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AMENDMENT OF DISTRIBUTION AGREEMENT AND ASSUMPTION OF DUTIES
AND RESPONSIBILITIES BY XXXX
Xxxxxxxx 0, 0000
XXX Xxxxxxxxxxxx, Inc.
PFS Investments Inc.
0000 Xxxxxxxxxxxx Xxxx., Xxxx. 000
Xxxxxx, XX 00000-0000
Dear Sirs:
Reference is made to that certain distribution
agreement (the "Agreement"), dated as of June 5, 2000,
between Xxxxx Xxxxxx Appreciation Fund Inc. (the "Investment
Company"),with respect to one or more separate series listed
on Exhibit A (each a "Fund") and PFS Distributors, Inc.
("PFSD"). This letter agreement (the "Amendment")
incorporates all of the conditions, responsibilities,
representations and other terms of the Agreement, except as
amended or modified in this Amendment.
WHEREAS, PFS Investments Inc. ("PFSI") and PFSD intend
to effect a transaction pursuant to which PFSD will merge
with and into PFSI (the "Merger");
WHEREAS, effective as of the Merger, PFSI, as the
successor of the Merger, is expected to perform all of the
responsibilities, obligations, duties and liabilities of
PFSD under that Agreement, as amended or supplemented by
this Amendment, effective December 1, 2005, and
WHEREAS, PFSD, or its successor, PFSI, wishes to serve
as principal underwriter and distributor for each Fund under
the terms of the Agreement, as modified and amended by this
Amendment;
THEREFORE, the Investment Company, on behalf of each
Fund, PFSD and PFSI agree that (i) as of the date hereof,
PFSD shall discharge, perform and be liable for such
obligations and responsibilities of PFSD under the
Agreement, as amended by this Amendment and (ii) in the
event that the Merger is consummated, from and after the
effective time of the Merger, PFSI shall discharge, perform
and be liable for such obligations and responsibilities of
PFSD under the Agreement, as amended by this Amendment.
Except as expressly amended hereby, the provisions of
the Agreement (after giving effect to the foregoing
substitution of parties) will remain in full force and
effect between PFSI and the Investment Company. Capitalized
terms not defined in this Amendment shall have the meanings
given to them in the Agreement.
We acknowledge that Xxxx Xxxxx Inc. ("Xxxx Xxxxx") and
Citigroup Inc. ("Citigroup") have entered into that certain
Global Distribution Agreement (the "Global Distribution
Agreement"), dated as of June 23, 2005, which provides, for
a period of three years from December 1, 2005, for the
distribution by Citigroup distributors of Citigroup
investment products and Xxxx Xxxxx investment products
within the United States and internationally and for
Citigroup's access to certain Xxxx Xxxxx investment products
pursuant to the terms of the Global Distribution Agreement.
1. Services as a Non-Exclusive Principal Underwriter and
Distributor
Notwithstanding anything to the contrary contained
in the Agreement:
1.1 You shall be, for the period of the Agreement as
amended by this Amendment, a non-exclusive principal
underwriter and distributor of each Fund.
1.2 You may perform any services for any entity, including
investment companies that are not advised or administered by
Citigroup or its subsidiaries.
1.3 You shall retain all rights to the information of your
customers, including, but not limited to, the names,
addresses, telephone numbers and social security numbers of
applicants for, purchasers of, and other customers of each
Fund as well as other identity and private information in
respect of your customers, employees, registered
representatives and agents ("Confidential Information");
provided, however, that Confidential Information shall not
include any customer information that: (x) was previously
known by us from a source other than you without obligations
of confidence; (y) was or is rightfully received by us from
a third party without obligations of confidence to you or
from publicly available sources without obligations of
confidence to you; or (z) was or is developed by means
independent of information obtained from you.
2. Termination
In addition to the termination rights already contained
in the Agreement, (i) at any time prior to the second
anniversary hereof, at your option you may terminate the
Agreement at any time in order for you to enter into a
mutually satisfactory mutual fund dealer agreement with the
principal underwriter that is an affiliate of Xxxx Xxxxx for
the Investment Company (a "Dealer Agreement") and (ii) at
any time following the second anniversary of the date
hereof, either party may at its option terminate the
Agreement at any time in order for you to enter into a
Dealer Agreement ; provided, that any such termination shall
only be effective upon execution and delivery of a Dealer
Agreement which shall be, unless the parties thereto
otherwise agree, in substantially the form presented to the
Board of the Investment Company and attached hereto as
Exhibit B with such additional changes as may be appropriate
to reflect changes in applicable laws, regulations or
industry practice.
3. Dealer and Other Agreements
You may not enter into dealer or similar agreements
with unaffiliated brokers, dealers, banks or other similar
firms or recordkeeping, shareholder servicing and sub-
accounting services with unaffiliated intermediaries without
the written consent of the Investment Company or its
authorized designee. No such unaffiliated intermediary is
authorized to act as agent for the Fund in connection with
the offering or sale of Shares of the Fund to the public or
otherwise, except for the limited purpose of determining the
time as of which transactions in Shares are deemed to have
been received.
4. Compliance Matters
(a) You shall act as a distributor and principal
underwriter of Shares in compliance in all material respects
with all applicable laws, rules and regulations, including,
without limitation, all rules and regulations made or
adopted pursuant to (i) the 1940 Act, (ii) the Securities
Exchange Act of 1934 ("1934 Act"), (iii) any securities
association registered under the 1934 Act, including without
limitation the NASD Conduct Rules or rules of any other
applicable self-regulatory organization. You shall offer
the Shares, and accept purchases, redemptions and exchanges
for Shares, in compliance with the Fund's registration
statement (including its prospectus and statement of
additional information), as it may be amended or
supplemented from time to time ("Registration Statement").
