EXHIBIT 99.6(a)(4)
XXXXX XXXXX MUNICIPALS TRUST
DISTRIBUTION AGREEMENT
ON BEHALF OF MASSACHUSETTS MUNICIPAL BOND PORTFOLIO
AGREEMENT effective November 1, 1996 between XXXXX XXXXX MUNICIPALS TRUST,
a Massachusetts business trust having its principal place of business in Boston
in the Commonwealth of Massachusetts, hereinafter called the "Trust," on behalf
of Massachusetts Municipal Bond Portfolio (the "Fund"), and XXXXX XXXXX
DISTRIBUTORS INC., a Massachusetts corporation having its principal place of
business in said Boston and formerly named EV Distributors, Inc., hereinafter
sometimes called the "Principal Underwriter."
IN CONSIDERATION of the mutual promises and undertakings herein contained,
the parties hereto agree:
1. The Trust grants to the Principal Underwriter the right to purchase
shares of the Fund upon the terms hereinbelow set forth during the term of this
Agreement. While this Agreement is in force, the Principal Underwriter agrees to
use its best efforts to find purchasers for shares of the Fund.
The Principal Underwriter shall have the right to buy from the Fund the
shares needed, but not more than the shares needed (except for clerical errors
and errors of transmission) to fill unconditional orders for shares of the Fund
placed with the Principal Underwriter by investors as set forth in the current
Prospectus relating to shares of the Fund. The price which the Principal
Underwriter shall pay for the shares so purchased shall be the public offering
price, as defined in paragraph 2 below. The Principal Underwriter shall notify
Investors Bank & Trust Company, Custodian of the Fund ("IBT"), and First Data
Investor Services Group, Transfer Agent of the Fund ("First Data"), or a
successor transfer agent, at the end of each business day, or as soon thereafter
as the orders placed with it have been compiled, of the number of shares and the
prices thereof which the Principal Underwriter is to purchase as principal for
resale. The Principal Underwriter shall take down and pay for shares ordered
from the Fund on or before the eleventh business day (excluding Saturdays) after
the shares have been so ordered.
The right granted to the Principal Underwriter to buy shares from the Fund
shall be exclusive, except that said exclusive right shall not apply to shares
issued in connection with the merger or consolidation of any other investment
company or personal holding company with the Fund or the acquisition by purchase
or otherwise of all (or substantially all) the assets or the outstanding shares
of any such company, by the Fund; nor shall it apply to shares, if any, issued
by the Fund in distribution of realized capital gains of the Fund payable in
shares or in cash at the option of the shareholder.
2. The shares may be resold by the Principal Underwriter to
investors upon the following terms and conditions.
The public offering price, i.e., the price per share at which the
Principal Underwriter may sell shares to the public, shall be equal to the net
asset value of a share of the Fund.
The net asset value of shares of the Fund shall be determined by the Trust
or IBT, as the agent of the Fund, as of the close of regular trading on the New
York Stock Exchange on each business day on which said Exchange is open, or as
of such other time on each such business day as may be determined by the
Trustees of the Trust, in accordance with the method referred to in Article XII
of the Declaration of Trust of the Trust. The Trust may also cause the net asset
value to be determined in substantially the same manner or estimated in such
manner and as of such other time or times as may from time to time be agreed
upon by the Trust and Principal Underwriter. The Trust will notify the Principal
Underwriter each time the net asset value of the Fund's shares is determined and
when such value is so determined it shall be applicable to transactions as set
forth in the current Prospectus relating to the Fund's shares.
No shares of the Fund shall be sold by the Fund during any period when the
determination of net asset value is suspended pursuant to Article XII of the
Declaration of Trust, except to the Principal Underwriter, in the manner and
upon the terms above set forth to cover contracts of sale made by the Principal
Underwriter with its customers prior to any such suspension, and except as
provided in the last paragraph of paragraph 1 hereof. The Trust shall also have
the right to suspend the sale of the Fund's shares if in the judgment of the
Trust conditions obtaining at any time render such action advisable. The
Principal Underwriter shall have the right to suspend sales at any time, to
refuse to accept or confirm any order from an investor or dealer, or to accept
or confirm any such order in part only, if in the judgment of the Principal
Underwriter such action is in the best interests of the Fund.
3. The Trust agrees that it will, from time to time, but subject to the
necessary approval of the Fund's shareholders, take such steps as may be
necessary to register the Fund's shares under the federal Securities Act of
1933, as amended from time to time (the "1933 Act"), to the end that there will
be available for sale such number of shares as the Principal Underwriter may
reasonably be expected to sell. The Trust agrees to indemnify and hold harmless
the Principal Underwriter and each person, if any, who controls the Principal
Underwriter within the meaning of Section 15 of the 1933 Act against any loss,
liability, claim, damages or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, claim, damages or
expense and reasonable counsel fees incurred in connection therewith), arising
by reason of any person acquiring any shares of the Fund, which may be based
upon the 1933 Act or on any other statute or at common law, on the ground that
the Registration Statement or Prospectus, as from time to time amended and
supplemented, includes an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading, unless such statement or omission was made in
reliance upon, and in conformity with, information furnished in writing to the
Trust in connection therewith by or on behalf of the Principal Underwriter;
provided, however, that in no case (1) is the indemnity of the Trust in favor of
the Principal Underwriter and any such controlling person to be deemed to
protect such Principal Underwriter or any such controlling person against any
liability of the Trust or the Fund or its security holders to which such
Principal Underwriter or any such controlling person would otherwise be subject
by reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement, or (ii) is the Trust or the Fund to
be liable under its indemnity agreement contained in this paragraph with respect
to any claim made against the Principal Underwriter or any such controlling
person unless the Principal Underwriter or any such controlling person, as the
case may be, shall have notified the Trust in writing within a reasonable time
after the summons or other first legal process giving information of the nature
of the claim shall have been served upon the Principal Underwriter or such
controlling person (or after such Principal Underwriter or such controlling
person shall have received notice of such service on any designated agent), but
failure to notify the Trust of any such claim shall not relieve it from any
liability which the Fund may have to the person against whom such action is
brought otherwise than on account of its indemnity agreement contained in this
paragraph. The Trust shall be entitled to participate, at the expense of the
Fund, in the defense, or, if the Trust so elects, to assume the defense of any
suit brought to enforce any such liability, but it the Trust elects to assume
the defense, such defense shall be conducted by counsel chosen by it and
satisfactory to the Principal Underwriter or controlling person or persons,
defendant or defendants in the suit. In the event the Trust elects to assume the
defense of any such suit and retains such counsel, the Principal Underwriter or
controlling person or persons, defendant or defendants in the suit, shall bear
the fees and expenses of any additional counsel retained by them, but, in case
the Trust does not elect to assume the defense of any such suit, the Fund shall
reimburse the Principal Underwriter or controlling person or persons, defendant
or defendants in the suit, for the reasonable fees and expenses of any counsel
retained by them. The Trust agrees promptly to notify the Principal Underwriter
of the commencement of any litigation or proceedings against it or any of its
officers or Trustees in connection with the issuance or sale of any of the
Fund's shares.
4. The Principal Underwriter covenants and agrees that, in selling the
shares of the Fund, it will use its best efforts in all respects duly to conform
with the requirements of all state and federal laws relating to the sale of such
shares, and will indemnify and hold harmless the Trust and each of its Trustees
and officers and each person, if any, who controls the Trust within the meaning
of Section 15 of the 1933 Act, against any loss, liability, damages, claim or
expense (including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees incurred
in connection therewith), arising by reason of any person acquiring any shares
of the Fund, which may be based upon the 1933 Act or any other statute or at
common law, on account of any wrongful act of the Principal Underwriter or any
of its employees (including any failure to conform with any requirement of any
state or federal law relating to the sale of such shares) or on the ground that
the registration statement or Prospectus, as from time to time amended and
supplemented, includes an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading, insofar as any such statement or omission was
made in reliance upon, and in conformity with information furnished in writing
to the Fund in connection therewith by or on behalf of the Principal
Underwriter, provided, however, that in no case (i) is the indemnity of the
Principal Underwriter in favor of any person indemnified to be deemed to protect
the Fund or any such person against any liability to which the Fund or any such
person would otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence in the performance of its or his duties or by reason of its
or his reckless disregard of its obligations and duties under this Agreement, or
(ii) is the Principal Underwriter to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against the Fund or
any person indemnified unless the Trust or such person, as the case may be,
shall have notified the Principal Underwriter in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon the Trust; the Fund or upon such
person (or after the Trust or such person shall have received notice of such
service on any designated agent), but failure to notify the Principal
Underwriter of any such claim shall not relieve it from any liability which it
may have to the Fund or any person against whom such action is brought otherwise
than on account of its indemnity agreement contained in this paragraph. The
Principal Underwriter shall be entitled to participate, at its own expense, in
the defense, or, if it so elects, to assume the defense of any suit brought to
enforce any such liability, but if the Principal Underwriter elects to assume
the defense, such defense shall be conducted by counsel chosen by it and
satisfactory to the Trust, or to its officers or Trustees, or to any controlling
person or persons, defendant or defendants in the suit. In the event that the
Principal Underwriter elects to assume the defense of any such suit and retains
such counsel, the Fund or such officers or Trustees or controlling person or
persons, defendant or defendants in the suit, shall bear the fees and expenses
of any additional counsel retained by them or the Trust, but, in case the
Principal Underwriter does not elect to assume the defense of any such suit, it
shall reimburse the Fund, any such officers and Trustees or controlling person
or persons, defendant or defendants in such suit, for the reasonable fees and
expenses of any counsel retained by them or the Trust. The Principal Underwriter
agrees promptly to notify the Trust of the commencement of any litigation or
proceedings against it in connection with the issue and sale of any of the
Fund's shares.
Neither the Principal Underwriter nor any dealer nor any other person is
authorized by the Trust to give any information or to make any representations,
other than those contained in the Registration Statement or Prospectus filed
with the Securities and Exchange Commission (the "Commission") under the 1933
Act (as said Registration Statement and prospectus may be amended or
supplemented from time to time), covering the shares of the Fund. Neither the
Principal Underwriter nor any other person is authorized to act as agent for the
Trust or the Fund in connection with the offering or sale of shares of the Fund
to the public or otherwise. All such sales made by the Principal Underwriter
shall be made by it as principal, for its own account. The Principal Underwriter
may, however, act as agent in connection with "exchanges" between investment
companies for which the Principal Underwriter acts as Principal Underwriter or
investment manager as provided in the agreement among such companies as from
time to time in effect.
5. (a) The Fund will pay, or cause to be paid -
(i) all the costs and expenses of the Fund, including fees and
disbursements of its counsel, in connection with the preparation and filing of
any required Registration Statement and/or Prospectus under the 1933 Act,
covering its shares and all amendments and supplements thereto, and preparing
and mailing periodic reports to shareholders (including the expense of setting
up in type any such Registration Statement, Prospectus and periodic report);
(ii) the cost of preparing temporary and permanent share
certificates (if any) for shares of the Fund;
(iii) the cost and expenses of delivering to the Principal
Underwriter at its office in Boston, Massachusetts, all shares of the Fund
purchased by it as principal hereunder; and
(iv) all the federal and state (f any) issue and/or transfer taxes
payable upon the issue by or (in the case of treasury shares) transfer from the
Fund to the Principal Underwriter of any and all shares of the Fund purchased by
the Principal Underwriter hereunder.
(b) The Principal Underwriter agrees that, after the Prospectus and
periodic reports have been set up in type, it will bear the expense of printing
and distributing any copies thereof which are to be used in connection with the
offering of shares of the Fund to investors. The Principal Underwriter further
agrees that it will bear the expenses of preparing, printing and distributing
any other literature used by the Principal Underwriter in connection with the
offering of the shares of the Fund for sale to the public and any expenses of
advertising in connection with such offering. The Fund agrees to pay the
expenses of registration and maintaining registration of its shares for sale
under federal and state securities laws, and, if necessary or advisable in
connection therewith, of qualifying the Trust or the Fund as a dealer or broker,
in such states as shall be selected by the Principal Underwriter and the fees
payable to each such state for continuing the qualification therein until the
Principal Underwriter notifies the Trust that it does not wish such
qualification continued.
6. If, at any time during the existence of this Agreement, the Trust shall
deem it necessary or advisable in the best interests of the Fund that any
amendment of this Agreement be made in order to comply with the recommendations
or requirements of the Commission or other governmental authority or to obtain
any advantage under Massachusetts or federal tax laws, and shall notify the
Principal Underwriter of the form of amendment which it deems necessary or
advisable and the reasons therefor, and, if the Principal Underwriter declines
to assent to such amendment, the Trust may terminate this Agreement forthwith by
written notice to the Principal Underwriter. If, at any time during the
existence of its agreement upon request by the Principal Underwriter, the Trust
fails (after a reasonable time) to make any changes in its Declaration of Trust,
as amended, or in its methods of doing business which are necessary in order to
comply with any requirement of federal law or regulations of the Commission or
of a national securities association of which the Principal Underwriter is or
may be a member, relating to the sale of the shares of the Fund, the Principal
Underwriter may terminate this Agreement forthwith by written notice to the
Trust.
7. In connection with purchases or sales of portfolio securities for the
account of the Fund, neither the Principal Underwriter nor any officer or
director of the Principal Underwriter shall act as a principal. The Principal
Underwriter covenants that it and its officers and directors shall comply with
the provisions of Article XIV of the Trust's By-Laws applicable to them.
8. The Principal Underwriter agrees that it will not take any long or
short positions in the shares of the Fund except as permitted by paragraph 1
hereof, and that, so far as it can control the situation, it will prevent any
officer, director or owner of voting common stock of the Principal Underwriter
from taking any long or short position in the shares of the Fund, except as
permitted by the By-Laws of the Trust as from time to time in effect.
9. The term "net asset value" as used in this Agreement with reference to
the shares of the Fund shall have the same meaning as the term "asset value" as
used in the Declaration of Trust, as amended, and as defined in Article XII
thereof.
10. (a) The Principal Underwriter is a corporation in the United States
organized under the laws of Massachusetts and holding membership in the National
Association of Securities Dealers, Inc., a securities association registered
under Section 15A of the Securities Exchange Act of 1934, and during the life of
this Agreement will continue to be so resident in the United States, so
organized and a member in good standing of said Association. The Principal
Underwriter will comply with the Trust's Declaration of Trust and By-Laws, and
the Investment Company Act of 1940 (the "1940 Act") and the rules promulgated
thereunder, insofar as they are applicable to the Principal Underwriter.
(b) The Principal Underwriter shall maintain in the United States
and preserve therein for such period or periods as the Commission shall
prescribe by rules and regulations applicable to it as Principal Underwriter of
an open-end investment company registered under the 1940 Act such accounts,
books and other documents as are necessary or appropriate to record its
transactions with the Fund. Such accounts, books and other documents shall be
subject at any time and from time to time such reasonable periodic, special and
other examinations by the Commission or any member or representative thereof as
the Commission may prescribe. The Principal Underwriter shall furnish to the
Commission within such reasonable time as the Commission may prescribe copies of
or extracts from such records which may be prepared without effort, expense or
delay as the Commission may by order require.
11. This Agreement shall continue in force indefinitely until terminated
as in this Agreement above provided, except that:
(a) this Agreement shall continue in effect through and including
April 28, 1997 and shall continue in full force and effect indefinitely
thereafter, but only so long as such continuance is specifically approved at
least annually (i) by the vote of a majority of the Trustees of the Trust who
are not "interested persons" (as defined in Section 2(a)(19) of the 0000 Xxx) of
the Trust or of the Principal Underwriter cast in person at a meeting called for
the purpose of voting on such approval, and (ii) by the Trustees of the Trust or
by vote of a majority of the outstanding voting securities (as defined in
Section 2(a)(42) of the 0000 Xxx) of the Fund;
(b) either party shall have the right to terminate this Agreement on
six (6) months' written notice thereof given in writing to the other; and
(c) the Trust shall have the right to terminate this Agreement
forthwith in the event that it shall have been established by a court of
competent jurisdiction that the Principal Underwriter or any director or officer
of the Principal Underwriter has taken any action which results in a breach of
the covenants set out in paragraph 7 hereof.
12. In the event of the assignment (as defined in Section 2(a)(4) of the
0000 Xxx) of this Agreement by the Principal Underwriter, this Agreement shall
automatically terminate.
13. Any notice under this Agreement shall be in writing, addressed and
delivered, or mailed postage paid, to the other party, at such address as such
other party may designate for the receipt of such notices. Until further notice
to the other party, it is agreed that the record address of the Trust and that
of the Principal Underwriter, shall be 00 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000.
14. The services of the Principal Underwriter to the Fund hereunder are
not to be deemed to be exclusive, the Principal Underwriter being free to (a)
render similar service to, and to act as principal underwriter in connection
with the distribution of shares of, other series of the Trust or investment
companies, and (b) engage in other business and activities from time to time.
15. The Principal Underwriter expressly acknowledges the provision in
Article XIV, Section 2 of the Trust's Declaration of Trust limiting the personal
liability of shareholders of the Fund. The Principal Underwriter hereby agrees
that it shall have recourse to the Trust or the Fund for payment of claims or
obligations as between the Trust or the Fund and the Principal Underwriter
arising out of this Agreement and shall not seek satisfaction from the
shareholders or any shareholder of the Fund. The Fund shall not be responsible
for obligations of any other series of the Trust.
16. This Agreement shall amend, replace and be substituted for the
distribution agreement dated June 7, 1993 between the Trust on behalf of the
Fund and Xxxxx Xxxxx Distributors, Inc., a separate Massachusetts corporation
that has served as principal underwriter prior to the effective date of this
Agreement as of the opening of business on November 1, 1996, and this Agreement
shall be effective as of such time.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement on
October 18, 1996.
XXXXX XXXXX MUNICIPALS TRUST
(on behalf of Massachusetts Municipal
Bond Portfolio)
By /s/ Xxxxxx X. Xxxxxx
-------------------------------
President
XXXXX XXXXX DISTRIBUTORS, INC.
By /s/ H. Day Xxxxxxx, Jr.
-------------------------------
Vice President
