Exhibit e(iii) under Form N-1A
Exhibit 1 under Item 601/Reg. S-K
DEUTSCHE FUNDS, INC.
DISTRIBUTION AGREEMENT
AGREEMENT made as of the __th day of _________, 1999, by and between
Deutsche Funds, Inc., a Maryland corporation, with its principal office and
place of business at _________________________________________ (the "Fund"), and
ICC Distributors, Inc., a Delaware corporation with its principal office and
place of business at Xxx Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx 00000 (the
"Distributor").
WHEREAS, the Fund is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company, may issue its shares of common stock (the
"Shares") in separate series and classes and continuously offers for sale its
Shares to the public; and
WHEREAS, the Distributor is registered under the Securities
Exchange Act of 1934, as amended ("1934 Act"), as a broker-dealer and is engaged
in the business of selling shares of registered investment companies either
directly to purchasers or through other securities dealers;
WHEREAS, the Fund offers Shares in one or more series as listed in
Appendix A hereto (each such series, together with all other series subsequently
established by the Fund and made subject to this Agreement in accordance with
Section 16 hereof, being herein referred to as a "Series," and collectively as
the "Series") and the Fund offers shares of one or more classes (each such class
together with all other classes subsequently established by a Series being
herein referred to as a "Class," and collectively as the "Classes");
WHEREAS, the Fund desires that the Distributor offer the
Shares of each Series and Class thereof to the public and the
Distributor is willing to provide those services on the terms and conditions set
forth in this Agreement in order to promote the growth of the Fund and
facilitate the distribution of the Shares;
NOW THEREFORE, for and in consideration of the mutual covenants
and agreements contained herein, the Fund and the Distributor hereby agree as
follows:
SECTION 1. DELIVERY OF DOCUMENTS AND APPOINTMENT
(a) The Fund has delivered to the Distributor properly certified or
authenticated copies of its Articles of Incorporation and Bylaws (collectively,
as amended from time to time, "Articles of Incorporation"), the Fund's
Notification of Registration filed with the U.S. Securities and Exchange
Commission ("SEC") pursuant to Section 8(a) of the 1940 Act on Form N-8A under
the 1940 Act, the Fund's Registration Statement and all amendments thereto filed
with the SEC pursuant to the Securities Act of 1933, as amended (the "Securities
Act"), or the 1940 Act (the "Registration Statement") and its current
Prospectuses and Statements of Additional Information (collectively, as
currently in effect and as amended or supplemented, the "Prospectus") and shall
promptly furnish the Distributor with all amendments of or supplements to the
foregoing, each properly certified or authenticated. In addition, the Fund shall
furnish the Distributor with properly certified or authenticated copies of all
documents, notices and reports filed with the SEC.
(b) The Fund has delivered to the Distributor certified copies of the
resolutions of the Board of Directors (the "Board") authorizing the appointment
of the Distributor as distributor and approving this Agreement.
(c) The Fund hereby appoints the Distributor as its principal underwriter and
distributor to sell its Shares to the public and hereby agrees during the term
of this Agreement to sell its Shares to the Distributor upon the terms and
conditions herein set forth.
SECTION 2. EXCLUSIVE NATURE OF DUTIES
The Distributor shall be the exclusive representative of the Fund to act as
its principal underwriter and distributor except that the rights given under
this Agreement to the Distributor shall not apply to Shares issued in connection
with the merger, consolidation or reorganization of any other investment company
with the Fund; the Fund's acquisition by purchase or otherwise of all or
substantially all of the assets or stock of any other investment company; or the
reinvestment in Shares by the Fund's shareholders of dividends or other
distributions or any other offering by the Fund of securities to its
shareholders.
SECTION 3. PURCHASE OF SHARES; OFFERING OF SHARES
(a) The Distributor shall have the right to buy from the Fund the Shares needed
to fill unconditional orders for unsold Shares of the Fund as shall then be
effectively registered under the Securities Act placed with the Distributor by
investors or securities dealers or depository institutions or other financial
intermediaries acting as agent for their customers or on their own behalf.
Alternatively, the Distributor may act as the Fund's agent, to offer, and to
solicit offers to subscribe to, unsold Shares of the Fund as shall then be
effectively registered under the Securities Act. The Distributor will promptly
forward all orders and subscriptions for Shares of the Fund. The price which the
Distributor shall pay for Shares purchased by it from the Fund shall be the net
asset value, determined as set forth in Section 3(c) hereof, used in determining
the public offering price on which the orders are based. The price at which the
Distributor shall offer and sell Shares to investors shall be the public
offering price, as set forth in Section 3(b) hereof. The Distributor may sell
Shares to securities dealers, depository institutions or other financial
intermediaries acting as agent for their customers that have entered into
agreements with the Distributor pursuant to Section 9 hereof or acting on their
own behalf. The Fund reserves the right to sell its Shares directly to investors
through subscriptions received by the Fund, but no such direct sales shall
affect the sales charges due to the Distributor hereunder.
(b) The public offering price of the Shares of the Fund, i.e., the price per
Share at which the Distributor or selected dealers or selected agents (each as
defined in Section 11 hereof) may sell Shares to the public or to those persons
eligible to invest in Shares as described in the Fund's Prospectus, shall be the
public offering price determined in accordance with the then currently effective
Prospectus of the Fund or Class thereof under the Securities Act, relating to
such Shares, but not to exceed the net asset value at which the Distributor,
when acting as principal, is to purchase such Shares, plus, in the case of
Shares for which an initial sales charge is assessed, an initial charge equal to
a specified percentage or percentages of the public offering price of the Shares
as set forth in the current Prospectus relating to the Shares. In the case of
Shares for which an initial sales charge may be assessed, Shares may be sold to
certain classes of persons at reduced sales charges or without any sales charge
as from time to time set forth in the current Prospectus relating to the Shares.
