Exhibit e(1)
DISTRIBUTION AGREEMENT
This Agreement, made as of the 16th day of May, 1992 between WORKING
ASSETS Common Holdings, a Massachusetts business trust (the "Fund"), and
Working Assets Capital Management, a California Corporation (the "Distributor")
for one year June 1, 1992 - May 31, 1993.
WHEREAS, the Fund proposes to engage in business as an open-end management
investment company and is registered as such under the Investment Company Act
of 1940, as amended (the "40 Act"); and
WHEREAS, the Distributor is registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended (the "34 Act"), and is a member in
good standing of the National Association of Securities Dealers, Inc. (the
'NASD');
WHEREAS, the Fund intends to commence a continuous offering of its Shares
of Beneficial Interest, no par value (the 'Shares'), and
WHEREAS, the Fund desires the Distributor to act as distributor of its
shares in connection with the continuous offering thereof, in the manner and on
the terms and conditions hereinafter set forth;
NOW, THEREFORE, the parties agree as follows:
1. Appointment of Distributor. The Fund hereby appoints the Distributor as
its exclusive agent to sell and to arrange for the sale of the Fund's Shares,
on the terms and for the period set forth in this Agreement, and the
Distributor hereby accepts such appointment and agrees to act hereunder. It is
understood and agreed that the services of the Distributor hereunder are not
exclusive, and the Distributor may act as principal underwriter for the shares
of any other registered investment company.
2. Offering and Sale of Shares.
(a) Solicitation of Orders. The Distributor shall use its best
efforts (but only in those states in which the Distributor may lawfully do so)
to obtain from investors unconditional orders for the sale of Shares authorized
for issuance by the Fund and which are registered under the Securities Act of
1933 (the "33 Act"). The Distributor shall not be obligated, however, to
register or maintain its registration as a broker or dealer under the states
securities laws of any jurisdiction if, in the judgment of the Distributor,
such registration is not practicable or feasible. The Distributor may in its
discretion reject any order to purchase Shares.
(b) Sale of Shares. The Distributor agrees to sell the Fund's Shares,
as agent for the Fund, upon the terms described in the Fund's then current
prospectus. This may include the imposition of a sales charge, also known as a
sales load, which be retained by the Distributor or paid to others as provided
in the then current prospectus. The Distributor shall not be obligated to sell
any certain number of Shares. Upon acceptance by the Distributor of an order
for the purchase of Fund Shares, the Distributor shall promptly transmit such
order to the Fund's shareholder servicing agent. A purchase order shall be
deemed effective at the time and in the manner set forth in the Fund's then
current prospectus. The Distributor shall not make any short sales of Shares.
(c) Transmission of Purchase Price. The Distributor shall promptly
transmit any funds received by it from investors in payment of the purchase
price or Shares sold through it to the Fund's shareholder servicing agent.
3. Duties of the Fund.
(a) Maintenance of Federal Registration. The Fund shall take, from
time to time, all necessary action and such steps, including payment of the
related filing fee, as may be necessary to register and maintain registration
of an indefinite number of a Shares under the '33 Act. The Fund agrees to file
from time to time such amendments, reports and other documents as may be
necessary in order that there may be no untrue statement of a material fact in
a registration statement or prospectus, or necessary in order that there may be
no untrue statement of a material fact in a registration statement or
prospectus, or necessary in order that there may be no untrue statement of a
material fact in a registration statement or prospectus, or necessary in order
that there may be no omission to state a material fact in the registration
statement or prospectus which omission would make the Statements therein
misleading.
(b) Maintenance of "Blue Sky" Qualifications. The Fund shall use its
best efforts to qualify and maintain the qualification of an appropriate number
of Shares for sale under the securities laws of such states as the Distributor
and the Fund may approve, and, if necessary or appropriate in connection
therewith, to qualify and maintain the qualification of the Fund as a broker or
dealer in such states; provided that the Fund shall not be required to amend
its Declaration of Trust or By-Laws to comply with the laws of any state, to
maintain an office in any state, to change the terms of the offering of the
Shares in any state, to change the terms of the offering of the Shares in any
state from the terms set forth in its then current prospectus, to qualify as a
foreign corporation in any state or to consent to service of process in any
state other than with respect to claims arising out of the offering and sale of
the Shares. The Distributor shall furnish such information and other material
relating to its affairs and activities as may be required by the Fund in
connection with such qualifications.