You will comply with and abide by the terms of a Fund's
Plan, as it may be amended from time to time.
(b) You agree to submit sales literature and
marketing materials (including memorandums, bulletins,
and/or information or related materials) prepared by you
intended for public distribution ("PFSI Marketing
Materials") to the co-principal underwriter of the
Investment Company which is an affiliate of Xxxx Xxxxx prior
to distribution or publication for written approval. Such
PFSI Marketing Materials shall be for review in accordance
with procedures to be agreed upon by the parties. You shall
be responsible for reviewing and making such filings with
the NASD, as required, of PFSI Marketing Materials relating
to each Fund.
(c) You shall adopt and follow procedures for the
confirmation of sales to investors and qualified securities
dealers, banks and other intermediaries (collectively
"Intermediaries") timeliness of orders, the collection of
amounts payable by investors and Intermediaries on such
sales, the correction of errors related to distribution of
Shares, the cancellation of unsettled transactions, and
assisting with the solicitation of proxies, and any other
matters governed by Rule 38a-1 under the 1940 Act (as may
apply to a distributor or principal underwriter for a
registered investment company), each as may be necessary to
comply with the requirements of the NASD, any other self-
regulatory organization, and the federal securities laws.
You shall provide reports or other information to the
Investment Company at the Investment Company's reasonable
request, including, without limitation, reports related to
the operation and implementation of the Investment Company's
policies related to customer privacy, safeguarding of
customer information, anti-money-laundering, sales and
marketing practices, the operation of your code of ethics or
other policies and procedures of the Investment Company.
(d) You represent, warrant and agree that you
have adopted and implemented: (i) an anti-money-laundering
program in compliance with the USA Patriot Act of 2001, the
regulations thereunder and NASD Conduct Rules, including,
without limitation, customer identification program
procedures, monitoring for suspicious activity, and (ii)
procedures to comply with applicable law and regulation
related to cash transaction reporting requirements, as well
as monitoring and reporting under FinCEN, OFAC and other
government watch lists.
(e) The Investment Company agrees that the
information exchanged under the Agreement and information
about the respective customers and potential customers of
each is confidential and as such shall not be disclosed by
the Fund, sold or used by the Fund in any way except to
carry out the terms of this Agreement. Notwithstanding the
foregoing, such customer information may be disclosed by the
Investment Company on a "need to know" basis as set forth in
applicable privacy rules and regulations. The obligations
regarding confidentiality hereunder shall not apply to any
information which is (i) otherwise publicly available, (ii)
already possessed by the entity to whom the information was
disclosed prior to disclosure hereunder, (iii) independently
developed by the entity, or (iv) disclosed pursuant to law,
rule, regulation or court or administrative order. The
Investment Company shall have the right to use any list of
shareholders of the Fund or any other list of investors
which it obtains in connection with its provision of
services under this Agreement, provided that such use is
consistent with applicable law and your privacy policies and
those of the Fund, including the provision of information to
the Fund's transfer agent or to agents used for the
solicitation of proxies. You agree that you will comply
with all of the foregoing obligations of this paragraph to
the extent that information is treated as customer
information of the Fund under applicable law or regulation,
including without limitation Regulation S-P. Each party
further agrees to take commercially reasonable steps, in
accordance with applicable law, to safeguard customer
information. The provisions of this paragraph will survive
termination of the Agreement.
(f) From time to time, each Fund may implement
policies, procedures or charges in an effort to avoid the
potential adverse effects on the Fund of short-term trading
by market timers. You agree to provide other assistance
reasonably designed to achieve compliance with these
policies. You will maintain and enforce policies with
respect to frequent trading and share redemption as are
reasonable and customary in the industry. To the extent
that accounts are held in street name, you agree to
cooperate with the Investment Company and the Investment
Company's Chief Compliance Officer (including, to the extent
practicable, providing account level sales and redemption
information) to assist in compliance with the frequent
trading and redemption fee provisions as set forth in the
Fund's prospectus and other policies set forth in the Fund's
Registration Statement.
(g) Purchases, exchanges and redemptions of
Shares through you will be at the public offering price of
such Shares (the net asset value of the Shares, with
appropriate adjustments for any applicable sales charge), as
determined in accordance with the then effective
Registration Statement used in connection with the offer and
sale of the Shares. The public offering price will reflect
scheduled variations in or the elimination of sales charges
on sales of Shares either generally to the public or in
connection with special purchase plans, as described in the
Registration Statement. You agree to apply any scheduled
variation in or waivers of sales charges uniformly to all
customers meeting the qualifications therefor as specified
in the Registration Statement. With respect to Funds sold
with an initial sales charge, your customers will be
entitled to reduced sales charges on purchases made under
any letter of intent or right of accumulation as described
in the Registration Statement. In such case, the concession
from the public offering price retained by you will be based
upon such reduced sales charge. When placing wire trades,
your agree to advise the Funds of any letter of intent
executed by its customer or any available right of
accumulation. The minimum initial purchase and the minimum
subsequent purchase of any Shares shall be as set forth in
the applicable Registration Statement. All orders are
subject to acceptance or rejection by the applicable Fund in
its sole discretion for any reason.