The Fund will advise the Distributor of the net asset value per Share at each
time as the net asset value per Share shall have been determined by the Fund.
(c) The net asset value per Share of each Series or Class thereof shall be
determined by the Fund, or an agent of the Fund, as of the close of the New York
Stock Exchange, Inc. ("NYSE") or such other time as set forth in the applicable
Prospectus on the Fund business day in accordance with the method set forth in
the Prospectus and guidelines established by the Board.
(d) The Fund reserves the right to suspend the offering of Shares of any Class
at any time in the absolute discretion of the Board, and upon notice of such
suspension the Distributor shall cease to offer Shares of the Fund or Classes
thereof specified in the notice.
(e) The Fund, or any agent of the Fund designated in writing to the Distributor
by the Fund, shall be promptly advised by the Distributor of all purchase orders
for Shares received by the Distributor and all subscriptions for Shares obtained
by the Distributor as agent shall be directed to the Fund for acceptance and
shall not be binding until accepted by the Fund. Any order or subscription may
be rejected by the Fund; provided, however, that the Fund will not arbitrarily
or without reasonable cause refuse to accept or confirm orders or subscriptions
for the purchase of Shares. The Fund (or its agent) will confirm orders and
subscriptions upon their receipt, will make appropriate book entries and, upon
receipt by the Fund (or its agent) of payment thereof, will issue such Shares in
uncertificated or certificated (if permitted) form pursuant to the instructions
of the Distributor. The Distributor agrees to cause such payment and such
instructions to be delivered promptly to the Fund (or its agent).
SECTION 4. REPURCHASE OR REDEMPTION OF SHARES
(a) Any of the outstanding Shares of the Fund may be tendered for redemption at
any time, and the Fund agrees to redeem or repurchase the Shares so tendered in
accordance with its obligations as set forth in the Fund's Articles of
Incorporation and the Prospectus relating to the Shares. The price to be paid to
redeem or repurchase the Shares of the Fund shall be equal to the net asset
value calculated in accordance with the provisions of Section 3(c) hereof less,
in the case of Shares for which a deferred sales charge is assessed, a deferred
sales charge equal to a specified percentage or percentages of the net asset
value of those Shares as from time to time set forth in the Prospectus relating
to those Shares or their cost, whichever is less. Shares for which a deferred
sales charge may be assessed and that have been outstanding for a specified
period of time may be redeemed without payment of a deferred sales charge as
from time to time set forth in the Prospectus relating to those Shares.
(b) The Fund or its designated agent shall pay (i) the total amount of the
redemption price consisting of the redemption price less any applicable deferred
sales charge to the redeeming shareholder or its agent and (ii) except as may be
otherwise required by the Conduct Rules (the "Rules") of the National
Association of Securities Dealers, Inc. (the "NASD") and any interpretations
thereof, any applicable deferred sales charges to the Distributor in accordance
with the Distributor's instructions on or before the third business day
subsequent to each calendar month-end.
(c) Redemption of Shares or payment therefor may be suspended at times when the
NYSE is closed for any reason other than its customary weekend or holiday
closings, when trading thereon is restricted, when an emergency exists as a
result of which disposal by the Fund of securities owned by the Fund is not
reasonably practicable or it is not reasonably practicable for the Fund fairly
to determine the value of its net assets, or during any other period when the
SEC so permits.
SECTION 5. DUTIES AND REPRESENTATIONS OF THE DISTRIBUTOR
(a) The Distributor shall use reasonable efforts to sell Shares of the Fund upon
the terms and conditions contained herein and in the then current Prospectus.
The Distributor shall devote reasonable time and effort to effect sales of
Shares but shall not be obligated to sell any specific number of Shares. The
services of the Distributor to the Fund hereunder are not to be deemed
exclusive, and nothing herein contained shall prevent the Distributor from
entering into like arrangements with other investment companies so long as the
performance of its obligations hereunder is not impaired thereby.
(b) In selling Shares of the Fund, the Distributor shall comply with the
requirements of all federal and state laws relating to the sale of the Shares.
None of the Distributor, any selected dealer, any selected agent or any other
person is authorized by the Fund to give any information or to make any
representations other than as is contained in the Fund's Prospectus or any
advertising materials or sales literature specifically approved in writing by
the Fund or its agents.
(c) The Distributor shall adopt and follow procedures for the confirmation of
sales to investors and selected dealers or selected agents, the collection of
amounts payable by investors and selected dealers or selected agents on such
sales, and the cancellation of unsettled transactions, as may be necessary to
comply with the requirements of the NASD and any other applicable
self-regulatory organization.
(d) The Distributor will perform its duties hereunder under the supervision of
and in accordance with the directives of the Board. The Distributor will perform
its duties hereunder in accordance with the Fund's Articles of Incorporation and
Prospectuses and with the instructions and directions of the Board and will
conform to and comply with the requirements of the 1940 Act, the Securities Act
and other applicable laws.
(e) The Distributor shall provide the Board with a written report of the amounts
expended in connection with this Agreement as requested by the Board.
(f) The Distributor shall be responsible for reviewing and making such filings,
as required, of advertisements ands sales literature relating to the Fund that
have been furnished to the Distributor.
