EXHIBIT e(1)
DISTRIBUTION AGREEMENT
AGREEMENT made this 26th day of February 2001, by and between Pilgrim
Variable Products Trust (the "Trust") and ING Pilgrim Securities, Inc.
("Distributor"), a Delaware Corporation.
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as a diversified open-end investment company
and offers its shares continuously to separate accounts of insurance companies
("Separate Accounts") to serve as an investment option under variable annuity
contracts or variable life insurance policies issued by the insurance companies;
and its shares may be sold in the future to separate accounts of other
affiliated or unaffiliated insurance companies and other persons to whom such
shares may be offered consistent with applicable tax law; and
WHEREAS, Distributor is registered as a broker-dealer under the
Securities Exchange Act of 1934 and is a member of the National Association of
Securities Dealers, Inc. ("NASD"); and
WHEREAS, the Trust and the Distributor wish to enter into this
Agreement whereby the Distributor will act as the Trust's principal underwriter
for the sale of shares of the Portfolios listed on the attached Schedule of
Portfolios comprising the Trust to the Separate Accounts;
NOW, THEREFORE, the parties hereto agree as follows:
1. APPOINTMENT OF THE DISTRIBUTOR
The Trust hereby appoints the Distributor as the principal underwriter
and distributor of the Trust to sell shares of the Trust's Portfolios to the
Separate Accounts and any other persons, and the Distributor hereby accepts such
appointment.
2. Purchase of Shares from the Trust
(a) The Trust herewith engages Distributor to act as exclusive
distributor of the shares of its separate series, and any other series which may
be designated from time to time hereafter ("Portfolios"), named and described on
the Schedule of Portfolios attached hereto and made a part of this Agreement by
reference. Said sales shall be made only to investors eligible to invest in a
registered investment company consistent with such company's serving as an
investment vehicle for variable annuities and variable life insurance company
contracts. Distributor need not hold itself available to receive by mail, telex
and/or telephone, orders for the purchase of shares.
(b) All shares sold by Distributor under this Agreement shall be
sold at the net asset value per share ("Offering Price") determined in the
manner described in Trust's Prospectus, as it may be amended from time to time.
3. Redemption of Shares by the Trust
(a) Any of the outstanding shares of each Portfolio may be
tendered for redemption at any time, and the Trust agrees to redeem any such
shares so tendered in accordance with the applicable provisions of the
Prospectus and Trust's Declaration of Trust and By-Laws. The redemption price is
the net asset value per share next determined after the initial receipt of
proper request for redemption.
(b) The right to redeem shares or to receive payment with respect
to any redemption may be suspended only in accordance with applicable law.
4. Duties of the Trust
(a) The Trust shall furnish to the Distributor copies of all
information, financial statements and other papers which the Distributor, may
reasonably request for use in connection with the distribution of the shares of
the Trust.
(b) The Trust shall take, from time to time, subject to the
necessary approval of its shareholders, all necessary action to fix the number
of its authorized shares and to register shares under the Securities Act of
1933, as amended (the "1933 Act"), in order that there will be available for
sale at least the number of shares as investors may reasonably be expected to
purchase.
5. Duties of the Distributor
In selling the shares of the Trust, the Distributor shall use its best
efforts to conform with the requirements of all applicable federal and state
laws and regulations, and the regulations of the NASD, relating to the sale of
such securities. Except as provided below, the Distributor is not authorized by
the Trust to give any information or make any representations, other than those
contained in the registration statement for the Trust and its shares, the
Prospectus, and any sales literature specifically approved a principal of the
Distributor. The Distributor shall furnish applicable federal and state
regulatory authorities with any information or reports in connection with its
services under this Agreement which such authorities may request in order to
ascertain whether the Trust's operations are being conducted in an manner
consistent with any applicable law or regulations. Nothing contained in this
Agreement shall prevent the Distributor from entering into distribution
agreements with other investment companies.
6. Allocation of Expenses
(a) The Trust will pay the following expenses in connection with
the sales and distribution of shares of the Portfolios.
(i) expenses pertaining to the preparation of its audited
and certified financial statements to be included in any amendments
("Amendments") to the Trust's Registration Statement under the 1933 Act,
including the Prospectus and Statement of Additional Information included
therein;
(ii) expenses pertaining to the preparation, printing, and
distribution of any reports or communications, including the Prospectus and the
Statement of Additional Information, which are sent to existing shareholders of
the Trust;
(iii) filing and other fees to federal and state securities
regulatory authorities necessary to register and maintain registration of the
shares; and
(iv) expenses of the Trust's administrator, including all
costs and expenses in connection with the issuance, transfer and registration of
the shares, including but not limited to any taxes and other governmental
charges in connection therewith.
(b) The Distributor will pay the following expenses:
(i) expenses of printing additional copies of the
Prospectus and Statement of Additional Information and any amendments or
supplements thereto which are necessary to continue to offer shares of the
Trust's Portfolios to the public;
(ii) expenses pertaining to the printing of additional
copies, for use by the Distributor as sales literature, of reports or other
communications which have been prepared for distribution to existing
shareholders of the Trust or incurred by the Distributor in advertising,
promoting and selling our shares to the public.
7. Records
All records maintained by the Distributor in connection with this
Agreement shall be the property of the Trust and shall be returned to the Trust
upon termination of this Agreement, free from any claims or retention of rights
by the Distributor. The Distributor shall keep confidential any information
obtained pursuant to this Agreement and shall disclose such information, only if
the Trust has authorized such disclosure, or if such disclosure is expressly
required by applicable federal or state regulatory authorities.
8. Duration and Termination of this Agreement
This Agreement shall become effective on the date first written above
or on such later date approved by the Company's Board of Trustees, including a
majority of those Trustees who are not parties to this Agreement or interested
persons (as such term is defined in the 1940 Act) thereof. Unless terminated as
provided herein, the Agreement shall continue in full force and effect for two
(2) years from the effective date of this Agreement, and shall continue in
effect from year to year thereafter for successive one (1) year periods if
approved at least annually (i) by a vote of a majority of the outstanding voting
securities of the Portfolios or by a vote of the Trustees of the Trust, and (ii)
by a vote of a majority of the Trustees of the Trust who are not interested
persons or parties to this Agreement (other than as Trustees of the Trust), cast
in person at a meeting called for the purpose of voting on this Agreement.
This Agreement may be terminated at any time without penalty on at
least sixty days notice by the Trust's Board of Trustees or by a majority vote
of its shareholders, with respect to any Portfolio by a majority vote of the
shareholders of the capital stock of such Portfolio, or by Distributor on sixty
days notice.
This Agreement shall terminate automatically in the event of its
assignment.
9. Miscellaneous
This Agreement shall be subject to the laws of the State of
Massachusetts and shall be interpreted and construed to further and promote the
operation of the Trust as an open-end investment company. As used herein, the
terms "Net Asset Value," "Investment Company," "Open-End Investment Company,"
"Assignment," "Principal Underwriter," "Interested Person," and "Majority of the
Outstanding Voting Securities," shall have the meanings set forth in the 1933
Act and the 1940 Act, as applicable, and the rules and regulations promulgated
thereunder.
10. Liability
Nothing contained herein shall be deemed to protect the Distributor
against any liability to the Trust or its shareholders to which the Distributor
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of the Distributor's duties hereunder, or by
reason of the Distributor's reckless disregard of its obligations and duties
hereunder.
PILGRIM VARIABLE PRODUCTS TRUST
By: /s/ Xxxxxx X. Naka
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Xxxxxx X. Naka, Senior Vice President
ING PILGRIM SECURITIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, Senior Vice President
