DISTRIBUTION CONTRACT
Fixed Income SHares
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
March 15, 2000
PIMCO Funds Distributors LLC
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Ladies and Gentlemen:
This will confirm the agreement between the undersigned (the "Trust") and
you (the "Distributor") as follows:
1. Description of Trust. The Trust, Fixed Income SHares ("FISH"), is an
open-end management investment company which presently has the following two
investment portfolios: FISH: Series C and FISH: Series M (each a "Portfolio").
Additional investment portfolios may be established in the future. This Contract
shall pertain to the Portfolios and to such additional investment portfolios as
shall be designated in Supplements to this Contract, as further agreed between
the Trust and the Distributor. The Trust engages in the business of investing
and reinvesting the assets of the Portfolios in the manner and in accordance
with the investment objectives and restrictions specified in the Trust's
currently effective Prospectus or Prospectuses and Statement of Additional
Information (together, the "Prospectus") relating to the Portfolios included in
the Trust's Registration Statement, as amended from time to time (the
"Registration Statement"), as filed by the Trust under the Investment Company
Act of 1940, as amended (together with the rules and regulations thereunder, the
"1940 Act") and the Securities Act of 1933, as amended (together with the rules
and regulations thereunder, the "1933 Act"). Copies of the documents referred to
in the preceding sentence have been furnished to the Distributor. Any amendments
to those documents shall be furnished to the Distributor promptly.
2. Appointment and Acceptance. The Trust hereby appoints the Distributor
as a distributor of shares of beneficial interest in the Trust (the "shares")
which may from time to time be registered under the 1933 Act and as servicing
agent of shareholders and shareholder accounts of the Trust, and the Distributor
hereby accepts such appointment in accordance with the terms and conditions set
forth herein. As the Trust's agent, the Distributor shall, except to the extent
provided in Section 4 hereof, be the exclusive distributor for the unsold
portion of the shares.
3. Sale of Shares to Distributor and Sales by Distributor. The Distributor
will have the right, as agent, to publicly sell shares of the Portfolios to
registered investment advisors
approved by PIMCO Advisory Services ("RIAs") against orders therefor. The price
for shares shall be net asset value.
The Trust shall sell through the Distributor, as the Trust's agent, shares
to RIAs as described in the Prospectus. All orders through the Distributor shall
be subject to acceptance and confirmation by the Trust. The Trust shall have the
right, at its election, to deliver either shares issued upon original issue or
treasury shares.
Prior to the time of transfer of any shares by the Trust to, or on the
order of, the Distributor or any RIA, the Distributor shall pay or cause to be
paid to the Trust or to its order an amount in New York clearing house funds
equal to the applicable net asset value of the shares. Upon receipt of
registration instructions in proper form, the Distributor will transmit or cause
to be transmitted such instructions to the Trust or its agent for registration
of the shares purchased.
On every sale, the Trust shall receive the net asset value of the shares.
The net asset value of shares shall be determined in the manner provided in the
Declaration of Trust and By-laws of the Trust as then in effect.
4. Sales of Shares by the Trust. In addition to sales by the Distributor,
the Trust reserves the right to issue shares at any time directly to its
shareholders as a stock dividend or stock split or to sell shares to its
shareholders or other persons at not less than net asset value to the extent
that the Trust, its officers, or other persons associated with the Trust
participate in the sale, or to the extent that the Trust or the transfer agent
for its shares receive purchase requests for shares.
5. Fees. The Trust, on behalf of the Portfolios, shall pay the Distributor
no fees.
6. Reservation of Right Not to Sell. The Trust reserves the right to
refuse at any time or times to sell any of its shares for any reason deemed
adequate by it.