(g) The Distributor represents and warrants to the Fund that:
(i) It is a corporation duly organized and existing and
in good standing under the laws of the State of
Delaware and it is duly qualified to carry on its
business in the State of Maine;
(ii) It is empowered under applicable laws and by its
Articles of Incorporation to enter into and perform
this Agreement;
(iii) All requisite corporate proceedings have been taken
to authorize it to enter into and perform this
Agreement;
(iv) It has and will continue to have access to the
necessary facilities, equipment and personnel to
perform its duties and obligations under this
Agreement;
(v) This Agreement, when executed and delivered, will
constitute a legal, valid and binding obligation of
the Distributor, enforceable against the Distributor
in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws
of general application affecting the rights and
remedies of creditors and secured parties;
(vi) It is registered under the 1934 Act with the SEC as a
broker-dealer, it is a member in good standing of the
NASD, it will abide by the rules and regulations of
the NASD, and it will notify the Fund if its
membership in the NASD is terminated or suspended;
(vii) The performance by the Distributor of its obligations
hereunder does not and will not contravene any
provision of its Articles of Incorporation; and
(viii) It has taken all reasonable business steps to ensure
that any system or software used in the operation of
its business that is an any way related to the
services provided herein: (A) manages and manipulates
data involving all dates from the 20th and 21st
centuries without material, functional or data
abnormality related to such dates; (B) has user
interfaces and data fields formatted to distinguish
between dates from the 20th and 21st centuries; and
(C) represents all data to include indications of the
millennium, century, and decade, as well as the
actual year.
(h) Notwithstanding anything in this Agreement, including the Appendices, to the
contrary, the Distributor makes no warranty or representation as to the number
of selected dealers or selected agents with which it has entered into agreements
in accordance with Section 11 hereof, as to the availability of any Shares to be
sold through any selected dealer, selected agent or other intermediary or as to
any other matter not specifically set forth herein.
SECTION 6. DUTIES AND REPRESENTATIONS OF THE FUND
(a) The Fund shall furnish to the Distributor copies of all financial statements
and other documents to be delivered to shareholders or investors at least two
business days prior to such delivery and shall furnish the Distributor copies of
all other financial statements, documents and other papers or information which
the Distributor may reasonably request for use in connection with the
distribution of Shares. The Fund shall make available to the Distributor the
number of copies of its Prospectuses as the Distributor shall reasonably
request.
(b) The Fund shall take, from time to time, subject to the approval of its Board
and any required approval of its shareholders, all action necessary to fix the
number of authorized Shares (if such number is not limited) and to register the
Shares under the Securities Act, to the end that there will be available for
sale the number of Shares as reasonably may be expected to be sold pursuant to
this Agreement.
(c) The Fund shall register or qualify its Shares for sale under the securities
laws of the various states of the United States and other jurisdictions
("States") as the Fund, in its sole discretion shall determine. Any registration
or qualification may be withheld, terminated or withdrawn by the Fund at any
time in its discretion. The Distributor shall furnish such information and other
material relating to its affairs and activities as may be required by the Fund
in connection with such registration or qualification.
(d) The Fund represents and warrants to the Distributor that:
(i) It is a corporation duly organized and existing and in good standing
under the laws of the State of Maryland;
(ii) It is empowered under applicable laws and by its Articles of
Incorporation to enter into and perform this Agreement;
(iii) All proceedings required by the Articles of Incorporation have been
taken to authorize it to enter into and perform its duties under this Agreement;
(iv) It is registered as an open-end management investment company with the
SEC under the 1940 Act;
(v) All Shares, when issued, shall be validly issued, fully paid and
non-assessable;
(vi) This Agreement, when executed and delivered, will constitute a legal,
valid and binding obligation of the Fund, enforceable against the Fund in
accordance with its terms, subject to bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting the rights and
remedies of creditors and secured parties;
(vii) The performance by the Fund of its obligations hereunder does not and
will not contravene any provision of its Articles of Incorporation.
(viii) The Fund's Registration Statement is currently effective and will
remain effective with respect to all Shares of the Fund's Series and Classes
thereof being offered for sale;
(ix) It will use its best efforts to ensure that its Registration Statement
and Prospectuses have been or will be, as the case may be, carefully prepared in
conformity with the requirements of the Securities Act and the rules and
regulations thereunder;
(x) It will use its best efforts to ensure that (A) its Registration
Statement and Prospectuses contain or will contain all statements required to be
stated therein in accordance with the Securities Act and the rules and
regulations thereunder, (B) all statements of fact contained or to be contained
in the Registration Statement or Prospectuses are or will be true and correct at
the time indicated or on the effective date as the case may be and (C) neither
the Registration Statement nor any Prospectus, when they shall become effective
or be authorized for use, will include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading to a purchaser of Shares;
(xi) It will from time to time file such amendment or amendments to its
Registration Statement and Prospectuses as, in the light of then-current and
then-prospective developments, shall, in the opinion of its counsel, be
necessary in order to have the Registration Statement and Prospectuses at all
times contain all material facts required to be stated therein or necessary to
make any statements therein not misleading to a purchaser of Shares ("Required
Amendments");
(xii) It shall not file any amendment to its Registration Statement or
Prospectuses without giving the Distributor reasonable advance notice thereof
(which shall be at least three Fund business days); provided, however, that
nothing contained in this Agreement shall in any way limit the Fund's right to
file at any time such amendments to its Registration Statement or Prospectuses,
of whatever character, as the Fund may deem advisable, such right being in all
respects absolute and unconditional; and
(xiii) It will use its best efforts to ensure that (A) any amendment to its
Registration Statement or Prospectuses hereafter filed will, when it becomes
effective, contain all statements required to be stated therein in accordance
with the 1940 Act and the rules and regulations thereunder, (B) all statements
of fact contained in the Registration Statement or Prospectuses will, when it
becomes effective, be true and correct at the time indicated or on the effective
date as the case may be and (C) no such amendment, when it becomes effective,
will include an untrue statement of a material fact or will omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading to a purchaser of the Shares.