(h) The handling and settlement of purchase,
exchange and redemption orders will be subject to the
provisions of the Registration Statement and such further
procedures as the Investment Company and you may determine
to be appropriate from time-to-time, consistent with this
Amendment. Citigroup Global Markets' internal systems are
suitably designed to handle such orders. Each Fund shall
notify you of the states or jurisdictions in which its
Shares are currently available for sale to the public. The
Investment Company shall have no obligation to register or
make available Fund shares in any state or jurisdiction.
You will be responsible for the accuracy, timeliness and
completeness of purchase, redemption or exchange orders
accepted by you.
(i) PFSI may print current Fund prospectuses and
statements of additional information for PFSI's use, which
may not vary in any material respect from the relevant
Fund's then-current prospectus and statement of additional
information. PFSI's printing will comply in all material
respects with all applicable legal and regulatory standards.
The Board of the Investment Company may terminate these
printing services at any time upon written notice to PFSI.
(j) The Investment Company acknowledges that the
co-principal underwriter which is affiliated with Xxxx Xxxxx
shall be responsible for reviewing the Registration
Statement of each Fund, as applicable, for the accuracy and
completeness of all disclosure concerning the distribution
of Shares and that you shall not have such responsibility,
except, in each case, to the extent the disclosure
information is provided by you or pertains to information
concerning your operations. Notwithstanding the foregoing,
nothing in this paragraph shall alter your responsibilities
for complying with the terms of the Registration Statement
in your offering of Shares.
5. Records. Upon the Investment Company's reasonable
request, you will provide access to or make copies of any
such records the Investment Company does not possess in
order to: (a) comply with a request from a government body
or self-regulatory organization; (b) verify compliance by
the other party of the terms of this Agreement; or (c) make
required regulatory reports.
6. Section 9 of the 1940 Act. You agree to promptly
notify the Investment Company should you cease to be such a
member of the NASD through expulsion or otherwise or if its
membership is suspended or should you be subject to any
limitations on your conduct under Section 9 of the 1940 Act.
7. Indemnification
You agree to indemnify, defend and hold the Investment
Company, its several officers and Board members, and any
person who controls the Investment Company within the
meaning of Section 15 of the 1933 Act, free and harmless
from and against any and all claims, demands, liabilities
and expenses (including the cost of investigating or
defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which the
Investment Company, its officers or Board members, or any
such controlling person may incur, under the 1933 Act or
under common law or otherwise, on account of (i) any act of
yours or any of your employees constituting willful
misfeasance, bad faith, or gross negligence in the
performance of your duties, (ii) by reason of your reckless
disregard of your obligations and duties under the Agreement
or this Amendment; or (iii) any act of yours or any of your
employees constituting negligence with respect to any
services performed related to printing prospectuses or
statements of additional information for a Fund, as
described in Paragraph 4(i) of this Amendment. The
foregoing indemnification provisions supplement the
indemnification provisions of the Agreement. The
indemnifications provisions of this Amendment and the
Agreement shall survive the termination of the Agreement
and/or this Amendment.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
If the foregoing is in accordance with your
understanding, kindly indicate your acceptance of this
Amendment by signing and returning to us the enclosed copy,
whereupon this Amendment will become binding on you.
Very truly yours,
Xxxxx Xxxxxx Appreciation
Fund Inc.
By:
_________________________
Name: R. Xxx Xxxxxx
Title: Chief Executive
Officer
Agreed to as of the date first above written:
PFS Distributors, Inc.
By: _____________________________
Name:
Title:
PFS Investments Inc.
By: _____________________________
Name:
Title:
EXHIBIT A
Fund Date Added:
Xxxxx Xxxxxx Appreciation December 1, 2005
Fund Inc.
EXHIBIT B
DEALER AGREEMENT
SELECTED DEALER CONTRACT
Xxxx Xxxxx Investor Services LLC
[Name & address of dealer]
Ladies and Gentlemen:
We, Xxxx Xxxxx Investors Services, LLC ("LMIS"), have
agreements with certain investment companies (each a
"Distribution Agreement") for which [name of asset
management entity] or an affiliate serves as investment
adviser (each a "Fund") or series thereof (each a "Series")
provided on Schedule A, as it may be amended from time to
time pursuant to which we act as the principal underwriter
and distributor for the sale of common shares of the Funds
or Series ("Shares"), and as such have the right to
distribute Shares for resale. Each Fund is an open-end
investment company registered under the Investment Company
Act of 1940, as amended (the "1940 Act") and the Shares
being offered to the public are registered under the
Securities Act of 1933, as amended (the "1933 Act"). The
term "Prospectus", as used herein, refers to the prospectus
and related statement of additional information (the
"Statement of Additional Information") incorporated therein
by reference (each as amended or supplemented) on file with
the Securities and Exchange Commission at the time in
question. We understand that you wish to act as a dealer
with respect to the Shares. You have represented that you
are either a broker-dealer registered with the Securities
and Exchange Commission ("SEC") under the Securities
Exchange Act of 1934, as amended, ("1934 Act") and a member
in good standing of the National Association of Securities
Dealers, Inc. ("NASD"), or a "bank" as defined in Section
3(a)(6) of the 1934 Act ("Bank") and are not required to
register as a broker-dealer under the 1934 Act, at the time
of each transaction subject to this Agreement. As a broker
in the capacity of principal underwriter and distributor for
the Series, we authorize you, and you hereby agree, to sell
or to arrange for the sale of Shares of each Fund or Series
upon the following terms and conditions, and you agree to
perform certain other services set forth in this Selected
Dealer Contract ("Contract"):
1. In all sales to the public you shall act as broker-
dealer for your customers or as dealer for your own account,
and in no transaction shall you have any authority to act as
agent for the Funds or any Series, for us or for any other
dealer except for the limited purpose of determining the
time as of which transactions in Shares are deemed to have
been received, in compliance with the provisions of this
Selected Dealer Agreement.
