Exhibit e(1)
FRANCHISE AGREEMENT
between
Fidelity Destiny Portfolios:
Destiny I
and
Fidelity Distributors Corporation
THIS AGREEMENT made this 30th day of March, 1999 between FIDELITY
DESTINY PORTFOLIOS, a Massachusetts business trust having its
principal office in Boston, Massachusetts which may issue one or more
series of beneficial interest (hereinafter called the "Issuer"), on
behalf of Destiny I, (hereinafter called the "Portfolio"), and
FIDELITY DISTRIBUTORS CORPORATION, a Massachusetts corporation, having
its principal office in Boston, Massachusetts (hereinafter called
"Distributors").
WITNESSETH:
WHEREAS Distributors has been formed for the purpose, among other
things, of sponsoring Periodic Payment Plan Certificates based upon
open-end investment company shares and other securities, and is able
and desirous of sponsoring Periodic Payment Plan Certificates based
upon the various classes of the Portfolio's shares as hereinafter
provided; and
WHEREAS Distributors desires to arrange for the acquisition of shares
of each class of the Portfolio for deposit and use under Systematic
Investment Plans (hereinafter sometimes collectively referred to as
the "Plans"), of which the STATE STREET BANK AND TRUST COMPANY will be
the Custodian; and
WHEREAS Distributors represents it is a member in good standing of
the National Association of Securities Dealers, Inc.; and
WHEREAS the Issuer is registered under the Investment Company Act of
1940, as amended (hereinafter called the "1940 Act"), shares of the
Portfolio are registered under the Securities Act of 1933, as amended,
(hereinafter called the "1933 Act") and the Issuer is willing to take
the necessary steps, subject to approval of its shareholders, to
continue to register Portfolio shares under the 1933 Act to the end
that there will be available for sale such number of Portfolio shares
as Distributors may reasonably be expected to sell.
NOW, THEREFORE in consideration of the sum of one dollar and other
good and valuable considerations by each of the parties hereto to the
other in hand paid, the receipt whereof is hereby acknowledged, and
the mutual covenants herein set forth, the parties hereto agree as
follows:
1. The Franchise Agreement, for Destiny I, previously in effect is
hereby terminated, effective as of the opening of business this date,
and relations between the Portfolio and Distributors thereafter will
be governed by the terms of this Agreement.
2. The Issuer agrees to sell upon demand at the net asset value,
determined as provided by the then current prospectus (as determined
by Fidelity Service Company, Inc., Boston, Massachusetts, as agent for
the Portfolio), which is without imposition of any sales charge, to
Distributors, or any bank or banks acting as Custodian for the Plans
sponsored and issued by Distributors, a sufficient number of Portfolio
shares to meet the requirements of all such Plans as are sold,
distributed and/or issued by Distributors.
3. The Issuer agrees that it will comply to the best of its ability
with the federal securities laws, and the Issuer agrees it will use
its best efforts to maintain enough shares of each class of the
Portfolio registered under the 1933 Act to permit the continued sale
of Portfolio shares. The Issuer further agrees to make readily
available to Distributors any data, information or material in its
possession that may be necessary to the registration or qualification
for the Plans for sale under the federal securities laws, or the laws
of any state.
4. The Issuer agrees to supply to Distributors or the bank or banks
acting as Custodian for the Plans issued by Distributors a sufficient
number of copies of any and all general mailings, together with the
necessary envelopes, including without limitation, proxy material,
proxies, annual, semi-annual and quarterly reports, notices and
prospectuses, sent from time to time to the holders of Portfolio
shares so as to provide a single copy, together with the necessary
envelope and postage, to each of Distributors' Planholders. The
Issuer agrees to furnish all the above mentioned material at no cost
to Distributors. Additional copies of any current prospectus and any
printed information issued as supplemental to such prospectus of the
Portfolio will be supplied by the Issuer at Distributors' expense in
sufficient quantities to accommodate Distributors in selling,
distributing and/or issuing the Plans. It is understood that
Distributors is an affiliate of Fidelity Management & Research Company
(hereinafter called "FMR"), investment adviser of the Portfolio and
that the Issuer's agreement to supply information and printed
materials described in this agreement may be fulfilled by FMR.
Distributors agrees that it will furnish the Issuer for its files two
copies of all material supplied to Planholders by Distributors. It is
recognized by the Issuer that FMR may make payment to Distributors
with respect to any expenses incurred in the distribution of shares of
the Portfolio, such payments payable from the past profits or other
resources of FMR including management fees paid to it by the Issuer.
5. The Issuer shall indemnify and hold harmless Distributors and each
person, if any, subjected to liability because of connection with
Distributors and their respective successors (all hereinafter in this
paragraph referred to as the "Defendants") against any liability,
claims, damage or expense (including, unless the Issuer elects to
assume the defense, the reasonable cost of investigating and defending
any alleged liability, claim, damage, or expense and reasonable
counsel fees in connection therewith), joint or several, arising by
reason of any person acquiring any Plans for Portfolio shares on the
ground that the registration statement or prospectus for shares of the
Portfolio includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary in
order to make statements therein not misleading, unless such statement
or omission occurred by reason of a variance in the prospectus
prepared by Distributors from the prospectus as contained in the
composition, etc., supplied by the Issuer or was made in reliance upon
information furnished by Distributors for use therein. In no case is
the indemnity of the Issuer in favor of Distributors or any person
indemnified to be deemed to protect Distributors or any such person
against any liability to the Issuer or its security holders to which
Distributors or any controlling person would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties under this Agreement. Upon the commencement
of any suit against any Defendant in respect of which indemnity may be
sought as aforesaid, such Defendant shall promptly notify the Issuer,
but failure so to notify the Issuer shall not relieve the Issuer from
any liability the Issuer may have to the Defendants otherwise than on
account of said indemnity agreement.