SECTION 7. STANDARD OF CARE
(a) The Distributor shall use its best judgment and efforts in rendering
services to the Fund under this Agreement but shall be under no duty to take any
action except as specifically set forth herein or as may be specifically agreed
to by the Distributor in writing. The Distributor shall not be liable to the
Fund or any of the Fund's shareholders for any error of judgment or mistake of
law, for any loss arising out of any investment, or for any action or inaction
of the Distributor in the absence of bad faith, willful misfeasance or gross
negligence in the performance of the Distributor's duties or obligations under
this Agreement or by reason of the Distributor's reckless disregard of its
duties and obligations under this Agreement
(b) The Distributor shall not be liable to the Fund for any action taken or
failure to act in good faith reliance upon:
(i) the advice of the Fund or of counsel, who may be counsel to the Fund or
counsel to the Distributor;
(ii) any oral instruction which the Distributor receives
and which it reasonably believes in good faith was
transmitted by the person or persons authorized by
the Board to give such oral instruction (the
Distributor shall have no duty or obligation to make
any inquiry or effort of certification of such oral
instruction);
(iii) any written instruction or certified copy of any
resolution of the Board, and the Distributor may rely
upon the genuineness of any such document or copy
thereof reasonably believed in good faith by the
Distributor to have been validly executed; or
(iv) any signature, instruction, request, letter of
transmittal, certificate, opinion of counsel,
statement, instrument, report, notice, consent,
order, or other document reasonably believed in good
faith by the Distributor to be genuine and to have
been signed or presented by the Fund or other proper
party or parties;
and the Distributor shall not be under any duty or obligation to inquire into
the validity or invalidity or authority or lack thereof of any statement, oral
or written instruction, resolution, signature, request, letter of transmittal,
certificate, opinion of counsel, instrument, report, notice, consent, order, or
any other document or instrument which the Distributor reasonably believes in
good faith to be genuine.
(c) The Distributor shall not be responsible or liable for any failure or delay
in performance of its obligations under this Agreement caused, directly or
indirectly, by circumstances beyond its reasonable control including, without
limitation, acts of civil or military authority, national emergencies, labor
difficulties (other than those related to the Distributor's employees), fire,
mechanical breakdowns, flood or catastrophe, acts of God, insurrection, war,
riots or failure of the mails, transportation, communication or power supply.
SECTION 8. INDEMNIFICATION
(a) The Fund will indemnify, defend and hold the Distributor, its employees,
agents, directors and officers and any person who controls the Distributor
within the meaning of Section 15 of the Securities Act or Section 20 of the 1934
Act ("Distributor Indemnitees") free and harmless from and against any and all
claims, demands, actions, suits, judgments, liabilities, losses, damages, costs,
charges, reasonable counsel fees and other expenses of every nature and
character (including the cost of investigating or defending such claims,
demands, actions, suits or liabilities and any reasonable counsel fees incurred
in connection therewith) which any Distributor Indemnitee may incur, under the
Securities Act, under the securities laws of the various States or under common
law or otherwise based upon any alleged untrue statement of a material fact
contained in the Fund's Registration Statement or Prospectuses, based upon any
alleged omission to state a material fact required to be stated in any one
thereof or necessary to make the statements in any one thereof not misleading,
or based upon any filing made with the regulatory authorities of any State
unless such statement or omission was made in reliance upon, and in conformity
with, information furnished in writing to the Fund in connection with the
preparation of the Registration Statement, exhibits to the Registration
Statement or filings made with the regulatory authorities of any State by or on
behalf of the Distributor ("Distributor Claims").
After receipt of the Distributor's notice of termination
under Section 13(e) of this Agreement, the Fund shall indemnify and hold each
Distributor Indemnitee free and harmless from and against any Distributor Claim;
provided, that the term Distributor Claim for purposes of this sentence shall
mean any Distributor Claim related to the matters for which the Distributor has
requested amendment to the Fund's Registration Statement and for which the Fund
has not filed a Required Amendment, regardless of with respect to such matters
whether any statement in or omission from the Registration Statement was made in
reliance upon, or in conformity with, information furnished to the Fund by or on
behalf of the Distributor.
(b) The Fund may assume the defense of any suit brought to enforce any
Distributor Claim and may retain counsel of good standing chosen by the Fund and
approved by the Distributor, which approval shall not be withheld unreasonably.
The Fund shall advise the Distributor that it will assume the defense of the
suit and retain counsel within ten (10) days of receipt of the notice of the
claim. If the Fund assumes the defense of any such suit and retains counsel, the
defendants shall bear the fees and expenses of any additional counsel that they
retain. If the Fund does not assume the defense of any such suit, or if
Distributor does not approve of counsel chosen by the Fund or has been advised
that it may have available defenses or claims that are not available to or
conflict with those available to the Fund, the Fund will reimburse any
Distributor Indemnitee named as defendant in such suit for the reasonable fees
and expenses of any counsel that person retains. A Distributor Indemnitee shall
not settle or confess any claim without the prior written consent of the Fund,
which consent shall not be unreasonably withheld or delayed.
(c) The Distributor will indemnify, defend and hold the Fund and its several
officers and directors (collectively, the "Fund Indemnitees"), free and harmless
from and against any and all claims, demands, actions, suits, judgments,
liabilities, losses, damages, costs, charges, reasonable counsel fees and other
expenses of every nature and character (including the cost of investigating or
defending such claims, demands, actions, suits or liabilities and any reasonable
counsel fees incurred in connection therewith), but only to the extent that such
claims, demands, actions, suits, judgments, liabilities, losses, damages, costs,
charges, reasonable counsel fees and other expenses result from, arise out of or
are based upon:
(i) any alleged untrue statement of a material fact
contained in the Fund's Registration Statement or
Prospectus or any alleged omission of a material fact
required to be stated or necessary to make the
statements therein not misleading, if such statement
or omission was made in reliance upon, and in
conformity with, information furnished to the Fund in
writing in connection with the preparation of the
Registration Statement or Prospectus by or on behalf
of the Distributor; or
(ii) any act of, or omission by, the Distributor or its
sales representatives that does not conform to the
standard of care set forth in Section 7 of this
Agreement (collectively, "Fund Claims").
