Exhibit (e)
DISTRIBUTION AGREEMENT
FOR
ELFUN DIVERSIFIED FUND
February 10, 1994
GE investment Services Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Dear Sirs:
This is to confirm that, in consideration of the agreements set out below,
Elfun Diversified Fund (the "Fund"), a diversified open-end mutual fund, has
agreed that GE Investment Services Inc. ("XXXX") will be, for the period of this
Agreement, the distributor of units of beneficial interest of the Fund.
1. Services as Distributor.
1.1 XXXX agrees to solicit orders for the sale of units of the Fund and to
undertake advertising and promotion that it believes reasonable in connection
with the solicitation.
1.2 XXXX will act as agent for the distribution of units of the Fund
covered by, and in accordance with, the Fund's prospectus (the "Prospectus") and
statement of additional information (the "Statement") then in effect under the
Securities Act of 1933, as amended (the "Securities Act"), each included as part
of the Registration Statement of the Fund on Form N-1A (the "Registration
Statement"), any amendments to the Registration Statement, and any amendments
to, supplements to, or material incorporated by reference into the Prospectus or
Statement, being referred to collectively in this Agreement as the "Registration
Statement."
1.3 All activities by XXXX as distributor of units of the Fund will comply
with all applicable laws, rules and regulations, including, without limitation,
all rules and regulations made or adopted pursuant to the Securities Act or the
Investment Company Act of 1940, as amended (the "1940 Act"), by the Securities
and Exchange Commission (the "Commission") or any securities association
registered under the Securities Exchange Act of 0000 (xxx "Xxxxxxxx Xxx").
1.4 (a) The public offering price of the units of the Fund will be the net
asset value determined as set forth in the Registration Statement.
(b) The Fund's transfer and dividend agent, or any other agent designated
in writing by the Fund, will be
promptly advised by XXXX of all purchase orders for units of the Fund placed
through XXXX. The Fund may cease, on the basis of market, economic or political
conditions, or on the basis of any other abnormal conditions, to accept any
orders for Fund units or continue to sell units until the members of the Fund's
Board of Trustees (the "Board members") deem it advisable to accept the orders
and to make the sales. The Fund will promptly advise XXXX of the determination
to cease accepting orders or selling units or to recommence accepting orders or
selling units. The Fund (or its agent) will confirm orders for units placed
through XXXX upon their receipt, or in accordance with any exemptive order of
the Commission, and will make appropriate book entries pursuant to the
instructions of XXXX. XXXX agrees to cause payment for units and instructions as
to book entries to be delivered promptly to the Fund (or its agent).
1.5 The outstanding units of the Fund are subject to redemption in
accordance with the applicable provisions set forth in the Prospectus. The price
to be paid to redeem the units will be equal to their net asset value,
determined as set forth in the Prospectus and Statement.
1.6 XXXX will provide one or more persons, during normal business hours, to
respond to telephone questions with respect to the Fund.
1.7 The Fund agrees at its own expense to execute any and all documents, to
furnish any and all information, and to take any other actions, that may be
reasonably necessary in connection with (a) registering units under the
Securities Act, if required, to the extent necessary to have available for sale
the number of units as may reasonably be expected to be purchased and (b) the
qualification and maintenance of the qualification of units of the Fund for sale
in such states as XXXX may designate, except that the Fund will not be obligated
to execute a general consent to service of process in any state.
1.8 The Fund will furnish XXXX from time to time, for use in connection
with the sale of units of the Fund such information with respect to the Fund and
its units as XXXX may reasonably request, all of which information must be
signed by one or more of the Fund's duly authorized officers; and such
information, when so signed by the Fund's officers, will be true and correct.
The Fund will also furnish XXXX upon request with: (a) financial statements of
the Fund audited at least annually by independent public accountants regularly
retained by the Fund, (b) quarterly earnings statements of the Fund or any
series of the Fund prepared by the Fund, (c) a monthly itemized list of the
securities in the portfolio of the Fund, (d) monthly balance sheets with respect
to the Fund as soon as practicable after the end of each month and (e) from time
to time any
additional information regarding the financial condition of the Fund as XXXX may
reasonably request.