2. Orders received from you will be accepted through us
only at the public offering price per share (i.e. the net
asset value per share plus the applicable front-end sales
charge, if any) applicable to each order, and all orders for
redemption of any Shares shall be executed at the net asset
value per share less any applicable deferred sales charge,
if any, in each case as set forth in the applicable
Prospectus. A Fund or Series may additionally impose
redemption fees, as described in the applicable Prospectus.
Any contingent deferred sales charge amounts received or
retained by you shall be paid over by you directly to us or
our designated delegate in partial consideration of our
payment to you of any commission amounts provided by us at
the time of sale. The procedure relating to the handling of
orders shall be subject to provisions of this Agreement and
instructions that we or the Fund shall forward from time to
time to you. All orders are subject to acceptance or
rejection by the applicable Fund or us in the sole
discretion of either. The minimum initial purchase and the
minimum subsequent purchase of any Shares shall be as set
forth in the applicable Prospectus. You agree to comply
with provisions of Rule 22c-2 under the 1940 Act as
applicable to each Fund (including reporting procedures
adopted to comply with the Rule).
3. You shall not place orders for any Shares unless you
have already received purchase orders for those Shares at
the applicable public offering price and subject to the
terms hereof. You agree that you will not offer or sell any
Shares except under circumstances that will result in
compliance with the applicable Federal and state securities
or banking laws (including, without limitation, applicable
provisions of the 1933 Act, 1934 Act, 1940 Act and the rules
and regulations of the NASD), any applicable banking laws,
the applicable rules and regulations thereunder and the
rules and regulations of applicable regulatory agencies or
authorities (collectively, "Law and Regulation") and that in
connection with sales and offers to sell Shares you will
furnish to each person to whom any such sale or offer is
made, a copy of the Prospectus as and when required under
applicable laws, rules and regulations and, upon request,
the Statement of Additional Information, and will not
furnish to any person any information relating to Shares
which is inconsistent in any respect with the information
contained in the Prospectus or Statement of Additional
Information (as then amended or supplemented). You shall
not furnish or cause to be furnished to any person or
display or publish any information or materials relating to
the Shares (including, without limitation, promotional
materials and sales literature, advertisements, press
releases, announcements, statements, posters, signs or other
similar material), except such information and materials as
may be furnished to you by, or on behalf of, us or the
Funds, and such other information and materials as may be
approved in writing by, or on behalf of, us or the Funds.
4. If you are a broker dealer, you are hereby
authorized (i) to place orders directly with the applicable
Fund or Series for Shares subject to the applicable terms
and conditions governing the placement of orders by us set
forth in the Prospectus and (ii) to tender Shares directly
to each Fund or Series or its agent for redemption subject
to the applicable terms and conditions governing the
redemption of Shares applicable to us set forth in the
Prospectus.
5. If you are a Bank, with respect to any and all
transactions in Shares of the Funds or Series pursuant to
this Agreement, it is understood and agreed in each case
that unless otherwise agreed to by us in writing: (i) you
shall be acting solely as agent for the account of your
customer; (ii) each transaction shall be initiated solely
upon the order of your customer; (iii) we shall execute
transactions only upon receiving instructions from you
acting as agent for your customer; (iv) as between you and
your customer, your customer will have full beneficial
ownership of all Shares; (v) each transaction shall be for
the account of your customer and not for your account; (vi)
we will serve as a clearing broker for you on a fully
disclosed basis, and you shall serve as the introducing
agent for your customers' accounts; and (vii) order will
comply with the applicable terms and conditions governing
the placement of orders as set forth in the Prospectus
including frequent trading redemption fee provisions.
6. You shall not withhold placing orders received from
your customers so as to profit yourself as a result of such
withholding, e.g., by a change in the "net asset value" from
that used in determining the offering price to your
customers.
7. You shall provide ongoing shareholder liaison
services to the shareholders of each Fund or Series,
including responding to shareholder inquiries, providing
shareholders with information on their investments, and any
other services now or hereafter deemed to be appropriate
subjects for the payment of "service fees" under NASD
Conduct Rule 2830.
8. Transactions in the Shares of a Fund or Series may
be effected through the Fund/SERV service of the National
Securities Clearing Corporation (the "NSCC") and, if
applicable, account records may be maintained through the
networking service of the NSCC, provided that each party
hereto will comply with all applicable rules of the NSCC and
the schedules thereto. Furthermore, you hereby represent
that all of your representations set forth in your agreement
with respect to participating in the NSCC network or in any
schedules thereto are accurate and true as of the date
hereof and will remain accurate and true insofar as the
transactions in the Shares of the Fund or Series are
effected through the Fund/SERV service of the NSCC and, if
applicable, the account records are maintained through the
networking service of the NSCC. You will be solely
responsible for the accuracy of each instruction through the
Fund/SERV service, and the issuance of a Fund/SERV
instruction will constitute your representation and warranty
to us and a Fund's transfer agent that the instruction is
accurate, complete, and issued as duly authorized by the
client whose Shares are the subject of the instruction.
9. In determining the amount of any sales concession
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 Prospectus and the
provisions of this Agreement. Unless at the time of
transmitting an order we advise you or the transfer agent to
the contrary, the Shares ordered will be deemed to be the
total holdings of the specified investor.