7. Use of Sub-Agents; Non-exclusivity. The Distributor may employ such
sub-agents, for the purposes of selling shares of the Trust as the Distributor,
in its sole discretion, shall deem advisable or desirable. The Distributor may
enter into similar arrangements with other issuers and, except to the extent
necessary to perform its obligations hereunder, nothing herein shall be deemed
to limit or restrict the right of the Distributor, or any affiliate of the
Distributor, or any employee of the Distributor, to engage in any other business
or to devote time and attention to the management or other aspects of any other
business, whether of a similar or dissimilar nature, or to render services of
any kind to any other corporation, firm, individual or association.
8. Basis of Purchases and Sales of Shares. The Distributor's obligation to
sell shares hereunder shall be on a best efforts basis only and the Distributor
shall not be obligated to sell any specific number of shares. Shares will be
sold by the Distributor only against orders therefor.
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The Distributor will not purchase shares from anyone other than the Trust
and will not take "long" or "short" positions in shares contrary to any
applicable provisions of the Declaration of Trust of the Trust, as amended.
9. Rules of Securities Associations, etc. As the Trust's agent, the
Distributor may sell and distribute shares in such manner not inconsistent with
the provisions hereof and the Trust's Prospectus as the Distributor may
determine from time to time. In this connection, the Distributor shall comply
with all laws, rules and regulations applicable to it, including, without
limiting the generality of the foregoing, all applicable rules or regulations
under the 1940 Act and of any securities association registered under the
Securities Exchange Act of 1934, as amended (together with the rules and
regulations thereunder, the "1934 Act"). The Distributor will conform to the
Conduct Rules of the National Association of Securities Dealers, Inc. and the
securities laws of any jurisdiction in which it sells, directly or indirectly,
any shares. The Distributor also agrees to furnish to the Trust sufficient
copies of any agreement or plan it intends to use in connection with any sales
of shares in adequate time for the Trust to file and clear them with the proper
authorities before they are put in use, and not to use them until so filed and
cleared.
10. Independent Contractor. The Distributor shall be an independent
contractor and neither the Distributor nor any of its officers or employees as
such, is or shall be an employee of the Trust. The Distributor is responsible
for its own conduct and the employment, control and conduct of its agents and
employees and for injury to such agents or employees or to others through its
agents or employees. The Distributor assumes full responsibility for its agents
and employees under applicable statutes and agrees to pay all employer taxes
thereunder.
11. Registration and Qualification of Shares. The Trust agrees to execute
such papers and to do such acts and things as shall from time to time be
reasonably requested by the Distributor for the purpose of qualifying and
maintaining qualification of the shares for sale under the so-called Blue Sky
Laws of any state or for maintaining the registration of each Portfolio of the
Trust and the Trust under the 1933 Act and the 1940 Act, to the end that there
will be available for sale from time to time such number of shares as the
Distributor may reasonably be expected to sell. The Trust shall advise the
Distributor promptly of (a) any action of the Securities and Exchange Commission
or any authorities of any state or territory, of which it may be advised,
affecting registration or qualification of the Trust, a Portfolio or the shares
thereof, or rights to offer such shares for sale and (b) the happening of any
event which makes untrue any statement or which requires the making of any
change in the registration statement or Prospectus in order to make the
statements therein not misleading.
12. Securities Transactions. The Trust agrees that the Distributor may
effect a transaction on any national securities exchange of which it is a member
for the account of the Trust and any Portfolio of the Trust which is permitted
by Section 11(a) of the 1934 Act.
13. Expenses.
(a) The Distributor shall from time to time employ or associate with
it such persons as it believes necessary to assist it in carrying out its
obligations under this Contract. The compensation of such persons shall be
paid by the Distributor.
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(b) The Distributor shall pay all expenses incurred in connection
with its qualification as a dealer or broker under Federal or state law.
(c) The Trust may enter into arrangements with affiliates of the
Distributor providing for the payment by such affiliates of some or all
expenses of preparing, printing and distributing advertising and sales
literature.