(c) Copies of Reports and Prospectus. The Fund shall keep the
Distributor fully informed with regard to its affairs and 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, including one certified copy, upon request by the
Distributor, of all financial statements prepared for the Fund by independent
public accountants and such reasonable number of copies of its most current
prospectus and annual and interim reports as the Distributor may request and
shall cooperate fully in the efforts of the Distributor to sell and arrange for
the sale of the Shares and in the performance of the Distributor under this
Agreement.
4. Expenses.
(a) Expenses Paid by the Fund. The Fund shall pay all expenses:
(i) in connection with the preparation, setting in type and
filing of any registration statement and prospectus under the '33 Act and/or
the '40 Act, and any amendments or supplements that may be made from time to
time;
(ii) in connection with the registration and qualification of
Shares for sale in the various states in which the fund shall determine it
advisable to qualify such Shares for sale (including registering of the Fund as
broker or dealer or any officer or the Fund or other person as agent or
salesman of the Fund 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;
(iv) of preparing, setting in type, printing and mailing
prospectuses annually to existing shareholders (if the Fund shall elect to do
so);
(v) in connection with the issue and transfer of Shares
resulting from the acceptance by the Distributor or orders to purchase Shares
placed with the Distributor by investors; including the expenses of confirming
such purchase orders; and (vi) of any issue taxes or (in the case of Shares
redeemed) any initial transfer taxes.
(b) Expenses Paid by the Distributor. The Distributor will (unless
such expenses are to be paid by the Fund under any plan adopted by the Fund
pursuant to Rule 12b-1 under the '40 Act) pay or cause to be paid all expenses:
(i) of printing and distributing any prospectus or reports
prepared for its use in connection with the distribution of Shares to the
public;
(ii) of preparing, setting in type, printing and mailing any
other literature used by the Distributor in connection with distribution of the
Shares to the public;
(iii) of advertising in connection with the distribution of such
Shares to the public;
(iv) incurred in connection with its registration as a broker
or dealer or the registration or qualification of its officers, partners,
directors or representatives under Federal and state laws; and
(v) incurred in connection with the sale and offering for
sale of Shares which have not been herein specifically allocated as between the
Fund and Distributor.
5. Conformity with Applicable Laws and Rules. The Distributor agrees that
in selling Shares hereunder it shall conform in all respects with the laws
of the United States and of any state in which Shares may be offered, and with
applicable rules and regulations of the NASD.
6. Independent Contractor. In performing its duties hereunder, the
Distributor shall be an independent contractor and neither the Distributor, nor
any of its officers, partners, directors, employees, or representatives is or
shall be an employee of the Fund in the performance of the Distributors duties
hereunder. The Distributor shall be 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 employee taxes thereunder.
7. Indemnification.
(a) Indemnification of Fund. The Distributor agrees to indemnify and
hold harmless the Fund and each of its trustees, officers, employees,
representatives and each person, if any, who controls the Fund within the
meaning of Section 15 of the '33 Act against any and all losses, liabilities,
damages, claims or expenses (including the reasonable costs or investigating or
defending any alleged loss, liability, damage, claims or expense and reasonable
legal counsel fees incurred in connection therewith) to which the Fund or such
of its trustees, officers, employees, representatives or controlling person may
become subject under the '33 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 Distributor or any of the
Distributors partners, directors, officers, employees or representatives, or
(ii) may be based upon any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, shareholder
report or other information covering Shares filed or made public by the Fund or
any amendment thereof or supplement thereto, 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 made in reliance upon information furnished to the Fund by the
Distributor. In no case (i) is the Distributor's indemnity in favor of the
Fund, or any person indemnified to be deemed to protect the Fund or such
indemnified 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 duties or by reason of reckless disregard of
obligations and duties under this Agreement or (ii) is the Distributor to be
liable under its indemnity agreement contained in this Paragraph in respect to
any claim made against the Fund or such 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 of the
nature of the claim shall have been served upon the Fund or upon such person
(or after the Fund or such person shall have received notice to such service on
any designated agent). However, failure to notify the Distributor of any such
claim shall not relieve the Distributor from any liability which the
Distributor may have to the Fund or any person against whom such action is
brought otherwise than on account of the Distdbutor's indemnity agreement
contained in this Paragraph.
The Distributor shall be entitled to participate, at its own expense, in
the defense, or, if the Distributor so elects, to assume to 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 legal counsel chosen by the
Distributor and satisfactory to the Fund, to its trustees, officers, employees
or representatives, or 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 legal counsel, the Fund, its trustees,
officers, employees, representatives or controlling person or persons,
defendant or defendants in the suit, shall bear the fees and expenses of any
additional legal counsel retained by them. If the Distributor does not elect to
assume the defense of any such suit, the Distributor will reimburse the Fund,
such trustees, officers, employees, representatives or controlling person or
persons, defendant or defendants in such suit for the reasonable fees and
expenses of any legal counsel retained by them. The Distributor agrees to
promptly notify the Fund of the commencement of any litigation of proceedings
against it or any of its partners, officers, employees or representatives in
connection with the issue or sale of any Shares.
(b) Indemnification of the Distributor. The Fund agrees to indemnify
and hold harmless the Distributor and each of its partners, officers,
employees, representatives and each person, if any, who controls the
Distributor within the meaning of Section 15 of the '33 Act against any and all
losses, liabilities, damages, claims or expenses (including the reasonable
costs of investigating or defending any alleged loss, liability, damage, claim
or expense and reasonable legal counsel fees incurred in connection therewith)
to which the Distributor or such of its partners, officers, employees,
representatives or controlling person may become subject under the '33 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 the Fund's trustees, officers, employees or
representatives, or (ii) may be based upon any untrue statement or alleged
untrue statement of a material fact contained in a registration statement,
prospectus, shareholder report or other information covering Shares filed or
made public by the Fund or any amendment thereof or supplement thereto, 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
unless such statement or omission was made in reliance upon information
furnished to the Fund by the Distributor. In no case (i) is the Fund's
indemnity in favor of the Distributor, or any person indemnified to be deemed
to protect the Distributor or such indemnified person against any liability 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 his
duties or by reason of his reckless disregard of his 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 claim made against
Distributor, or person indemnified unless the Distributor, or such person, as
the 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 upon such person (or after the Distributor or such person shall
have received notice of such service on any designated agent). However, failure
to notify the Fund of any such claim shall not relieve the Fund of any
liability which the Fund may have to the Distributor or any person against whom
such action is brought otherwise than on account of the Fund's indemnity
agreement contained in this Paragraph.
The Fund shall be entitled to participate, at its own expense, in the
defense, or, if the Fund so elects, to assume the defense of any suit brought
to enforce any such claim, but if the Fund elects to assume the defense, such
defense shall be conducted by legal counsel chosen by the Fund and satisfactory
to the Distributor, to its partners, officers, employees or representatives, or
to any 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 legal counsel, the Distributor, its partners, officers, employees,
representatives or controlling person or persons, defendant or defendants in
the suit, shall bear the fees and expenses of any additional legal counsel
retained by them. If the Fund does not elect to assume the defense of any such
suit, the Fund will reimburse the Distributor, such partners, officers,
employees, representatives or controlling person or persons, defendant or
defendants in such suit for the reasonable fees and expenses of any legal
counsel retained by them. The Fund agrees to promptly notify the Distributor of
the commencement of any litigation or proceedings against it or any of its
trustees, officers, employees or representatives in connection with the issue
or sale or any Shares.
9. Authorized representations. The Distributor is not authorized by the
Fund to give on behalf of the Fund any information of to make any
representations in connection with the sale of Shares other than the
information and representations contained in a registration statement of
prospectus filed with the Securities and Exchange Commission ("SEC") under the
'33 Act and/or the '40 Act, covering Shares, as such registration statement and
prospectus may be amended or supplemented 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 tombstone ads and sales literature
or other material as it may deem appropriate. No person other than Distributor
is authorized to act as principal underwriter (as such term is defined in the
'40 Act) for the Fund.
l0. Term of Agreement. The term of this Agreement shall begin on the date
first above written, and unless sooner terminated as hereinafter provided, this
Agreement shall remain in effect until May 1987. Thereafter, this Agreement
shall continue in effect from year to year, subject to the termination
provisions and all other terms and conditions thereof, so long as: (a) such
continuation shall be specifically approved at least annually by the Board of
Trustees or by vote of a majority of the outstanding voting securities of the
Fund and, concurrently with such approval by the Board of Trustees or poor to
such approval by the holders of the outstanding voting securities of the Fund,
as the case may be, by the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the trustees of the Fund
who are not parties to this Agreement or interested persons of any such party;
and (b) the Distributor shall not have notified the Fund, in writing, at least
60 days prior to June 30, 1985 or poor to June 30 of any year thereafter, that
it does not desire such continuation. The Distributor shall furnish to the
Fund, promptly upon its request, such information as may reasonably be
necessary to evaluate the terms of this Agreement or any extension, renewal or
amendment hereof.
11. Amendment and Assignment of Agreement. This Agreement may not be
amended or assigned without the affirmative vote of a majority of the
outstanding voting securities of the Fund, and this Agreement shall
automatically and immediately terminate in the event of its assignment.
12. Termination of Agreement. This Agreement may be terminated by either
party hereto, without the payment of any penalty, upon 60 days prior notice in
writing to the other party; provided, that in the case of termination by the
Fund such action shall have been authorized by resolution of a majority of the
trustees of the Fund who are not parties to this Agreement or interested
persons of any such party, or by vote of a majority of the outstanding voting
securities of the Fund.
13. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
Nothing herein contained shall be deemed to require the Fund to take any
action contrary to its Declaration of Trust or By-Laws, or any applicable
statutory or regulatory requirement to which it is subject or by which it is
bound, or to relieve or deprive the Board of Trustees of the Fund of its
responsibility for and control of the conduct of the affairs of the Fund.
14. Definition of Terms. Any question of interpretation of any term or
provision of this Agreement having a counterpart in or otherwise derived from a
term or provision of the '40 Act shall be resolved by reference to such term or
provision of the '40 Act and to interpretation thereof, if any, by the United
States courts or, in the absence of any controlling decision of any such court,
by rules, regulations or orders of the Securities and Exchange Commission
validly issued pursuant to the '40 Act. Specifically, the terms "vote of a
majority of the outstanding voting securities", "interested persons",
"assignment', and "affiliated person", as used in Paragraphs 10, 11 and 12
hereof, shall have the meanings assigned to them by Section 2(a) of the '40
Act. In addition, where the effect of a requirement of the '40 Act reflected in
any provision of this Agreement is relaxed by a rule, regulation or order of
the Securities and Exchange Commission, whether of special or of general
application, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their duly authorized representatives and their respective corporate
seals to be hereunto affixed, as of the day and year first above written.
Working Assets Common Holdings
By: Xxxxxx Xxxxxxx
--------------------------
Xxxxxx Xxxxxxx, Treasurer
Attest:
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Secretary
Working Assets Capital Management
By: Xxx Xxxxx
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Xxx Xxxxx
Addendum to Distribution Agreement
Paragraph 3(b) to the Distribution Plan is amended as follows:
The Distributor may make Permitted Payments in any amount to any Qualified
Recipient, provided that (i) the aggregate of (A) the total amount of all
Permitted Payments to all Qualified Recipients (whether made under (a) and/or
(b) above) and (B) the total of Permitted Expenses (as hereinafter defined) do
not exceed in any fiscal year of the Fund the percentage provided in the then
current prospectus.
Paragraph 4 to the Distribution Plan is amended as follows:
4. Expenses Authorized. The Distributor is authorized, pursuant to this Plan,
to purchase advertising of shares of the Fund, to pay for sales literature and
other promotional material, including items, such as books, that may be given
to purchasers of fund shares, and to make payments to the salesmen of the
Distributor. Any such advertising and sales material may include references to
other open-end investment companies or other investments and any salesmen so
paid are not required to devote their time solely to the sale of Fund shares.
Any such expenses ("Permitted Expenses") shall be reimbursed or paid by the
Fund, except that the amount of reimbursement or payment of Permitted Expenses
by the Fund plus the amount of Permitted Payments to Qualified Recipients shall
not in any fiscal year exceed the percentage provided in the then current
prospectus.