(d) The Distributor may assume the defense of any suit brought to enforce any
Fund Claim and may retain counsel of good standing chosen by the Distributor and
approved by the Fund, which approval shall not be withheld unreasonably. The
Distributor shall advise the Fund that it will assume the defense of the suit
and retain counsel within ten (10) days of receipt of the notice of the claim.
If the Distributor assumes the defense of any such suit and retains counsel, the
defendants shall bear the fees and expenses of any additional counsel that they
retain. If the Distributor does not assume the defense of any such suit, or if
the Fund does not approve of counsel chosen by the Distributor or has been
advised that it may have available defenses or claims that are not available to
or conflict with those available to the Distributor, the Distributor will
reimburse any Fund Indemnitee named as defendant in such suit for the reasonable
fees and expenses of any counsel that person retains. A Fund Indemnitee shall
not settle or confess any claim without the prior written consent of the
Distributor, which consent shall not be unreasonably withheld or delayed.
(e) The Fund's and the Distributor's obligations to provide indemnification
under this Section is conditioned upon the Fund or the Distributor receiving
notice of any action brought against a Distributor Indemnitee or Fund
Indemnitee, respectively, by the person against whom such action is brought
within twenty (20) days after the summons or other first legal process is
served. Such notice shall refer to the person or persons against whom the action
is brought. The failure to provide such notice shall not relieve the party
entitled to such notice of any liability that it may have to any Distributor
Indemnitee or Fund Indemnitee except to the extent that the ability of the party
entitled to such notice to defend such action has been materially adversely
affected by the failure to provide notice.
(f) The provisions of this Section and the parties' representations and
warranties in this Agreement shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Distributor
Indemnitee or Fund Indemnitee and shall survive the sale and redemption of any
Shares made pursuant to subscriptions obtained by the Distributor. The
indemnification provisions of this Section will inure exclusively to the benefit
of each person that may be a Distributor Indemnitee or Fund Indemnitee at any
time and their respective successors and assigns (it being intended that such
persons be deemed to be third party beneficiaries under this Agreement).
(g) The Distributor agrees promptly to notify the Fund of
the commencement of any litigation or proceeding of which
it becomes aware arising out of or in any way connected with the issuance or
sale of Shares. The Fund agrees promptly to notify the Distributor of the
commencement of any litigation or proceeding of which it becomes aware arising
out of or in any way connected with the issuance or sale of its Shares.
(h) Nothing contained herein shall require the Fund to
take any action contrary to any provision of its Articles of
Incorporation or any applicable statute or regulation or shall require the
Distributor to take any action contrary to any provision of its Articles of
Incorporation or Bylaws or any applicable statute or regulation; provided,
however, that neither the Fund nor the Distributor may amend their Articles of
Incorporation and Bylaws, respectively, in any manner that would result in a
violation of a representation or warranty made in this Agreement, except if
required by any applicable statute or regulation, and then only after notice to
the other party.
(i) Nothing contained in this section shall be construed to
protect the Distributor against any liability to the Fund
or the security holders of the Fund to which the Distributor would otherwise be
subject by reason of its failure to satisfy the standard of care set forth in
Section 7 of this Agreement.
SECTION 9. NOTIFICATION TO THE DISTRIBUTOR
The Fund shall advise the Distributor immediately: (i) of any request
by the SEC for amendments to the Fund's Registration Statement or Prospectus or
for additional information; (ii) in the event of the issuance by the SEC of any
stop order suspending the effectiveness of the Fund's Registration Statement or
any Prospectus or the initiation of any proceedings for that purpose; (iii) of
the happening of any material event which makes untrue any statement made in the
Fund's then current Registration Statement or Prospectus or which requires the
making of a change in either thereof in order to make the statements therein not
misleading; and (iv) of all action of the SEC with respect to any amendments to
the Fund's Registration Statement or Prospectus which may from time to time be
filed with the Commission under the 1940 Act or the Securities Act.
SECTION 10. COMPENSATION; EXPENSES
(a) In consideration of the Distributor's services in connection with the
distribution of Shares of the Fund and each Class thereof, the Distributor shall
receive: (i) any applicable sales charge assessed upon investors in connection
with the purchase of Shares; (ii) from the Fund, any applicable contingent
deferred sales charge ("CDSC") assessed upon investors in connection with the
redemption of Shares; (iii) from the Fund, the distribution service fees with
respect to the Shares of those Classes as designated in Appendix A for which a
plan under Rule 12b-1 under the 1940 Act (a "Plan") is effective (the
"Distribution Fee"); and (iv) from the Fund, the shareholder service fees with
respect to the Shares of those Classes as designated in Appendix A (the "Service
Fee"). The Distribution Fee and Service Fee shall be accrued daily by each
applicable Fund or Class thereof and shall be paid monthly as promptly as
possible after the last day of each calendar month but in any event on or before
the fifth (5th) Fund business day after month-end, at the rate or in the amounts
set forth in Appendix A and, as applicable, the Plan(s). The Fund grants and
transfers to the Distributor a general unperfected lien and security interest in
any and all securities and other assets of the Fund now or hereafter maintained
in an account at the Fund's custodian on behalf of the Fund to secure any
Distribution Fees and Service Fees owed the Distributor by the Fund under this
Agreement.