6. Distributors shall indemnify and hold harmless the Issuer and each
person, if any, subjected to liability because of connection with the
Issuer and their respective successors (all hereinafter in this
paragraph referred to as the "Defendants") against any liability,
claims, damages, or expense (including, unless Distributors elects to
assume the defense, the reasonable cost of investigating and defending
any alleged liability, claim, damages or expense and reasonable
counsel fees in connection therewith), joint or several, arising by
reason of the sponsorship or distribution by Distributors of Plans
based upon the Portfolio shares unless such liability, claim, damages
or expense arise by reason of an untrue statement of a material fact
or omission to state a material fact required to be stated in the
prospectus or registration statement of the Portfolio, or necessary in
order to make the statements therein not misleading. In no case is
the indemnity of Distributors in favor of the Issuer or any person
indemnified to be deemed to protect the Issuer or any such person
would otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of its duties under this
Agreement. Upon the commencement of any suit against any Defendant in
respect of which indemnity may be sought as aforesaid, such Defendant
shall promptly notify Distributors but failure to notify Distributors
shall not relieve Distributors from any liability Distributors may
have to the Defendants otherwise than on account of said indemnity
agreement.
7. The Agreement on the part of the Issuer to sell Portfolio shares
upon demand, at net asset value set forth in paragraph 2 hereof, is
subject to the following limitations:
(a) That the Plans are maintained in good standing as unit investment
trusts under the federal securities laws, provided, however, that
Distributors reserves the right to change the terms or conditions of,
or suspend or discontinue, any Plans at any time after notification
thereof to the Issuer by letter or prepaid telegram; and
(b) That the membership of Distributors in the National Association of
Securities Dealers, Inc. and its registration as a broker-dealer under
the Securities Exchange Act of 1934, as amended, have not been
cancelled, revoked or suspended; and
(c) That Distributors is not in violation of any of the federal or
state laws and regulations relating to the registration and sale of
said Plans.
If Distributors shall, within thirty days after a default under any of
the provisions of this paragraph, cure such default to the reasonable
satisfaction of the Issuer, then the agreement of the Issuer to sell
at the net asset value Portfolio shares in accordance with paragraph 2
hereof shall remain unimpaired, anything in this paragraph 7 to the
contrary notwithstanding.
8. This Agreement shall have a term of two years from the effective
date of the registration of the Plans under the 1933 Act. Thereafter
this Agreement shall continue from year to year, unless either party
shall serve a notice upon the other by certified or registered mail,
return receipt requested, 120 days prior to the end of the year after
which termination is desired, canceling this Agreement, provided that
it shall be approved by the directors or shareholders of the Issuer as
required by Section 15 of the 1940 Act. Notwithstanding to the
termination of this Agreement, the Issuer agrees to sell sufficient
Portfolio shares to Distributors or any bank or banks acting as
Custodian for the Plans to permit completion of all Plans begun prior
to such termination. Distributors represents and agrees that it will
use its best efforts to sell Plans based upon Portfolio shares
throughout the term of this Agreement.
9. Distributors or any bank or banks acting as Custodian for the
Plans may from time to time substitute a new investment medium for the
Portfolio shares in accordance with the provisions of the Plan
certificate and prospectus in effect at the time.
10. All communications provided for hereunder shall be in writing and
shall be deemed to have been duly given if delivered or mailed by
first class mail prepaid (unless delivery by certified or registered
mail, return receipt requested, is provided for) to the respective
parties as follows:
Fidelity Destiny Portfolios: Destiny I Fidelity Distributors
Corporation
00 Xxxxxxxxxx Xxxxxx 00 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000 Xxxxxx, Xxxxxxxxxxxxx 00000
or to such other address as the Issuer or Distributors designates by
written notice to that effect to the other.
11. This Agreement contains the entire understanding between the
parties and any modification, alteration, change or subsequent
agreement hereafter made shall be ineffective to change, modify or
discharge this Agreement in whole or in part unless such modification,
alteration, change or subsequent agreement is in writing and signed by
the party against whom enforcement of the change, modification,
discharge or alteration is sought.
12. This Agreement shall be construed in accordance with the laws of
Massachusetts.
13. This Agreement shall be binding upon and enforceable by and shall
bind and inures to the benefit of the Issuer and Distributors and
their respective heirs, executors, administrators, successors and
assigns.
14. Distributors is expressly put on notice of the limitation of
shareholder liability as set forth in Article XI Section 3 of the
"Declaration of Trust" of the Issuer and agrees that the obligations
assumed by the Issuer under this contract shall be limited in all
cases to the Portfolio and its assets and Distributors shall not seek
satisfaction of any obligation from the shareholders or any
shareholder of the Issuer, or out of any assets of the Issuer other
than the assets of the Portfolio. Nor shall Distributors seek
satisfaction of any obligations from the trustees or any individual
trustee of the Issuer.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, all as of the day and year first above written.
FIDELITY DESTINY PORTFOLIOS:
on behalf of Destiny I
By /s/Xxxxxx X. Xxxxx
Senior Vice President
WITNESS:
/s/Xxxx X. Xxxxxx FIDELITY DISTRIBUTORS CORPORATION
Secretary
By /s/Xxxxxx X. Xxxxxx
President
ATTEST:
/s/Xxxx X. Xxxxxx
Clerk