(d) The Trust shall pay or cause to be paid all expenses incurred in
connection with (i) the preparation, printing and distribution to
shareholders of the Prospectus and reports and other communications to
existing shareholders, (ii) future registrations of shares under the 1933
Act and the 1940 Act, (iii) amendments of the Registration Statement
subsequent to the initial public offering of shares, (iv) qualification of
shares for sale in jurisdictions designated by the Distributor, including
under the securities or so-called "Blue Sky" laws of any State, (v)
qualification of the Trust as a dealer or broker under the laws of
jurisdictions designated by the Distributor, (vi) qualification of the
Trust as a foreign corporation authorized to do business in any
jurisdiction if the Distributor determines that such qualification is
necessary or desirable for the purpose of facilitating sales of shares,
(vii) maintaining facilities for the issue and transfer of shares, and
(viii) supplying information, prices and other data to be furnished by the
Trust under this Contract.
(e) The Trust shall pay any original issue taxes or transfer taxes
applicable to the sale or delivery of shares or certificates therefor.
14. Indemnification of Distributor. The Trust shall prepare and furnish to
the Distributor from time to time such number of copies of the most recent form
of the Prospectus filed with the SEC as the Distributor may reasonably request.
The Trust authorizes the Distributor to use the Prospectus, in the form
furnished to the Distributor from time to time, in connection with the sale of
shares. The Trust shall indemnify, defend and hold harmless the Distributor, its
officers and trustees and any person who controls the Distributor within the
meaning of the 1933 Act, 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 Distributor, its officers and trustees or any such
controlling person may incur under the 1933 Act, the 1940 Act, the common law or
otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus or
arising out of or based upon any alleged omission to state a material fact
required to be stated in either or necessary to make the statements in either
not misleading. This Contract shall not be construed to protect the Distributor
against any liability to the Trust or its shareholders to which the Distributor
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 Contract. This indemnity
agreement is expressly conditioned upon the Trust being notified of any action
brought against the Distributor, its officers or directors or any such
controlling person, which notification shall 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 10 days
after the summons or other first legal process shall have been served. The
failure to notify the Trust of any such action shall not relieve the Trust from
any
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liability which it may have to the person against whom such action is brought by
reason of any such alleged untrue statement or omission otherwise than on
account of the indemnity agreement contained in this Section 14. The Trust shall
be entitled to assume the defense of any suit brought to enforce any such claim,
demand or liability, but, in such case, the defense shall be conducted by
counsel chosen by the Trust and approved by the Distributor. If the Trust elects
to assume the defense of any such suit and retain counsel approved by the
Distributor, the defendant or defendants in such suit shall bear the fees and
expenses of any additional counsel retained by any of them, but in case the
Trust does not elect to assume the defense of any such suit, or in the case the
Distributor does not approve of counsel chosen by the Trust, the Trust will
reimburse the Distributor, its officers and directors or the controlling person
or persons named as defendant or defendants in such suit, for the fees and
expenses of any counsel retained by the Distributor or them. In addition, the
Distributor shall have the right to employ counsel to represent it, its officers
and directors and any such controlling person who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Distributor against the Trust hereunder if in the reasonable judgment of the
Distributor it is advisable for the Distributor, its officers and directors or
such controlling person to be represented by separate counsel, in which event
the fees and expense of such separate counsel shall be borne by the Trust. This
indemnity agreement and the Trust's representations and warranties in this
Contract shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Distributor, its officers and
directors or any such controlling person. This indemnity agreement shall inure
exclusively to the benefit of the Distributor and its successors, the
Distributor's officers and directors and their respective estates and any such
controlling persons and their successors and estates. The Trust shall promptly
notify the Distributor of the commencement of any litigation or proceedings
against it in connection with the issue and sale of any shares.
