AGREEMENT
AGREEMENT made this 18th day of April 1997 between Xxxx Xxxxxx Xxxxxxxx
Inc., a corporation organized under the laws of the State of Delaware (the
"Broker"), and Xxxxxxxx Financial Services, Inc., a corporation organized under
the laws of the State of New York (the "Sponsor").
WITNESSETH
WHEREAS, the Broker is a securities firm registered under the Securities
Exchange Act of 1934, as amended to date, engaged in the business of selling
shares of investment companies ("Investment Companies") registered under the
Investment Company Act of 1940, as amended to date (the "1940 Act"); and
WHEREAS, the Sponsor is engaged in the business of sponsoring,
distributing securities of, or rendering management and investment advisory
services to Investment Companies (all such Investment Companies of the Sponsor
being referred to herein as "Sponsored Funds"); and
WHEREAS, the Broker and the Sponsor wish to enter into an Agreement with
each other as a precondition or additional condition to the Broker distributing
or selling, or continuing to distribute or sell, any Sponsored Funds.
NOW THEREFORE, the parties agree as follows:
1. The Sponsor agrees not to contact any account executives or other
personnel of the Broker in writing, by telephone, in person or by any other
means or to provide such account executives or any other personnel of the Broker
with any written materials for the purpose of soliciting and promoting the sale
of any shares of the Sponsored Funds (i.e., wholesaling activities) unless
approved by a branch manager (upon whose approval you may rely), a Regional
Sales Manager, a Senior Vice President or any higher ranking officer of the
Broker unless otherwise advised by an officer of the External Mutual Funds
Department. All regional or national marketing efforts must be coordinated with
and reviewed by the appropriate Regional Sales Manager and/or an officer of the
External, Mutual Funds Department. This provision is not intended to prohibit
contacts related to client servicing requirements in the normal course of
business, including routine mailings to the Broker's employees and registered
representatives of other broker/dealers regarding developments related to
specific Sponsored Funds, such as dividend changes, meetings of shareholders, as
well as routine mailings to the Broker's employees and registered
representatives of other broker/dealers regarding the objectives,
characteristics and performance of specific funds or to prohibit contacts
related to requirements of the 1940 Act or other applicable law, as long as, in
each case, the intent is to inform rather than to solicit new business.
Information sent from the Sponsor regarding new or existing Sponsored Funds, as
long as it is not part of a promotional effort, will not be considered
solicitation of new business. Any promotional or marketing efforts for an
existing fund and all marketing efforts related to the introduction of a new or
additional Sponsored Fund (consistent with clause 3) may not be undertaken
without the prior written consent of a Senior Vice
President or higher ranking officer of the Broker. Copies of all such mailings
to the Broker's employees will be sent to R. Xxxxxxx Xxxxxxxxx, External Mutual
Funds Marketing, at Xxx Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000.
2. The Sponsor agrees not to directly or indirectly contact in writing,
by telephone, in person or by any other means any customers of the Broker
(including employees of the Broker) who have purchased shares of any of the
Sponsored Funds through the Broker in connection with the potential purchase of
shares of any additional Sponsored Fund without the prior written consent of a
Senior Vice President or higher ranking officer of the Broker. This provision is
not intended to prohibit contacts related to client servicing requirements in
the normal course of business, including materials that are routinely included
in and with account statements, confirmations, annual and semi-annual reports,
year-end tax reports, and dividend payments sent to all shareholders of any
Sponsored Funds, or to prohibit contacts related to requirements of the 1940 Act
or other applicable law, as long as, in each case, the intent is to inform
investors rather than to solicit new business. Information sent from the Sponsor
regarding new or existing Sponsored Funds, as long as it is not part of a
promotional effort, will not be considered solicitation of new business. Copies
of all such mailings to the Broker's customers will be sent to R. Xxxxxxx
Xxxxxxxxx, External Mutual Funds Marketing, at Xxx Xxxxx Xxxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, XX 00000.
3. The Sponsor will not sell any shares of additional Sponsored Funds
through the Broker (other than those currently covered by the Dealer Agreement)
pursuant to any dealer Agreement between the Broker and the Sponsor without the
prior written consent of a Senior Vice President or higher ranking officer of
the Broker. This is not intended to prohibit dividend reinvestment, exchanges or
direct investments into any additional Sponsored Funds initiated by customers or
employees of the Broker who are already shareowners in Sponsored Funds.