(b) The Fund shall cause its transfer agent (the "Transfer Agent") to withhold,
from redemption proceeds payable to holders of Shares of the Series and the
Classes thereof, all CDSCs properly payable by the shareholders in accordance
with the terms of the applicable Prospectus and shall cause the Transfer Agent
to pay such amounts over to the Distributor as promptly as possible after each
month end.
(c) Except as specified in Sections 8 and 10(a) of this Agreement, the
Distributor shall be entitled to no compensation or reimbursement of expenses
for the services provided by the Distributor pursuant to this Agreement. The
Distributor may receive compensation from the Fund's investment advisors, other
service providers or their respective affiliates (collectively, the "Advisor")
for its services hereunder or for additional services all as may be agreed to
between the Advisor and the Distributor. Notwithstanding anything in this
Agreement to the contrary, to the extent the Distributor receives compensation
from the Advisor that is disclosed to the Board, the Fund will indemnify, defend
and hold each Distributor Indemnitee free and harmless from and against any and
all claims, demands, actions, suits, judgments, liabilities, losses, damages,
costs, charges, reasonable counsel fees and other expenses of every nature and
character (including the cost of investigating or defending such claims,
demands, actions, suits or liabilities and any reasonable counsel fees incurred
in connection therewith) related in any way to such payment.
(d) The Fund shall be responsible and assumes the obligation for payment of all
its expenses, including fees and disbursements of its counsel and auditors, in
connection with the preparation and filing of the Registration Statement and
Prospectuses (including but not limited to the expense of setting in type the
Registration Statement and Prospectuses and printing sufficient quantities for
internal compliance, regulatory purposes and for distribution to current
shareholders).
(e) The Fund shall bear the cost and expenses (i) of the registration of its
Shares for sale under the Securities Act; (ii) of the registration or
qualification of its Shares for sale under the securities laws of the various
States; (iii) if necessary or advisable in connection therewith, of qualifying
the Fund, or its Series or the Classes thereof (but not the Distributor) as an
issuer or as a broker or dealer, in such States as shall be selected by the
Fund; and (iv) payable to each State for continuing registration or
qualification therein until the Fund decides to discontinue registration or
qualification. The Distributor shall pay all expenses relating to the
Distributor's broker-dealer qualification.
SECTION 11. SELECTED DEALER AND SELECTED AGENT AGREEMENTS
(a) The Distributor shall have the right to enter into sub-distribution
agreements with securities dealers of its choice ("selected dealers") and with
depository institutions and other financial intermediaries of its choice
("selected agents") for the sale of Shares and to fix therein the portion of the
sales charge, if any, that may be allocated to the selected dealers or selected
agents; provided, that all such agreements shall be in substantially the form of
agreement as set forth in Appendix B hereto or such other form as approved by
the Fund. Shares of each Series or Class thereof shall be resold by selected
dealers or selected agents only at the public offering price(s) set forth in the
Prospectus relating to the Shares. The Distributor shall offer and sell Shares
of the Fund only to such selected dealers as are members in good standing of the
NASD. The Distributor shall have the right to enter into shareholder servicing
agreements with financial intermediaries of its choice; provided, that all such
agreements shall be in substantially the form of agreement as approved by the
Fund.
(b) The Distributor will supervise the Fund's relationship with selected dealers
and agents and may make payments to those selected dealers and agents in such
amounts as the Distributor may determine from time to time in its sole
discretion. The amount of payments to selected dealers and agents by the
Distributor may be reviewed by the Board from time to time; provided, however,
that no payment by the Distributor to any selected dealer or agent with respect
to a Share shall exceed the amount of payments made to the Distributor hereunder
with respect to that Share.
SECTION 12. CONFIDENTIALITY
The Distributor agrees to treat all records and other information related
to the Fund as proprietary information of the Fund and, on behalf of itself and
its employees, to keep confidential all such information, except that the
Distributor may:
(i) prepare or assist in the preparation of periodic reports to
shareholders and regulatory bodies such as the SEC;
(ii) provide information typically supplied in the investment
company industry to companies that track or report price,
performance or other information regarding investment
companies; and
(iii) release such other information as approved in writing by the
Fund, which approval shall not be unreasonably withheld;
provided, however, that the Distributor may release any information regarding
the Fund without the consent of the Fund if the Distributor reasonably believes
that it may be exposed to civil or criminal legal proceedings for failure to
comply, when requested to release any information by duly constituted
authorities or when so requested by the Fund.
SECTION 13. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective with respect to each series or class
listed in Appendix A. Upon effectiveness of this Agreement, it shall supersede
all previous agreements between the parties hereto covering the subject matter
hereof insofar as such Agreement may have been deemed to relate to the Fund.
(b) This Agreement shall continue in effect with respect to a Series Fund for a
period of one year from its effectiveness and thereafter shall continue in
effect with respect to the Series until terminated; provided, that continuance
is specifically approved at least annually (i) by the Board or by a vote of a
majority of the outstanding voting securities of the Fund and (ii) by a vote of
a majority of Directors of the Fund (I) who are not parties to this Agreement or
interested persons of any such party (other than as Directors of the Fund) and
(II) with respect to each Class of a Series for which there is an effective
Plan, who do not have any direct or indirect financial interest in any such Plan
applicable to the Class or in any agreements related to the Plan, cast in person
at a meeting called for the purpose of voting on such proposal.
