B-20
AMENDMENT TO DISTRIBUTION AGREEMENT
December 1, 2005
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
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 Citigroup Global Markets Inc. This letter
agreement (the "Amendment") amends or supplements certain terms
of the Agreement as set forth below. Except as expressly
amended hereby, the provisions of the Agreement are and shall
remain in full force and effect. 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
Amended and Restated Global Distribution Agreement (the "Global
Distribution Agreement"), dated as of October 3, 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 the 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 the 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 Investment Company 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) intended for public
distribution ("CGMI 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 CGMI Marketing Materials shall be submitted 15
days in advance for review. You shall be responsible for
reviewing and making such filings with the NASD, as required,
of CGMI 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 of the Investment Company, 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 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.
(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 the
Fund 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 any act of yours or any of your employees
constituting willful misfeasance, bad faith, or gross
negligence in the performance of its duties, or by reason of
your reckless disregard of your obligations and duties under
the Agreement or 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.
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:
Citigroup Global Markets Inc.
By: _____________________________
Name:
Title:
EXHIBIT A
Fund Date Added:
Xxxxx Xxxxxx Appreciation Fund December 1, 2005
Inc.
EXHIBIT B
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
