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EXHIBIT 6(A)
DISTRIBUTION AGREEMENT
This Distribution Agreement is made as of this 7th day of
December, 1993 between PACIFIC HORIZON FUNDS, INC., a Maryland corporation
(herein called the "Company"), and CONCORD FINANCIAL GROUP, INC., a Delaware
corporation (herein called "CFG").
WHEREAS, the Company is an open-end, management investment
company and is so registered under the Investment Company Act of 1940; and
WHEREAS, the Company will offer and maintain the following
investment portfolios: Prime Fund, Treasury Fund, Treasury Only Fund,
Government Fund, Tax-Exempt Money Fund, California Tax-Exempt Money Market
Fund, Prime Value Fund, Aggressive Growth Fund, U.S. Government Securities
Fund, Capital Income Fund, California Tax-Exempt Bond Fund, Blue Chip Fund,
Flexible Bond Fund, Asset Allocation Fund, National Municipal Bond Fund,
Utilities Fund, Short-Term Government Fund, Corporate Bond Fund, Growth and
Income Fund, International Bond Fund and International Equity Fund
(individually a "Fund" and collectively the "Funds"); and
WHEREAS, pursuant to an Administration Agreement dated
November 13, 1989, as amended, Basic Administrative Services Agreement dated
November 13, 1989, as amended, and Special Management Services Agreement, dated
April 22, 1992, as amended, (collectively the "Management Agreements") between
the Company and Concord Holding Corporation ("Concord"), the Company has
retained Concord to provide administrative and management services to the
Funds; and
WHEREAS, the Company desires to retain CFG as Distributor for
the Funds to provide for the sale and Distribution of shares of common stock of
the Funds, each such share having a par value of $.001 per share (herein
collectively called "Shares"), and CFG is willing to render such services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants set forth herein the parties hereto agree as follows:
I. DELIVERY OF DOCUMENTS
The Company has delivered to CFG copies of each of the
following documents and will deliver to it all future amendments and
supplements thereto, if any:
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(a) The Company's Charter and all amendments
thereto (such Charter, as presently in effect and as it shall from time to time
be amended, herein called the "Company's Charter");
(b) Bylaws of the Company (such Bylaws, as
presently in effect and as they shall from time to time be amended, herein
called the "Bylaws");
(c) Resolutions of the Board of Directors of the
Company authorizing the execution and delivery of this Agreement;
(d) Post-Effective Amendment No. 33 to the
Company's 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"), on Form N-1A as filed with the Securities and Exchange Commission (the
"Commission") relating to the Shares, and all subsequent amendments thereto
(said registration statement, as presently in effect and as amended or
supplemented from time to time, is herein called the "Registration Statement");
(e) Notification of Registration of the Company
under the 1940 Act on Form N-8A as filed with the Commission; and
(f) Prospectuses and statements of additional
information of the Company and of each Fund (such prospectuses and statements
of additional information, as presently in effect and as they shall from time
to time be amended and supplemented, herein called individually the
"Prospectus" and collectively the "Prospectuses").
II. DISTRIBUTION
1. APPOINTMENT OF DISTRIBUTOR. The Company hereby
appoints CFG as Distributor of the Funds' Shares and CFG hereby accepts such
appointment and agrees to render the services and duties set forth in this
Section II.
2. SERVICES AND DUTIES.
(a) The Company agrees to sell through CFG, as
agent, from time to time during the term of this Agreement, Shares of the Funds
(whether authorized but unissued or treasury shares, in the Company's sole
discretion) upon the terms and at the current offering price as described in
the applicable Prospectus. CFG will act only on its own behalf as principal in
making agreements with selected dealers or others for the sale and redemption
of Shares, and shall sell Shares only at the offering price thereof as set
forth in the applicable Prospectus. CFG shall devote its best efforts to effect
sales of Shares of
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each of the Funds, but shall not be obligated to sell any certain number of
Shares.
(b) In all matters relating to the sale and
redemption of Shares CFG will act in conformity with the Company's Charter,
Bylaws and Prospectuses and with the instructions and directions of the Board
of Directors of the Company, and will conform to and comply with the
requirements of the 1933 Act, the 1940 Act, the regulations of the National
Association of Securities Dealers, Inc. and all other applicable federal or
state laws and regulations. In connection with such sales, CFG acknowledges
and agrees that it is not authorized to provide any information or make any
representations other than as contained in the Company's Registration Statement
and Prospectuses and any sales literature specifically approved by the Company.