15. Indemnification of Trust. The Distributor agrees to indemnify, defend
and hold harmless the Trust, its officers and Trustees and any person who
controls the Trust within the meaning of the 1933 Act, 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 Trust, its officers or Trustees
or any such controlling person, may incur under the 1933 Act, the 1940 Act, the
common law or otherwise, but only to the extent that such liability or expense
incurred by the Trust, its officers or Trustees or such controlling person
resulting from such claims or demands shall arise out of or be based upon (a)
any alleged untrue statement of a material fact contained in information
furnished in writing by the Distributor to the Trust specifically for use in the
Registration Statement or the Prospectus or shall arise out of or be based upon
any alleged omission to state a material fact in connection with such
information required to be stated in the Registration Statement or the
Prospectus or necessary to make such information not misleading, (b) any alleged
act or omission on the Distributor's part as the Trust's agent that has not been
expressly authorized by the Trust in writing, and (c) any claim, action, suit or
proceeding which arises out of or is alleged to arise out of the Distributor's
failure to exercise reasonable care and diligence with respect to its services
rendered in connection with investment, reinvestment, employee benefit and other
plans for shares. The foregoing rights of indemnification shall be in addition
to any other rights to which the Trust or a trustee may be entitled as a matter
of law. This indemnity agreement is expressly conditioned upon the Distributor
being notified of any action brought against the Trust, its officers or Trustees
or any such controlling person, which
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notification shall be given by letter or telegram addressed to the Distributor
at its principal office in Stamford, Connecticut, and sent to the Distributor by
the person against whom such action is brought, within 10 days after the summons
or other first legal process shall have been served. The failure to notify the
Distributor of any such action shall not relieve the Distributor from any
liability which it may have to the Trust, its officers or Trustees or such
controlling person by reason of any alleged misstatement, omission, act or
failure on the Distributor's part otherwise than on account of the indemnity
agreement contained in this Section 15. The Distributor shall have a right to
control the defense of such action with counsel of its own choosing and approved
by the Trust if such action is based solely upon such alleged misstatement,
omission, act or failure on the Distributor's part, and in any other event the
Trust, its officers and Trustees or such controlling person shall each have the
right to participate in the defense or preparation of the defense of any such
action at their own expense. If the Distributor elects to assume the defense of
any such suit and retain counsel approved by the Trust, the defendant or
defendants in such suit shall bear the fees and expenses of any additional
counsel retained by any of them, but in case the Distributor does not elect to
assume the defense of any such suit, or in the case the Trust does not approve
of counsel chosen by the Distributor, the Distributor will reimburse the Trust,
its officers and Trustees or the controlling person or persons named as
defendant or defendants in such suit, for the fees and expenses of any counsel
retained by the Trust or them. In addition, the Trust shall have the right to
employ counsel to represent it, its officers and Trustees and any such
controlling person who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Trust against the Distributor
hereunder if in the reasonable judgment of the Trust it is advisable for the
Trust, its officers and Trustees or such controlling person to be represented by
separate counsel, in which event the fees and expense of such separate counsel
shall be borne by the Distributor. This indemnity agreement and the
Distributor's representations and warranties in this Contract shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of the Trust, its officers and Trustees or any such controlling
person. This indemnity agreement shall inure exclusively to the benefit of the
Trust and its successors, the Trust's officers and Trustees and their respective
estates and any such controlling persons and their successors and estates. The
Distributor shall promptly notify the Trust of the commencement of any
litigation or proceedings against it in connection with the issue and sale of
any shares.
16. Assignment Terminates this Contract; Amendments of this Contract. This
Contract shall automatically terminate, without the payment of any penalty, in
the event of its assignment. This Contract may be amended only if such amendment
be approved either by action of the Trustees of the Trust or at a meeting of the
shareholders of the Trust by the affirmative vote of a majority of the
outstanding shares of the Trust, and by a majority of the Trustees of the Trust
who are not interested persons of the Trust and who have no direct or indirect
financial interest in the operation of the Plans or this Contract by vote cast
in person at a meeting called for the purpose of voting on such approval.