1.9 The Fund represents to XXXX that the Registration Statement filed by
the Fund with the Commission under the Securities Act has been carefully
prepared in conformity with the requirements of the Securities Act and the 1940
Act and the respective rules and regulations of the Commission thereunder. The
Fund represents and warrants to XXXX that the Registration Statement contains
all statements required to be stated therein in conformity with the Securities
Act and the rules and regulations of the Commission thereunder; that all
statements of fact contained in the Registration Statement are true and correct;
and that the Registration Statement does not 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. The Fund may, but will
not be obligated to, propose from time to time such amendment or amendments to
the Registration Statement and such supplement or supplements to the Prospectus
as may, in the Fund's judgment, be necessary or advisable. If the Fund does not
propose an amendment or amendments or supplement or supplements within 15 days
after receipt by the Fund of a written request from XXXX to do so, XXXX may, at
its option, terminate this Agreement in accordance with the requirements of
Section 2 of this Agreement or decline to make offers of the Fund's securities
until the amendments are made. The Fund will not file any amendment to the
Registration Statement or supplement to the Prospectus without giving XXXX
reasonable notice thereof in advance; provided, however, that nothing contained
in this Agreement will in any way limit the Fund's right to file at any time
such amendments to the Registration Statement or supplements to the Prospectus,
of whatever character, as the Fund may deem advisable, this right being in all
respects absolute and unconditional.
1.10 (a) The Fund authorizes XXXX to use any Prospectus with respect to the
Fund in the form furnished to XXXX from time to time in connection with the sale
of Fund units and agrees to furnish such quantities of the Prospectus as XXXX
may reasonably request. XXXX will devote reasonable time and effort to effect
sales of Fund units, but will not be obligated to sell any specific number of
units. The services of XXXX under this Agreement are not to be deemed exclusive
and nothing contained in this Agreement should be deemed to prevent XXXX from
entering into distribution arrangements with other investment companies so long
as the performance of its obligations under this Agreement is not impaired by
XXXX'x doing so.
(b) In selling the units of the Fund, XXXX will use its best efforts in all
respects duly to conform with
the requirements of all federal and state laws and regulations of the National
Association of Securities Dealers, Inc. (the "NASD") relating to the sale of the
units. Neither XXXX nor any other person is authorized by the Fund to give any
information or to make any representations, other than those contained in the
Registration Statement or the Prospectus or in any sales literature specifically
approved by the Fund.
(c) XXXX will adopt and follow procedures, as approved by the Fund, for the
confirmation of sales to purchasers of Fund units placed through XXXX, the
collection of amounts payable by those purchasers, and the cancellation of
unsettled transactions, as may be necessary to comply with the requirements of
the NASD and applicable rules and regulations of the Commission.
1.11 (a) The Fund agrees promptly to notify XXXX of the commencement of any
litigation or proceedings against the Fund or any of its officers or trustees in
connection with the issuance and sale of any units of the Fund.
(b) The Fund agrees to indemnify and hold XXXX, its several officers and
directors, and any person who controls XXXX within the meaning of Section 15 of
the Securities Act, free and harmless from and against any and all claims,
demands, liabilities and expenses (including the cost of investigating or
defending those claims, demands or liabilities and any counsel fees incurred in
connection with them) that XXXX, its officers and directors, or any controlling
person may incur under the Securities Act or under common law or otherwise,
arising out of or based upon any untrue statement, or alleged untrue statement,
of a material fact contained in the Registration Statement or the Prospectus or
arising out of or based upon any omission, or alleged omission, to state a
material fact required to be stated in either the Registration Statement or
Prospectus or necessary to make the statements in either not misleading;
provided, however, that the Fund's agreement to indemnify XXXX, its officers and
directors, and any controlling person will not be deemed to cover any claims,
demands, liabilities or expenses arising out of any untrue statement or alleged
untrue statement or omission or alleged omission in the Registration Statement
or Prospectus made in reliance upon and in conformity with written information
furnished to the Fund by XXXX specifically for use in the preparation of the
Registration Statement or the Prospectus.
(c) The Fund's agreement to indemnify XXXX, its officers and directors, and
any controlling person, described in paragraph (b) of this Section 1.11, is
expressly conditioned upon the Fund's being notified of any action brought
against XXXX, its officers or directors, or any controlling person, such
notification to be given by
letter or by telegram addressed to the Fund at its principal office in New York,
New York within twenty business days after the summons or other first legal
process is served on the person seeking indemnification. The failure to notify
the Fund in this manner of any such action will not relieve the Fund from any
liability that the Fund may have to the person against whom the action is
brought by reason of any such untrue, or alleged untrue, statement or omission,
or alleged omission, otherwise than on account of the Fund's indemnity agreement
contained in this Section 1.11.
(d) The Fund will be entitled to assume the defense of any suit brought to
enforce any claim, demand or liability contemplated by this Section 1.11, but,
in such case, the defense will be conducted by counsel of good standing chosen
by the Fund and approved by XXXX (who will not, except with the consent of XXXX,
be counsel to the Fund). In the event the Fund elects to assume the defense of
any such suit and retain counsel of good standing approved by XXXX, the
defendant or defendants in the suit will bear the fees and expenses of any
additional counsel retained by any of them; but in case the Fund does not elect
to assume the defense of any such suit, or in case XXXX does not approve of
counsel chosen by the Fund, the Fund will reimburse XXXX, its officers and
directors, or any controlling person or persons named as defendant or defendants
in the suit, for the fees and expenses of any counsel retained by XXXX or them.
(e) The Fund's indemnification agreement contained in this Section 1.11 and
the Fund's representations and warranties in this Agreement will remain
operative and in full force and effect regardless of any investigation made by
or on behalf of XXXX, its officers and directors, or any controlling person, and
will survive the delivery of any units of the Fund. The Fund's agreement of
indemnity will inure exclusively to XXXX'x benefit, to the benefit of its
several officers and directors, and their respective estates, and to the benefit
of any controlling persons and their successors, except that the Fund will not
be obligated to indemnify any entity or person pursuant to this Section 1.11
against any liability to which XXXX, its officers and directors, or any
controlling person would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in performance of, or reckless disregard of, the
obligations and duties set forth in this Agreement.
1.12 (a) XXXX agrees to indemnify and hold the Fund, its several officers
and Board members, and any person, if any, who controls the Fund within the
meaning of Section 15 of the Securities Act, free and harmless from and against
any and all claims, demands, liabilities and expenses (including the cost of
investigating or defending those
claims, demands or liabilities and any counsel fees incurred in connection with
them) that the Fund, its officers or Board members, or any controlling person,
may incur under the Securities Act, or under common law or otherwise, but only
to the extent that the liability or expense incurred by the Fund, its officers
or Board members, or any controlling person resulting from the claims or demands
arise out of or are based upon any untrue, or alleged untrue statement of a
material fact contained in information furnished in writing by XXXX to the Fund
specifically for use in the Registration Statement and used in the Fund's
answers to any of the items of the Registration Statement or in the
corresponding statements made in the Prospectus, or arise out of or are based
upon any omission, or alleged omission, to state a material fact in connection
with the information furnished in writing by XXXX to the Fund and required to be
stated in the answers or necessary to make the information not misleading.
(b) XXXX'x agreement to indemnify the Fund, its officers and Board members,
and any controlling person under this Section 1.12 is expressly conditioned upon
XXXX'x being notified of any action brought against the Fund, its officers or
Board members, or any controlling person, such notification to be given by
letter or telegram addressed to XXXX at its principal office and sent to XXXX by
the person against whom the action is brought, within twenty business days after
the summons or other first legal process is served on the person seeking
indemnification. The failure to notify XXXX of any such action will not relieve
XXXX from any liability that XXXX may have to the Fund, its officers or Board
members, or to the controlling person otherwise than on account of XXXX'x
indemnity agreement contained in this Section 1.12.
(c) XXXX will have the right to control the defense of any action
contemplated by this Section 1.12, with counsel of its own choosing,
satisfactory to the Fund, unless the action referred to in paragraph (a) of this
Section 1.12 is not based solely upon an alleged misstatement or omission on
XXXX'x part. In such event, the Fund, its officers or Board members or the
controlling person will each have the right to participate in the defense or
preparation of the defense of the action.
(d) XXXX will not be obligated to indemnify any entity or person pursuant
to this Section 1.12 against any liability to which the Fund, its officers and
Board members, or any controlling person would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in performance of, or
reckless disregard of, the obligations and duties set forth in this Agreement.
1.13 No units of the Fund may be offered by XXXX or the Fund under any of
the provisions of this Agreement, and no orders for the purchase or sale of
units of the Fund pursuant to this Agreement may be accepted by the Fund if and
so long as the effectiveness of the Registration Statement is suspended under
any of the provisions of the Securities Act or if and so long as a current
prospectus as required by Section 10 of the Securities Act is not on file with
the Commission; provided, however, that nothing contained in this Section 1.13
will in any way restrict or have an application to or bearing upon the Fund's
obligation to redeem its units from any shareholder in accordance with the
provisions of Section 1.5 of this Agreement and provided, further, that XXXX may
continue to offer units of the Fund until XXXX has been notified in writing of
the occurrence of any of the foregoing events.
1.14 The Fund agrees to advise XXXX immediately in writing:
(a) of any request by the Commission for amendments to the
Registration Statement or the Prospectus or any additional information
regarding the Fund;
(b) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any
proceeding for that purpose;
(c) of the happening of any event that makes untrue any statement of a
material fact made in the Registration Statement or the Prospectus or that
requires the making of any change in the Registration Statement or the
Prospectus in order to make the statements therein not misleading; and
(d) of all actions of the Commission with respect to any amendments to
the Registration Statement or the Prospectus that may from time to time be
filed with the Commission.
2. Term.
This Agreement will become effective as of the date first written above and
will continue automatically for successive annual periods (until terminated in
the manner provided herein) so long as its continuance is specifically approved
at least annually by the Board members of the Fund by vote cast in person at a
meeting called for the purpose of voting on the approval, or by a vote of a
majority (as defined in the 0000 Xxx) of the Fund's outstanding voting
securities. This Agreement is terminable without penalty, (a) on not less than
60 days' notice (i) by action of the Board members of the Fund, or (ii) by the
vote of holders of
a majority of the Fund's units, or (b) upon not less than 60 days' written
notice by XXXX. This Agreement will also terminate automatically in the event of
its assignment (as defined in the 1940 Act and the rules under the 1940 Act).
3. Amendments.
This Agreement may only be modified or amended or the terms hereof waived
only if the modification of amendment is specifically approved by the Board
members of the Fund by vote cast in person at a meeting called for the purpose
of voting on the approval, or by the vote of a majority of outstanding voting
securities of the Fund.
4. Miscellaneous.
4.1 (a) The Fund will bear all costs and expenses including fees and
disbursements of its counsel and independent accountants, in connection with the
preparation and filing of any registration statements and prospectuses under the
Securities Act and the 1940 Act, and all amendments and supplements thereto, and
the expense of preparing, printing, mailing and otherwise distributing
prospectuses, annual or interim reports or proxy materials.
(b) The Fund will bear all costs and expenses of qualification of its units
for sale in such states of the United States or other jurisdictions as selected
by XXXX pursuant to Section 1.7 of this Agreement and the cost and expenses
payable to each for continuing qualification therein.
* * * * *
If the terms and conditions described above are in accordance with your
understanding, kindly indicate your acceptance of this Agreement by signing and
returning to us the enclosed copy of this Agreement.
Very truly yours,
ELFUN DIVERSIFIED FUND
BY: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Trustee
Accepted:
GE INVESTMENT SERVICES INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
Title: Senior Vice President