(c) This Agreement may be terminated at any time with respect to a Series or
Class, without the payment of any penalty, (i) by the Board or by a vote of a
majority of the outstanding voting securities of the Series or, with respect to
each Class for which there is an effective Plan, a majority of Directors of the
Fund who do not have any direct or indirect financial interest in any such Plan
or in any agreements related to the Plan, on 60 days' written notice to the
Distributor or (ii) by the Distributor on 60 days' written notice to the Fund.
(d) This Agreement shall automatically terminate upon its assignment and upon
the termination of the Distributor's membership in the NASD.
(e) The obligations of Sections 5(e), 6(d), 8, 9 and 10 of this Agreement shall
survive any termination of this Agreement with respect to a Series or Class
thereof.
SECTION 14. NOTICES
Any notice required or permitted to be given hereunder by the Distributor
to the Fund or the Fund to the Distributor shall be deemed sufficiently given if
personally delivered or sent by telegram, facsimile or registered, certified or
overnight mail, postage prepaid, addressed by the party giving such notice to
the other party at the last address furnished by the other party to the party
giving such notice, and unless and until changed pursuant to the foregoing
provisions hereof each such notice shall be addressed to the Fund or the
Distributor, as the case may be, at their respective principal places of
business.
SECTION 15. ACTIVITIES OF THE DISTRIBUTOR
Except to the extent necessary to perform the Distributor's obligations
hereunder, nothing herein shall be deemed to limit or restrict the Distributor's
right, or the right of any of the Distributor's employees, agents, officers or
directors who may also be a director, officer or employee of the Fund, or
affiliated persons of the Fund to engage in any other business or to devote time
and attention to the management or other aspects of any other business, whether
of a similar or dissimilar nature, or to render services of any kind to any
other corporation, Fund, firm, individual or association.
SECTION 16. ADDITIONAL FUNDS AND CLASSES
In the event that the Fund establishes one or more series of Shares or
one or more classes of Shares after the effectiveness of this Agreement, such
series of Shares or classes of Shares, as the case may be, shall become Series
and Classes under this Agreement upon approval of this Agreement by the Fund
with respect to the series of Shares or class of Shares and the execution of an
amended Appendix A reflecting the applicable names and terms. The Distributor
may elect not to make any such series or classes subject to this Agreement.
SECTION 17. MISCELLANEOUS
(a) The Distributor shall not be liable to the Fund and the Fund shall not be
liable to the Distributor for consequential damages under any provision of this
Agreement except that Distributor Claims, as that term is used in Section 8(a)
of this Agreement, shall include consequential damages related to or based upon
any filing made with the regulatory authorities of any State.
(b) No provisions of this Agreement may be amended or modified in any manner
except by a written agreement properly authorized and executed by the
Distributor and the Fund.
(c) This Agreement shall be governed by, and the provisions of this Agreement
shall be construed and interpreted under and in accordance with, the laws of the
State of Delaware.
(d) This Agreement constitutes the entire agreement between the Distributor and
the Fund and supersedes any prior agreement with respect to the subject matter
hereof, whether oral or written.
(e) This Agreement may be executed by the parties hereto on any number of
counterparts, and all of the counterparts taken together shall be deemed to
constitute one and the same instrument.
(f) If any part, term or provision of this Agreement is held to be illegal, in
conflict with any law or otherwise invalid, the remaining portion or portions
shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid.
(g) Section headings in this Agreement are included for convenience only and are
not to be used to construe or interpret this Agreement.
(h) No affiliated person, employee, agent, officer or director of the
Distributor shall be liable at law or in equity for the Distributor's
obligations under this Agreement.
(i) The Fund shall be liable to the Distributor only with respect to those
Series and Classes of the Fund, and the Distributor shall look solely to the
Fund to satisfy any liability of a Series or Class thereof to the Distributor.
(j) Each of the undersigned warrants and represents that they have full power
and authority to sign this Agreement on behalf of the party indicated and that
their signature will bind the party indicated to the terms hereof.
(k) The terms "vote of a majority of the outstanding voting securities,"
"interested person," "affiliated person" and "assignment" shall have the
meanings ascribed thereto in the 1940 Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
DEUTSCHE FUNDS, INC.
By:
Name:
Secretary
ICC DISTRIBUTORS, INC.
By:
Xxxx X. Xxxxxx
President
- A5 -
DEUTSCHE FUNDS, INC.
DISTRIBUTION AGREEMENT
Appendix A
as of _________________, 1999
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Distribution Service
Series Class Fee Fee
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DEUTSCHE FUNDS, INC.
DISTRIBUTION AGREEMENT
Appendix B
[Form of Sub-Distribution Agreement]
SUB-DISTRIBUTION AGREEMENT
[Date]
Ladies and Gentlemen:
ICC Distributors, Inc. ("ICC"), a Delaware corporation, serves as
distributor (the "Distributor") of the Deutsche Funds, Inc. (collectively, the
"Funds," individually, a "Fund"). The Funds are open-end investment companies
(or series thereof) registered under the Investment Company Act of 1940, as
amended (the "Investment Company Act"). The Funds offer their shares ("Shares")
to the public in accordance with the terms and conditions contained in the
Prospectus of each Fund. The term "Prospectus" as used herein refers to each
prospectus on file with the Securities and Exchange Commission which is part of
the registration statement of each Fund under the Securities Act of 1933 (the
"Securities Act"). In connection with the foregoing you may serve as a
participating dealer (and, therefore, accept orders for the purchase or
redemption of Shares, respond to shareholder inquiries and perform other related
functions) on the following terms and conditions:
1.Participating Dealer. You are hereby designated a Participating Dealer
and as such are authorized (i) to accept orders for the purchase of Shares and
to transmit to the Fund such orders and the payment made therefore, (ii) to
accept orders for the redemption of Shares and to transmit to the Fund such
orders and all additional material, including any certificates for Shares, as
may be required to complete the redemption and (iii) to assist shareholders with
the foregoing and other matters relating to their investments in each Fund, in
each case subject to the terms and conditions set forth in the Prospectus of
each Fund. You are to review each Share purchase or redemption order submitted
through you or with your assistance for completeness and accuracy. You further
agree to undertake from time to time certain shareholder servicing activities
for customers of yours who have purchased Shares and who use your facilities to
communicate with the Funds or to effect redemptions or additional purchases of
the Shares.
