Exhibit (e)(1)
XXXXX XXXXX VARIABLE TRUST
DISTRIBUTION AGREEMENT
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AGREEMENT effective August 14, 2000 between XXXXX XXXXX VARIABLE TRUST, a
Massachusetts business trust having its principal place of business in Boston in
the Commonwealth of Massachusetts, hereinafter called the "Trust," on behalf of
each of its series listed on Schedule A (a "Fund"), and XXXXX XXXXX
DISTRIBUTORS, INC., a Massachusetts corporation having its principal place of
business in said Boston, hereinafter sometimes called the "Principal
Underwriter." The Trustees of the Trust have established one class of shares of
each of the Funds (the "Class") but may establish other classes of shares from
time to time (all such classes referred to collectively as "Classes").
IN CONSIDERATION of the mutual promises and undertakings herein contained,
the parties hereto agree with respect to each Fund:
1. The Trust grants to the Principal Underwriter the right to purchase all
classes of shares of the Fund upon the terms hereinbelow set forth during the
term of this Agreement. While this Agreement is in force, the Principal
Underwriter agrees to use its best efforts to find Purchasers (as defined below)
for shares of the Fund.
The Principal Underwriter shall have the right to buy from the Fund the
shares needed, but not more than the shares needed (except for clerical errors
and errors of transmission) to fill unconditional orders for shares of the Fund
placed with the Principal Underwriter by financial service firms or investors as
set forth in the current Prospectus relating to shares of the Fund. The price
which the Principal Underwriter shall pay for the classes of shares so purchased
shall be the net asset value used in determining the public offering price on
which such orders were based. The Principal Underwriter shall notify Investors
Bank & Trust Company, Custodian and Transfer Agent of the Trust ("IBT"), or a
successor custodian or transfer agent, at the end of each business day, or as
soon thereafter as the orders placed with it have been compiled, of the number
of shares and the prices thereof which the Principal Underwriter is to purchase
as principal for resale. IBT may be referred to herein as the "Custodian" or the
"Transfer Agent". The Principal Underwriter shall take down and pay for shares
ordered from the Fund on or before the eleventh business day (excluding
Saturdays) after the shares have been so ordered.
The Trust intends to continuously offer the shares of its various Funds for
sale to sub-accounts of various life insurance separate accounts, employee
thrift plans, and, subject to applicable law, the public (all eligible
purchasers of such shares being referred to collectively as the "Purchasers").
The Trust also intends that the Purchasers may provide certain beneficial
ownership rights to individuals under variable annuity and variable life
insurance contracts, employee thrift plans or other such arrangements (the
"Participants"). The Trust may suspend sales of the shares of any one or more
Funds at any time, and may resume sales of any such Funds at a later date.
The right granted to the Principal Underwriter to buy shares from the Fund
shall be exclusive, except that said exclusive right shall not apply to shares
issued in connection with the merger or consolidation of any other investment
company or personal holding company with the 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 Fund; nor shall it apply to shares, if any, issued
by the Fund in distribution of income or realized capital gains of the Fund
payable in shares or in cash at the option of the shareholder.
2. The Funds have no load or redemption charge and the Distributor will
receive no compensation for acting in such capacity (except for the service fee
described in Section 5(c) of this Agreement). Notwithstanding this, the
Distributor assumes and will pay, from its own resources, all expenses related
to distribution of the Funds' shares and will bear all other costs and expenses
attributable to any activity primarily intended to result in the sale of shares.
The net asset value of shares of each Class of Fund shall be determined by
the Trust or IBT, as the agent of the Trust, as of the close of regular trading
on the New York Stock Exchange (the "Exchange") on each business day on which
said Exchange is open, or as of such other time on each such business day as may
be determined by the Trustees of the Trust, in accordance with the methodology
and procedures for calculating such net asset value authorized by the Trustees.
The Trust may also cause the net asset value to be determined in substantially
the same manner or estimated in such manner and as of such other time or times
as may from time to time be agreed upon by the Trust and Principal Underwriter.
The Trust will notify the Principal Underwriter each time the net asset value of
a Class of shares is determined and when such value is so determined it shall be
applicable to transactions as set forth in the current Prospectus(es) and
Statement(s) of Additional Information (hereafter the "Prospectus") relating to
the Fund's shares.