(c) CFG will bear the cost of (i) printing and
distributing any Prospectus (including any supplement thereto), and (ii)
preparing, printing and distributing any literature, advertisement or material
which is primarily intended to result in the sale of the Shares; provided,
however, that CFG shall not be obligated to bear the expenses incurred by the
Company in connection with (1) the preparation and printing of any supplement
or amendment to any Registration Statement or Prospectus necessary for the
continued effective registration of the Shares under the 1933 Act or any state
securities laws; and (2) the printing and distribution of any Prospectus,
supplement or amendment thereto for existing shareholders of the Fund described
therein.
(d) All Shares of the Aggressive Growth, U.S.
Government Securities, Capital Income, California Tax- Exempt Bond, Blue Chip,
Flexible Bond, Asset Allocation, National Municipal Bond, Utilities, Corporate
Bond, Growth and Income, International Bond and International Equity Funds of
the Company offered for sale by CFG shall be offered for sale to the public at
a price per Share (the "offering price") equal to (i) their net asset value
(determined in the manner set forth in the Company's Charter and then current
Prospectuses) plus, except with respect to those classes of persons or
transactions set forth in the then current Prospectuses, (ii) a sales charge
which shall be the percentage of the offering price of such Shares as set forth
in the Company's then current Prospectuses. The offering price, if not an
exact multiple of one cent, shall be adjusted to the nearest cent. Concessions
by CFG to broker-dealers and other persons shall be set forth in either the
selling agreements between CFG and such broker-dealers and persons or, if such
concessions are described in the then current Prospectuses, shall be as so set
forth. No broker-dealer or other person who enters into a selling agreement
with CFG shall
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be authorized to act as agent for the Company in connection with the offering
or sale of its Shares to the public or otherwise.
(e) If any Shares sold by CFG under the terms of
this Agreement are redeemed or repurchased by the Company or by CFG as agent or
are tendered for redemption within seven business days after the date of
confirmation of the original purchase of said Shares, CFG shall forfeit the
amount above the net asset value received by it in respect of such Shares,
provided that the portion, if any, of such amount re-allowed by CFG to
broker-dealers or other persons shall be repayable to the Company only to the
extent recovered by CFG from the broker-dealer or other person concerned. CFG
shall include in the forms of agreement with such broker-dealers and other
persons a corresponding provision for the forfeiture by them of their
concession with respect to Shares sold by them or their principals and redeemed
or repurchased by the Company or by CFG as agent (or tendered for redemption)
within seven business days after the date of confirmation of such initial
purchases.
3. SALES AND REDEMPTIONS.
(a) The Company shall pay all costs and expenses
in connection with the registration of the Shares under the 1933 Act, and all
expenses in connection with maintaining facilities for the issue and transfer
of the Shares and for supplying information, prices and other data to be
furnished by the Company hereunder, and all expenses in connection with
preparing, printing and distributing the Prospectuses except as set forth in
subsection 2(c) of Section II hereof or in any other agreement entered into by
the Company.
(b) The Company shall execute all documents,
furnish all information and otherwise take all actions which may be reasonably
necessary in the discretion of the Company's officers in connection with the
qualification of the Shares for sale in such states as CFG may designate to the
Company and the Company may approve, and the Company shall pay all filing fees
which may be incurred in connection with such qualification. CFG shall pay all
expenses connected with its qualification as a dealer under state or federal
laws and, except as otherwise specifically provided in this Agreement, all
other expenses incurred by CFG in connection with the sale of the Shares as
contemplated in this Agreement. It is understood that certain shareholder
servicing expenses to be incurred in connection with the Shares may be paid as
provided in a Shareholder Service Plan adopted by the Company. The Distributor
agrees to be responsible for the operation of such Plan in accordance with the
terms thereof.
(c) The Company shall have the right to suspend
the sale of Shares of any Fund at any time in response to
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conditions in the securities markets or otherwise, and to suspend the
redemption of Shares of any Fund at any time as permitted by the 1940 Act or
the rules of the Commission ("Rules").
(d) The Company reserves the right to reject any
order for Shares, but will not do so arbitrarily or without reasonable cause.