4. The names and addresses and other information concerning customers of
the Broker are and shall remain sole property of the Broker, provided such
information is supplied by the Broker or by its customers with regard to such
customers' accounts with the Broker. The Sponsor will not communicate the names,
addresses and other information concerning customers of the Broker who have
purchased shares of any of the Sponsored Funds through the Broker to any third
party unless required to do so by statute, regulation or process of a court of
competent jurisdiction; the Sponsor agrees to notify the Broker of any such
compelled disclosure within ten (10) days of the disclosure, provided such
notice is possible and practical within ten (10) days of the disclosure. This
prohibition is not intended to preclude the use of such list by outside vendors
on behalf of the Sponsor for the purpose of servicing or locating shareholder
accounts.
5. The parties to this Agreement acknowledge that a breach of clause 2
and/or 4 will affect the Broker; specifically, direct sales initiated willfully
by the Sponsor to customers of the Broker and any direct sales to these
customers by a third party who has obtained such customer list from the Sponsor
constitutes a material breach of clause 2 and/or 4 (subject to the exceptions
noted in clause 6 below) and may damage the Broker in a significant manner. In
the event the Sponsor or any successor entity or person under the control of the
Sponsor violates clause 2 and/or 4 of this Agreement, the Sponsor or its
successor will be liable to pay out of its assets an
amount the arbitrators referred to in clause 14 below determine to be fair and
reasonable under the circumstances.
6. Any unintentional or immaterial or accidental breach of the terms of
this Agreement on the part of the Sponsor shall not constitute a violation of
the terms of this Agreement for the purposes of clause 5 hereof or otherwise.
Notwithstanding the foregoing, Sponsor agrees that Broker shall be entitled to
equitable relief to limit or stop any injury to the Broker. Without limiting the
generality of the foregoing, contacting a person or entity whom the Sponsor does
not know to be a customer of the Broker or who is also a customer of other
brokers shall not be a breach of this Agreement.
7. The provisions of this Agreement pertaining to Broker employees shall
not apply to any person once such person is no longer associated with the
Broker. The provisions of this Agreement pertaining to customer of the Broker
shall not apply to any customer who has requested that the "Broker of Record" on
their account(s) be changed to another broker/dealer or to "No Dealer of
Record."
8. The term "Sponsor" as used in this Agreement shall include the
Sponsor and any successor entity thereto and any "affiliated persons", as
defined in the 1940 Act, of the Sponsor or any successor entity thereto, other
than the Sponsored Funds.
9. This Agreement shall survive the termination of any selling,
distribution or underwriting Agreement to which the Broker and the Sponsor are
both parties and is intended to supersede or modify any contrary provision set
forth in any such Agreement. No provision of this Agreement shall limit the
right of the Broker or the Sponsor to terminated any selling, distribution or
underwriting Agreement to which the Broker and the Sponsor are both parties. The
rights of the Broker and the Sponsor under this Agreement are in addition to any
rights that the Broker and the Sponsor may have under any applicable law.
10. This Agreement may be terminated by either party on 90 days' written
notice to the other party; provided, however, that if this Agreement is
terminated by the Sponsor, the provisions of clauses 2,4,5,6 and 7 shall
continue in effect for a period of five years from the date hereof.
11. This Agreement may be amended or modified only by a further written
Agreement between the parties hereto.
12. If any clause, provision or section hereof shall be ruled invalid or
unenforceable by any court of competent jurisdiction, the invalidity or
unenforceability of such clause, provision or section shall not affect any of
the remaining clauses, provisions or sections hereof.
13. This Agreement may be executed in several counterparts, each of
which shall be an original and all of which constitute both one and the same
instrument.
14. In the event a dispute arises between the Sponsor and the Broker
about any of the terms of this Agreement, the parties agree to submit the
dispute to arbitration before the New York Stock Exchange, National Association
of Securities Dealers, Inc. or the American Arbitration Association at the
option of the party alleged to have breached the Agreement. Broker's application
to a court of law for an injunction or temporary restraining notice will not
constitute a waiver by Broker of its right to arbitration as set forth in this
paragraph. Judgment on the arbitration award may be entered in any state or
federal court having jurisdiction.
15. The Broker and the Sponsor mutually warrant that each will keep this
Agreement confidential except as required by law, regulation, rule or process of
a court of competent jurisdiction or in response to a request from any
regulatory agency.
16. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the date first above written.
XXXX XXXXXX XXXXXXXX INC.
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
BY: _________________________________
Name: Xxxxxxx X. XxXxxxxxx
Title: President and Chief Operating
Officer, Xxxx Xxxxxx Capital
XXXXXXXX FINANCIAL SERVICES, INC.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
BY: __________________________________
Name: Xxxxxxx Xxxxxxx
Title: President
