Exhibit(e)(4)
UNDERWRITING AND DISTRIBUTION SERVICES AGREEMENT
AGREEMENT made this 5th day of April, 2002 between XXXXXXX PATHWAY SERIES, a
Massachusetts business trust (the "Fund"), and XXXXXXX DISTRIBUTORS, INC., a
Delaware corporation ("SDI").
In consideration of the mutual covenants hereinafter contained, it is hereby
agreed by and between the parties hereto as follows:
1. The Fund hereby appoints SDI to act as principal underwriter of the Class A,
Class B and Class C shares of beneficial interest (hereinafter called "shares")
of the Fund in jurisdictions wherein shares of the Fund may legally be offered
for sale; provided, however, that the Fund in its absolute discretion may (a)
issue or sell shares directly to holders of shares of the Fund upon such terms
and conditions and for such consideration, if any, as it may determine, whether
in connection with the distribution of subscription or purchase rights, the
payment or reinvestment of dividends or distributions, or otherwise; (b) issue
or sell shares at net asset value to the shareholders of any other investment
company, for which SDI shall act as exclusive distributor, who wish to exchange
all or a portion of their investment in shares of such other investment company
for shares of the Fund; or (c) issue shares in connection with the merger or
consolidation of any other investment company with the Fund or the Fund's
acquisition, by purchase or otherwise, of all or substantially all of the assets
of any other investment company or all or substantially all of the outstanding
shares of any such company. SDI shall appoint various financial service firms
("Firms") to provide distribution services to investors. The Firms shall provide
such office space and equipment, telephone facilities, personnel, literature
distribution, advertising and promotion as is necessary or beneficial for
providing information and distribution services to existing and potential
clients of the Firms. SDI may also provide some of the above services for the
Fund.
SDI accepts such appointment as distributor and principal underwriter and agrees
to render such services and to assume the obligations herein set forth for the
compensation herein provided. SDI shall for all purposes herein provided be
deemed to be an independent contractor and, unless expressly provided herein or
otherwise authorized, shall have no authority to act for or represent the Fund
in any way. SDI, by separate agreement with the Fund, may also serve the Fund in
other capacities. The services of SDI to the Fund under this Agreement are not
to be deemed exclusive, and SDI shall be free to render similar services or
other services to others so long as its services hereunder are not impaired
thereby.
In carrying out its duties and responsibilities hereunder, SDI will, pursuant to
separate written contracts, appoint various Firms to provide advertising,
promotion and other distribution services contemplated hereunder directly to or
for the benefit of existing and potential shareholders who may be clients of
such Firms. Such Firms shall at all times be deemed to be independent
contractors retained by SDI and not the Fund.
SDI shall use its best efforts with reasonable promptness to sell such part of
the authorized shares of the Fund remaining unissued as from time to time shall
be effectively registered under the Securities Act of 1933, as amended
("Securities Act"), and the Investment Company Act of 1940, as amended (the
"1940 Act"), at prices determined as hereinafter provided and on terms
hereinafter set forth, all subject to applicable federal and state laws and
regulations and to the Declaration of Trust, as amended, of the Fund, provided,
however, that SDI may in its discretion refuse to accept orders for shares from
any particular applicant.
2. SDI shall sell shares of the Fund to or through qualified Firms in such
manner, not inconsistent with the provisions hereof and the Fund's currently
effective registration statement, including the prospectus and statement of
additional information and any supplements or amendments thereto ("Registration
Statement"), as SDI may determine from time to time, provided that no Firm or
other person shall be appointed or authorized to act as agent of the Fund
without the prior consent of the Fund. In addition to sales made by it as agent
of the Fund, SDI may, in its discretion, also sell shares of the Fund as
principal to persons with whom it does not have selling group agreements.
Shares of any class of any series of the Fund offered for sale or sold by SDI
shall be so offered or sold at a price per share determined in accordance with
the Registration Statement. The price the Fund shall receive for all shares
purchased from it shall be the net asset value used in determining the public
offering price applicable to the sale of such shares. Any excess of the sales
price over the net asset value of the shares of the Fund sold by SDI as agent
shall be retained by SDI as a commission for its services hereunder. SDI may
compensate Firms for sales of shares at the commission levels provided in the
Registration Statement from time to time. SDI may pay other commissions, fees or
concessions to Firms, and may pay them to others in its discretion, in such
amounts as SDI shall determine from time to time. SDI shall be entitled to
receive and retain any applicable contingent deferred sales charge as described
in the Registration Statement. SDI shall also receive any distribution services
fee payable by the Fund as provided in the Fund's Rule 12b-1 Plan, as amended
from time to time (the "Plan").
SDI will require each Firm to conform to the provisions hereof and the
Registration Statement with respect to the public offering price or net asset
value, as applicable, of the Fund's shares, and neither SDI nor any such Firms
shall withhold the placing of purchase orders so as to make a profit thereby.