III. LIMITATIONS OF LIABILITY
CFG shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Company or any Fund in connection with
the matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or negligence on its part in the performance of
its duties or from reckless disregard by it of its obligations and duties under
this Agreement.
IV. CONFIDENTIALITY
CFG will treat confidentially and as proprietary information
of the Company all records and other information relative to the Company and
the Funds and prior or present shareholders or those persons or entities who
respond to CFG'S inquiries concerning investment in the Company, and will not
use such records and information for any purpose other than the performance of
its responsibilities and duties hereunder or under any other agreement with the
Company, except after prior notification to and approval in writing by the
Company, which approval shall not be unreasonably withheld and may not be
withheld where CFG may be exposed to civil or criminal contempt proceedings for
failure to comply, when CFG is requested to divulge such information by duly
constituted authorities, or when CFG is so requested by the Company.
V. INDEMNIFICATION
1. COMPANY REPRESENTATIONS. The Company represents and
warrants to CFG that at all times the Registration Statement and Prospectuses
will in all material respects conform to the applicable requirements of the
1933 Act and the Rules and will not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, except that no representation or warranty
in this subsection shall apply to statements or omissions made in reliance upon
and in conformity with written information furnished to the Company by
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or on behalf of and with respect to CFG expressly for use in the Registration
Statement or Prospectuses.
2. CFG REPRESENTATIONS. CFG represents and warrants to the
Company that it is duly organized as a Delaware corporation and is and at all
times will remain duly authorized and licensed to carry out its services as
contemplated herein.
3. COMPANY INDEMNIFICATION. The Company will indemnify,
defend and hold harmless CFG, its several officers and directors, and any
person who controls CFG within the meaning of Section 15 of the 1933 Act, from
and against any losses, claims, damages or liabilities, joint or several, to
which any of them may become subject under the 1933 Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon, any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, the Prospectuses or in any application or other document executed by
or on behalf of the Company, or arise out of, or are based upon, information
furnished by or on behalf of the Company filed in any state in order to qualify
the Shares under the securities or blue sky laws thereof ("Blue Sky
Application"), or arise out of, or are based upon, the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse
CFG, its several officers and directors, and any person who controls CFG within
the meaning of Section 15 of the 1933 Act, for any legal or other expenses
reasonably incurred by any of them in investigating, defending or preparing to
defend any such action, proceeding or claim; provided, however, that the
Company shall not be liable in any case to the extent that such loss, claim,
damage or liability arises out of, or is based upon, any untrue statement,
alleged untrue statement, or omission or alleged omission made in the
Registration Statement, the Prospectuses, any Blue Sky Application or any
application or other document executed by or on behalf of the Company in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of and with respect to CFG specifically for inclusion
therein.
The Company shall not indemnify any person pursuant to this
subsection 3 unless the court or other body before which the proceeding was
brought has rendered a final decision on the merits that such person was not
liable by reason of his willful misfeasance, bad faith or negligence in the
performance of his duties, or his reckless disregard of obligations and duties,
under this Agreement ("disabling conduct") or, in the absence of such a
decision, a reasonable determination (based upon a review of the facts) that
such person was not liable by reason of disabling conduct has been made by the
vote of a majority of a quorum of directors of the Company who are neither
"interested
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persons" of the Company (as defined in the 0000 Xxx) nor parties to the
proceeding, or by an independent legal counsel in a written opinion.
Each Fund shall advance attorneys' fees and other expenses
incurred by any person in defending any claim, demand, action or suit which is
the subject of a claim for indemnification pursuant to this subsection 3, so
long as: (a) such person shall undertake to repay all such advances unless it
is ultimately determined that he is entitled to indemnification hereunder; and
(b) such person shall provide security for such undertaking, or the Fund shall
be insured against losses arising by reason of any lawful advances, or a
majority of a quorum of the disinterested, non-party directors of the Company
(or an independent legal counsel in a written opinion) shall determine based on
a review of readily available facts (as opposed to a full trial-type inquiry)
that there is reason to believe that such person ultimately will be found
entitled to indemnification hereunder.
