distributor shall notify the Custodian of the Trust (currently Investors Bank &
Trust Company), at the end of each business day, or as soon thereafter as the
orders placed with the Distributor have been compiled, of the number of Shares
and the prices thereof which have been ordered through the Distributor since the
end of the previous business day.
The right granted to the Distributor to place orders for Shares with the
Trust shall be exclusive, except that this exclusive right shall not apply to
Shares issued in the event that an investment company (whether a regulated or
private investment company or a personal holding company) is merged with and
into or consolidated with the Trust or in the event that the Trust acquires, by
purchase or otherwise, all (or substantially all) the assets or the outstanding
shares of any such company; nor shall it apply to Shares issued by the Trust as
a dividend or stock split. The exclusive right to place orders for Shares
granted to the Distributor may be waived by the Distributor by notice to the
Trust in writing, either unconditionally or subject to such conditions and
limitations as may be set forth in such notice to the Trust. The Trust hereby
acknowledges that the Distributor may render distribution and other services to
other parties,
including other investment companies. In connection with its duties hereunder,
the Distributor shall also arrange for computation of performance statistics
with respect to the Trust and arrange for publication of current price
information in newspapers and other publications.
2. The Shares may be sold by the Distributor on behalf of the Trust, to
any investor or to or through any dealer having a sales agreement with the
Distributor, upon the following terms and conditions:
The public offering price of Shares of the Trust, i.e., the price per
Share at which the Distributor or any dealer purchasing Shares through the
Distributor may sell shares to the public, shall be the net asset value of such
Shares.
The net asset value of Shares of the Trust shall be determined by the
Trust, or by an agent of the Trust, as of the close of the New York Stock
Exchange on each day on which the New York Stock Exchange is open for trading
(and on such other days as the Trustees deem necessary in order to comply with
Rule 22c-1 under the 1940 Act), in accordance with the method established
pursuant to the Governing Instruments. The Trust shall have the right to suspend
the sale of Shares if, because of some extraordinary condition, the New York
Stock Exchange shall be closed, or if conditions existing during the hours when
the Exchange is open render such action advisable or for any other reason deemed
adequate by the Trust.
3. The Trust agrees that it will, from time to time, but subject to the
necessary approval, if any, of its shareholders, take all necessary action to
register such number of Shares under the Securities Act of 1933, as amended (the
"1933 Act"), as the Distributor may reasonably be expected to sell.
The Distributor shall be an independent contractor and neither the
Distributor nor any of its directors, officers or employees as such, is or shall
be an employee of the Trust. It is understood that Trustees, officers and
shareholders of the Trust are or may become interested in the Distributor, as
directors, officers, employees, or otherwise and that directors, officers and
employees of the Distributor are or may become similarly interested in the Trust
and that the Distributor may be or become interested in the Trust as a
shareholder or otherwise. The Distributor is responsible for its own conduct and
the employment, control and conduct (but only with respect to the duties and
obligations of the Distributor hereunder) of its agents and employees and for
any injury to any person through its agents or employees. The Distributor
assumes full responsibility for its agents and employees under applicable
statutes and agrees to pay all employer taxes thereunder.
4. The Distributor covenants and agrees that, in selling Shares, it will
use its best efforts in all respects duly to conform with the requirements of
all state and federal laws and the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. relating to the sale of Shares, and will
indemnity and hold harmless the Trust and each of its Trustees and officers and
each person, if any, who controls the Trust within the meaning of Section 15 of
the Act (the "Indemnified Parties") against all losses, liabilities, damages,
claims or expenses (including the reasonable cost of investigating or defending
any alleged loss, liability, damages, claim or expense and reasonable counsel
fees incurred in connection therewith) arising from any claim, demand, action or
suit (collectively, "Claims"), arising by reason of any person's acquiring any
of the Shares through the Distributor, which may be based upon the 1933 Act or
any other statute or common law, on account of any wrongful act of the
Distributor or any of its employees (including any failure to conform with any
requirement of any state or federal law or the Rules of Fair Practice of the
National Association of Securities Dealers, Inc. relating to the sale of Shares)
or on the ground that the registration statement under the 1933 Act, including
all amendments thereto (the "Registration Statement"), or Prospectus or previous
prospectus or Statement of Additional Information or previous statement of
additional information, with respect to such Shares, includes or included an
untrue statement of a material fact or omits or omitted to state a material fact
required to be stated therein or
necessary in order to make the statements therein not misleading, if and only if
any such act, statement or omission was made in reliance upon information
furnished by the Distributor to the Trust; PROVIDED, however, that in no case
(i) is the indemnity of the Distributor in favor of any Indemnified Party to be
deemed to protect any such Indemnified Party against liability to which such
Indemnified Party would otherwise be subject by reason of wilful misfeasance,
bad faith or gross negligence in the performance of its or his duties or by
reason of its or his reckless disregard of its or his obligations and duties
under this Agreement, or (ii) is the Distributor to be liable under its
indemnity agreement contained in this Section 4 with respect to any Claim made
against any Indemnified Party unless such Indemnified Party shall have notified
the Distributor in writing within a reasonable time after the summons or other
first legal process giving information of the nature of the Claim shall have
been served upon such Indemnified Party (or after such Indemnified Party shall
have received notice of such service on any designated agent), but failure to
notify the Distributor of any such Claim shall not relieve it from any liability
which it may have to any Indemnified Party otherwise than on account of its
indemnity agreement contained in this Section 4. 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 any such Claim,
and, if the Distributor elects to assume the defense, such defense shall be
conducted by counsel chosen by it and satisfactory to each Indemnified Party. In
the event that the Distributor elects to assume the defense of any such suit and
retain such counsel, each Indemnified Party shall bear the fees and expenses of
any additional counsel retained by it but, in case the Distributor does not
elect to assume the defense of any such suit, it shall reimburse the Indemnified
Parties for the reasonable fees and expenses of any counsel retained by them.