10. (a) You agree that payment for orders from
you for the purchase of Shares will be made in accordance
with the terms of the Prospectus. On or before the business
day following the settlement date of each purchase order for
Shares, you shall transfer same day funds to an account
designated by us with the transfer agent in an amount equal
to the public offering price on the date of purchase of the
Shares being purchased less your sales concession, if any,
with respect to such purchase order determined in accordance
with the Prospectus. If payment for any purchase order is
not received in accordance with the terms of the Prospectus,
we reserve the right, without notice, to cancel the sale and
to hold you responsible for any loss sustained as a result
thereof.
(b) If any Shares sold under the terms of this
Agreement are sold with a sales charge and are redeemed or
are tendered for redemption within seven (7) business days
after confirmation of your purchase order for such Shares,
you shall forthwith refund to us the full sales concession
received by you on the sale.
(c) We will pay or cause to be paid to you any
ongoing distribution fees and/or shareholder service fees
with respect to Shares of the Series purchased through you
and held by or for your customers at such rates and in such
manner as may be described in the Prospectus.
(d) Certificates evidencing Shares generally will
not be available. Upon payment for Shares in accordance
with paragraph 10(a) above, the transfer agent will issue
and transmit to you or your customer a confirmation
statement evidencing the purchase of such Shares. Any
transaction in uncertificated Shares, including purchases,
transfers, redemptions and repurchases, shall be effected
and evidenced by book-entry on the records of the transfer
agent.
(e) We will not accept any conditional orders for
Shares transmitted by you.
(f) Each Fund's Board has adopted a Distribution
Plan pursuant to Rule 12b-1 of the 1940 Act (the "Plans")
with respect to the Shares. Under the terms of the Plans,
we may be entitled to compensation for distribution related
services that it provides to the Investment Companies, and
we are permitted to pay all or a portion of such
compensation to entities that engage in or support the
distribution of Shares. For the services to be provided
under this Contract and for so long as this Contract remains
in effect, we agree to pay you in accordance with Schedule
B.
(g) In the event we do not receive payment from a
Fund or Series under the relevant Distribution Agreement or
plan of distribution adopted pursuant to the applicable Plan
or as otherwise provided in the Prospectus, or if such
Distribution Agreement or Plan is cancelled, you agree to
waive your right to receive compensation until such time, if
ever, we receive payment.
11. No person is authorized to make any
representations concerning Shares except those contained in
the current Prospectus and Statement of Additional
Information and in printed information subsequently issued
by us or the Funds as information supplemental to the
Prospectus and the Statement of Additional Information. In
purchasing or offering Shares pursuant to this Contract you
shall rely solely on the representations contained in the
Prospectus, the Statement of Additional Information and the
supplemental information above mentioned.
12. You agree to deliver to each purchaser making a
purchase of Shares from or through you a copy of the
Prospectus as required by applicable Law and Regulation and,
upon request, the Statement of Additional Information. You
may instruct the transfer agent to register Shares purchased
in your name and account as nominee for your customers. You
agree thereafter to deliver to any purchaser whose Shares
you or your nominee are holding as record holder copies of
the annual and interim reports and proxy solicitation
materials and any other information and materials relating
to the Funds or Series and prepared by or on behalf of us,
the Funds or the investment adviser, custodian, transfer
agent or dividend disbursing agent for distribution to
beneficial holders of Shares. The Funds shall be
responsible for the costs associated with forwarding such
reports, materials and other information and shall reimburse
you in full for such costs. You further agree to make
reasonable efforts to endeavor to obtain proxies from such
purchasers whose Shares you or your nominee are holding as
record holder. You further agree to obtain from each
customer to whom you sell Shares any taxpayer identification
number certification required under Section 3406 of the
Internal Revenue Code of 1986, as amended (the "Code"), and
the regulations promulgated thereunder, and to provide us or
our designee with timely written notice of any failure to
obtain such taxpayer identification number certification in
order to enable the implementation of any required backup
withholding in accordance with Section 3406 of the Code and
the regulations thereunder. Additional copies of the
Prospectus, Statement of Additional Information, annual or
interim reports, proxy solicitation materials and any such
other information and materials relating to the Funds will
be supplied to you in reasonable quantities upon request.
13. (a) In accordance with the terms of the
Prospectus, a reduced sales charge or no sales charge
(collectively, "discounts") may be available to purchasers
of Shares or certain classes of investors, depending on the
amount of the investment or proposed investment. In each
case where a discount is applicable, you agree to furnish to
the transfer agent sufficient information to permit
confirmation of qualification for a discount, and acceptance
of the purchase order is subject to such confirmation.
Discounts may be modified or terminated at any time in the
sole discretion of each Fund.
(b) You agree to advise us promptly as to the
amount of any and all sales by you qualifying for a
discount.
(c) Exchanges (i.e., the investment of the
proceeds from the liquidation of Shares of one Series in the
Shares of another Series, each of which is managed by the
same or an affiliated investment adviser) shall, where
available, be made in accordance with the terms of each
Prospectus.
(d) You represent that you have, and will
maintain during the term of this Contract, adequate written
supervisory procedures and internal controls to ensure that
your customers receive all available discounts, and you
agree: (i) to inform your customers of applicable discount
opportunities and to inquire about other qualifying holdings
that might entitle customers to receive discounts; (ii) to
advise us, contemporaneously with each purchase order you
forward to us as agent for your customers, of the
availability of any discounts; and (iii) that in the event
that you fail to provide us with information concerning the
availability of discounts as provided in (ii) above, you,
and not us or the Funds, shall be responsible for
reimbursing your customer any applicable discount amount.
