DISTRIBUTION CONTRACT
Distribution Contract dated May 19, 1999, between THE XXXXXX ASSET
ALLOCATION TRUST, a Massachusetts business trust (the "Trust"), and XXXXXX
INVESTORS' SERVICE DISTRIBUTORS, INC., a Delaware corporation (the
"Distributor").
In consideration of the mutual promises and undertakings herein
contained, the parties hereto agree as follows:
1. Appointment as Distributor. The Trust hereby appoints the
Distributor as a general distributor of shares of beneficial interest of each
series (the "Funds") of shares (the "shares") which may be established by the
Trustees pursuant to the Declaration of Trust of the Trust.
2. Distributions by Distributor. The Distributor will have the right to
obtain subscriptions for and to sell shares as agent of the Trust. The
Distributor shall be under no obligation to effectuate any particular amount of
sales of shares or to promote or make sales except to the extent the Distributor
deems advisable. Nothing herein shall be deemed to obligate the Distributor to
register or qualify as a broker or dealer in any state, territory or other
jurisdiction in which it is not now registered or qualified or to maintain its
registration or qualification in any state, territory or other jurisdiction in
which it is now registered or qualified. The right granted to obtain
subscriptions for and sell shares of the Funds shall be exclusive, except that
said exclusive right shall not apply to shares issued to (1) employee benefit
plans having 50 or more eligible employees; (2) charitable organizations; (as
defined in Section 501(c)(3) of the Internal Revenue Code); (3) current or
retired officers, directors, or full-time employees of The Winthrop Corporation
(or its direct or indirect subsidiaries) or current or former Trustees or
officers of a Xxxxxx managed mutual fund; (4) spouses of individuals described
in (3); (5) guardians or trustees of a trust for the sole benefit of the minor
child or other dependent of an individual described in (3); (6) charitable
remainder trusts or life income pools established for the benefit of a
charitable organization (as defined in Section 501(c)(3) of the Internal Revenue
Code); or (7) bank trust departments purchasing shares either for their own
account or for the account of their clients, or (8) individual clients of Xxxxxx
Investors' Service, Inc.. Such exclusive right also shall not apply to shares
issued in connection with the merger or consolidation of any other investment
company or personal holding company with a Fund or the acquisition by purchase
or otherwise of all (or substantially all) the assets or the outstanding shares
of any such company, by the Trust; or shares, if any, issued by a Fund in
distribution of net investment income or realized capital gains of the Fund
payable in shares or in cash at the option of the shareholder.
3. Public Offering Price. All subscriptions and sales of shares by the
Distributor hereunder shall be at the public offering price. The public offering
price shall be (1) the applicable net asset value of the shares in accordance
with the provisions of the then current Prospectus of the applicable Fund (2)
plus any purchase adjustment as described in the current Prospectus of the
applicable Fund and (3) the applicable sales charge, if any.
4. Repurchase of Shares. The Distributor may act as agent for the Trust
in connection with the repurchase of shares by the Trust upon the terms and
conditions set forth in the then current Prospectus of the applicable Fund. The
Trust will reimburse the Distributor for any reasonable expenses incurred by the
Distributor in connection with any such repurchase of shares for the account of
the Trust.
5. Cooperation by the Trust. 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 territory or for maintaining the registration of the Trust and of the
shares under the Securities Act of 1933, as amended, (the "1933 Act") and the
Investment Company Act of 1940, as amended (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 will advise the
Distributor promptly of (i) 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 or the shares, or rights to
offer the shares for sale, and (ii) the happening of any event which makes
untrue any statement in the registration statement or Prospectus or which
requires the making of any change in the registration statement or Prospectus in
order to make the statements therein not misleading. The Trust shall make
available to the Distributor such copies of each Fund's currently effective
Prospectus and of all information, financial statements and other papers as the
Distributor shall reasonably request in connection with the distribution of
shares of the Funds.
6. The Distributor as 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.
7. Representations. The Distributor is not authorized by the Trust to
give any information or to make any representations other than those contained
in the registration statement or Prospectuses filed with the Securities and
Exchange Commission under the 1933 Act (as said registration statement and
Prospectuses 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 Funds for
the Distributor's use. Nothing herein shall be construed to prevent the
Distributor from preparing and distributing sales literature or other material
as it may deem appropriate.
