EXHIBIT 6.
FORM OF DISTRIBUTION AGREEMENT BETWEEN THE
HOLLAND TRUST AND HCM INVESTMENTS, INC.
FORM OF
DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT ("Agreement") made this ____ day of ___________,
1996, by and between THE HOLLAND TRUST, a Delaware Business Trust (the "Trust"),
and HCM INVESTMENTS, INC., a Delaware corporation (the "Distributor").
W I T N E S S E T H:
WHEREAS, the Trust intends to engage in business as an open-end management
investment company of the series type and register as such under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust is authorized to issue shares of beneficial interest
(the "Shares"), in separately designated series ("Funds") each with its own
investment objective, investment program, policies, and restrictions; and
WHEREAS, the Trust has registered the Shares of the Funds under the
Securities Act of 1933, as amended (the "1933 Act"), pursuant to a registration
statement on Form N-1A (the "Registration Statement"), including a prospectus
("Prospectus") and a statement of additional information ("Statement of
Additional Information"); and
WHEREAS, the Distributor is registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended (the "1934 Act"); and
WHEREAS, the Trust wishes to engage the services of the Distributor as
distributor of the Shares of the Funds and the Distributor is willing to serve
in that capacity;
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements hereinafter set forth, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. APPOINTMENT OF DISTRIBUTOR. (a) The Trust hereby appoints the
Distributor as principal underwriter and distributor of the Trust to service the
Shares of the Funds in jurisdictions wherein the Shares may be legally offered
for sale. The Distributor shall be the exclusive agent for the servicing of
Shares of the Funds; PROVIDED, HOWEVER, that the Trust in its absolute
discretion may issue Shares of the Funds otherwise than through the Distributor
in connection with (i) the payment or reinvestment of dividends or
distributions, (ii) any merger or consolidation of the Trust or a Fund with any
other investment company
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or trust or any personal holding company, or the acquisition of the assets of
any such entity or another series of the Trust, (iii) any offer of exchange
authorized by the Board of Trustees of the Trust, (iv) any sales of Shares to
Trustees and officers of the Trust or to the Distributor or such other
persons identified in the current Prospectus and Statement of Additional
Information of the Trust, or (v) the issuance of such Shares to a unit
investment trust if such unit investment trust has elected to use Shares as
an underlying investment. Notwithstanding any other provision hereof, the
Trust may terminate, suspend, or withdraw the offering of the Shares of a
Fund whenever, in its sole discretion, it deems such action to be desirable.
(b) The Distributor hereby accepts such appointment as principal
underwriter and distributor of the Trust and agrees that it will use its best
efforts to promote the Funds and to solicit orders for the purchase of Shares.
The Distributor shall service Shares of the Funds as agent for the Corporation
at prices determined as hereinafter provided and on the terms set forth herein,
all according to applicable federal and state laws and regulations and the
Declaration of Trust and By-Laws of the Trust. The Distributor may service
Shares of the Funds to or through qualified brokers, dealers or others and shall
require each such person to conform to the provisions hereof, the Registration
Statement, the current Prospectus and Statement of Additional Information, and
applicable law. Neither the Distributor nor any such person shall withhold the
placing of purchase orders for Shares so as to make a profit thereby.
(c) The Distributor shall order Shares of the Funds from the Trust only to
the extent that it shall have received purchase orders therefor. The
Distributor will not make, or authorize any brokers, dealers, or others to make,
(i) any short sales of Shares or (ii) any sales of Shares to any Trustee or
officer of the Trust, the Distributor, or any corporation or association
furnishing investment advisory, managerial, or supervisory services to the
Trust, or to any such corporation or association, unless such sales are made in
accordance with the then current Prospectus and Statement of Additional
Information.
(d) The Distributor is not authorized by the Trust to give any information
or to make any representation other than those contained in the current
Prospectus, Statement of Additional Information, and shareholder reports, or in
supplementary materials specifically approved by the Trust.
2. OFFERING PRICE OF SHARES. All Shares of each Fund serviced under this
Agreement shall be sold at the public offering price per Share in effect at the
time of the sale as described in the then current Prospectus and Statement of
Additional Information; PROVIDED, HOWEVER, that any public offering price for
the Shares shall be the net asset value per Share, as determined in the manner
described in the Trust's current Prospectus and/or Statement of Additional
Information. At no time shall the Trust receive less than the full net asset
value of the Shares, determined in the manner set forth in the then current
Prospectus and Statement of Additional Information.
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3. PAYMENT OF EXPENSES. (a) Except as otherwise provided herein, the
Distributor shall pay, or arrange for others to pay, all its expenses, including
the following: (i) payments to representatives of the Distributor and to
qualified brokers, dealers and others in respect of the servicing Shares of the
Funds; (ii) compensation and expenses of employees of the Distributor who engage
in or support the servicing of Shares of the Funds or render shareholder support
services not otherwise provided by the Corporation's transfer and shareholder
servicing agent; (iii) formulation and implementation of marketing and
promotional activities; (iv) preparation, printing, and distribution of
supplementary materials and the printing and distribution of Prospectuses,
Statements of Additional Information, and shareholder reports for recipients
other than existing shareholders of the Funds; (v) qualification of the Trust as
a broker or dealer under state law as well as qualification of the Trust as an
entity authorized to do business in certain states; and (vi) obtaining such
information, analyses, and reports with respect to marketing and promotional
activities as the Trust may from time to time reasonably request.
(b) The Trust shall pay or arrange for others to pay the following
expenses: (i) preparation, printing, and distribution to shareholders of
Prospectuses and Statements of Additional Information; (ii) preparation,
printing, and distribution of shareholder reports and other communications to
shareholders; (iii) registration of the Shares of the Funds under the federal
securities laws; (iv) qualification of the Shares of the Funds for sale in such
states as the Distributor and the Trust may approve; (v) maintaining facilities
for the issue and transfer of Shares; (vi) supplying information, prices, and
other data to be furnished by the Trust under this Agreement; and (vii) taxes
applicable to the sale or delivery of the Shares of the Funds or certificates
therefor.
4. FURNISHING OF INFORMATION. The Trust shall furnish to the Distributor
for use in connection with the servicing of Shares of the Funds such
information, financial statements, and other documents as the Distributor may
reasonably request. The Trust shall also make available such number of copies
of the current Prospectus, Statement of Additional Information, and shareholder
reports as the Distributor shall reasonably request.
5. REPURCHASE OF SHARES. The Distributor as agent and for the account of
the Trust may repurchase Shares of the Funds offered for resale to it and redeem
such Shares at their net asset value determined as set forth in the Prospectus
and Statement of Additional Information.
6. INDEMNIFICATION. (a) The Trust agrees to indemnify and hold harmless
the Distributor and 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, against any
losses, claims, damages, or liabilities to which the Distributor or such
controlling person may become
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subject under the 1933 Act or otherwise, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon:
(i) any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement or any amendment thereto or
the Prospectus (other than an omitting prospectus prepared pursuant to
Rule 482 under the 1933 Act unless such omitting prospectus has been
specifically approved by the Trust) or the Statement of Additional
Information or any amendment or supplement thereto or an annual or interim
report to shareholders; or
(ii) the omission or alleged omission to state in the Registration
Statement or any amendment thereto or the Prospectus (other than an
omitting prospectus prepared pursuant to Rule 482 under the 1933 Act unless
such omitting prospectus has been specifically approved by the Trust) or
the Statement of Additional Information or any amendment or supplement
thereto or an annual or interim report to shareholders, a material fact
required to be stated therein or necessary to make the statements therein
not misleading;
and shall reimburse, as incurred, the Distributor and each such controlling
person for any legal or other expenses reasonably incurred by the Distributor or
such controlling person in connection with investigating, defending against, or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability, or action; PROVIDED, HOWEVER, that the Trust shall not be
liable in any such case to the extent that any such loss, claim, damage, or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement or
any amendment thereto, or the Prospectus or Statement of Additional Information
or any amendment or supplement thereto, or in an annual or interim report to
shareholders, in reliance upon and in conformity with written information
furnished to the Trust by the Distributor specifically for use therein; and
PROVIDED FURTHER, that this indemnity agreement shall not protect the
Distributor or any such controlling person against any liability to which it
would otherwise be subject by reason of willful misfeasance, bad faith, or
negligence in the performance of its duties, or by reason of its failure to
exercise due care in rendering services hereunder. This indemnity agreement
shall be in addition to any liability which the Trust may otherwise have.