00.Xx a result of the necessity to compute the amount
of any contingent deferred sales charge or redemption charge
due with respect to the redemption of Shares, you may hold
Shares of a Fund imposing such a charge in a "street name"
account with our consent, and, in such event, you shall be
responsible for computation, collection and payment to us of
such charges, the application of any discounts, the
application of Fund or Series' market-timing policies, all
in accordance with the applicable Prospectus for the Fund or
Series. Except as otherwise permitted by us, Shares owned
by a shareholder must be in a separate identifiable account
for such shareholder.
15. (a) We and each Fund reserve the right in our
discretion, without notice, to suspend sales or withdraw the
offering of any Shares entirely. Each party hereto has the
right to terminate this Contract without penalty upon notice
to the other party; provided, however, that termination
shall not affect any party's obligations hereunder with
respect to any transactions or activities occurring prior to
the effective time of termination. Upon termination of this
Contract, ongoing trail commissions and/or shareholder
servicing fees shall no longer accrue or be paid to you. We
reserve the right to amend this Contract in any respect
effective on notice to you and your placing of an order
after the effective date of any such amendment shall
constitute your acceptance thereof. Each notice of
amendment required by this paragraph shall be given in
writing and delivered personally or mailed by certified mail
or overnight courier service or sent by facsimile to the
address identified herein or such other address as you may
by written notice provide.
(b) Each party hereto agrees to provide prompt
notice to the other party in the event of an assignment to
this Contract.
16. We shall have full authority to take such action
as we may deem advisable in respect of all matters
pertaining to the continuous offering of Shares. We shall
be under no liability to you except for lack of good faith
and for obligations expressly assumed by us herein. Nothing
contained in this paragraph 16 is intended to operate as,
and the provisions of this paragraph 16 shall not in any way
whatsoever constitute a waiver by you of compliance with,
any provisions of the 1933 Act or of the rules and
regulations of the SEC issued thereunder.
17. You agree that: (a) you shall not effect any
transactions (including, without limitation, any purchases
and redemptions) in any Shares registered in the name of, or
beneficially owned by, any customer unless such customer has
granted you full right, power and authority to effect such
transactions on his behalf, (b) we shall have full authority
to act upon your express instructions to sell, repurchase or
exchange Shares through us on behalf of your customers under
the terms and conditions provided in the Prospectus and (c)
you shall indemnify and hold harmless the Funds, us and both
of our respective affiliates, representatives and agents,
successors and assigns, officers and directors, and each
person who controls either us or the Funds (within the
meaning of Section 15 of the 0000 Xxx) from and against any
and all direct or indirect costs, claims, expenses,
liabilities or losses, including attorney's fees resulting
from (i) any alleged violation of any statute or regulation
or rule of a self-regulatory organization (including,
without limitation, the securities laws and regulations of
the United States or any state or jurisdiction or the NASD
Conduct Rules) or any alleged tort or breach of contract,
related to the offer or sale by you of Shares of the Funds
pursuant to this Contract (except to the extent that our
negligence or failure to follow correct instructions
received from you is the cause of such loss, claim,
liability, cost or expense); (ii) requests, directions,
actions or inactions of or by you, your officers, directors,
employees, partners or agents regarding the purchase,
redemption or transfer of registration of Shares of the
Funds for your accounts, your customers and other
shareholders or from any unauthorized or improper use of any
on-line computer facilities; (iii) incorrect investment
instructions received by us or a Fund or Fund agent from
you; or (iv) the breach by you of any of your
representations, warranties or agreements specified herein
or your failure to comply with the terms and conditions of
this Contract.
We agree to indemnify you and hold you harmless from
and against any and all liabilities and losses resulting
directly from (i) any misstatement of a material fact in the
Prospectus of a Fund or Series or the omission of any
material fact required to be stated in the Prospectus of a
Fund or Series or necessary to make the statements in the
Prospectus not misleading; or (ii) our failure to comply
with the terms and conditions of this Contract. The
foregoing indemnification provisions shall survive
termination of this Contract.
18. (a) You shall be permitted to accept orders for
the purchase, exchange or redemption of Shares of the Funds
on each business day that the New York Stock Exchange
("NYSE") is open for business and a Fund's net asset value
is determined ("Business Day"). Instructions received in
proper form by you prior to time of acceptance for orders
set forth in the applicable Prospectus ("Close of Trading")
(generally the close of regular trading on the NYSE, which
is generally 4:00 p.m. Eastern Time), and with respect to
which you transmit orders to the Fund via the NSCC Fund/SERV
system up to the latest time accepted by Fund/SERV on a
given Business Day, will be deemed to have occurred, and
will be credited to the respective account, at the per share
NAV next calculated after the Close of Trading on that
Business Day. You will not transmit orders based on
Instructions received from Shareholders after the Close of
Trading for that Business Day's NAV.
(b) The offering price ("Offering Price") of
Shares of each Investment Company shall be the net asset
value per share as next determined by the Investment Company
following receipt of an order at Financial Intermediary's
principal office, plus any applicable sales charge.
(c) You agree to maintain records sufficient to
identify the date and time of receipt of all customer
transactions or as otherwise required by applicable Law and
Regulation. You further agree to make such records
available upon request for examination by us, or its
designated representative, at the request of the transfer
agent or by appropriate governmental authorities. Under no
circumstances shall you change, alter or manipulate any
customer transactions received by you in good order.