3. The Fund will use its best efforts to keep effectively registered under the
Securities Act for sale as herein contemplated such shares as SDI shall
reasonably request and as the Securities and Exchange Commission shall permit to
be so registered. Notwithstanding any other provision hereof, the Fund may
terminate, suspend or withdraw the offering of shares whenever, in its sole
discretion, it deems such action to be desirable.
4. The Fund will execute any and all documents and furnish any and all
information that may be reasonably necessary in connection with the
qualification of its shares for sale (including the qualification of the Fund as
a dealer where necessary or advisable) in such states as SDI may reasonably
request (it being understood that the Fund shall not be required without its
consent to comply with any requirement which in its opinion is unduly
burdensome). The Fund will furnish to SDI from time to time such information
with respect to the Fund and its shares as SDI may reasonably request for use in
connection with the sale of shares of the Fund.
5. SDI shall issue and deliver or shall arrange for various Firms to issue and
deliver on behalf of the Fund such confirmations of sales made by it pursuant to
this agreement as may be required. At or prior to the time of issuance of
shares, SDI will pay or cause to be paid to the Fund the amount due the Fund for
the sale of such shares. Certificates shall be issued or shares registered on
the transfer books of the Fund in such names and denominations as SDI may
specify.
6. SDI shall order shares of the Fund from the Fund only to the extent that it
shall have received purchase orders therefor. SDI will not make, or authorize
Firms or others to make (a) any short sales of shares of the Fund; or (b) any
sales of such shares to any Trustees or officer of the Fund or to any officer or
director of SDI or of any corporation or association furnishing investment
advisory,
2
managerial or supervisory services to the Fund, or to any corporation or
association, unless such sales are made in accordance with the Registration
Statement relating to the sale of such shares. SDI, as agent of and for the
account of the Fund, may repurchase the shares of the Series at such prices and
upon such terms and conditions as shall be specified in the Registration
Statement. In selling or reacquiring shares of the Fund for the account of the
Fund, SDI will in all respects conform to the requirements of all state and
federal laws and the Conduct Rules of the National Association of Securities
Dealers, Inc., relating to such sale or reacquisition, as the case may be, and
will indemnify and save harmless the Fund and its Trustees from any damage or
expense on account of any wrongful act or failure to act by SDI or any employee,
representative or agent of SDI. SDI will observe and be bound by all the
provisions of the Fund's organizational documents (and of any fundamental
policies adopted by the Fund pursuant to the 1940 Act, notice of which shall
have been given to SDI) which at the time in any way require, limit, restrict,
prohibit or otherwise regulate any action on the part of SDI hereunder.
SDI agrees to indemnify and hold harmless the Fund and each of its Board members
and officers and each person, if any, who controls the Fund within the meaning
of Section 15 of the Securities Act, against any and all losses, claims,
damages, liabilities or litigation (including legal and other expenses) to which
the Fund or such Board members, officers, or controlling persons may become
subject under such Act, under any other statute, at common law or otherwise,
arising out of the acquisition of any shares by any person which (i) may be
based upon any wrongful act by SDI or any of SDI's employees or representatives,
or (ii) may be based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statement therein not misleading if such statement or
omission was made in reliance upon information furnished to the Fund by SDI, or
(iii) may be incurred or arise by reason of SDI's acting as the Fund's agent
instead of purchasing and reselling shares as principal in distributing the
shares to the public, provided, however, that in no case (i) is SDI's indemnity
in favor of a Board member or officer or any other person deemed to protect such
Board member or officer or other person against any liability to which any such
person would otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence in the performance of his duties or by reason of his
reckless disregard of obligations and duties under this Agreement or (ii) is SDI
to be liable under the indemnity agreement contained in this paragraph with
respect to any claim made against the Fund or any person indemnified unless the
Fund or such person, as the case may be, shall have notified SDI in writing
within a reasonable time after the summons or other first legal process giving
information of the nature of the claims shall have been served upon the Fund or
upon such person (or after the Fund or such person shall have received notice of
such service on any designated agent), but failure to notify SDI of any such
claim shall not relieve SDI from any liability which SDI may have to the Fund or
any person against whom such action is brought otherwise than on account of
SDI's indemnity agreement contained in this paragraph. SDI shall be entitled to
participate, at SDI's own expense, in the defense, or, if SDI so elects, to
assume the defense of any suit brought to enforce any such liability, but if SDI
elects to assume the defense, such defense shall be conducted by counsel chosen
by SDI and satisfactory to the Fund, to its officers and Board members, or to
any controlling person or persons, defendant or defendants in the suit. In the
event that SDI elects to assume the defense of any such suit and retain such
counsel, the Fund, such officers and Board members or controlling person or
persons, defendant or defendants in the suit shall bear the fees and expenses of
any additional counsel retained by them, but, in case SDI does not elect to
assume the defense of any such suit, SDI will reimburse the Fund, such officers
and Board members or controlling person or persons, defendant or defendants in
such suit for the reasonable fees and expenses of any counsel retained by them.