8. Compensation. The compensation for the services of the Distributor
under this Agreement shall be (i) the retention of any sales charges applicable
to the subject shares, and (ii) those amounts payable to the Distributor as
reimbursement of expenses pursuant to any distribution plan for the Trust which
may be in effect. Nothing contained herein shall relieve the Trust of any
obligations under its management contract or any other contract with any
affiliate of the Distributor.
9. Expenses Payable by the Fund. The Trust, on behalf of each Fund,
shall pay for and affix any stock issue stamps (or in the case of treasury
shares transfer stamps) required for the issue (or transfer) of shares of the
Funds. The Trust, on behalf of each Fund, shall pay all fees and expenses in
connection with (a) the preparation and filing of any registration statement and
Prospectus under the 1933 Act or the 1940 Act and amendments thereto, (b) the
registration or qualification of shares for sale in the various states,
territories or other jurisdictions (including without limitation the registering
or qualifying the Trust as a broker or dealer or any officer of the Trust as
agent or salesman in any state, territory or other jurisdiction), (c) the
preparation and distribution of any report or other communication to
shareholders of each Fund in their capacity as such, and (d) the preparation and
distribution of any Prospectuses sent to existing shareholders of the Funds. The
Trust, on behalf of each Fund, shall also make all payments (including but not
limited to expenses) pursuant to any written plan or agreement relating to the
implementation of such plan approved in accordance with Rule 12b-1 under the
1940 Act in connection with the distribution of each Fund's shares.
10. Expenses Payable by the Distributor. The Distributor or its parent
will defray expenses of (a) printing and distributing any Prospectuses or
reports prepared for its use in connection with the offering of the shares for
sale to the public (other than to existing shareholders of the Funds), (b) any
other literature used by the Distributor in connection with such offering, and
(c) any advertising in connection with such offering, unless any of the expenses
listed in subparagraphs (a), (b) or (c) of this paragraph 10 are to be paid by
the Trust, on behalf of each Fund, under a Rule 12b-1 plan or agreement relating
to the implementation of such plan as described in paragraph 9 hereof.
11. Indemnification of the Distributor. The Trust, on behalf of each
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 ground that the registration statement,
Prospectus, shareholder reports or other information filed or made public by the
Trust, with respect to each Fund, as from time to time amended and supplemented,
included an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading and arising under the 1933 Act, or any other statute or
the common law, provided, however, that the Trust does not agree to so indemnify
the Distributor or hold it harmless to the extent that such statement or
omission was made on reliance upon, and in conformity with, information
furnished to the Trust in connection therewith by or on behalf of the
Distributor; and provided, further, that in no case (i) is the indemnity of the
Trust in favor of the Distributor or any person indemnified to be deemed to
protect the Distributor or any such person against any liability to the Trust or
its security holders to which the Distributor or any controlling person would
otherwise be subject by reason of wilful 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, or (ii) is the
Trust, on behalf of a Fund, to be liable under its indemnity agreement contained
in this paragraph with respect to any claim made against the Distributor or any
person indemnified hereunder unless the Distributor or such person, as the case
may be, shall have notified the Trust in writing of such 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 such person (or after the Distributor or such person shall have
received notice of such service on any designated agent), but failure to notify
the Trust of any such claim shall not relieve it from any liability which it may
have to the Distributor or any person against whom such action is brought
otherwise than on account of its indemnity agreement contained in this
paragraph. The Trust 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 such claim, but if the Trust elects to assume the defense, such
defense shall be conducted by counsel chosen by it and satisfactory to the
Distributor or such person or persons, defendant or defendants in the suit. In
the event the Trust elects to assume the defense of any such suit and retain
such counsel, the Distributor, such officers or directors or such controlling
person or persons, defendant or defendants in the suit, shall bear the fees and
expenses of any additional counsel retained by them. If the Trust does not elect
to assume the defense of any such suit, it will reimburse the Distributor, such
officers or directors or such controlling person or persons, defendant or
defendants in the suit, for the reasonable fees and expenses of any counsel
retained by them. The Trust agrees promptly to notify the Distributor of the
commencement of any litigation or proceedings against it, any of its Funds, or
any of its officers or Trustees in connection with the issuance or sale of any
of the shares.