19. Solely for the limited purpose of receiving
orders for the Shares of the Funds by customers prior to the
Close of Trading on a Business Day and communicating such
orders after the Close of Trading on such Business Day, you
will be deemed to act as agent of the Funds. Each
communication of orders by you shall constitute a
representation that such orders were received by us prior to
the calculation of net asset value, as described in the
applicable Prospectus on the Business Day on which the order
is priced in accordance with Rule 22c-1 under the Investment
Company Act of 1940. You represent and warrant that: (i)
there are controls in place designed to prevent market
timing, (ii) you will use your best efforts to assist us in
identifying market timers or investors who engage in a
pattern of short-term trading, and (iii) your internal
systems for processing and transmitting orders are suitably
designed to prevent orders received at or after the Close of
Trading from being aggregated with orders received before
the Close of Trading.
20. You agree that, with respect to the compensation
you receive in connection with the offering of Shares or
transactions involving Shares (including payments from us or
our affiliates), you will make or cause to be made
disclosure of such payments in accordance with applicable
Law and Regulation.
21. You agree that it is your responsibility to
evaluate and determine that any transaction in Shares
(including a transaction in a specific class of Shares of a
Fund or Series) is a suitable transaction for each client
based on the client's objectives and risk profile. If you
are a Bank, you further represent and warrant to us that you
will use your best efforts to ensure that any purchase of
Shares by your customers constitutes a suitable investment
for such customers. You shall not effect any transaction
in, or induce any purchase or sale of, any Shares by means
of any manipulative, deceptive or other fraudulent device or
contrivance and shall otherwise deal equitably and fairly
with your customers with respect to transactions in Shares.
22. If you are a Bank, you will not make Shares
available to your customers, including your fiduciary
customers, or accept any fees or compensation hereunder
except in compliance with all Law and Regulation applicable
to you, or any of your affiliates engaging in such activity,
including without limitation ERISA and regulated rules,
regulations and interpretations, which may affect your
business practices.
23. In selling Shares you will comply with all
applicable Law and Regulation, including the applicable Law
and Regulation of the jurisdictions in which you sell any
Shares directly or indirectly.
24. You represent and warrant to us and the Funds:
(a) You have in place an anti-money laundering
program ("AML program") that does now and will continue to
comply with applicable laws and regulations, including the
relevant provisions of the Bank Secrecy Act and the USA
PATRIOT Act (Pub. L. No. 107-56 (2001)), as they may be
amended, and the regulations issued thereunder by duly
vested regulatory authority and the conduct the Rules of the
NASD and the New York Stock Exchange, Inc., as applicable
("Anti-Money Laundering Law and Regulation").
(b) You have, after undertaking reasonable inquiry,
no information or knowledge that (i) any customers that you
introduce to the Funds or on whose behalf you purchase
Shares, or (ii) any person or entity controlling, controlled
by or under common control with such customers is an
individual or entity or in a country or territory that is on
an Office of Foreign Assets Control ("OFAC") list or similar
list of sanctioned or prohibited persons maintained by a
U.S. governmental or regulatory body.
(c) You have in place, and have conducted due
diligence pursuant to, policies, procedures and internal
controls reasonably designed (i) to verify the identity of
the customers that you introduce to the Funds or on whose
behalf you purchase Shares, and (ii) to identify those
customers' sources of funds, and have no reason to believe
that any of the invested funds were derived from illegal
activities.
(d) You will provide us or the Funds (or their
service providers) upon reasonable request any information
regarding specific accounts that may be reasonably necessary
for the Funds and their service providers to fulfill their
responsibilities relating to their anti-money laundering
programs or any other information reasonably requested by us
or the Funds (or their service providers) to assist with
compliance with the Anti-Money Laundering Law and
Regulation, as may be permitted by law or regulation.
(e) You will promptly notify us should you become
aware of any change in the above representations and
warranties. In addition, we on our own behalf and on behalf
of the Funds hereby provide notice to you that we and/or the
Funds reserve the right to make inquires of and request
additional information from you regarding your AML program.
25. (a) You represent and warrant that you have
adopted and implemented procedures to safeguard customer
information and records that are reasonably designed to
ensure the security and confidentiality of customer records
and information and to ensure your compliance with the SEC's
Regulation S-P or other applicable privacy law. Both of us
agree on behalf of ourselves, our affiliates and employees
that the terms of this Contract, information exchanged
hereunder and information about our respective customers and
potential customers is confidential and as such shall not be
disclosed, sold or used in any way except to carry out the
terms of this Contract. Notwithstanding the foregoing, such
confidential information may be disclosed on a "need to
know" basis as set forth in applicable privacy rules and
regulations. The obligations regarding confidentiality
hereunder shall not apply to any information which is (i)
otherwise publicly available, (ii) already possessed by the
entity to whom the information was disclosed prior to
disclosure hereunder, (iii) independently developed by the
entity, or (iv) disclosed pursuant to law, rule, regulation
or court or administrative order. The provisions of this
paragraph shall survive termination of this Contract.
(b) You represent and warrant that the security of
your computer system is commercially reasonable and
reasonably designed to prevent any illegal or injurious
activities of persons (including persons outside of you)
attempting to access a computer system maintained or
operated by or on behalf of us or the Funds through your
computer system.
26. You agree that you will promptly forward any
client complaints or threatened or pending litigation
notices specifically relating to the management of the
Funds, whether written or if verbal, in the form of a
written summary, to us or our designated party. We or our
designated party will undertake to investigate and respond
to the complaint or threatened or pending litigation
notices in line with our complaints and litigation
procedures. You agree to fully cooperate with such
investigation and response.