2.Limitation of Authority. No person is authorized to make any
representations concerning the Fund or the Shares except those contained in the
Prospectus of each Fund and in such printed information as the Distributor may
subsequently prepare. No person is authorized to distribute any sales material
relating to any Fund without the prior written approval of the Distributor.
3.Compensation. As compensation for such services, you will look solely to
the Distributor, and you acknowledge that the Funds shall have no direct
responsibility for any compensation. In addition to any sales charge payable to
you by your customer pursuant to a Prospectus, the Distributor will pay you no
less often than annually a shareholder processing and service fee (as we may
determine from time to time in writing) computed as a percentage of the average
daily net assets maintained with each Fund during the preceding period by
shareholders who purchase their shares through you or with your assistance,
provided that said assets are at least $______ in the fund family for which you
are to be compensated, and provided that in all cases your name is transmitted
with each shareholder's purchase order.
4.Prospectus and Reports. You agree to comply with the provisions contained
in the Securities Act governing the distribution of prospectuses to persons to
whom you offer Shares. You further agree to deliver, upon our request, copies of
any amended Prospectus of the relevant Fund to purchasers whose Shares you are
holding as record owner and to deliver to such persons copies of the annual and
interim reports and proxy solicitation materials of the Funds. We agree to
furnish to you as many copies of each Prospectus, annual and interim reports and
proxy solicitation materials as you may reasonably request.
5.Qualification to Act. You represent that you are a member in good
standing of the National Association of Securities Dealers, Inc. (the "NASD").
Your expulsion or suspension from the NASD will automatically terminate this
Agreement on the effective date of such expulsion or suspension. You agree that
you will not offer Shares to persons in any jurisdiction in which you may not
lawfully make such offer due to the fact that you have not registered under, or
are not exempt from, the applicable registration or licensing requirements of
such jurisdiction. You agree that in performing the services under this
Agreement, you at all times, will comply with the Conduct Rules (formerly the
Rules of Fair Practice) of the NASD, including, without limitation, the
provisions of Rule 2830 (formerly Section 26) of such Rules. You agree that you
will not combine customer orders to reach breakpoints in commission for any
purposes whatsoever unless authorized by the then current Prospectus in respect
of a particular class of Shares or by us in writing. You also agree that you
will place orders immediately upon their receipt and will not withhold any order
so as to profit therefrom. In determining the amount payable to you hereunder,
we reserve the right to exclude any sales which we reasonably determine are not
made in accordance with the terms of the relevant prospectus and provisions of
the Agreement.
0.Xxxx Sky. The Funds have registered an indefinite number of Shares under
the Securities Act. The Funds intend to make appropriate notice filings in
certain states where such filing is required. We will inform you as to the
states or other jurisdictions in which we believe the Shares are eligible for
sale under the respective securities laws of such states. You agree that you
will offer Shares to your customers only in those states where such Shares are
eligible to be sold. We assume no responsibility or obligation as to your right
to sell Shares in any jurisdiction.
7.Authority of Fund. Each Fund shall have full authority to take such
action as it deems advisable in respect of all matters pertaining to the
offering of its Shares, including the right not to accept any order for the
purchase of Shares.
8.Record Keeping. You will (i) maintain all records required by law to be
kept by you relating to transactions in Shares and, upon request by any Fund,
promptly make such of these records available to the Fund as the Fund may
reasonably request in connection with its operations and (ii) promptly notify
the Fund if you experience any difficulty in maintaining the records described
in the foregoing clauses in an accurate and complete manner.
9.Liability. The Distributor shall be under no liability to you except for
lack of good faith and for obligations expressly assumed by it hereunder. In
carrying out your obligations, you agree to act in good faith and without
negligence. Nothing contained in this Agreement is intended to operate as a
waiver by the Distributor or you of compliance with any provisions of the
Investment Company Act, the Securities Act, the Securities Exchange Act of 1934,
as amended, or the rules and regulations promulgated by the Securities and
Exchange Commission thereunder.
10.Termination. This Agreement may be terminated by either party, without
penalty, upon ten days' written notice to the other party and shall
automatically terminate in the event of its assignment, as defined in the
Investment Company Act. This Agreement may also be terminated at any time for
any particular Fund without penalty by the vote of a majority of the members of
the Board of Directors or Trustees of such Fund who are not "interested persons"
(as such phrase is defined in the Investment Company Act) and who have no direct
or indirect financial interest in the operation of the Distribution Agreement
between such Fund and the Distributor or by the vote of a majority of the
outstanding voting securities of the Fund.
11.Communications. All communications other than this agreement and those
pertaining to this agreement should be sent to the address listed below. Any
notice to you shall be duly given if mailed or telegraphed to you at the address
specified by you below.
[TA Address]
If the foregoing is in accordance with your understanding
of our agreement, please sign and return to us both copies
of this Agreement to:
[----------]
c/o ICC Distributors, Inc.
Attn: Dealer Services
X.X. Xxx 0000
Xxxxxxxx, Xxxxx 00000
ICC Distributors, Inc.
By: Xxxxxxxx X. Xxxxx
Vice President
Confirmed and accepted:
Firm Name:
By:
Signature
Printed Name and Title
Date:
Address:
Clears Through:
Phone No.:
