Exhibit e(1)
FORM OF DISTRIBUTION AGREEMENT
This Distribution Agreement is made as of this 30th day of April, 1999
by and between HT Insight Funds, Inc. d/b/a Xxxxxx Insight(R) Funds, a Maryland
Corporation (the "Company"), and PROVIDENT DISTRIBUTORS, INC., a Delaware
corporation ("Provident" or "Distributor").
WHEREAS, the Company is an open-end management investment company and
is so registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Company desires to retain Provident as Distributor for the
Company's separate portfolios - Xxxxxx Insight Government Money Market Fund,
Xxxxxx Insight Money Market Fund, Xxxxxx Insight Tax-Free Money Market Fund,
Xxxxxx Insight Equity Fund ("Equity Fund"), and Xxxxxx Insight
Short/Intermediate Bond Fund ("S/I Bond Fund") (individually, a "Fund" and
collectively, the "Funds") to provide for the sale and distribution of shares of
the Funds (the "Shares"), and Provident is willing to render such services;
NOW THEREFORE, in consideration of the premises and mutual covenants
set forth herein and intending to be legally bound hereby, the parties hereto
agree as follows:
DELIVERY OF DOCUMENTS
The Company has delivered to Provident copies of each of the following
documents and will deliver to it all future amendments and supplements thereto,
if any:
(a) The Company's most recent Prospectus(es) and Statement(s) of
Additional Information and all amendments and supplements
thereto (collectively, the "Prospectuses").
DISTRIBUTION
1. APPOINTMENT OF DISTRIBUTOR. The Company hereby appoints Provident as
Distributor of the Funds' Shares and Provident hereby accepts such appointment
and agrees to render the services and duties set forth in this Section II. In
the event that the Company establishes one or more portfolios other than the
Funds with respect to which it desires to retain Provident to act as distributor
hereunder, the Company shall notify Provident in writing. If Provident is
willing to render such services, it shall notify the Company whereupon such
portfolio shall become one of the "Funds" hereunder and such portfolio shall be
listed on an addendum acknowledged in writing by the parties hereto.
2. SERVICES AND DUTIES.
(a) The Company agrees to sell through Provident, as agent, from time
to time during the term of this Agreement, Shares upon the terms and at the
current offering price as described in the applicable Prospectus. Provident will
act only in its own behalf as principal in making agreements with selected
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dealers or others for the sale and redemption of Shares, and shall sell Shares
only at the offering price thereof as set forth in the applicable Prospectus.
Prior to making any payments from its own resources to financial institutions,
securities dealers or other industry professionals for shareholder services,
administration or distribution assistance for a Fund, Provident will enter into
written agreements in a form satisfactory to the Company's Board of Directors.
Provident shall devote appropriate efforts to effect sales of Shares of each of
the Funds, but shall not be obligated to sell any certain number of Shares.
(b) In all matters relating to the sale and redemption of Shares,
Provident will act in conformity with the Company's Articles of Incorporation,
By-Laws and applicable Prospectuses and with the instructions and directions of
the Board of Directors of the Company and will conform to and comply with the
requirements of the 1933 Act, the 1940 Act, the regulations of the National
Association of Securities Dealers, Inc. and all other applicable Federal or
state laws and regulations.
(c) All Shares of the Equity Fund and S/I Bond Fund and future funds
covered by this Agreement offered for sale by Provident shall be offered for
sale to the public at a price per share (the "offering price") equal to (i)
their net asset value (determined in the manner set forth in the applicable
Prospectuses), plus (ii) any sales charge applicable to a class of Shares which
shall be the percentage of the offering price of such Shares as set forth in the
applicable Prospectuses. The offering price, if not an exact multiple of one
cent, shall be adjusted to the nearest cent. Concessions paid by Provident to
broker-dealers and other persons shall be set forth in either the selling
agreements between Provident and such broker-dealers and persons or, if such
concessions are described in the applicable Prospectuses, shall be as so set
forth. No broker-dealer or other person who enters into a selling or
distribution and servicing agreement with Provident shall be authorized to act
as agent for the Company in connection with the offering or sale of Shares to
the public or otherwise.
(d) If any Shares sold by Provident under the terms of this Agreement
are redeemed or repurchased by the Company or by Provident as agent or are
tendered for redemption within seven business days after the date of
confirmation of the original purchase of said Shares, Provident shall forfeit
the amount above the net asset value received by it with respect to such Shares,
provided that the portion, if any, of such amount re-allowed by Provident to
broker-dealers or other persons shall be repayable to the Company only to the
extent recovered by Provident from the broker-dealer or other persons concerned.
Provident shall include in the form of agreement with such broker-dealers and
other persons a corresponding provision for the forfeiture by them of their
concession with respect to Shares sold by them or their principals and redeemed
or repurchased by the Company or by Provident as agent (or tendered for
redemption) within seven business days after the date of confirmation of such
initial purchases.