SDI agrees to notify the Fund promptly of the commencement of any
3
litigation or proceedings against it in connection with the issue and sale of
any shares. The Fund shall not, without the prior written consent of SDI, effect
any settlement of any pending or threatened action, suit or proceeding in
respect of which the Fund is or could have been a party and indemnity has or
could have been sought hereunder by the Fund, unless such settlement includes an
unconditional release of SDI from all liability on claims that are the subject
matter of such action, suit or proceeding.
The Fund agrees to indemnify and hold harmless SDI and each of SDI's directors
and officers and each person, if any, who controls SDI within the meaning of
Section 15 of the Securities Act, against any and all losses, claims, damages,
liabilities or litigation (including legal and other expenses) to which SDI or
such directors, officers or controlling persons may become subject under such
Act, under any other statute, at common law or otherwise, arising out of the
acquisition of any shares by any person which (i) may be based upon any wrongful
act by the Fund or any of its employees or representatives, or (ii) may be based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading if such statement or omission was not made
in reliance upon information furnished to SDI by the Fund; provided, however,
that in no case (i) is the Fund's indemnity in favor of a director or officer or
any other person deemed to protect such director or officer or other person
against any liability to which any such person would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the performance
of his duties or by reason of his reckless disregard of obligations and duties
under this Agreement or (ii) is the Fund to be liable under its indemnity
agreement contained in this paragraph with respect to any claims made against
SDI or any such director, officer or controlling person unless SDI or such
director, officer or controlling person, as the case may be, shall have notified
the Fund in writing within a reasonable time after the summons or other first
legal process giving information of the nature of the claim shall have been
served upon SDI or upon such director, officer or controlling person (or after
SDI or such director, officer or controlling person shall have received notice
of such service on any designated agent), but failure to notify the Fund of any
such claim shall not relieve it from any liability which it may have to the
person against whom such action is brought otherwise than on account of its
indemnity agreement contained in this paragraph. The Fund will 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 liability, but if the Fund
elects to assume the defense, such defense shall be conducted by counsel chosen
by it and satisfactory to SDI, its directors, officers, or controlling person or
persons, defendant or defendants in the suit. In the event that the Fund elects
to assume the defense of any such suit and retain such counsel, SDI, its
directors, officers or controlling person or persons, defendant or defendants in
the suit, shall bear the fees and expenses of any additional counsel retained by
them, but, in case the Fund does not elect to assume the defense of any such
suit, it will reimburse SDI or such directors, officers or controlling person or
persons, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Fund agrees to notify SDI promptly
of the commencement of any litigation or proceedings against it or any of its
officers or directors in connection with the issuance or sale of any shares. SDI
shall not, without the prior written consent of the Fund, effect any settlement
of any pending or threatened action, suit or proceeding in respect of which
either SDI is or could have been a party and indemnity has or could have been
sought hereunder by SDI, unless such settlement includes an unconditional
release of the Fund from all liability on claims that are the subject matter of
such action, suit or proceeding.
4
7. The Fund shall assume and pay all charges and expenses of its operations not
specifically assumed or otherwise to be provided by SDI under this Agreement or
the Plan. The Fund will pay (or will enter into arrangements providing that
others will pay) all fees and expenses in connection with the registration of
the Fund and its shares under the United States securities laws and the
registration and qualification of shares for sale in the various jurisdictions
in which the Fund shall determine it advisable to qualify such shares for sale
(including registering the Fund as a broker or dealer or any officer of the Fund
or other person as agent or salesman of the Fund in any such jurisdictions). SDI
will pay all expenses (other than expenses which one or more Firms may bear
pursuant to any agreement with SDI) incident to the sale and distribution of the
shares issued or sold hereunder, including, without limiting the generality of
the foregoing, all (a) expenses of printing and distributing any prospectus and
of preparing, printing and distributing or disseminating any other literature,
advertising and selling aids in connection with the offering of the shares for
sale (except that such expenses need not include expenses incurred by the Fund
in connection with the preparation, typesetting, printing and distribution of
any registration statement or prospectus, report or other communication to
shareholders in their capacity as such), and (b) expenses of advertising in
connection with such offering.
No transfer taxes, if any, which may be payable in connection with the issue or
delivery of shares sold as herein contemplated or of the certificates for such
shares shall be borne by the Fund, and SDI will indemnify and hold harmless the
Fund against liability for all such transfer taxes.
The net asset value shall be calculated in accordance with the provisions of the
Fund's current prospectus. On each day when net asset value is not calculated,
the net asset value of a share of any class of any series of the Fund shall be
deemed to be the net asset value of such a share as of the close of business on
the last previous day on which such calculation was made.
8. This Agreement shall become effective on the date hereof and shall continue
until September 30, 2002; and shall continue from year to year thereafter only
so long as such continuance is approved in the manner required by the 1940 Act.
This Agreement shall automatically terminate in the event of its assignment and
may be terminated at any time without the payment of any penalty by the Fund or
by SDI on sixty (60) days' written notice to the other party. The indemnity
provisions contained herein shall remain operative and in full force and effect
regardless of any termination of this Agreement. The Fund may effect termination
with respect to any class of any series of the Fund by a vote of (i) a majority
of the Board of Trustees of the Fund, including 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 the Plan, this Agreement or in
any other agreement related to the Plan or this Agreement, or (ii) a majority of
the outstanding voting securities of such class. Without prejudice to any other
remedies of the Fund, the Fund may terminate this Agreement at any time
immediately upon SDI's failure to fulfill any of its obligations hereunder.
This Agreement may not be amended to increase the amount to be paid to SDI by
the Fund for services hereunder with respect to any class of any series of the
Fund without the vote of a majority of the outstanding voting securities of such
class. All material amendments to this Agreement must in any event be approved
by a vote of the Board of Trustees of the Fund including the Trustees who are
not interested persons of the Fund and who have no direct or indirect financial
interest in the operation of the Plan, this Agreement or in any other agreement
related to the Plan or this Agreement, cast in person at a meeting called for
such purpose.
5
The terms "assignment", "interested person" and "vote of a majority of the
outstanding voting securities" shall have the meanings set forth in the 1940 Act
and the rules and regulations thereunder.
SDI shall receive such compensation for its distribution services as set forth
in the Plan. Termination of this Agreement shall not affect the right of SDI to
receive payments on any unpaid balance of the compensation earned prior to such
termination, as set forth in the Plan.
Notwithstanding anything in this Agreement to the contrary, SDI shall be
contractually bound hereunder by the terms of any publicly announced waiver of
or cap on the compensation received for its distribution services under the Plan
or by the terms of any written document provided to the Board of Trustees of the
Fund announcing a waiver or cap, as if such waiver or cap were fully set forth
herein.
9. SDI will not use or distribute, or authorize the use, distribution or
dissemination by Firms or others in connection with the sale of Fund shares any
statements other than those contained in the Fund's Registration Statement,
except such supplemental literature or advertising as shall be lawful under
federal and state securities laws and regulations. SDI will furnish the Fund
with copies of all such material.
10. If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder shall not be thereby
affected.
11. Any notice under this Agreement shall be in writing, addressed and delivered
or mailed, postage prepaid, to the other party at such address as such other
party may designate for the receipt of such notice.
12. All parties hereto are expressly put on notice of the Fund's Declaration of
Trust, and all amendments thereto, all of which are on file with the Secretary
of The Commonwealth of Massachusetts, and the limitation of shareholder and
Trustee liability contained therein. This Agreement has been executed by and on
behalf of the Fund by its representatives as such representatives and not
individually, and the obligations of the Fund hereunder are not binding upon any
of the Trustees or officers of the Fund or the shareholders of the Fund
individually but are binding upon only the assets and property of the Fund. With
respect to any claim by SDI for recovery of any liability of the Fund arising
hereunder allocated to a particular series or class, whether in accordance with
the express terms hereof or otherwise, SDI shall have recourse solely against
the assets of that series or class to satisfy such claim and shall have no
recourse against the assets of any other series or class for such purpose.
13. This Agreement shall be construed in accordance with applicable federal law
and with the laws of The Commonwealth of Massachusetts.
14. This Agreement is the entire contract between the parties relating to the
subject matter hereof and supersedes all prior agreements between the parties
relating to the subject matter hereof.
6
IN WITNESS WHEREOF, the Fund and SDI have caused this Agreement to be executed
as of the day and year first above written.
Attest: XXXXXXX PATHWAY SERIES, on behalf of the series
listed on the attached Schedule A
By: /s/Xxxxxxxx Xxxxxxx By: /s/Xxxx Xxxxxxxx
----------------------------------- --------------------------------------------
Name: Xxxxxxxx Xxxxxxx Name: Xxxx Xxxxxxxx
Title: Assistant Secretary Title: Vice President
Attest: XXXXXXX DISTRIBUTORS, INC.
By: /s/Xxxx Xxxxxxx By: /s/Xxxxxx X. Xxxxx
----------------------------------- --------------------------------------------
Name: Xxxx Xxxxxxx Name: Xxxxxx X. Xxxxx
Title: Assistant Secretary Title: President
7
Schedule A
Conservative Portfolio
Growth Portfolio
Moderate Portfolio
8