4. CFG INDEMNIFICATION. CFG will indemnify, defend and hold
harmless the Company, each Fund, the Company's several officers and directors
and any person who controls the Company or any Fund within the meaning of
Section 15 of the 1933 Act, from and against any losses, claims, damages or
liabilities, joint or several, to which any of them may become subject under
the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon, any breach of its representations and warranties in subsection 2
hereof or its agreements in subsection 2 of Section II hereof, or which arise
out of, or are based upon, any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement, the Prospectuses, any
Blue Sky Application or any application or other document executed by or on
behalf of the Company, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, which statement or omission was made in reliance upon
and in conformity with information furnished in writing to the Company or any
of its several officers and directors by or on behalf of and with respect to
CFG specifically for inclusion therein, and will reimburse the Company, each
Fund, the Company's several officers and directors, and any person who controls
the Company or any Fund within the meaning of Section 15 of the 1933 Act, for
any legal or other expenses reasonably incurred by any of them in
investigating, defending or preparing to defend any such action, proceeding or
claim.
5. GENERAL INDEMNITY PROVISIONS. No indemnifying party
shall be liable under its indemnity agreement contained in sub-section 3 or 4
hereof with respect to any claim made against such indemnifying party unless
the indemnified party shall have
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notified the indemnifying party 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 the indemnified party (or after the
indemnified party shall have received notice of such service on any designated
agent), but failure to notify the indemnifying party of any such claim shall
not relieve it from any liability which it may otherwise have to the
indemnified party. The indemnifying party will 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 liability, and if the indemnifying party
elects to assume the defense, such defense shall be conducted by counsel chosen
by it and reasonably satisfactory to the indemnified party. In the event the
indemnifying party elects to assume the defense of any such suit and retain
such counsel, the indemnified party shall bear the fees and expenses of any
additional counsel retained by the indemnified party.
VI. DURATION AND TERMINATION
This Agreement shall become effective as of the date hereof
and, unless sooner terminated as provided herein, shall continue in effect with
respect to each Fund until October 31, 1994. Thereafter, if not terminated,
this Agreement shall continue automatically for successive terms of one year,
provided that such continuance is specifically approved at least annually (a)
by a vote of a majority of those members of the Board of Directors of the
Company who are not parties to this Agreement or "interested persons" of any
such party, cast in person at a meeting called for the purpose of voting on
such approval, and (b) by the Board of Directors of the Company or by vote of a
"majority of the outstanding voting securities" of the Funds as to which the
Agreement is effective; provided, however, that this Agreement may be
terminated by the Company at any time, without the payment of any penalty, by
vote of a majority of the entire Board of Directors of the Company or by a vote
of a "majority of the outstanding voting securities" of such Funds on 60 days'
written notice to CFG, or by CFG at any time, without the payment of any
penalty, on 90 days' written notice to the Company. This Agreement will
automatically and immediately terminate in the event of its "assignment." (As
used in this Agreement, the terms "majority of the outstanding voting
securities," "interested person" and "assignment" shall have the same meanings
as such terms have in the 1940 Act.)
VII. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived,
discharged or terminated except by an instrument in writing
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signed by the party against which an enforcement of the change, waiver,
discharge or termination is sought.
VIII. NOTICES
Notices of any kind to be given to the Company hereunder by
CFG shall be in writing and shall be duly given if mailed or delivered to the
Company at 000 Xxxxx Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxxx 00000-0000,
Attention: Xxxxxx X. Xxxxxxx, President, with a copy to Suite 1100, 0000
Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000, Attention: W. Xxxxx
XxXxxxxx, III, Secretary, or at such other address or to such individual as
shall be so specified by the Company to CFG. Notices of any kind to be given
to CFG hereunder by the Company shall be in writing and shall be duly given if
mailed or delivered to CFG at 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Xxxxxxx X. Xxxxxxxxx, Chief Executive Officer, or at
such other address or to such individual as shall be so specified by CFG to the
Company.
IX. MISCELLANEOUS
The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby.
Subject to the provisions of Section VI hereof, this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and shall be governed by New York law; provided, however, that
nothing herein
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shall be construed in a manner inconsistent with the 1940 Act or any rule or
regulation of the Commission thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
PACIFIC HORIZON FUNDS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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President
Attest: /s/ W. Xxxxx XxXxxxxx, III
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Secretary
CONCORD FINANCIAL GROUP, INC.
By: /s/ Xxxxxxx Xxxxxxxxx
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Chief Executive Officer
Attest: /s/ Xxxx Murgidichien
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Secretary
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