(b) The Distributor agrees to indemnify and hold harmless the Trust, each
of the Trust's Trustees, each of the Trust's officers who signed the
Registration Statement, and each person, if any, who controls the Trust within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against
any losses, claims, damages or liabilities to which the Trust or any such
Trustee, officer, or controlling person may become subject under the 1933 Act or
otherwise, insofar as such losses, claims, damages, or liabilities (or actions
in respect thereof) arise out of or are based upon:
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(i) any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement or any amendment thereto or
the Prospectus or Statement of Additional Information, or any amendment or
supplement thereto, or the omission or alleged omission to state in the
Registration Statement or any amendment thereto, or the Prospectus or
Statement of Additional Information or any amendment or supplement thereto,
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent that such
untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written
information furnished to the Trust by the Distributor specifically for use
therein; or
(ii) any untrue statement or alleged untrue statement of a material
fact contained in any unauthorized supplementary materials or omitting
prospectus prepared pursuant to Rule 482 under the 1933 Act, or the
omission or alleged omission to state in any such materials or prospectus,
a material fact required to be stated therein or necessary to make the
statements therein not misleading; or
(iii) any act or deed of the Distributor, its employees, or its
representatives which has not been authorized by the Trust in any
Prospectus or Statement of Additional Information or by this Agreement;
and shall reimburse, as incurred, any legal or other expenses reasonably
incurred by the Trust or any such Trustee , officer, or controlling person in
connection with investigating, defending against, or appearing as a third-party
witness in connection with any such loss, claim, damage, liability or action;
PROVIDED, HOWEVER, that this indemnity agreement shall not protect any Trustee
or officer of the Trust against any liability to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office. This
indemnity agreement shall be in addition to any liability which the Distributor
may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section 6 of
notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 6, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 6. In case any such action is brought against any indemnified party,
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it may wish, to assume the defense thereof, with counsel satisfactory to
such indemnified party; PROVIDED, HOWEVER, that if the defendants in any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be one or more
legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnifying party shall not have the right to direct the defense of
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such action on behalf of such indemnified party or parties and such
indemnified party or parties shall have the right to select separate counsel
to defend such action on behalf of such indemnified party or parties. After
notice from the indemnifying party to such indemnified party of its election
so to assume the defense thereof and approval by such indemnified party of
counsel appointed to defend such action, the indemnifying party shall not be
liable to such indemnified party under this Section 6 for any legal or other
expense, other than reasonable costs of investigation, subsequently incurred
by such indemnified party in connection with the defense thereof, unless (i)
the indemnified party shall have employed separate counsel in accordance with
the proviso to the next preceding sentence or (ii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense
of the indemnifying party. After such notice from the indemnifying party to
such indemnified party, the indemnifying party shall not be liable for the
costs and expenses of any settlement of such action effected by such
indemnified party without the consent of the indemnifying party, unless such
indemnifying party waived its rights under this Section 6 in which case the
indemnified party may effect such a settlement without such consent.
7. TERM AND TERMINATION. (a) This Agreement shall become effective as of
the date hereof. Unless sooner terminated as herein provided, this Agreement
shall remain in full force and effect for a period of one year, and thereafter
may be continued for successive periods of one year, but only so long as each
such continuance is specifically approved at least annually (i) by the Board of
Trustees of the Trust, and (ii) by vote of a majority of the Trustees of the
Trust who are not "interested persons" of the Trust, as that term is defined in
Section 2(a)(19) of the 1940 Act (the "Disinterested Trustees"), cast in person
at a meeting called for the purpose of voting on such approval.
(b) This Agreement may be terminated at any time, without the payment of
any penalty, by the Board of Trustees of the Trust or a majority of the
Disinterested Trustees, by vote of a majority of the outstanding voting
securities of the Trust, or by the Distributor, on not more than 60 days' nor
less than 30 days' written notice to the other party or upon such shorter notice
as may be mutually agreed upon.
(c) This Agreement shall automatically terminate in the event of its
assignment.
(d) The reimbursement and indemnification provisions contained in
Section 6 of this Agreement shall remain in full force and effect regardless of
any termination of this Agreement.
8. DEFINITION OF CERTAIN TERMS. For purposes of this Agreement the terms
"assignment," "interested person," "majority of the outstanding voting
securities," and "principal underwriter" shall have their respective meanings
defined in the 1940 Act and the rules and regulations thereunder, subject,
however, to such exemptions as may be granted
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to either the Distributor or the Trust by the Securities and Exchange
Commission, or such interpretative positions as may be taken by the
Commission or its staff under the 1940 Act.
9. NOTICE. Any notice under this Agreement shall be given in writing,
addressed and delivered, or mailed postpaid (a) if to the Distributor, to HCM
Investments, Inc., Suite 3260, 00 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000;
and (b) if to the Trust, to The Holland Trust, Suite 3260, 00 Xxxx Xxxxxx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000.
10. CAPTIONS. The captions in this Agreement are included for convenience
of reference only and in no other way define or delineate any of the provisions
hereof or otherwise affect their construction or effect.
11. INTERPRETATION. Nothing herein contained shall be deemed to require
the Trust to take any action contrary to its Declaration of Trust or By-Laws, or
any applicable statutory or regulatory requirement to which it is subject or by
which it is bound, or to relieve or deprive the Board of Trustees of its
responsibility for and control of the conduct of the affairs of the Trust.
12. GOVERNING LAW. Except insofar as the 1940 Act or other federal laws
and regulations may be controlling, this Agreement shall be governed by, and
construed and enforced in accordance with the laws of the State of Illinois.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly authorized and their respective
corporate seals to be hereunto affixed, as of the day and year first above
written.
ATTEST: THE HOLLAND TRUST
_________________________ By:____________________________________
Title: President and Chairman of the
Board of Trustees
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ATTEST: HCM INVESTMENTS, INC.
_________________________ By:____________________________________
Title: President, Treasurer and Director
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