27. (a) If you are a broker-dealer, you represent and
warrant that: (a) you are a member in good standing of the
NASD, or, if a foreign dealer who is not eligible for
membership in the NASD, that (i) you will not make any sales
of Shares in, or to nationals of, the United States of
America, its territories or its possessions, and (ii) in
making any sales of Shares you will comply with the NASD's
Conduct Rules and (b) you are a member in good standing of
the Securities Investor Protection Corporation ("SIPC").
You agree to notify us immediately in the event of (i) your
expulsion or suspension from the NASD or SIPC, or (ii) the
institution of an investigation or proceeding by any
federal, state or self-regulatory organization against you
alleging that you have violated any applicable federal or
state law, rule or regulation or any rule of the NASD or of
SIPC arising out of your activities as a broker-dealer or
bank, as appropriate, or in connection with this Contract,
or which may otherwise affect in any material way its
ability to act in accordance with the terms of this
Contract. We shall have the right to terminate immediately
upon receipt of such notice.
(b) You represent and warrant that (i) each employee
and agent of yours who shall engage in the offering or sale
of Shares is currently duly licensed under applicable
federal and state laws and regulations, and, if you are a
broker-dealer, with the NASD, and (ii) you shall not permit
any employee or agent to offer or sell Shares unless such
person is duly licensed under applicable federal and state
laws and regulations, and with the NASD.
28. If you are a Bank or distributing through a Bank
affiliate, you or the affiliate represent and warrant that
you or the affiliate are not in violation of any banking
law, rule or regulations as to which you are subject and
that the transactions contemplated by this Contract will not
result in any violations of any banking law, rule or
regulation.
29. You agree that it is your responsibility to
provide proper instruction, training and supervision of
appropriate sales personnel in order that Shares will be
offered and sold in accordance with the terms and conditions
of this Contract and in accordance with all applicable laws.
You also agree that it is your responsibility to assure that
your sales personnel are properly licensed, certified and
familiar with the Funds, Series and any classes thereof.
30. You represent and warrant that you will not offer
Shares of any Fund or Series for sale in any state or
jurisdiction where such Shares may not be legally sold or
where you are not qualified to act as a broker-dealer. We
shall inform you as to the states or other jurisdictions in
which the Fund or Series has advised us that Shares have
been qualified for sale under, or are exempt from the
requirements of, the respective securities laws of such
states.
31. You agree to distribute or cause to be delivered
to your customers Prospectuses, proxy solicitation
materials, shareholder reports and other materials in
compliance with applicable legal requirements, except to the
extent that we undertake to do so.
32. (a) We shall notify you of the states or other
jurisdictions in which Shares are currently available for
sale to the public. We shall have no obligation to register
or make available Shares in any state or other jurisdiction.
(b) [You shall provide to the transfer agent of each
Fund or Series each client's state of residency on each
trade record and registration record so we can monitor
trades for blue sky compliance. The Fund or its agent will
reject any ineligible trades and notify you upon
cancellation.]
33. You shall not incur, nor does it have the
authority to incur, any debts or obligations on behalf of us
or any Fund or Series.
34. You shall provide any assistance that we or the
Funds reasonably request in connection with a Fund's or
Series' solicitation of proxies.
35. Any claim, controversy, dispute or deadlock
arising under this agreement (collectively, a "Dispute")
shall be settled by arbitration administered in accordance
with the rules and regulations of the NASD. Any arbitration
and award of the arbitrators, or a majority of them, shall
be final and the judgment upon the award rendered may be
entered in any state or federal court having jurisdiction.
No punitive damages are to be awarded.
36. All communications to us should be sent, postage
prepaid, to __________________. Any notice to you shall be
duly given if mailed, telegraphed or telecopied to you at
the address specified by you below. Communications
regarding placement of orders for Shares should be sent,
postage prepaid, to
________________________________________.
37. This Contract shall be binding upon both parties
hereto when signed by us and accepted by you in the space
provided below; provided, however, that you shall not have
any obligations hereunder other than in respect of the
duties and agreements expressly undertaken and made by you
herein.
38. This Contract and the terms and conditions set
forth herein shall be governed by, and construed in
accordance with, the laws of the State of Maryland. To the
extent that the applicable laws of the State of Maryland
conflict with the applicable provisions of the federal
securities laws, the latter shall control.
39. To the extent a Fund or Series imposes a
redemption fee as provided in the applicable Prospectus, you
agree to abide and comply with the terms of the attached
Redemption Fee Addendum.
40. This Contract shall not be construed to
constitute a partnership, joint venture, or agency between
you and us or any Fund or Series, nor to create an employer-
employee relationship between you and us. You acknowledge
that you are an independent contractor, that your business
is its own and entirely separate from that of ours and the
Funds and Series, and that you will not deal with or
represent itself to the public in any other way.
41. You agree to provide us with any assistance or
report that we reasonably request in order to fulfill our
duties to assist the Funds with compliance with Rule 38a-1
under the 1940 Act, in our capacity as principal underwriter
to each Fund.
Xxxx Xxxxx Investor Services,
LLC
By:
Managing Director
Accepted:
Firm Name: _____________________________
NASD Registration
Number: _____________________________
By: _____________________________
Address: _____________________________
_____________________________
Accepted By (signature):
Name (print): Title:
Date:
SCHEDULE A - FUNDS
[insert funds]
SCHEDULE B - COMPENSATION
Beginning on the effective date of this Contract, for
each Fund listed on Schedule A, Xxxx Xxxxx will pay the
Financial Intermediary a quarterly fee equal on an annual
basis to [0.25%] of the average daily net asset value of
[Financial Intermediary Shares of Funds] owned beneficially
by clients of the Financial Intermediary during such period.
*Institutional shares do not pay service fees
Redemption Fee Addendum
