Exhibit (e)
DISTRIBUTION AGREEMENT
THIS AGREEMENT made as of the 1st day of June 2002 by and between XXX XXX
FUNDS II, INC. (the "Fund"), a business corporation established and existing
under the laws of the State of Maryland and engaged in the business of an
open-end management investment company and XXX XXX SECURITIES CORPORATION (the
"Distributor"), a corporation organized and existing under the laws of the State
of Delaware.
WHEREAS, the Fund proposes to offer shares of beneficial interest in the
seven separate series representing interests in different portfolio of assets of
the Fund and such other series as may from time to time hereafter established
(each series being referred to herein as a "Series" or collectively as the
"Series").
NOW, THEREFORE, in consideration of the mutual convenants hereinafter
contained, the parties hereto agree as follows:
Section 1. APPOINTMENT OF THE DISTRIBUTOR. The Fund hereby appoints the
Distributor as its exclusive agent to sell and distribute shares of each Series
then in existence (the "Shares") for the account and risk of the Fund during the
continuous offering of such 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 that purchases of Shares of any Series may be
made through other broker-dealers who are members in good standing of the
National Association of Securities Dealers, Inc. ("NASD") in connection with the
offering and sale of the Shares, in which case the Distributor shall enter into
Dealer Agreements ("Dealer Agreements") or amend existing Dealer Agreements with
such broker-dealers, through persons who are not required or permitted to become
NASD members by entering into Selling Agency Agreements or other agreements
("Agency Agreements") (collectively, "Agreements") and directly through the
Fund's Transfer Agent in the manner set forth in a Series' Prospectus.
Section 2. SERVICES AND DUTIES OF THE DISTRIBUTOR.
(a) The Distributor agrees to arrange to sell, as exclusive agent
for the Fund, from time to time during the term of this Agreement, Shares of any
Series upon the terms described in such Series' Prospectus. As used in this
Agreement, the term "Prospectus" shall mean a prospectus and the term "Statement
of Additional Information" shall mean the statement of additional information
included in the Fund's Registration Statement and the term "Registration
Statement" shall mean the Registration Statement, including exhibits and
financial statements, most recently filed by the Fund with the Securities and
Exchange Commission and effective under the Securities Act of 1933, as amended
(the "1933 Act") and the Investment Company Act of 1940, as amended (the "1940
Act"), as such Registration Statement is amended by any amendments thereto at
the time in effect.
(b) Upon commencement of the continuous public offering of Shares of
any Series, the Distributor will hold itself available to receive orders,
satisfactory to the Distributor, for the purchase of Shares of such Series and
will accept such orders on behalf of the Series as of the time of receipt of
such orders and will transmit such orders as are so accepted to the Fund's
Transfer Agent as promptly as practicable. Purchase orders shall be deemed
effective at the time and in the manner set forth in a Series' Prospectus.
(c) The Distributor may enter into Dealer Agreements (or amend
existing Dealer Agreements to conform therewith) with such registered and
qualified retail broker-dealers as it may select pursuant to which such
broker-dealers may also arrange for the sale or sell Shares of any Series or
enter into Agency Agreements (or amend existing Agency Agreements to conform
therewith) pursuant to which such persons may also arrange for the sale or sell
shares of any Series.
(d) The offering price of the Shares of a Series shall be the net
asset value (as described in the Articles of Incorporation of the Fund, as
amended from time to time and determined as set forth in the Prospectus and the
Statement of Additional Information of such Series) per Share for the Series
next determined following receipt of an order plus the applicable sales charge,
if any, calculated in the manner set forth in the Series' Prospectus. The
Distributor shall receive the entire amount of the sales charge, if any, as
compensation for its services under this Agreement; however, the Distributor may
reallow all or any portion of such sales charge to persons entering into
Agreements (or amending existing Dealer Agreements) with the Distributor to sell
Shares of such Series. Shares of a Series may be sold at prices that reflect
scheduled variations in, or elimination of, the sales charge to particular
classes of investors or transactions in accordance with a Series' Prospectus and
Statement of Additional Information. The Fund shall furnish the Distributor,
with all possible promptness, advice of each computation of the net asset value
of a Series. The Distributor shall also be entitled, subject to the terms and
conditions of the Fund's Plan of Distribution pursuant to Rule 12b-1 under the
Investment Company Act of 1940, to amounts payable by a Fund thereunder.
(e) The Distributor shall use its best efforts to obtain from
investors unconditional orders for Shares and shall not be obligated to arrange
for sales of any certain number of Shares of a Series and the services of the
Distributor to the Fund hereunder shall not be deemed to be exclusive, and the
Distributor shall be free to (i) render similar services to, and act as
underwriter or distributor in connection with the distribution of shares of
other investment companies, and (ii) engage in any other businesses and
activities from time to time.
(f) The Distributor is authorized on behalf of the Fund to
repurchase Shares of the Series presented to it by dealers at the price
determined in accordance with, and in the manner set for in, the Prospectus of
such Series.
(g) Unless otherwise notified by the Fund, any right granted to the
Distributor to accept orders for Shares or to make sales on behalf of the Fund
or to purchase Shares for resale will not apply to (i) Shares issued in
connection with the
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merger or consolidation of any other investment company with the Fund or its
acquisition, by purchase or otherwise, of all or substantially all of the assets
of any investment company or substantially all the outstanding Shares of any
such company and (ii) Shares that may be offered by the Fund to shareholders of
the Fund by virtue of their being such shareholders.
(h) If and whenever the determination of net asset value is
suspended and until such suspension be terminated, no further order for Shares
shall be accepted by the Distributor after it has received advance written
notice of such suspension except unconditional orders placed with the
Distributor before its receipt of notice. In addition, the Fund reserves the
right to suspend sales and the Distributor's authority to accept orders for
Shares on behalf of the Fund if, in the judgment of a majority of the Board of
Directors or a majority of the Executive Committee of such Board, if such body
exists, it is in the best interests of the Fund to do so, such suspension to
continue for such period as may be determined by such majority; and in that
event, no Shares will be sold by the Distributor on behalf of the Fund after the
Distributor has received advance written notice while such suspension remains in
effect except for Shares necessary to cover unconditional orders accepted by the
Distributor before it had knowledge of the suspension.
Section 3. DUTIES OF THE FUND.
(a) The Fund agrees to sell Shares of its constituent Series so long
as it has Shares available for sale and to cause its Transfer Agent to issue, if
requested by the Purchaser, certificates for Shares of its Series, registered in
such names and amounts as promptly as practicable after receipt by the Fund of
the net asset value thereof.
(b) 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 of the Series.
This shall include, without limitation, one certified copy of all financial
statements of each of the Series prepared by independent accountants and such
reasonable number of copies of a Series' most current Prospectus, the Statement
of Additional Information and annual and interim reports as the Distributor may
request. The Fund shall cooperate fully in the efforts of the Distributor to
arrange for the sale of Shares of the Series and in the performance of the
Distributor under this Agreement.
(c) The Fund shall take, from time to time, all necessary action to
register the Shares of the Series under the 1933 Act, including payments of the
related filing fees, so that there will be available for sale such number of
Shares of the Series as the Distributor may be expected to sell. 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
the Registration Statement or Prospectus of a Series, or necessary in order that
there may be no omission to state a material fact in the Registration Statement
or Prospectus of a Series, which omission would make the statements therein, in
light of the circumstances under which they were made, misleading.
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(d) The Fund shall use its best efforts to notify the Distributor of
the states and jurisdictions in which its shares are qualified for sale and
represents and warrants that it shall continue to qualify and maintain the
registration and qualification of an appropriate number of Shares of the Series
and the Fund for sale under the securities laws of such states as the
Distributor and the Fund shall mutually agree, and, if necessary or appropriate
in connection therewith, to qualify and maintain the qualification of the Fund
as a broker-dealer in such states. The Distributor shall furnish such
information and other material relating to its affairs and activities as may be
requested by the Fund in connection with such qualifications.
Section 4. EXPENSES
(a) The Fund shall bear all costs and expenses of the continuous
offering the Shares of the Fund in connection with: (i) fees and disbursements
of its counsel and auditors, (ii) the preparation, filing and printing of any
Registration Statements and/or Prospectuses and Statements of Additional
Information required by and under federal and state securities laws, (iii) the
preparation and mailing of annual and interim reports and proxy materials, if
any, to shareholders (iv) the qualification of the Shares of the Series for sale
and of the Fund as a broker-dealer under the securities laws of such states or
other jurisdictions as shall be selected by the Distributor pursuant to Section
3(d) hereof and the cost and expenses payable to each such state or jurisdiction
for continuing qualification therein, and (v) the costs associated in
transmitting orders to, and processing by the Fund's transfer agent, charges of
clearing corporation and sender costs.
(b) The Distributor shall bear (i) the costs and expenses of
preparing, printing and distributing any materials not prepared by the Fund and
other materials used by the Distributor in connection with its offering of
Shares of the Series for sale to the public (including the additional costs of
printing copies of the Prospectus and of annual and interim reports) to
shareholders other than copies thereof required for distribution to existing
shareholders or for filing with any federal and state securities authorities,
(ii) any expenses of advertising incurred by the Distributor in connection with
such offering and (iii) the expenses of registration or qualification of the
Distributor as a broker-dealer under federal or state laws, if necessary, and
the expenses of continuing such registration or qualification. It is understood
and agreed that so long as any Plan of Distribution as to a Series of the Fund
pursuant to Rule 12b-1 under the 1940 Act continues in effect, any expenses
incurred by the Distributor hereunder may be paid from amounts received by it
from a Series under such Plan.
Section 5. INDEMNIFICATION.
(a) The Fund agrees to indemnify, defend and hold the Distributor,
its officers, directors, employees and agents and any person who controls the
Distributor within the meaning of Section 15 of the 1933 Act or Section 20 of
the Securities Exchange Act of 1934, as amended ( the "1934 Act"), free and
harmless from and against any and all losses, claims, damages, liabilities and
expenses (including the cost
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of investigating or defending such claims, damages or liabilities and any
counsel fees incurred in connection therewith) which the Distributor, its
officers, directors, employees and agents or any such controlling person may
incur under the 1933 Act, the 1934 Act, or under common law or otherwise, which
(i) may be based upon any wrongful act by the Fund or any or its employees or
representatives, or (ii) which may arise out of or may be based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, Prospectus, or Statement of Additional Information of
the Fund or a Series or arising out of or based upon the omission or any alleged
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such claims,
damages, liabilities or expenses arise out of or are based upon any such untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with information furnished in writing by the Distributor
to the Fund for use in the Registration Statement, Prospectus or Statement of
Additional Information; PROVIDED, HOWEVER, that in no case is the Fund's
indemnity deemed to protect the Distributor, its officers, directors, employees,
agents or any person who controls the Distributor within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act 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. The
Distributor agrees to promptly notify the Fund of any event giving rise to a
right of indemnification hereunder, including any action brought against the
Distributor, its officers, directors, employees and agents or any such
controlling person, such notification to be given by letter or telegram
addressed to the Fund at its principal business office, but the Distributor's
failure so to notify the Fund shall not relieve the Fund from any obligation it
may have to indemnify the Distributor hereunder or otherwise. 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 the Distributor, its officers,
directors 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, the Distributor, its officers, directors 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 the
Distributor or such, officers, directors 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 promptly to notify the Distributor 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.
The Distributor agrees to indemnify, defend and hold the Fund, its
Directors and officers and any person who controls the Fund, if any, within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, free and
harmless from and against any and all losses, claims, damages, liabilities and
expenses (including the cost of investigating or defending such claims, damages
or liabilities and any counsel fees incurred in connection therewith) which the
Fund, its Directors or officers or any such controlling person may incur under
the 1933 Act, the 1934 Act, or under common law or otherwise, but only to the
extent that such liability or expense incurred by the Fund, its Directors or
officers or such controlling person arises out of or is based upon any untrue
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statement or alleged untrue statement of a material fact contained in
information furnished in writing by the Distributor to the Fund for use in the
Registration Statement, Prospectus or Statement of Additional Information of the
Fund or a Series; PROVIDED, HOWEVER, that in no case is the Distributor's
indemnity deemed to protect a Director or officer or any person who controls the
Fund within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act 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. The Fund agrees to promptly notify the Distributor of any
event giving rise to a right of indemnification hereunder, including any action
brought against the Fund, its Directors or officers or any such controlling
persons, such notification being given to the Distributor at its principal
business office, but the Fund's failure so to notify the Distributor shall not
relieve the Distributor from any obligation it may have to indemnify the Fund
hereunder or otherwise. The Distributor 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 Distributor elects to
assume the defense, such defense shall be conducted by counsel chosen by the
Distributor and satisfactory to the Fund, to its officers and Directors, 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 counsel, the Fund, such officers and Directors 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 Distributor does
not elect to assume the defense of any such suit, the Distributor will reimburse
the Fund, such officers and Directors or controlling person or persons,
defendant or defendants in such suit for the reasonable fees and expenses of any
counsel retained by them. The Distributor agrees promptly to notify the Fund of
the commencement of any litigation or proceedings against it in connection with
the issue and sale of any of Shares.
Section 6. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in the
first paragraph of Section 5 is for any reason held to be unavailable from the
Fund, the Fund and the Distributor shall contribute to the aggregate losses,
claims, damages, liabilities or expenses (including the reasonable costs of
investigating or defending such claims, damages or liabilities but after
deducting any contribution received by the Fund from persons other than the
Distributor who may also be liable for contribution, such as persons who control
the Fund within the meaning of the 1933 Act, officers of the Fund who signed the
applicable Registration Statement and Directors) to which the Fund and the
Distributor may be subject in such proportion so that the Distributor is
responsible for that portion represented by the percentage the sales charge
appearing in the Prospectus of the Fund bears to the public offering price
appearing therein and the Fund is responsible for the balance; provided,
however, that (i) in no case shall the Distributor be responsible for any amount
in excess of the portion of the sales charge received and retained by it in
respect of the Shares of a Series purchased through it hereunder and (ii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 0000 Xxx) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this Section 6,
each person, if any, who controls the Distributor within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the
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Distributor. Each party who may seek contribution under this Section 6 shall,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this Section 6, give written
notice of the commencement of such action, suit or proceeding to the party or
parties from whom such contribution may be sought, but the omission so to notify
such contributing party or parties shall not relieve the party or parties from
whom contribution may be sought from any other obligation it or they may have
otherwise than on account of this Section 6.
Section 7. COMPLIANCE WITH SECURITIES LAWS. The Fund represents that it is
registered as an open-end management investment company under the 1940 Act, and
agrees that it will comply with all of the provisions of the 1940 Act and of the
rules and regulations thereunder. The Fund and the Distributor each agree to
comply with all of the applicable terms and provisions of the 1940 Act, the 1933
Act and, subject to the provisions of Section 3(d), all applicable state "Blue
Sky" laws. The Distributor agrees to comply with all of the applicable terms and
provisions of the 1934 Act and to the rules and regulations of the National
Association of Securities Dealers, Inc., of which it is a member.
Section 8. TERMS OF CONTRACT. This Agreement shall go into effect on the
date hereof and shall continue in effect until May 1, 2003 and thereafter for
successive periods of one year each if such continuance is approved at least
annually thereafter (i) either by an affirmative vote of a majority of the
outstanding shares of the Fund or by the Board of Directors of the Fund, and
(ii) in either case, by a majority of the Directors of the Fund who are not
interested persons of the Distributor or (otherwise than as Directors) of the
Fund (the "12b-1 Directors"), cast in person at a meeting called for the purpose
of voting on such approval. This Agreement may be terminated at any time without
the payment of a penalty, by a majority of the 12b-1 Directors, by the vote of a
majority of the outstanding shares of the Fund, or by the Distributor on sixty
(60) days' written notice to the other party.
Section 9. ASSIGNMENT. This Agreement may not be assigned by the
Distributor and shall automatically terminate in the event of an attempted
assignment by the Distributor; provided, however, that the Distributor may
employ or enter into agreements with such other person, persons, company, or
companies, as it shall determine in order to assist it in carrying out this
Agreement.
Section 10. AMENDMENT. This Agreement may be amended or modified at any
time by mutual agreement in writing of the parties hereto, provided that any
such amendment is approved by a majority of the Directors of the Fund who are
not interested persons of the Distributor or by the holders of a majority of the
outstanding Shares of the Fund. If the Fund should at any time 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 SEC or other governmental authority or to obtain any advantage under state
or federal tax laws and should notify the Distributor of the form of such
amendment, and the reasons therefor, and if the Distributor should decline to
assent forthwith. If the Distributor should at any time request that a change be
made in the Fund's Master Fund Agreement or By-Laws or in its methods of doing
business, in order to comply with any requirements of federal law or regulations
of the SEC or of a national securities association of which the Distributor
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is or may be a member relating to the sale of Shares of the Funds, and the Fund
should not make such necessary change within a reasonable time, the Distributor
may terminate this Agreement forthwith.
Section 11. GOVERNING LAW. This Agreement shall be governed and construed
in accordance with the laws of the State of New York without regard for choice
of laws principles thereunder.
Section 12. AUTHORIZED REPRESENTATIONS.
(a) The Fund is not authorized to give any information or to make
any representations on behalf of the Distributor other than the information and
representations contained in a Registration statement (including a Prospectus or
Statement of Additional Information) covering Shares, as such Registration
Statement and Prospectus may be amended or supplemented from time to time.
(b) The Distributor is not authorized to give any information or to
make any representations on behalf of the Fund or in connection with the sale of
Shares other than the information and representations contained in a
Registration statement (including a Prospectus or Statement of Additional
Information) covering Shares, as such Registration Statement may be amended or
supplemented from time to time. No person other than the Distributor is
authorized to act as principal underwriter (as such term is defined in the 0000
Xxx) for the Fund.
Section 13. PRIOR AGREEMENT SUPERSEDED. This Agreement supersedes any
prior agreement relating to the subject matter hereof between the parties.
Section 14. COUNTERPARTS. This Agreement may be executed 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.
Section 15. MISCELLANEOUS.
(a) The captions in this Agreement are included for ease of
reference only, and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
(b) If any provision of 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.
(c) The provisions of Section 5 hereof shall survive the termination
of this Agreement.
Section 16. USE OF NAME. It is understood that the name "Xxx Xxx" or any
derivative thereof or logo associated with that name is the valuable property of
the
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Distributor and its affiliates, and that the Fund and Series have the right to
use such name (or derivative or logo) only with the approval of the Distributor
only so long as the Distributor is Distributor of the Fund. Upon termination of
this Agreement, the Fund and Series shall forthwith cease to use such name (or
derivative or logo).
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
XXX XXX FUNDS II, INC.
(SEAL)
Attest: ________________________ Name:______________________________
Title:_____________________________
XXX XXX SECURITIES CORPORATION
(SEAL)
Attest:_________________________ Name:______________________________
Title:_____________________________
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