3. SERVICE PLAN REPORTS.
So long as the Company has one or more service plans in effect for one
or more classes of shares (the "Service Plans"), the Distributor shall provide
the Company's Board of Directors at least quarterly, a written report of the
amounts expended by the Distributor pursuant to the Service Plans and the
purpose for which such expenditures were made.
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4. SALES AND REDEMPTIONS.
(a) The Company shall pay all costs and expenses in connection with the
registration of the Shares under the 1933 Act, and all expenses in connection
with maintaining facilities for the issue and transfer of the Shares and for
supplying information, prices and other data to be furnished by the Company
hereunder, and all expenses in connection with preparing, printing and
distributing the Prospectuses except as set forth in subsection 2(c) of Section
II hereof.
(b) The Company shall execute all documents, furnish all information
and otherwise take all actions which may be reasonably necessary in the
discretion of the Company's officers in connection with the qualification of the
Shares for sale in such states as Provident may designate to the Company and the
Company may approve, and the Company shall pay all filing fees which may be
incurred in connection with such qualification. Provident shall pay all other
expenses incurred by Provident in connection with the sale of the Shares, except
as otherwise specifically provided in this Agreement.
(c) The Company shall have the right to suspend the sale of Shares at
any time in response to conditions in the securities markets or otherwise, and
to suspend the redemption of Shares of any Fund at any time permitted by the
1940 Act or the rules of the SEC ("Rules").
(d) The Company reserves the right to reject any order for
Shares, but will not do so arbitrarily or without reasonable cause.
CONFIDENTIALITY
Provident will treat confidentially and as proprietary information of the
Company all records and other information relative to the Company, to the
Company's prior or current shareholders and to those persons or entities who
respond to Provident's inquiries concerning investment in the Company, and,
except as provided below, will not use such records and information for any
purpose other than the performance of its responsibilities and duties hereunder.
Any other use by Provident of the information and records referred to above may
be made only after prior notification to and approval in writing by the Company.
Such approval shall not be unreasonably withheld and may not be withheld where:
(i) Provident may be exposed to civil or criminal contempt proceedings for
failure to divulge such information; (ii) Provident is requested to divulge such
information by duly constituted authorities; or (iii) Provident is so requested
by the Company.
INDEMNIFICATION
1. COMPANY REPRESENTATION. The Company represents and warrants to
Provident that at all times the Registration Statement and Prospectuses will in
all material respects conform to the applicable requirements of the 1933 Act and
the Rules thereunder and will not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
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which they are made, not misleading, except that no representation or warranty
in this subsection shall apply to statements or omissions made in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of and with respect to Provident expressly for use in the Registration
Statement or Prospectuses.
2. PROVIDENT REPRESENTATION. Provident represents and warrants to the
Company that it is duly organized as a Delaware corporation and is and at all
times will remain registered as a broker/dealer under the Securities Exchange
act of 1934 and a member in good standing with the National Association of
Securities Dealers and is otherwise duly authorized and licensed to carry out
its services as contemplated herein.
3. COMPANY INDEMNIFICATION. The Company, on behalf of each Fund, will
indemnify, defend and hold harmless Provident, its several officers and
directors and any person who controls Provident within the meaning of Section 15
of the 1933 Act, from and against any losses, claims, damages or liabilities,
joint or several, to which any of them may become subject under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Prospectuses or in any application or other document
executed by the Company, or arise out of, or are based upon, information
furnished on behalf of a Fund, filed in any state in order to qualify the Shares
under the securities or blue sky laws thereof ("Blue Sky Application"), or arise
out of, or are based upon, 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, and will reimburse Provident, its several officers and
directors, and any person who controls Provident within the meaning of Section
15 of the 1933 Act, for any legal or other expenses reasonably incurred by any
of them in investigating, defending or preparing to defend any such action,
proceeding or claim; PROVIDED, HOWEVER, that the Company shall not be liable in
any case to the extent that such loss, claim, damage or liability arises out of,
or is based upon, any untrue statement, alleged untrue statement, or omission or
alleged omission made in the Registration Statement, the Prospectuses, any Blue
Sky Application or any application or other document executed by or on behalf of
the Company in reliance upon and in conformity with written information
furnished to the Company by or on behalf of and with respect to Provident
specifically for inclusion therein.
The Company shall not indemnify any person pursuant to this subsection
3 unless the court or other body before which the proceeding was brought has
rendered a final decision on the merits that such person was not liable by
reason of his willful misfeasance, bad faith or gross negligence in the
performance of his duties, or his reckless disregard of his obligations and
duties, under this Agreement ("disabling conduct") or, in the absence of such a
decision, a reasonable determination (based upon a review of the facts) that
such person was not liable by reason of disabling conduct has been made by the
vote of a majority of a quorum of directors of the Company who are neither
"interested persons" of the Company (as defined in the 0000 Xxx) nor parties to
the proceeding, or by an independent legal counsel in a written opinion.
The Company shall advance attorneys' fees and other expenses incurred
by any person in defending any claim, demand, action or suit which is the
subject of a claim for indemnification pursuant to this subsection 3, so long
as: (i) such person shall undertake to repay all such advances unless it is
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ultimately determined that he is entitled to indemnification hereunder; and (ii)
such person shall provide security for such undertaking, or the Company shall be
insured against losses arising by reason of any lawful advances, or a majority
of a quorum of the disinterested, non-party directors of the Company (or an
independent legal counsel in a written opinion) shall determine based on a
review of readily available facts (as opposed to a full trial-type inquiry) that
there is reason to believe that such person ultimately will be found entitled to
indemnification hereunder.
4. PROVIDENT INDEMNIFICATION. Provident will indemnify, defend and hold
harmless the Company, the Company's several officers and directors and any
person who controls the Company within the meaning of Section 15 of the 1933
Act, from and against any losses, claims, damages or liabilities, joint or
several, to which any of them may become subject under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon any breach of
its representations, warranties and agreements herein, or which arise out of, or
are based upon, any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, the Prospectuses, any Blue Sky
Application or any application or other documents executed by or on behalf of
the Company 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, which statement or omission was made in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of and with respect to Provident specifically for inclusion therein, and will
reimburse the Company, the Company's several officers and directors, and any
person who controls the Company within the meaning of Section 15 of the 1933
Act, for any legal or other expenses reasonably incurred by any of them in
investigating, defending or preparing to defend any such action, proceeding or
claim, as such expenses are incurred.
5. GENERAL INDEMNITY PROVISION. No indemnifying party shall be liable under its
indemnity agreement contained in subsection 3 or 4 hereof with respect to any
claim made against such indemnifying party unless the indemnified party shall
have notified the indemnifying party 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 indemnified party (or after the
indemnified party shall have received notice of such service on any designated
agent), but failure to notify the indemnifying party of any such claim shall not
relieve it from any liability which it may otherwise have to the indemnified
party. The indemnifying party 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, and if the indemnifying party elects to assume the
defense, such defense shall be conducted by counsel chosen by it and reasonably
satisfactory to the indemnified party. In the event the indemnifying party
elects to assume the defense of any such suit and retain such counsel, the
indemnified party shall bear the fees and expenses of any additional counsel
retained by the indemnified party, provided that the indemnified party shall
have the right to employ one separate counsel to represent it in such suit if in
the reasonable judgment of the indemnified party it is advisable because of an
actual or potential conflict of interest between it and the indemnifying party
in the conduct of the defense of such action, in which event the fees and
expenses of such separate counsel will be borne by the indemnifying party.
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DURATION AND TERMINATION
This Agreement shall become effective as of the date first above written, and,
unless sooner terminated as provided herein, shall continue until April 30,
2000. Thereafter, if not terminated, this Agreement shall continue automatically
for successive terms of one year, provided that such continuance is specifically
approved at least annually by a vote of the majority of those members of the
Board of Directors of the Company who are not parties to this Agreement or
"interested persons" of the Company and have no direct or indirect financial
interest in the operation of each Fund's Service Plan or in this Agreement, or
in any agreement relating to the Plan, by vote cast in person at a meeting
called for the purpose of voting on such approval; PROVIDED, HOWEVER, that this
Agreement may be terminated by the Company at any time, without the payment of
any penalty, by vote of a majority of the entire Board of Directors of the
Company or by a vote of a "majority of the outstanding voting securities" of the
Company on 60 days' written notice to Provident, or by Provident at any time,
without the payment of any penalty, on 60 days' written notice to the Company.
This Agreement will automatically and immediately terminate in the event of its
"assignment". (As used in this Agreement, the terms "majority of the outstanding
voting securities," "interested person" and "assignment" shall have the same
meanings as such terms have in the 1940 Act.)
AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived, discharged or terminated
except by an instrument in writing signed by the party against which an
enforcement of the change, waiver, discharge or termination is sought.
NOTICES
Notices of any kind to be given to the Company hereunder by Provident
shall be in writing and shall be duly given if mailed or delivered to the
Company at Four Falls Xxxxxxxxx Xxxxxx, 0xx Xxxxx, Xxxx Xxxxxxxxxxxx, XX 00000,
or at such other address or to such individual as shall be so specified by the
Company to Provident. Notices of any kind to be given to Provident hereunder by
the Company shall be in writing and shall be duly given if mailed or delivered
to Provident at Four Falls Corporate Center, 6th Floor, West Conshohocken, PA
19428 or at such other address or to such individual as shall be so specified by
Provident to the Company.
MISCELLANEOUS
The captions in this Agreement are included for convenience of reference only
and in no way define or delimit any of the provisions hereof or otherwise affect
their construction or effect. If any provision if this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby. Subject to the provisions of
Section V hereof, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by Delaware law; PROVIDED, HOWEVER, that nothing herein shall be
construed in a manner inconsistent with the 1940 Act or any rule or regulation
of the SEC thereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
HT INSIGHT FUNDS, INC. d/b/a XXXXXX
INSIGHT FUNDS
By: ________________________________
Attest: ____________________
PROVIDENT DISTRIBUTORS, INC.
By: ________________________________
Attest: ____________________