Except with the prior written consent of the Distributor, no Indemnified Party
shall confess any Claim or make any compromise in any case in which the
Distributor will be asked to indemnify such Indemnified Party. The Distributor
agrees promptly to notify the Trust of the commencement of any litigation or
proceeding against it in connection with the issuance and sale of any of the
Shares.
Neither the Distributor nor any dealer nor any other person is
authorized to give any information or to make any representation on behalf of
the Trust in connection with the sale of Shares, other than those contained in
the Registration Statement or Prospectus or Statement of Additional Information.
5. The Trust will pay, or cause to be paid--
(i) all costs and expenses of the Trust, including fees and
disbursements of its counsel, in connection with the preparation and filing of
the Registration Statement, Prospectus and Statement of Additional Information,
and preparing and mailing to shareholders Prospectuses, Statements of Additional
Information, statements and confirmations and periodic reports (including the
expense of setting in type the Registration Statement, Prospectus and Statement
of Additional Information or any periodic report);
(ii) the cost of preparing temporary or permanent certificates for
Shares;
(iii) the cost and expenses of delivering to the Distributor at its
office in Boston, Massachusetts all Shares purchased through it as agent
hereunder;
(iv) all fees and disbursements of the Transfer Agent and Custodian,
subject to the Trust's transfer agent and custody agreements; and
(v) a fee to the Administrator of the Trust (pursuant to the
Administrative Services Agreement).
The Distributor shall receive no compensation for its services to the
Trust hereunder.
The Distributor agrees that with respect to the sale of Shares of the
Trust, subject to the Trust's obligations under clause (iii) above, (a) after
the Prospectus and Statement of Additional Information and periodic reports have
been set in type, it will bear the expense (other than the cost of mailing to
shareholders of the Trust) of printing and distributing any copies thereof
ordered by it which are to be used in connection with the offering or sale of
Shares to any dealer or prospective investor, (b) it will bear the expenses of
preparing, printing and distributing any other literature used by the
Distributor or furnished by it for use by any dealer in connection with the
offering of Shares for sale to the public and any expense of sending
confirmations and statements to any dealer having a sales agreement with the
Distributor, and (c) it will bear the expenses of qualification of Shares for
sale in the various states and, if necessary or advisable in connection
therewith, of qualifying the Trust as a broker or dealer in any such state.
6. If, at any time during the term of this Agreement, the Trust shall
deem it necessary or advisable in the best interests of the Trust that any
amendment of this Agreement be made in order to comply with any recommendation
or requirement of the Securities and Exchange Commission or other governmental
authority or to obtain any advantage under Massachusetts or federal tax laws, it
shall notify the Distributor of the form of amendment which it deems necessary
or advisable and the reasons therefor. If the Distributor declines to assent to
such amendment (after a reasonable time), the Trust may terminate this Agreement
forthwith by written notice to the Distributor without payment of any penalty.
If, at any time during the term of this Agreement, the Distributor requests the
Trust to make any change in its Governing Instruments or in its methods of doing
business which are necessary in order to comply with any requirement of federal
law or regulations of the Securities and Exchange Commission or of a national
securities association of which the Distributor is or may become a member,
relating to the sale of Shares, and the Trust fails (after a reasonable time) to
make any such change as requested, the Distributor may terminate this Agreement
forthwith by written notice to the Trust without payment of any penalty.
7. The Distributor agrees that it will not take any long or short
position in the Shares of the Trust and that, so far as it can control the
situation, it will prevent any of its Directors or officers from taking any long
or short position in the Shares of the Trust, except as permitted by the
Governing Instruments.
8. This Agreement shall become effective upon its execution and shall
continue in force indefinitely, PROVIDED that such continuance is "specifically
approved at least annually" by the vote of a majority of the Trustees of the
Trust who are not "interested persons" of the Trust or of the Distributor at a
meeting specifically called for the purpose of voting on such approval, and by
the Board of Trustees of the Trust. The aforesaid requirement that continuance
of this Agreement be "specifically approved at least annually" shall be
construed in a manner consistent with the 1940 Act. If such annual approval is
not obtained, this Agreement shall terminate on the date which is 15 months
after the date of the last approval.
This Agreement may be terminated at any time by (i) the Trust, (a) by
the vote of a majority of the Trustees of the Trust who are not "interested
persons" of the Trust or the Distributor, (b) by the vote of the Board of
Trustees of the Trust, or (c) by the "vote of a majority of the outstanding
voting securities" of the Trust, or (ii) by the Distributor, in any case without
payment of any penalty on not more than 60 days nor less than 30 days written
notice to the other party.
This Agreement shall automatically terminate in the event of its
assignment.
9. The terms "vote of a majority of the outstanding voting securities",
"interested person", "assignment" and "specifically approved at least annually"
shall have the respective meanings specified in, and shall be construed in a
manner consistent with, the 1940 Act, SUBJECT, however, to such exemptions as
may be granted by the Securities and Exchange Commission thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names on their behalf by the undersigned,
thereunto duly authorized, and their respective seals to be hereto affixed, all
as of the day and year first above written. The undersigned Trustee of the Trust
has executed this Agreement not individually, but as Trustee under the
Declaration of Trust, dated April 1, 1996, and the obligations of this Agreement
are not binding upon any of the Trustees or shareholders of the Trust
individually, but bind only the Trust estate.
DOMINI INSTITUTIONAL TRUST
By
Title:
SIGNATURE BROKER-DEALER
SERVICES, INC.
By
Title:
