XXXXX XXXXXX MULTIPLE DISCIPLINE TRUST
DISTRIBUTION AGREEMENT
_____________, 2002
PFS Distributors, Inc.
0000 Xxxxxxxxxxxx Xxxx., Xxxx. 000
Xxxxxx Xxxxxxx 00000-0000
Dear Sirs:
This is to confirm that, in consideration of the agreements hereinafter
contained, the above-named investment company (the "Trust") has agreed that you
shall be, for the period of this Agreement, the non-exclusive principal
underwriter and co-distributor of shares of the Trust and each Series of the
Trust identified on Schedule A attached hereto. For purposes of this Agreement,
the term "Shares" shall mean shares of the each Series, or one or more Series,
as the context may require.
1. Services as Principal Underwriter and Distributor
-------------------------------------------------
1.1 You will act as agent for the distribution of Shares covered by,
and in accordance with, the registration statement, prospectus and statement of
additional information then in effect under the Securities Act of 1933, as
amended (the "1933 Act"), and the Investment Company Act of 1940, as amended
(the "1940 Act"), and will transmit or cause to be transmitted promptly any
orders received by you or those with whom you have sales or servicing agreements
for purchase or redemption of Shares to the transfer and dividend disbursing
agent for the Trust of which the Trust has notified you in writing.
1.2 You agree to use your best efforts to solicit orders for the sale
of Shares. It is contemplated that you will enter into sales or servicing
agreements with registered securities brokers and banks and into servicing
agreements with financial institutions and other industry professionals, such as
investment advisers, accountants and estate planning firms. In entering into
such agreements, you will act only on your own behalf as principal underwriter
and distributor.
1.3 You shall act as the non-exclusive principal underwriter and
co-distributor of Shares in compliance with all applicable laws, rules, and
regulations, including, without limitation, all rules and regulations made or
adopted from time to time by the Securities and Exchange Commission (the "SEC")
pursuant to the 1933 Act or the 1940 Act or by any securities association
registered under the Securities Exchange Act of 1934, as amended.
1.4 Whenever in their judgment such action is warranted for any
reason, including, without limitation, market, economic or political conditions,
the Trust's officers may decline to accept any orders for, or make any sales of,
any Shares until such time as those officers deem it advisable to accept such
orders and to make such sales and the Trust shall advise you promptly of such
determination.
1.5 The Trust will pay you an annual fee in connection with he
offering and sale of the Shares under this Agreement. The annual fee paid to you
will be calculated daily and paid monthly by the Trust at an annual rate set
forth in the Services and Distribution Plan (the "Plan") based on the average
daily net assets of the Trust; provided that payment shall be made in any month
only to the extent that
such payment shall not exceed the sales charge limitations established by the
National Association of Securities Dealers, Inc.
The annual fee paid to you under this Section 1.5 may be used by you
to cover any expenses primarily intended to result in the sale of Shares,
including, but not limited to, the following:
(a) cost of payments made to your employees or other broker-dealers
that engage in the distribution of the Shares;
(b) payments made to, and expenses of, persons who provide support
services in connection with the distribution of the Shares, including, but
not limited to, office space and equipment, telephone facilities, answering
routine inquiries regarding the Trust, processing shareholder transactions
and providing any other shareholder services;
(c) costs relating to the formulation and implementation of marketing
and promotional activities, including, but not limited to, direct mail
promotions and television, radio, newspaper, magazine and other mass media
advertising;
(d) costs of printing and distributing prospectuses and reports of
the Trust to prospective shareholders of the Trust;
(e) costs involved in preparing, printing and distributing sales
literature pertaining to the Trust; and
(f) costs involved in obtaining whatever information, analyses and
reports with respect to marketing and promotional activities that the Trust
may, from time to time, deem advisable;
except that distribution expenses shall not include any expenditures in
connection with services which you, any of its affiliates, or any other person
have agreed to bear without reimbursement.
1.6 You shall prepare and deliver reports to the Treasurer of the
Trust on a regular, at least quarterly, basis, showing the distribution expenses
incurred pursuant to this Agreement and the Plan and the purposes therefor, as
well as any supplemental reports as the Trustees, from time to time, may
reasonably request.
2. Duties of the Trust
-------------------
2.1 The Trust agrees to pay all costs and expenses in connection with
the registration of Shares under the 1933 Act, and all expenses in connection
with maintaining facilities for the issue and transfer of Shares and for
supplying information, prices and other data to be furnished by the Trust
hereunder, and all expenses in connection with the preparation and printing of
the Trust's prospectuses and statements of additional information for regulatory
purposes and for distribution to shareholders; provided however, that nothing
contained herein shall be deemed to require the Trust to pay any costs of
advertising or marketing the sale of Shares.
2.2 The Trust agrees to execute any and all documents and to furnish
any and all information and otherwise to take any other actions that may be
reasonably necessary in the discretion of the Trust's officers in connection
with the qualification of Shares for sale in such states and other U.S.
jurisdictions as the Trust may approve and designate to you from time to time,
and the Trust agrees to pay all expenses that may be incurred in connection with
such qualification. You shall pay all expenses
2
connected with your own qualification as a securities broker or dealer under
state or Federal laws and, except as otherwise specifically provided in this
Agreement, all other expenses incurred by you in connection with the sale of
Shares as contemplated in this Agreement.
2.3 The Trust shall furnish you from time to time, for use in
connection with the sale of Shares, such information reports with respect to the
Trust or any relevant Series and the Shares as you may reasonably request, all
of which shall be signed by one or more of the Trust's duly authorized officers;
and the Trust warrants that the statements contained in any such reports, when
so signed by the Trust's officers, shall be true and correct. The Trust also
shall furnish you upon request with (a) the reports of the annual audits of the
financial statements of the Trust for each Series made by independent certified
public accountants retained by the Trust for such purpose; (b) semi-annual
unaudited financial statements pertaining to each Series; (c) quarterly earnings
statements prepared by the Trust for any Series; (d) a monthly itemized list of
the securities in each Series' portfolio; (e) monthly balance sheets as soon as
practicable after the end of each month; (f) the current net asset value and
offering price per share for each Series on each day such net asset value is
computed and (g) from time to time such additional information regarding the
financial condition of each Series of the Trust as you may reasonably request.
3. Representations and Warranties
------------------------------
The Trust represents to you that all registration statements, prospectuses
and statements of additional information filed by the Trust with the SEC under
the 1933 Act and the 1940 Act with respect to the Shares have been prepared in
conformity with the requirements of said Acts and the rules and regulations of
the SEC thereunder. As used in this Agreement, the terms "registration
statement", "prospectus" and "statement of additional information" shall mean
any registration statement, prospectus and statement of additional information
filed by the Trust with the SEC and any amendments and supplements thereto filed
by the Trust with the SEC. The Trust represents and warrants to you that any
such registration statement, prospectus and statement of additional information,
when such registration statement becomes effective and as such prospectus and
statement of additional information are amended and supplemented, includes at
the time of such effectiveness, amendment or supplement all statements required
to be contained therein in conformance with the 1933 Act, the 1940 Act and the
rules and regulations of the SEC; that all statements of material fact contained
in any registration statement, prospectus or statement of additional information
will be true and correct when such registration statement becomes effective; and
that neither any registration statement nor any prospectus or statement of
additional information when such registration statement becomes effective 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 the Trust's Shares. The Trust may, but shall not be
obligated to, propose from time to time such amendment or amendments to any
registration statement and such supplement or supplements to any prospectus or
statement of additional information as, in the light of future developments,
may, in the opinion of the Trust, be necessary or advisable. If the Trust shall
not propose such amendment or amendments and/or supplement or supplements within
fifteen days after receipt by the Trust of a written request from you to do so,
you may, at your option, terminate this Agreement or decline to make offers of
the Trust's Shares until such amendments are made. The Trust shall not file any
amendment to any registration statement or supplement to any prospectus or
statement of additional information without giving you reasonable notice thereof
in advance; provided, however, that nothing contained in this Agreement shall in
any way limit the Trust's right to file at any time such amendments to any
registration statement and/or supplements to any prospectus or statement of
additional information, of whatever character, as the Trust may deem advisable,
such right being in all respects absolute and unconditional.
4. Indemnification
---------------
3
4.1 The Trust authorizes you to use any prospectus or statement of
additional information furnished by the Trust from time to time, in connection
with the sale of Shares. The Trust agrees to indemnify, defend and hold you,
your several officers and directors, and any person who controls you 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 such
counsel fees incurred in connection therewith) which you, your officers and
directors, or any such controlling person, may incur under the 1933 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 any registration
statement, any prospectus or any statement of additional information or arising
out of or based upon any omission, or alleged omission, to state a material fact
required to be stated in any registration statement, any prospectus or any
statement of additional information or necessary to make the statements in any
of them not misleading; provided, however, that the Trust's agreement to
indemnify you, your officers or directors, and any such controlling person shall
not be deemed to cover any claims, demands, liabilities or expenses arising out
of any statements or representations made by you or your representatives or
agents other than such statements and representations as are contained in any
prospectus or statement of additional information and in such financial and
other statements as are furnished to you pursuant to paragraph 2.3 of this
Agreement; and further provided that the Trust's agreement to indemnify you and
the Trust's representations and warranties herein before set forth in paragraph
3 of this Agreement shall not be deemed to cover any liability to the Trust or
its shareholders to which you would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of your duties, or
by reason of your reckless disregard of your obligations and duties under this
Agreement. The Trust's agreement to indemnify you, your officers and directors,
and any such controlling person, as aforesaid, is expressly conditioned upon the
Trust's being notified of any action brought against you, your officers or
directors, or any such controlling person, such notification to be given by
letter or by telegram addressed to the Trust at its principal office in New
York, New York and sent to the Trust by the person against whom such action is
brought, within ten days after the summons or other first legal process shall
have been served. The failure so to notify the Trust of any such action shall
not relieve the Trust from any liability that the Trust may have to the person
against whom such action is brought by reason of any such untrue, or alleged
untrue, statement or omission, or alleged omission, otherwise than on account of
the Trust's indemnity agreement contained in this paragraph 4.1. The Trust will
be entitled to assume the defense of any suit brought to enforce any such claim,
demand or liability, but, in such case, such defense shall be conducted by
counsel of good standing chosen by the Trust. In the event the Trust elects to
assume the defense of any such suit and retains counsel of good standing, the
defendant or defendants in such suit shall bear the fees and expenses of any
additional counsel retained by any of them; but if the Trust does not elect to
assume the defense of any such suit, the Trust will reimburse you, your officers
and directors, or the controlling person or persons named as defendant or
defendants in such suit, for the reasonable fees and expenses of any counsel
retained by you or them. The Trust's indemnification agreement contained in this
paragraph 4.1 and the Trust's 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 you, your officers and directors, or any
controlling person, and shall survive the delivery of any of the Trust's Shares.
This agreement of indemnity will inure exclusively to your benefit, to the
benefit of your several officers and directors, and their respective estates,
and to the benefit of the controlling persons and their successors. The Trust
agrees to notify you promptly of the commencement of any litigation or
proceedings against the Trust or any of its officers or Board members in
connection with the issuance and sale of any of the Trust's Shares.
4.2 You agree to indemnify, defend and hold the Trust, its several
officers and Board members, and any person who controls the Trust 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 costs of
investigating or defending such claims, demands or liabilities and any counsel
fees incurred in connection therewith) that the Trust, its officers or Board
members or any such controlling person may incur under the 1933 Act, or under
common law or otherwise, but only to the extent that such liability or
4
expense incurred by the Trust, its officers or Board members, or such
controlling person resulting from such claims or demands shall arise out of or
be based upon any untrue, or alleged untrue, statement of a material fact
contained in information furnished in writing by you to the Trust and used in
the answers to any of the items of the registration statement or in the
corresponding statements made in the prospectus or statement of additional
information, or shall arise out of or be based upon any omission, or alleged
omission, to state a material fact in connection with such information furnished
in writing by you to the Trust and required to be stated in such answers or
necessary to make such information not misleading. Your agreement to indemnify
the Trust, its officers or Board members, and any such controlling person, as
aforesaid, is expressly conditioned upon your being notified of any action
brought against the Trust, its officers or Board members, or any such
controlling person, such notification to be given by letter or telegram
addressed to you at your principal office in Boston, Massachusetts and sent to
you by the person against whom such action is brought, within ten days after the
summons or other first legal process shall have been served. You shall have the
right to control the defense of such action, with counsel of your own choosing,
satisfactory to the Trust, if such action is based solely upon such alleged
misstatement or omission on your part or with the Trust's consent, and in any
event the Trust, its officers or Board members or such controlling person shall
each have the right to participate in the defense or preparation of the defense
of any such action with counsel of its own choosing reasonably acceptable to you
but shall not have the right to settle any such action without your consent,
which will not be unreasonably withheld. The failure to so notify you of any
such action shall not relieve you from any liability that you may have to the
Trust, its officers or Board members, or to such controlling person by reason of
any such untrue, or alleged untrue, statement or omission, or alleged omission,
otherwise than on account of your indemnity agreement contained in this
paragraph 4.2. You agree to notify the Trust promptly of the commencement of any
litigation or proceedings against you or any of your officers or directors in
connection with the issuance and sale of any of the Trust's Shares.
5. Effectiveness of Registration
-----------------------------
No Shares shall be offered by either you or the Trust under any of the
provisions of this Agreement and no orders for the purchase or sale of such
Shares under this Agreement shall be accepted by the Trust if and so long as the
effectiveness of the registration statement then in effect or any necessary
amendments thereto shall be suspended under any of the provisions of the 1933
Act, or if and so long as a current prospectus as required by Section 5(b) (2)
of the 1933 Act is not on file with the SEC; provided, however, that nothing
contained in this paragraph 5 shall in any way restrict or have any application
to or bearing upon the Trust's obligation to repurchase its Shares from any
shareholder in accordance with the provisions of the Trust's prospectus,
statement of additional information or charter documents, as amended from time
to time.
6. Offering Price
--------------
Shares of any class of any Series of the Trust offered for sale by you
shall be offered for sale at a price per share (the "offering price") equal to
(a) their net asset value (determined in the manner set forth in the Trust's
charter documents and the then-current prospectus and statement of additional
information) plus (b) a sales charge, if applicable, which shall be the
percentage of the offering price of such Shares as set forth in the Trust's
then-current prospectus relating to such Series. In addition to or in lieu of
any sales charge applicable at the time of sale, Shares of any class of any
Series of the Trust offered for sale by you may be subject to a contingent
deferred sales charge as set forth in the Trust's then-current prospectus and
statement of additional information. You shall be entitled to receive any sales
charge levied at the time of sale in respect of the Shares without remitting any
portion to the Trust. Any payments to a broker or dealer through whom you sell
Shares shall be governed by a separate agreement between you and such broker or
dealer and the Trust's then-current prospectus and statement of additional
information. Any payments to any provider of services to you shall be governed
by a separate agreement between you and such service provider.
5
7. Notice to You
-------------
The Trust agrees to advise you immediately in writing:
(a) of any request by the SEC for amendments to the
registration statement, prospectus or statement of
additional information then in effect or for additional
information;
(b) in the event of the issuance by the SEC of any stop
order suspending the effectiveness of the registration
statement, prospectus or statement of additional information
then in effect 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, prospectus or statement of additional information
then in effect or that requires the making of a change in
such registration statement, prospectus or statement of
additional information in order to make the statements
therein not misleading; and
(d) of all actions of the SEC with respect to any
amendment to the registration statement, or any supplement
to the prospectus or statement of additional information,
which may from time to time be filed with the SEC.
8. Term of the Agreement
---------------------
This Agreement shall become effective on the date hereof, shall have an
initial term of two years from the date hereof, and shall continue for
successive annual periods thereafter so long as such continuance is specifically
approved at least annually by (a) the Trust's Board or (b) by a vote of a
majority (as defined in the 0000 Xxx) of the Trust's outstanding voting
securities, provided that in either event the continuance is also approved by a
majority of the Board members of the Trust who are not interested persons (as
defined in the 0000 Xxx) of any party to this Agreement, by vote cast in person
at a meeting called for the purpose of voting on such approval. This Agreement
is terminable with or without cause, without penalty, on 60 days' notice by the
Trust's Board or by vote of holders of a majority of the relevant Series
outstanding voting securities, or on 90 days' notice by you. This Agreement will
also terminate automatically, as to the relevant Series, in the event of its
assignment (as defined in the 1940 Act and the rules and regulations
thereunder).
6
9. Arbitration
-----------
Any claim, controversy, dispute or deadlock arising under this
Agreement (collectively, a "Dispute") shall be submitted to arbitration in
accordance with the Code of Arbitration Procedure of the NASD, or similar rules
or code, in effect at the time of the submission of any such Dispute. 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.
10. Miscellaneous
-------------
So long as you act as a principal underwriter and distributor of Shares,
you shall not perform any services for any entity other than investment
companies advised or administered by Citigroup Inc. or its subsidiaries. The
Trust recognizes that the persons employed by you to assist in the performance
of your duties under this Agreement may not devote their full time to such
service and nothing contained in this Agreement shall be deemed to limit or
restrict the persons employed by you or any of your affiliates right to engage
in and devote time and attention to other businesses or to render services of
whatever kind or nature, provided, however, that in conducting such business or
rendering such services your employees and affiliates would take reasonable
steps to assure that the other parties involved are put on notice as to the
legal entity with which they are dealing. This Agreement and the terms and
conditions set forth herein shall be governed by, and construed in accordance
with, the laws of the State of New York without giving effect to its conflict of
interest principles.
11. Limitation of Liability
-----------------------
The Trust and you agree that the obligations of the Trust under this
Agreement shall not be binding upon any of the Trustees, shareholders, nominees,
officers, employees or agents, whether past, present or future, of the Trust,
individually, but are binding only upon the assets and property of the Trust, as
provided in the Master Trust Agreement. The execution and delivery of this
Agreement have been authorized by the Trustees and signed by an authorized
officer of the Trust, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officer shall be deemed to have
been made by any of them individually or to impose any liability on any of them
personally, but shall bind only the trust property of the Trust as provided in
its Master Trust Agreement.
If the foregoing is in accordance with your understanding, kindly indicate
your acceptance of this Agreement by signing and returning to us the enclosed
copy, whereupon this Agreement will become binding on you.
Very truly yours,
XXXXX XXXXXX multiple discipline trust
By:
-----------------------------
Authorized Officer
Accepted:
PFS DISTRIBUTORS, INC.
By:
------------------------------
Authorized Officer
7
