EX-99.B6(a)(iv)
DISTRIBUTION AGREEMENT FOR
GUINNESS FLIGHT ASIA SMALL CAP FUND
EX-99.B6(a)(iv)
FORM OF
GENERAL DISTRIBUTION AGREEMENT
AGREEMENT made April 29, 1996 by and between the Guinness Flight
Investment Funds, Inc., a Maryland corporation which may issue one or more
series of shares (the "Guinness Funds"), with respect to shares of the Guinness
Flight Asia Smaller Cap Growth Fund, a series of the Guinness Funds (the
"Fund"), and First Fund Distributors, Inc., a Delaware corporation having its
principal place of business at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx (the
"Distributor").
WHEREAS, the Guinness Funds wishes to employ the services of the
Distributor in connection with the promotion and distribution of the Guinness
Funds' shares representing the Fund (the "Shares");
NOW, THEREFORE, in consideration of the mutual promises and
undertakings herein contained, the parties agree as follows:
1. Documents. The Guinness Funds has furnished the Distributor with
copies of the Guinness Funds' Articles of Incorporation, By Laws, Investment
Advisory Agreement, Custodian Agreement, current Prospectus and Statement of
Additional Information, and all forms relating to any plan, program or service
offered by the Guinness Funds. The Guinness Funds shall furnish promptly to the
Distributor a copy of any amendment or supplement to any of the above mentioned
documents. The Guinness Funds shall furnish promptly to the Distributor any
additional documents necessary or advisable to perform its functions hereunder.
2. Sale of Shares. The Guinness Funds grants to the Distributor the
right to sell shares as agent on behalf of the Guinness Funds (the "Shares"),
during the term of this Agreement, subject to the registration requirements of
the Securities Act of 1933, as amended ("1933 Act"), and of the laws governing
the sale of securities in the various states ("Blue Sky Laws"), under the terms
and conditions set forth in this agreement. The Distributor (i) shall have the
right to sell, as agent on behalf of the Guinness Funds, shares authorized for
issue and registered under the 1933 Act, and (ii) may sell shares under offers
of exchange, if available, between and among other funds or portfolios advised
by Guinness Flight Investment Management Limited ("Guinness Flight").
3. Sale of Shares by the Guinness Funds. The rights granted to the
Distributor shall be nonexclusive in that the Guinness Funds reserves the right
to sell the Shares to investors on applications received and accepted by the
Guinness Funds. Further, the Guinness Funds reserves the right to issue Shares
in connection with the merger, consolidation or other combination by
the Guinness Funds through purchase or otherwise, with any other
entity.
4. Public Offering Price. Except as otherwise noted in the Guinness
Funds' current Prospectus and/or Statement of Additional Information, all Shares
sold to investors by the Distributor or the Guinness Funds will be sold at the
public offering price. The public offering price for all accepted subscriptions
will be the net asset value per share, as determined in the manner described in
the Guinness Funds' current Prospectus and/or Statement of Additional
Information, plus a sales charge (if any) described in the Guinness Funds'
current Prospectus and/or Statement of Additional Information. The Guinness
Funds shall in all cases receive the net asset value per share on all sales. If
a sales charge is in effect, the Distributor shall have the right, subject to
such rules or regulations of the Securities and Exchange Commission as may then
be in effect pursuant to Section 22 of the Investment Company Act of 1940, to
pay a portion of the sales charge to dealers who have sold shares of the
Guinness Funds. If a fee in connection with shareholder redemptions is in
effect, the Guinness Funds shall collect the fee on behalf of the Distributor
and, unless otherwise agreed upon by the Guinness Funds and the Distributor, the
Distributor shall be entitled to receive all of such fees.
5. Suspension of Sales. If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further orders
for Shares shall be processed by the Distributor except such unconditional
orders as may have been placed with the Distributor before it had knowledge of
the suspension. In addition, the Guinness Funds reserves the right to suspend
sales and the Distributor's authority to process orders for Shares on behalf of
the Guinness Funds if, in the judgment of the Guinness Funds, it is in the best
interests of the Guinness Funds to do so. Suspension will continue for such
period as may be determined by the Guinness Funds.
6. Solicitation of Sales. In consideration of these rights granted to
the Distributor, the Distributor agrees to use all reasonable efforts,
consistent with its other business, to secure purchasers for Shares of the
Guinness Funds. This shall not prevent the Distributor from entering into like
arrangements (including, arrangements involving the payment of underwriting
commissions) with other issuers. While the Distributor is registered as a broker
or dealer under the Blue Sky Laws of certain United States jurisdictions, it
shall not be required to maintain its registration in any jurisdiction in which
it is now registered. If a sales charge is in effect, the Distributor shall have
the right to enter into sales agreements with dealers of its choice for the sale
of shares of the Guinness Funds to the public at the public offering price only
and fix in such agreements the portion of the sales charge which may be retained
by dealers, provided that the Guinness Funds shall approve the form of the
dealer agreement and the dealer discounts set forth therein and
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shall evidence such approval by filing said form of dealer agreement and
amendments thereto as an exhibit to its currently effective Registration
Statement under the 1933 Act.
7. Authorized Representations. The Distributor is not authorized by the
Guinness Funds to give any information or to make any representations other than
those contained in the appropriate registration statements or Prospectuses and
Statements of Additional Information filed with the Securities and Exchange
Commission under the 1933 Act (as these registrations statements, Prospectuses
and Statements of Additional Information may be amended from time to time), or
contained in shareholder reports or other material that may be prepared by or on
behalf of the Guinness Funds for the Distributor's use. Consistent with the
foregoing, the Distributor may prepare and distribute sales literature or other
material as it may deem appropriate, provided such sales literature complies
with applicable law and regulation.
8. Registration of Shares. The Guinness Funds agrees that it will take
all action necessary to register Shares under the 1933 Act (subject to the
necessary approval of its shareholders) so that there will be available for sale
the number of Shares the Distributor may reasonably be expected to sell. The
Guinness Funds shall make available to the Distributor such number of copies of
its currently effective Prospectus and Statement of Additional Information as
the Distributor may reasonably request at the Distributor's expense. The
Guinness Funds, at its expense, 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
Guinness Funds.
9. Distribution Expenses. The Distributor shall bear all expenses in
connection with the performance of its services hereunder, including, but not
limited to, (a) printing and distributing any Prospectuses and Statements of
Additional Information or reports prepared for its use in connection with the
offering of shares for sale to the public other than to existing shareholders of
the Guinness Funds determined at the time of mailing any such Prospectuses and
Statements of Additional Information or reports, (b) any other literature used
by the Distributor in connection with such offering, and (c) advertising and
promotional activities in connection with such Offering.
10. Guinness Funds Expenses. The Guinness Funds shall pay all fees and
expenses (a) in connection with the preparation, setting in type and filing of
any registration statement, Prospectus and Statement of Additional Information
under the 1933 Act and amendments for the issue of its shares, (b) in connection
with the registration and qualification of shares for sale in the various states
in which the Board of Directors of the Guinness Funds shall determine it
advisable to qualify such shares for sale (including registering the Guinness
Funds as a broker or
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dealer or any officer of the Guinness Funds as agent or salesman in any state),
(c) of preparing, setting in type, printing and mailing any report or other
communication to shareholders of the Guinness Funds in their capacity as such,
and (d) of preparing, setting in type, printing and mailing Prospectuses,
Statements of Additional Information and any supplements thereto sent to
existing shareholders.
The Distributor shall bear all expenses in connection with the
performance of its services hereunder and shall have no obligation to pay or to
reimburse the Guinness Funds for any other expenses incurred by or on behalf of
the Fund, including, any expenses which may be in excess of expense limitations
imposed by any state.
11. Use of the Distributor's Name. The Guinness Funds shall not use the
name of the Distributor, or any of its affiliates, in any Prospectus or
Statement of Additional Information, sales literature, and other material
relating to the Guinness Funds in any manner without the prior written consent
of the Distributor (which shall not be unreasonably withheld); provided,
however, that the Distributor hereby approves all lawful uses of the names of
the Distributor and its affiliates in the Prospectus and Statement of Additional
Information of the Guinness Funds and in all other materials which merely refer
in accurate terms to their appointments hereunder or which are required by the
Securities and Exchange Commission or any state securities authority.
12. Use of the Guinness Funds' Name. Neither the Distributor nor any of
its affiliates shall use the name of the Guinness Funds in any Prospectuses or
Statements of Additional Information, sales literature, or other material
relating to the Guinness Funds on any forms for other than internal use in any
manner without the prior consent of the Guinness Funds (which shall not be
unreasonably withheld); provided, however, that the Guinness Funds hereby
approves all uses of its name in the Prospectus and Statement of Additional
Information of the Guinness Funds and in sales literature and all other
materials which are required by the Distributor in the discharge of its duties
hereunder which merely refer in accurate terms to the appointment of the
Distributor hereunder, or which are required by the Securities and Exchange
Commission or any state securities authority.
13. Insurance. The Distributor agrees to maintain fidelity bond and
liability insurance coverages which are, in scope and amount, consistent with
coverages customary for distribution activities. The Distributor shall notify
the Guinness Funds upon receipt of any notice of material, adverse change in the
terms or provisions of its insurance coverage. Such notification shall include
the date of change and the reason or reasons therefor. The Distributor shall
notify the Guinness Funds of any material claim against it, whether or not
covered by
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insurance, and shall notify the Guinness Funds, from time to time as may be
appropriate, of the total outstanding claims made by it under its insurance
coverage.
14. Indemnification. The Guinness Funds agrees to indemnify and hold
harmless the Distributor and each of its directors and officers and each person,
if any, who controls the Distributor 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, based upon the
ground that the registration statement Prospectus, Statement of Additional
Information, shareholder reports or other information filed or made public by
the Guinness Funds (as from time to time amended) included an untrue statement
of a material fact or omitted to state a material fact required to be stated or
necessary in order to make the statements not misleading under the 1933 Act, or
any other statute or the common law. However, the Guinness Funds does not agree
to indemnify the Distributor or hold it harmless to the extent that the
statement or omission was made in reliance upon, and in conformity with,
information furnished to the Guinness Funds by or on behalf of the Distributor.
In no case (i) is the indemnity of the Guinness Funds in favor of the
Distributor or any person indemnified to be deemed to protect the Distributor or
any person against any liability to the Guinness Funds or its security holders
to which the Distributor or such person would otherwise be subjected 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 Guinness Funds to be liable under its
indemnity agreement contained in this paragraph with respect to any claim made
against the Distributor or any person indemnified unless the Distributor or
person, as the case may be, shall have notified the Guinness Funds 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 any such person (or after the Distributor or such
person shall have received notice of service on any designated agent). However,
failure to notify the Guinness Funds of any claim shall not relieve the Guinness
Funds from any liability which it may have to the Distributor or any person
against whom such action is brought otherwise than on account of its indemnity
agreement contained in this paragraph. The Guinness Funds 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 claims, but if the Guinness Funds
elects to assume the defense, the defense shall be conducted by counsel chosen
by it and satisfactory to the Distributor or person or persons, defendant or
defendants in the suit. In the event the Guinness Funds elects to assume the
defense of any suit and retain counsel, the Distributor, officers
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or 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. If the Guinness Funds does not elect to assume the defense of any suit, it
will reimburse the Distributor, officers or 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 Guinness Funds agrees to notify
the Distributor promptly of the commencement of any litigation or proceedings
against it or any of its officers or directors in connection with the issuance
or sale of any of the shares.
The Distributor also covenants and agrees that it will indemnify and
hold harmless the Guinness Funds and each of its Board members and officers and
each person, if any, who controls the Guinness Funds 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,
based upon the 1933 Act or any other statute or common law, alleging any
wrongful act of the Distributor or any of its employees or alleging that the
registration statement, Prospectus, Statement of Additional Information,
shareholder reports or other information field or made public by the Guinness
Funds (as from time to time amended) included an untrue statement of a material
fact or omitted to state a material fact required to be stated or necessary in
order to make the statements not misleading, insofar as the statement or
omission was made in reliance upon, and in conformity with information furnished
to the Guinness Funds by or on behalf of the Distributor. In no case (i) is the
indemnity of the Distributor in favor of the Guinness Funds or any person
indemnified to be deemed to protect the Guinness Funds or any person against any
liability to which the Guinness Funds or such 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 Distributor to be
liable under its indemnity agreement contained in this paragraph with respect to
any claim made against the Guinness Funds or any person indemnified unless the
Guinness Funds or 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 Guinness Funds or any such person (or
after the Guinness Funds or such person shall have received notice of service on
any designated agent). However, failure to notify the Distributor of any claim
shall not relieve the Distributor from any liability which it may have to the
Guinness Funds or any person against whom such action is brought otherwise than
on account of its indemnity agreement contained in this paragraph. In the case
of any notice to the Distributor, it shall be entitled to participate, at its
own expense, in the
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defense or, if it so elects, to assume the defense of any suit brought to
enforce any claim, but if the Distributor elects to assume the defense, the
defense shall be conducted by counsel chosen by it and satisfactory to the
Guinness Funds, to its officers and Board and to any controlling person or
persons, defendant or defendants in the suit. In the event the Distributor
elects to assume the defense of any suit and retain counsel, the Guinness Funds
or controlling persons, defendant or defendants in the suit, shall bear the fees
and expenses of any additional counsel retained by them. If the Distributor does
not elect to assume the defense of any suit, it will reimburse the Guinness
Funds, officers and Board or controlling person or persons, defendant or
defendants in the suit, for the reasonable fees and expenses of any counsel
retained by them. The Distributor agrees to notify the Guinness Funds promptly
of the commencement of any litigation or proceedings against it in connection
with the issue and sale of any of the shares.
15. Liability of the Distributor. The Distributor shall,not be liable
for any damages or loss suffered by the Guinness Funds in connection with the
matters to which this Agreement relates, except for damages or loss resulting
from willful misfeasance, reckless disregard, bad faith or gross negligence on
the Distributor's part in the performance of its duties under this Agreement.
Any person, even though also an officer, partner, employee or agent of the
Distributor, or any of its affiliates, who may be or become an officer of the
Guinness Funds, shall be deemed, when rendering services to or acting on any
business of the Guinness Funds in any such capacity (other than services or
business in connection with the Distributor's duties under this Agreement), to
be rendering such services to or acting solely for the Guinness Funds and not as
an officer, partner, employee or agent or one under the control or direction of
the Distributor or any of its affiliates, even if paid by the Distributor or an
affiliate thereof.
16. Acts of God, Etc. The Distributor shall not be liable for delays or
errors occurring by reason of circumstances not reasonably foreseeable and
beyond its control, including, but not limited to, acts of civil or military
authority, national emergencies, work stoppages, fire, flood, catastrophe, acts
of God, insurrection, war, riot or failure of communication or power supply. In
addition, in the event of equipment breakdowns which are (i) beyond the
reasonable control of the Distributor and (ii) not primarily attributable to the
failure of the Distributor to reasonably maintain or provide for the maintenance
of such equipment, the Distributor shall, at no additional expense to the
Guinness Funds, take reasonable steps in good faith to minimize service
interruptions but shall have no liability with respect thereto.
17. Supplemental Information. The Distributor and the Guinness Funds
shall regularly consult with each other regarding the Distributor's performance
of its obligations under this
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Agreement. In connection therewith, the Guinness Funds shall submit to the
Distributor at a reasonable time in advance of filing with the Securities and
Exchange Commission copies of any amended or supplemented registration
statements (including exhibits) under the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended, and, at a reasonable time in
advance of their proposed use, copies of any amended or supplemented forms
relating to any plan, program or service offered by the Guinness Funds. Any
change in such material which would require any change in the Distributor's
obligations under the foregoing provisions shall be subject to the Distributor's
approval, which shall not be unreasonably withheld.
18. Term. This Agreement shall become effective on April 29, 1996 or
such later date as may be agreed upon by the parties hereto, and shall continue
through April 28, 1998, and thereafter shall continue automatically for
successive annual periods, provided such continuance is specifically approved at
least annually (i) by the Fund's Board of Directors or (ii) by a vote of a
majority of the outstanding Shares of the Fund (as defined in the Investment
Company Act of 1940), provided that in either event the continuance is also
approved by the majority of the Fund's Directors who are not parties to the
Agreement or Interested persons (as defined in the 0000 Xxx) of any party to
this Agreement, by vote cast in person at a meeting called for the purpose of
voting on such approval. This Agreement is terminable without penalty on not
less than sixty days' notice by the Fund's Board of Directors, by vote of a
majority of the outstanding Shares of the Fund (as defined by the 0000 Xxx) or
by the Distributor. Any termination shall not affect the rights and obligations
of the parties under Sections 9, 14, 15, and 16, hereof.
Upon termination of this Agreement in whole, at the Guinness Funds'
expense and direction, the Distributor shall transfer to such successor as the
Guinness Funds shall specify all relevant books, records and other data
established or maintained by the Distributor under this Agreement.
19. Notice. Any notice required or permitted to be given by either
party to the other shall be deemed sufficient if sent by (i) telex, (ii)
telecopier, or (iii) registered or certified mail, postage prepaid, addressed by
the party giving notice to the other party at the last address furnished by the
other party to the party giving notice: if to the Guinness Funds, at Guinness
Flight Investment Funds Inc., Attention Xxxxx Xxxxxxxx, 000 Xxxxx Xxxx Xxxxxx,
Xxxxx 000, Xxxxxxxx, XX 00000, Telecopy No. (000) 000-0000; and if to the
Distributor, First Fund Distributors, Attention Xxxxxx Xxxxxxxxx, 0000 X.
Xxxxxxxxx Xxxx, Xxxxx 000X, Xxxxxxx, XX 00000, Telecopy No. (000) 000-0000, or
such other telecopy number or address as may be furnished by one party to the
other.
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20. Confidential Information. The Distributor will treat confidentially
and as proprietary information of the Guinness Funds all records and other
information relative to the Guinness Funds and to prior or present shareholders
or to those persons or entities who respond to the Distributor's inquiries
concerning investment in the Guinness Funds, and will not use such records and
information for any purposes other than performance of its responsibilities and
duties hereunder, except after prior notification to and approval in writing by
the Guinness Funds, which approval shall not be unreasonably withheld and may
not be withheld if the Distributor might, in its sole judgment exercised in good
faith, be exposed to civil or criminal contempt proceedings for failure to
comply, when requested to divulge such information by duly constituted
authorities, or when so requested by the Guinness Funds.
21. Limitation of Liability. The Distributor is expressly put on notice
of the limitation of shareholder liability as set forth in the Articles of
Incorporation of the Guinness Funds and agrees that the obligations assumed by
the Guinness Funds under this contract shall be limited in all cases to the
Guinness Funds and its assets. The Distributor shall not seek satisfaction of
any such obligation from the shareholders or any shareholder of the Guinness
Funds. Nor shall the Distributor seek satisfaction of any such obligation from
the Directors or any individual Director of the Guinness Funds. The Distributor
understands that the rights and obligations of each series of shares of the
Guinness Funds under the Guinness Funds' Articles of Incorporation are separate
and distinct from those of any and all other series.
22. Miscellaneous. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced in accordance with and
governed by the laws of the Commonwealth of Massachusetts to the extent federal
law does not govern. 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. Except as otherwise provided
herein or under the Investment Company Act of 1940, this Agreement may not be
changed, waived, discharged or amended except by written instrument which shall
make specific reference to this Agreement and which shall be signed by the party
against which enforcement of such change, waiver, discharge or amendment is
sought. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
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IN WITNESS WHEREOF, the Guinness Funds has executed this instrument in
its name and behalf, and its seal affixed, by one of its officers duly
authorized, and the Distributor has executed this instrument in its name and
behalf, and its corporate seal affixed, by one of its officers duly authorized,
as of the day and year first above written.
Guinness Flight Investment Funds,
Inc. with respect to the Guinness
Flight Global Government Bond Fund
Attest:
By:
-------------------------------------
President
FIRST FUND DISTRIBUTORS, INC.
Attest:
By:
-------------------------------------
Vice President and Secretary
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