Exhibit 0
XXX XXXXXX XXXXXX STRATEGIC FIXED-INCOME FUND
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT is made as of the 31st day of December, 1992,
between The Xxxxxx Square Strategic Fixed-Income Fund, a Massachusetts
business trust (the "Fund"), having its principal place of business in
Wilmington, Delaware, and Xxxxxx Square Distributors, Inc., a corporation
organized under the laws of the State of Delaware (the "Distributor"), having
its principal place of business in Wilmington, Delaware.
WHEREAS, the Fund wishes to employ the services of Distributor, with such
assistance from its affiliates as the latter may provide, such employment to
take effect at the close of business on December 31, 1992; and
WHEREAS, Distributor wishes to provide distribution services to the Fund
as set forth below;
NOW, THEREFORE, in consideration of the mutual promises and undertakings
herein contained, the parties agree as follows:
1. SALE OF SHARES. The Fund grants to the Distributor the right to sell
shares of beneficial interest, par value $0.01 per share, of all series
of the Fund, now or hereafter created, (the "shares") on its behalf
during the term of this Agreement and subject to the registration
requirements of the Securities Act of 1933, as amended (the "1933 Act"),
and of the laws governing the sale of securities in various states (the
"Blue Sky Laws") under the following terms and conditions: the
Distributor (i) shall have the right to sell, as agent on behalf of the
Fund, shares authorized for issue and registered under the 1933 Act; (ii)
may sell shares under offers of exchange, if available, between and among
the funds distributed by Distributor and advised by Xxxxxx Square
Management Corporation or Wilmington Trust Company; and (iii) shall sell
such shares only in compliance with the terms set forth in the Fund's
currently effective registration statement. Distributor may enter into
selling agreements with selected dealers and others for the sale of Fund
shares and will act only on its own behalf as principal in entering into
such selling agreements.
2. SALE OF SHARES BY THE FUND. The rights granted to the Distributor shall
be non-exclusive in that the Fund reserves the right to sell its shares
to investors on applications received and accepted by the Fund. Further,
the Fund reserves the right to issue shares in connection with (a) the
merger or consolidation, or acquisition by the Fund through purchase or
otherwise, with any other investment company, trust or personal holding
company; and (b) a pro rata distribution directly to the holders of
shares in the nature of a stock dividend or split-up.
3. SHARES COVERED BY THIS AGREEMENT. This Agreement shall apply to issued
shares of all series of the Fund, shares of all series of the Fund held
in its treasury in the event that in the discretion of the Fund treasury
shares shall be sold, and shares of all series of the Fund repurchased
for resale.
FIXDDIST
4. PUBLIC OFFERING PRICE. Except as otherwise noted in the Fund's current
Prospectus (the "Prospectus") or Statement of Additional Information (the
"SAI") with respect to each series, all shares sold to investors by the
Distributor or the Fund will be sold at the public offering price. The
public offering price for all accepted subscriptions will be the net
asset value per share, determined in the manner described in the Fund's
current Prospectus or SAI with respect to the applicable series plus a
sales charge (if any) described in that Prospectus or SAI. The Fund
shall in all cases receive the net asset value per share on all sales.
If a sales charge is in effect, the Distributor shall have the right,
subject to the Rules of Fair Practice of the National Association of
Securities Dealers and to such rules or regulations of the Securities and
Exchange Commission as may then be in effect pursuant to Section 22 of
the Investment Company Act of 1940, as amended (the "1940 Act"), to pay a
portion of the sales charge to dealers or others who have sold shares of
the applicable series.
5. SUSPENSION OF SALES. If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further
orders for shares shall be processed by the Distributor except such
unconditional orders placed with the Distributor before it had knowledge
of the suspension. In addition, the Fund reserves the right to suspend
sales and the Distributor's authority to process orders for shares on
behalf of the Fund if, in the judgment of the Fund, it is in the best
interests of the Fund to do so. Suspension will continue for such period
as may be determined by the Fund. In addition, the Distributor reserves
the right to reject any purchase order.
6. SOLICITATION OF SALES. In consideration of these rights granted to the
Distributor, the Distributor agrees to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of
the Fund. This shall not prevent the Distributor from entering into like
arrangements (including arrangements involving the payment of
underwriting commissions) with other issuers. Distributor agrees to use
all reasonable efforts to ensure that taxpayer identification numbers
provided for shareholders of the Fund are correct.
7. AUTHORIZED REPRESENTATIONS. The Distributor is not authorized by the
Fund to give any information or to make any representations other than
those contained in the appropriate registration statements, Prospectuses
or SAI's filed with the Securities and Exchange Commission under the 1933
Act (as those registration statements, Prospectuses and SAI's may be
amended from time to time), or contained in shareholder reports or other
material that may be prepared by or on behalf of the Fund for the
Distributor's use. This shall not be construed to prevent the
Distributor from preparing and distributing, in compliance with
applicable laws and regulations, sales literature or other material as it
may deem appropriate. Distributor will furnish or cause to be furnished
copies of such sales literature or other material to the President of the
Fund or his designee and will provide him with a reasonable opportunity
to comment on it. Distributor agrees to take appropriate action to cease
using such sales literature or other material to which the Fund
reasonably objects as promptly as practicable after receipt of the
objection.
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8. PORTFOLIO SECURITIES. Portfolio securities of every series of the Fund
may be bought or sold by or through the Distributor, and the Distributor
may participate directly or indirectly in brokerage commissions or
"spreads" for transactions in portfolio securities of any series of the
Fund. However, all sums of money received by the Distributor as a result
of such purchases and sales or as a result of such participation must,
after reimbursement of actual expenses of the Distributor in connection
with such activity, be paid over by the Distributor to or for the benefit
of the applicable series.
9. REGISTRATION OF SHARES. The Fund agrees that it will take all action
necessary to register shares under the 1933 Act (subject to the necessary
approval, if any, of its shareholders) so that there will be available
for sale the number of shares the Distributor may reasonably be expected
to sell. The Fund shall furnish to the Distributor copies of all
information, financial statements and other papers which the Distributor
may reasonably request for use in connection with the distribution of
shares of each series of the Fund.
10. EXPENSES, COMPENSATION AND REIMBURSEMENT
(a) The Fund shall pay all fees and expenses:
(i) in connection with the preparation, setting in type and
filing of any registration statement, Prospectus and SAI
under the 1933 Act, and any amendments thereto, for the
issue of its shares;
(ii) in connection with the registration and qualification of
shares for sale in the various states in which the Board of
Trustees (the "Trustees") of the Fund shall determine it
advisable to qualify such shares for sale (including
registering the Fund or Series as a broker or dealer or any
officer of the Fund as agent or salesperson in any state);
(iii) of preparing, setting in type, printing and mailing any
report or other communication to shareholders of the Fund in
their capacity as such; and
(iv) of preparing, setting in type, printing and mailing
Prospectuses, SAI's, and any supplements thereto, sent to
existing shareholders.
(b) The Distributor shall pay expenses of:
(i) printing and distributing Prospectuses, SAI's and reports
prepared for its use in connection with the offering of the
shares for sale to the public;
(ii) any other literature used in connection with such offering;
and
(iii) advertising in connection with such offering.
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(c) In addition to the services described above, Distributor will
provide services including assistance in the production of marketing
and advertising materials for the sale of shares of the Fund and
their review for compliance with applicable regulatory requirements,
entering into dealer agreements with broker-dealers to sell shares
of the Fund and monitoring their financial strength and contractual
compliance, providing, directly or through its affiliates certain
investor support services, personal service, and the maintenance of
shareholder accounts.
(d) In connection with the services to be provided by the Distributor
under this Agreement, the Distributor shall receive:
(i) a service fee and reimbursement from the Fund (which may
include reimbursement for the expenses incurred pursuant to
Section 10(b) hereof), to the extent and under the terms and
conditions set forth in any Plan of Distribution of the Fund
or its series ("Plan"), as such Plan may be in effect from
time to time, and subject to any further limitations on such
fee or reimbursement as the Trustees of the Fund may impose,
and
(ii) any sales charge, as set forth in the Fund's registration
statement, paid by any purchaser of Fund shares.
11. INDEMNIFICATION.
(a) The Fund agrees to indemnify and hold harmless the Distributor and
each of its directors and officers and each person, if any, who
controls the Distributor within the meaning of Section 15 of the
1933 Act against any loss, liability, claim, damages or expense
(including the reasonable cost of investigating or defending any
alleged loss, liability, claim, damages, or expense and reasonable
counsel fees incurred in connection therewith) arising by reason of
any person acquiring any shares, based upon the 1933 Act or any
other statute or common law, alleging any wrongful act of the Fund
or any of its employees or representatives, or based upon the
grounds that the registration statements, Prospectuses, SAI's,
shareholder reports or other information filed or made public by the
Fund (as from time to time amended) included an untrue statement of
a material fact or omitted to state a material fact required to be
stated or necessary in order to make the statements not misleading.
However, the Fund does not agree to indemnify the Distributor or
hold it harmless to the extent that the statement or omission was
made in reliance upon, and in conformity with, information furnished
to the Fund in writing by or on behalf of the Distributor. In no
case (i) is the indemnity of the Fund in favor of the Distributor or
any person indemnified to be deemed to protect the Distributor or
any person against any liability to the Fund or its security holders
to which the Distributor or such person would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties or by reason of its reckless disregard
of its obligations and duties under this Agreement, or (ii) is the
Fund to be liable under its indemnity agreement contained in this
Section 11(a) with respect to any claim made against the Distributor
or any person indemnified unless the Distributor or person, as the
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case may be, shall have notified the Fund in writing of the
claim within a reasonable time after the summons or other first
written notification giving information of the nature of the claim
shall have been served upon the Distributor or any such person or
after the Distributor or such person shall have received notice of
service on any designated agent. However, failure to notify the
Fund of any claim shall not relieve the Fund from any liability
which it may have to the Distributor or any person against whom such
action is brought other than on account of its indemnity agreement
contained in this Section 11(a). The Fund shall be entitled to
participate at its own expense in the defense, or, if it so elects,
to assume the defense of any suit brought to enforce any claims, but
if the Fund elects to assume the defense, the defense shall be
conducted by counsel chosen by it and satisfactory to the
Distributor, or person or persons, defendant or defendants in the
suit. In the event the Fund elects to assume the defense of any
suit and retain counsel, the Distributor, officers or directors or
controlling person(s) or defendant(s) in the suit, shall bear the
fees and expenses of any additional counsel retained by them. If
the Fund does not elect to assume the defense of any suit, it will
reimburse the Distributor, officers or directors or controlling
person(s) or defendant(s) in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Fund agrees to notify
the Distributor promptly of the commencement of any litigation or
proceedings against it or any of its officers or Trustees in
connection with the issuance or sale of any of the shares.
(b) The Distributor also covenants and agrees that it will indemnify and
hold harmless the Fund and each of the members of its Trustees and
officers and each person, if any, who controls the Fund within the
meaning of Section 15 of the 1933 Act, against any loss, liability,
damages, claim or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, damages,
claim or expense and reasonable counsel fees incurred in connection
therewith) arising by reason of any person acquiring any shares,
based upon the 1933 Act or any other statute or common law, alleging
any wrongful act of the Distributor or any of its employees or
representatives, or alleging that the registration statements,
Prospectuses, SAI's, shareholder reports or other information filed
or made public by the Fund (as from time to time amended) included
an untrue statement of a material fact or omitted to state a
material fact required to be stated or necessary in order to make
the statements not misleading, insofar as the statement or omission
was made in reliance upon, and in conformity with, information
furnished in writing to the Fund by or on behalf of the Distributor.
In no case (i) is the indemnity of the Distributor in favor of the
Fund or any person indemnified to be deemed to protect the Fund or
any person against any liability to which the Fund or such person
would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of its duties or by
reason of its reckless disregard of its obligations and duties under
this Agreement, or (ii) is the Distributor to be liable under its
indemnity agreement contained in this Section 11(b) with respect to
any claim made against the Fund or any person indemnified unless the
Fund or person, as the case may be, shall have notified the
Distributor in writing of the claim within a reasonable time after
the summons or other first written notification giving information
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of the nature of the claim shall have been served upon the Fund or
any such person or after the Fund or such person shall have
received notice of service on any designated agent. However,
failure to notify the Distributor of any claim shall not relieve the
Distributor from any liability which it may have to the Fund or any
person against whom the action is brought other than on account of
its indemnity agreement contained in this Section 11(b). In the
case of any notice to the Distributor, it shall be entitled to
participate, at its own expense, in the defense, or, if it so
elects, to assume the defense of any suit brought to enforce any
claims, but if the Distributor elects to assume the defense, the
defense shall be conducted by counsel chosen by it and satisfactory
to the Fund, to its officers and Trustees and to any controlling
person(s) or any defendants(s) in the suit. In the event the
Distributor elects to assume the defense of any suit and retain
counsel, the Fund or controlling person(s) or defendant(s) in the
suit, shall bear the fees and expenses of any additional counsel
retained by them. If the Distributor does not elect to assume the
defense of any suit, it will reimburse the Fund, its officers or
Trustees, controlling person(s) or defendant(s) in the suit, for the
reasonable fees and expenses of any counsel retained by them. The
Distributor agrees to notify the Fund promptly of the commencement
of any litigation or proceedings against it in connection with the
issue and sale of any of the shares.
12. EFFECTIVENESS, TERMINATION, ETC. This Agreement shall become effective
at the close of business on December 31, 1992, and unless terminated as
provided, shall continue in force for one (1) year from the date of its
execution and thereafter from year to year, provided continuance after
the one (1) year period is approved at least annually by either (i) the
vote of a majority of the Trustees of the Fund, or by the vote of a
majority of the outstanding voting securities of the Fund, and (ii) the
vote of a majority of those Trustees of the Fund who are not interested
persons of the Fund, who have no direct or indirect financial interest in
the operation of any Plan of the Fund or any agreements related to the
Plan and who are not parties to this Agreement or interested persons of
any party, cast in person at a meeting called for the purpose of voting
on the approval. This Agreement shall automatically terminate in the
event of its assignment. As used in this Section 12, the terms "vote of
a majority of the outstanding voting securities," "assignment" and
"interested person" shall have the respective meanings specified in the
1940 Act and the rules enacted thereunder as now in effect or as
hereafter amended. In addition to termination by failure to approve
continuance or by assignment, this Agreement may at any time be
terminated without the payment of any penalty by vote of a majority of
the Trustees of the Fund who are not interested persons of the Fund and
who have no direct or indirect financial interest in the operation of any
Plan of the Fund or any agreements related to the Plan, or by vote of a
majority of the outstanding voting securities of the Fund, on not more
than sixty (60) days' written notice to the Fund. This Agreement may be
terminated by the Distributor upon not less than sixty (60) days' prior
written notice to the Fund.
13. NOTICE. Any notice under this Agreement shall be given in writing
addressed and hand delivered or sent by registered or certified mail,
postage prepaid, to the other party to this Agreement at its principal
place of business.
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14. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
15. GOVERNING LAW. To the extent that state law has not been preempted by
the provisions of any law of the United States heretofore or hereafter
enacted, as the same may be amended from time to time, this Agreement
shall be administered, construed and enforced according to the laws of
the State of Delaware.
16. SHAREHOLDER LIABILITY. The Distributor is hereby expressly put on notice
of the limitation of shareholder liability as set forth in the
Declaration of Trust of the Fund and agrees that obligations assumed by
the Fund pursuant to this Agreement shall be limited in all cases to the
Fund and its assets. The Distributor agrees that it shall not seek
satisfaction of any such obligation from the shareholders or any
individual shareholder of the Fund, nor from the Trustees or any
individual Trustee of the Fund.
17. MISCELLANEOUS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the
purposes hereof. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed in two counterparts, each of which taken
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
THE XXXXXX SQUARE STRATEGIC FIXED-INCOME FUND
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Xxxxx X. Xxxxxxx, President
XXXXXX SQUARE DISTRIBUTORS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxx, President
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