17. Effective Period and Termination of this Contract. This Contract shall
take effect upon the date first above written and shall remain in full force and
effect continuously as to a Portfolio (unless terminated automatically as set
forth in Section 16 hereof) until terminated:
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(a) Either by such Portfolio or the Distributor by not more than
sixty (60) days' nor less than thirty (30) days' written notice delivered
or mailed by registered mail, postage prepaid, to the other party; or
(b) Automatically as to any Portfolio at the close of business one
year from the date hereof, or upon the expiration of one year from the
effective date of the last continuance of this Contract, whichever is
later, if the continuance of this Contract is not specifically approved at
least annually by the Trustees of the Trust or the shareholders of such
Portfolio by the affirmative vote of a majority of the outstanding shares
of such Portfolio, and by a majority of the Trustees of the Trust who are
not interested persons of the Trust and who have no direct or indirect
financial interest in the operation of the Plans or this Contract by vote
cast in person at a meeting called for the purpose of voting on such
approval.
Action by a Portfolio under (a) above may be taken either (i) by vote of
the Trustees of the Trust, or (ii) by the affirmative vote of a majority of the
outstanding shares of such Portfolio. The requirement under (b) above that the
continuance of this Contract be "specifically approved at least annually" shall
be construed in a manner consistent with the 1940 Act and the rules and
regulations thereunder.
Termination of this Contract pursuant to this Section 17 shall be without
the payment of any penalty.
If this Contract is terminated or not renewed with respect to one or more
Portfolios, it may continue in effect with respect to any Portfolio as to which
it has not been terminated (or has been renewed).
18. Certain Definitions. For the purposes of this Contract, the
"affirmative vote of a majority of the outstanding shares" means the affirmative
vote, at a duly called and held meeting of shareholders, (a) of the holders of
67% or more of the shares of the Trust or Portfolio, as the case may be, present
(in person or by proxy) and entitled to vote at such meeting, if the holders of
more than 50% of the outstanding shares of the Trust or Portfolio, as the case
may be, entitled to vote at such meeting are present in person or by proxy, or
(b) of the holders of more than 50% of the outstanding shares of the Trust or
Portfolio, as the case may be, entitled to vote at such meeting, whichever is
less.
For the purposes of this Contract, the terms "interested persons" and
"assignment" shall have the meanings defined in the 1940 Act, subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
under said Act. Certain other items used herein that are not otherwise defined
have the meaning given in the Trust's Prospectus or constituent agreements or
documents of the Trust.
The Declaration of Trust establishing the Trust, a copy of which, together
with all amendments thereto (the "Declaration"), is on file in the Office of the
Secretary of State of the Commonwealth of Massachusetts, was filed on November
8, 1999. Under Massachusetts law, shareholders of a "Massachusetts business
trust" could, under certain circumstances, be held personally liable for the
obligations of the trust. However, the Declaration of Trust of FISH
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disclaims shareholder liability for acts or obligations of FISH on behalf of its
Portfolios and requires that notice of such disclaimer be given in each
agreement, obligation, or instrument entered into or executed by FISH. The
Declaration of Trust provides for indemnification out of the property of the
relevant Portfolio for all loss and expense of any shareholder of that Portfolio
held personally liable for the obligations of FISH solely by reason of his being
or having been a shareholder of FISH. Thus, the risk of a shareholder's
incurring financial loss on account of such shareholder liability is limited to
circumstances in which the Portfolio itself would be unable to meet its
obligations.
A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of the Commonwealth of Massachusetts, and notice is hereby
given that this instrument is executed on behalf of the Trustees of the Trust as
Trustees and not individually and that the obligations of this instrument are
not binding upon any of the Trustees or shareholders individually but are
binding only upon the assets and property of the Trust.
If the foregoing correctly sets forth the agreement between the Trust and
the Distributor, please so indicate by signing and returning to the Trust the
enclosed copy hereof.
Very truly yours,
FIXED INCOME SHARES
By: /s/ XXXXX X. XXXXXX
--------------------------------
Title: President
ACCEPTED:
PIMCO FUNDS DISTRIBUTORS LLC
By: /s/ XXXXXXX X. XXXXXXXX
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Title:
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