No Class of shares of the Fund shall be sold by the Fund during any period
when the determination of that Class's net asset value is suspended pursuant to
the Declaration of Trust, except to the Principal Underwriter, in the manner and
upon the terms above set forth to cover contracts of sale made by the Principal
Underwriter with the Purchasers prior to any such suspension, and except as
provided in paragraph 1 hereof. The Trust shall also have the right to suspend
the sale of any Class of shares if in the judgment of the Trust conditions
obtaining at any time render such action advisable. The Principal Underwriter
shall have the right to suspend sales at any time, to refuse to accept or
confirm any order from any Purchaser, or to accept or confirm any such order in
part only, if in the judgment of the Principal Underwriter such action is in the
best interests of the Fund.
3. The Trust covenants and agrees that it will, from time to time, but
subject to the necessary approval of the Fund's shareholders, take such steps as
may be necessary to register the Fund's shares under the federal Securities Act
of 1933, as amended from time to time (the "1933 Act"), to the end that there
will be available for sale such number of shares as the Principal Underwriter
may reasonably be expected to sell. The Trust covenants and agrees to indemnify
and hold harmless the Principal Underwriter and each person, if any, who
controls the Principal Underwriter 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 of the Fund,
which may be based upon the 1933 Act or on any other statute or at common law,
on the ground that the Registration Statement or Prospectus, as from time to
time amended and supplemented, includes an untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, unless such statement or
omission was made in reliance upon, and in conformity with, information
furnished in writing to the Trust in connection therewith by or on behalf of the
Principal Underwriter; provided, however, that in no case (i) is the indemnity
of the Trust in favor of the Principal Underwriter and any such controlling
person to be deemed to protect such Principal Underwriter or any such
controlling person against any liability to the Trust or the Fund or the
Purchasers to which such Principal Underwriter or any such controlling person
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 Agreement, or (ii) is the
Trust or the Fund to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Principal Underwriter or
any such controlling person unless the Principal Underwriter or any such
controlling person, as the case may be, shall have notified the Trust 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 the Principal
Underwriter or such controlling person (or after such Principal Underwriter or
such controlling 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 the Fund may have to the person against whom
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such action is brought otherwise than on account of its indemnity agreement
contained in this paragraph. The Trust shall be entitled to participate, at the
expense of the Fund, in the defense, or, if the Trust so elects, to assume the
defense of any suit brought to enforce any such liability, but if the Trust
elects to assume the defense, such defense shall be conducted by counsel chosen
by it and satisfactory to the Principal Underwriter or controlling person or
persons, defendant or defendants in the suit. In the event the Trust elects to
assume the defense of any such suit and retains such counsel, the Principal
Underwriter 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 Trust does not elect to assume the defense of any such
suit, the Fund shall reimburse the Principal Underwriter or 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 Principal Underwriter of the commencement of any litigation or proceedings
against it or any of its officers or Trustees in connection with the issuance or
sale of any of the Fund's shares.
4. The Principal Underwriter covenants and agrees that, in selling the
shares of the Fund, it will use its best efforts in all respects duly to conform
with the requirements of all state and federal laws relating to the sale of such
shares, and will indemnify and hold harmless the Trust and each of its 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
of the Fund, which may be based upon the 1933 Act or any other statute or at
common law, on account of any wrongful act of the Principal Underwriter or any
of its employees (including any failure to conform with any requirement of any
state or federal law relating to the sale of such shares) or on the ground that
the Registration Statement or Prospectus, as from time to time amended and
supplemented, includes an untrue statement of a material fact or omits 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 in writing
to the Trust in connection therewith by or on behalf of the Principal
Underwriter, provided, however, that in no case (i) is the indemnity of the
Principal Underwriter in favor of any person indemnified to be deemed to protect
the Fund or any such person against any liability to which the Fund or any such
person would otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence in the performance of its or his duties or by reason of its
or his reckless disregard of its obligations and duties under this Agreement, or
(ii) is the Principal Underwriter to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against the Fund or
any person indemnified unless the Trust or such person, as the case may be,
shall have notified the Principal Underwriter 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 the Trust, the Fund or upon such
person (or after the Trust, the Fund or such person shall have received notice
of such service on any designated agent), but failure to notify the Principal
Underwriter of any such claim shall not relieve it from any liability which it
may have to the Fund or any person against whom such action is brought otherwise
than on account of its indemnity agreement contained in this paragraph. The
Principal Underwriter 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 liability, but if the Principal Underwriter elects to assume
the defense, such defense shall be conducted by counsel chosen by it and
satisfactory to the Trust, or to its officers or Trustees, or to any controlling
person or persons, defendant or defendants in the suit. In the event that the
Principal Underwriter elects to assume the defense of any such suit and retains
such counsel, the Fund or such officers or Trustees or controlling person or
persons, defendant or defendants in the suit, shall bear the fees and expenses
of any additional counsel retained by them or the Trust, but, in case the
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Principal Underwriter does not elect to assume the defense of any such suit, it
shall reimburse the Fund, any 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 or the Trust. The Principal Underwriter
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
Fund's shares.
Neither the Principal Underwriter nor any Purchaser nor any other person is
authorized by the Trust to give any information or to make any representations,
other than those contained in the Registration Statement or Prospectus filed
with the Securities and Exchange Commission (the "Commission") under the 1933
Act, (as said Registration Statement and Prospectus may be amended or
supplemented from time to time), covering the shares of the Fund. Neither the
Principal Underwriter nor any Purchaser nor any other person is authorized to
act as agent for the Trust or the Fund in connection with the offering or sale
of shares of the Fund to the public or otherwise. All such sales made by the
Principal Underwriter shall be made by it as principal, for its own account. The
Principal Underwriter may, however, act as agent in connection with the
repurchase of shares as provided in paragraph 6 below, or in connection with
"exchanges" between investment companies for which the Principal Underwriter (or
an affiliate thereof) acts as principal underwriter or investment adviser.
5(a). The Fund will pay, or cause to be paid (by one or more classes)
(i) all the costs and expenses of the Fund, including fees and
disbursements of its counsel, in connection with the preparation and filing of
any required Registration Statement and/or Prospectus under the 1933 Act, or the
1940 Act, covering its shares and all amendments and supplements thereto, and
preparing and mailing periodic reports to the Participants (including the
expense of setting up in type any such Registration Statement, Prospectus or
periodic report);
(ii) the cost of preparing temporary and permanent share certificates (if
any) for shares of the Fund;
(iii) the cost and expenses of delivering to the Principal Underwriter at
its office in Boston, Massachusetts, all shares of the Fund purchased by it as
principal hereunder; and
(iv) all the federal and state (if any) issue and/or transfer taxes payable
upon the issue by or (in the case of treasury shares) transfer from the Fund to
the Principal Underwriter of any and all shares of the Fund purchased by the
Principal Underwriter hereunder.
(v) the fees, costs and expenses of the registration or qualification of
shares for sale in the various states, territories or other jurisdictions
(including without limitation the registering or qualifying the Fund as a broker
or dealer or any officer of the Fund as agent or salesman in any state,
territory or other jurisdiction); and
(vi) all payments to be made pursuant to any written plan (if any),
approved in accordance with Rule 12b-1 under the 1940 Act or any written service
plan.
(b) The Principal Underwriter agrees that, after the Prospectus (other than
to existing shareholders of the Fund) and periodic reports have been set up in
type, it will bear the expense of printing and distributing any copies thereof
which are to be used in connection with the offering of shares of the Fund to
the Purchasers. The Principal Underwriter further agrees that it will bear the
expenses of preparing, printing and distributing any other literature used by
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the Principal Underwriter or furnished by it for use by the Purchasers in
connection with the offering of the shares of the Fund for sale to the public
and any expenses of advertising in connection with such offering.
(c) In addition, the Trust agrees, in accordance with the Funds' service
plans (each, a "Plan"), adopted in a manner consistent with Rule 12b-1 under the
1940 Act, to make certain payments as follows The Principal Underwriter shall be
entitled to be paid by the Fund a separate service fee (calculated in accordance
with paragraph 5(d)) out of the relevant Class' assets, such payment to be made
in the manner set forth and subject to the terms of this paragraph 5.
(d) The service fees referred to in paragraph 5(c) shall be accrued and
paid by the Fund in the following manner. Each class shall accrue daily an
amount calculated at the rate of .25% per annum of its daily net assets, which
net assets shall be computed as described in paragraph 2. The daily amounts so
accrued throughout the month shall be paid to the Principal Underwriter on the
last day of each month. Such service fees may be paid by the Principal
Underwriter to the Purchasers described in paragraph 1. The aggregate amounts
accrued and paid pursuant to this paragraph (d) during any fiscal year of the
Fund shall not exceed .25% of the average daily net assets of a Class for such
year.
(e) The persons authorized to direct the disposition of monies paid or
payable by the Fund pursuant to the Plan or this Agreement shall be the
President or any Vice President or the Treasurer of the Trust. Such persons
shall provide to the Trust's Trustees and the Trustees shall review, at least
quarterly, a written report of the amounts so expended and the purposes for
which such expenditures were made.
6. The Trust hereby authorizes the Principal Underwriter to repurchase,
upon the terms and conditions set forth in written instructions given by the
Trust to the Principal Underwriter from time to time, as agent of the Trust and
for its account, such shares of the Fund as may be offered for sale to the Fund
from time to time.
(a) The Principal Underwriter shall notify in writing IBT at the end of
each business day, or as soon thereafter as the repurchases in each pricing
period have been compiled, of the number of shares of each Class repurchased for
the account of the Fund since the last previous report, together with the prices
at which such repurchases were made, and upon the request of any officer or
Trustee of the Trust shall furnish similar information with respect to all
repurchases made up to the time of the request on any day.
(b) The Trust reserves the right to suspend or revoke the foregoing
authorization at any time; unless otherwise stated, any such suspension or
revocation shall be effective forthwith upon receipt of notice thereof by an
officer of the Principal Underwriter, by telegraph or by written instrument from
an officer of the Trust duly authorized by its Trustees. In the event that the
authorization of the Principal Underwriter is, by the terms of such notice,
suspended for more than twenty-four hours or until further notice, the
authorization given by this paragraph 6 shall not be revived except by action of
a majority of the Trustees of the Trust.
(c) The Principal Underwriter shall have the right to terminate the
operation of this paragraph 6 upon giving to the Trust thirty (30) days' written
notice thereof.
(d) The Trust agrees to authorize and direct IBT to pay, for the account of
the Fund, the purchase price of any shares so repurchased against delivery of
the certificates in proper form for transfer to the Trust or for cancellation by
the Trust.
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(e) The Trust agrees that the Fund will reimburse the Principal
Underwriter, from time to time on demand, for any reasonable expenses incurred
in connection with the repurchase of shares of the Fund pursuant to this
paragraph 6.
7. If, at any time during the existence of this Agreement, the Trust shall
deem it necessary or advisable in the best interests of the Fund that any
amendment of this Agreement be made in order to comply with the recommendations
or requirements of the Commission or other governmental authority or to obtain
any advantage under Massachusetts or federal tax laws, and shall notify the
Principal Underwriter of the form of amendment which it deems necessary or
advisable and the reasons therefor, and, if the Principal Underwriter declines
to assent to such amendment, the Trust may terminate this Agreement forthwith by
written notice to the Principal Underwriter. If, at any time during the
existence of its agreement upon request by the Principal Underwriter, the Trust
fails (after a reasonable time) to make any changes in its Declaration of Trust,
as amended, or in its methods of doing business which are necessary in order to
comply with any requirement of federal law or regulations of the Commission or
of a national securities association of which the Principal Underwriter is or
may be a member, relating to the sale of the shares of the Fund, the Principal
Underwriter may terminate this Agreement forthwith by written notice to the
Trust.
8(a). The Principal Underwriter is a corporation in the United States
organized under the laws of Massachusetts and holding membership in the National
Association of Securities Dealers, Inc., a securities association registered
under Section 15A of the Securities Exchange Act of 1934, as amended from time
to time, and during the life of this Agreement will continue to be so resident
in the United States, so organized and a member in good standing of said
Association. The Principal Underwriter covenants that it and its officers and
directors will comply with the Trust's Declaration of Trust and By-Laws, and the
1940 Act and the rules promulgated thereunder, insofar as they are applicable to
the Principal Underwriter.
(b) The Principal Underwriter shall maintain in the United States and
preserve therein for such period or periods as the Commission shall prescribe by
rules and regulations applicable to it as Principal Underwriter of an open-end
investment company registered under the 1940 Act such accounts, books and other
documents as are necessary or appropriate to record its transactions with the
Fund. Such accounts, books and other documents shall be subject at any time and
from time to time to such reasonable periodic, special and other examinations by
the Commission or any member or representative thereof as the Commission may
prescribe. The Principal Underwriter shall furnish to the Commission within such
reasonable time as the Commission may prescribe copies of or extracts from such
records which may be prepared without effort, expense or delay as the Commission
may by order require.
9. This Agreement shall continue in force indefinitely until terminated as
in this Agreement above provided, except that:
(a) this Agreement shall remain in effect through and including April 28,
2002 (or, if applicable, the next April 28 which follows the day on which a Fund
has become a Fund hereunder by amendment to Schedule A subsequent to April 28,
2002), and shall continue in full force and effect indefinitely thereafter, but
only so long as such continuance after April 28, 2000 (or, if applicable, said
next April 28) is specifically approved at least annually (i) by the vote of a
majority of the Rule 12b-1 Trustees cast in person at a meeting called for the
purpose of voting on such approval, and (ii) by the Trustees of the Trust or by
vote of a majority of the outstanding voting securities of the Fund;
(b) either party shall have the right to terminate this Agreement with
respect to any Class on six (6) months' written notice thereof given in writing
to the other;
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(c) the Trust shall have the right to terminate this Agreement forthwith in
the event that it shall have been established by a court of competent
jurisdiction that the Principal Underwriter or any director or officer of the
Principal Underwriter has taken any action which results in a breach of the
covenants set out in paragraph 9 hereof;
(d) if this Agreement is terminated with respect of any Class or Fund, it
shall not terminate the Agreement with respect to any other Class or Fund; and
(e) additional series of the Trust will become Funds hereunder upon
approval by the Trustees of the Trust and amendment of Schedule A.
10. In the event of the assignment of this Agreement by the Principal
Underwriter, this Agreement shall automatically terminate.
11. Any notice under this Agreement shall be in writing, addressed and
delivered, or mailed postage paid, to the other party, at such address as such
other party may designate for the receipt of such notices. Until further notice
to the other party, it is agreed that the record address of the Trust and that
of the Principal Underwriter, shall be 000 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000.
12. The services of the Principal Underwriter to the Trust hereunder are
not to be deemed to be exclusive, the Principal Underwriter being free to (a)
render similar service to, and to act as principal underwriter in connection
with the distribution of shares of, other series of the Trust or other
investment companies, and (b) engage in other business and activities from time
to time.
13. The terms "vote of a majority of the outstanding voting securities,"
"assignment" and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, subject, however, to such
exemptions as may be granted by the Commission by any rule, regulation or order.
14. The Principal Underwriter expressly acknowledges the provision in the
Trust's Declaration of Trust limiting the personal liability of the shareholders
of the Trust and the Trustees of the Trust. The Principal Underwriter hereby
agrees that it shall have recourse only to the assets of the relevant Fund or
Class thereof for payment of claims or obligations as between the Trust and the
Principal Underwriter arising out of this Agreement and shall not seek
satisfaction from any shareholders or from the Trustees. No Fund or Class shall
not be responsible for obligations of any other fund or class of the Trust.
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IN WITNESS WHEREOF, the parties hereto have entered into this Agreement on
the 14th day August, 2000.
XXXXX XXXXX VARIABLE TRUST
By /s/ Xxxxx X. Xxxxxx
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President
XXXXX XXXXX DISTRIBUTORS, INC.
By /s/ Xxxx X. Xxxxxx
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Vice President
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SCHEDULE A
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XXXXX XXXXX VARIABLE TRUST
DISTRIBUTION AGREEMENT
EFFECTIVE: AUGUST 14, 2000
Name of Funds Adopting this Agreement
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Xxxxx Xxxxx VT Income Fund of Boston
Xxxxx Xxxxx VT Information Age Fund
Xxxxx Xxxxx VT Worldwide Health Sciences Fund