12. Indemnification of the Trust. The Distributor agrees that it will
indemnify and hold harmless the Trust, the Funds and each of the Trust's
Trustees and officers and each person, if any, who controls the Trust 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 alleging that the
registration statement, prospectus, shareholder reports or other information
filed or made public by the Trust, 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 therein or necessary in order to make the statements therein not
misleading, insofar as any such statement or omission was made in reliance upon,
and in conformity with information furnished to the Trust by or on behalf of the
Distributor, provided, however, that in no case (i) is the indemnity of the
Distributor in favor of the Trust, Fund or any person indemnified to be deemed
to protect the Trust, Fund or any such person against any liability to which the
Trust, Fund or any such person would otherwise be subject by reason of wilful
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, or (ii) is the Distributor to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against the Trust,
Fund or any person indemnified unless the Trust, Fund or such person, as the
case may be, shall have notified the Distributor in writing of such 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 Trust,
Fund or upon such person (or after the Trust, Fund or such person shall have
received notice of such service on any designated agent), but failure to notify
the Distributor of any such claim shall not relieve it from any liability which
it may have to the Trust, Fund or any person against whom such action is brought
otherwise than on account of its indemnity agreement contained in this
paragraph. In the case of any such notice to the Distributor, the Distributor
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 such claim,
but if the Distributor elects to assume the defense, such defense shall be
conducted by counsel chosen by the Distributor and satisfactory to the Trust, to
its officers and Trustees and to any controlling person or persons, defendant or
defendants in the suit. In the event that the Distributor elects to assume the
defense of any such suit and retain such counsel, the Trust or such controlling
persons, defendant or defendants in the suit, shall bear the fees and expense of
any additional counsel retained by them. If the Distributor does not elect to
assume the defense of any such suit, it will reimburse the Trust, such officers
and Trustees or controlling person or persons, defendant or defendants in such
suit, for the reasonable fees and expenses of any counsel retained by them. The
Distributor agrees promptly to notify the Trust of the commencement of any
litigation or proceedings against it in connection with the issue and sale of
any of the shares.
13. Effective Date, Termination and Amendment. This Contract shall
become effective on the date of its execution and (unless terminated as herein
provided) shall remain in full force and effect through and including February
28, 2000 and shall continue in full force and effect as to each Fund
indefinitely thereafter, but only so long as such continuance after February 28,
2000 is specifically approved at least annually (a) by vote of a majority of the
outstanding voting securities of that Fund or by the Trustees of the Trust, and
(b) by the vote of a majority of the Trustees of the Trust who are not
interested persons of the Trust or of the Distributor cast in person at a
meeting called for the purpose of voting on such approval. This Contract shall
at any time be terminated with respect to any Fund without the payment of any
penalty (1) by vote of the Trustees of the Trust or by vote of a majority of the
outstanding voting securities of that Fund, on 60 days' written notice to the
Distributor, (2) automatically in the event of its assignment, and (3) by the
Distributor on 60 days' written notice to the Trust. Any notice under this
Contract shall be given in writing, addressed and delivered, or mailed postpaid,
to the other party at the principal office of such party.
This Contract may be amended as to any Fund at any time by a writing
signed by both parties hereto, provided that no amendment of this Contract shall
be effective as to that Fund until approved (a) by vote of a majority of the
outstanding voting securities of that Fund or by vote of the Trustees of the
Trust, and (b) by the vote of a majority of the Trustees of the Trust who are
not interested persons of the Trust or of the Distributor cast in person at a
meeting called for the purpose of voting on such approval.
14. Limitation of Liability. The Distributor expressly acknowledges the
provision in the Declaration of Trust of the Trust (Article IV, Section 4.1)
limiting the personal liability of shareholders and Trustees of the Trust, and
the Distributor hereby agrees that is shall have recourse only to the Trust for
payment of claims or obligations as between the Trust and the Distributor
arising out of this Contract and shall not seek satisfaction from the
shareholders, the Trustees, any shareholder or any Trustee of the Trust. No Fund
shall be liable for the obligations of any other Fund hereunder.
15. Certain Definitions. The terms "interested person", "vote of a
majority of the outstanding voting securities" and "assignment" when used in
this Contract shall have the respective meanings specified in the 1940 Act,
subject, however, to such exemptions as may be granted by the Securities and
Exchange Commission by any rule, regulation or order.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Distribution Contract to be executed in its name and on its behalf by one of its
officers thereunto duly authorized, all as of the day and year first above
written.
THE XXXXXX ASSET ALLOCATION TRUST
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
President
XXXXXX INVESTORS' SERVICE DISTRIBUTORS, INC.
By: /s/ A.M. Xxxxx III
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A.M. Xxxxx III
President
