FORM OF DEALER AGREEMENT
THIS DEALER AGREEMENT ("Agreement") is made this ________ day of
___________________, 200__, between Xxxx Xxxxx Xxxx Xxxxxx, Incorporated ("Xxxx
Xxxxx"), a Maryland corporation, and _________________________________________,
a __________________________________ ("Financial Intermediary").
Pursuant to the terms of various Underwriting Agreements (each, an
"Underwriting Agreement"), Xxxx Xxxxx has been appointed to serve as the
principal underwriter in connection with the offering and sale of shares of the
common stock of certain investment companies (the "Investment Companies")
registered under the Investment Company Act of 1940, as amended ("1940 Act").
The Investment Companies currently offered for public sale include
multiple, distinct series of shares of common stock, which have been designated
by the names listed on Schedule A and which correspond to distinct portfolios of
investments (each a "Fund" and collectively, the "Funds"). Schedule A may be
amended from time to time by written notice from Xxxx Xxxxx to Financial
Intermediary.
The board of directors (the "Board") of each Investment Company has
designated a class of shares of common stock of each Fund as the Primary Class
of shares ("Primary Shares"), a separate class as the Financial Intermediary
Class of shares ("Financial Intermediary Shares") and a separate class as the
Institutional Class of shares ("Institutional Shares"). The Primary Shares,
Financial Intermediary Shares and the Institutional Shares are hereafter
referred to, collectively, as the "Shares."
Xxxx Xxxxx desires to retain Financial Intermediary in connection with
the offering and sale of the Shares of each Fund and to have Financial
Intermediary perform certain services for the Investment Companies and their
shareholders.
In consideration of the premises and the mutual covenants contained
herein, Xxxx Xxxxx and Financial Intermediary agree as follows:
1. Authorization. Xxxx Xxxxx hereby authorizes Financial Intermediary, and
Financial Intermediary hereby agrees, to sell and to arrange for the sale of
Shares on the terms set forth in this Agreement. Xxxx Xxxxx also authorizes
Financial Intermediary, and Financial Intermediary hereby agrees, to perform
certain other services set forth herein.
2. Services, Duties and Representations of Financial Intermediary.
(a) Financial Intermediary agrees to sell Shares on a best efforts basis
upon the terms described in this Agreement and the currently effective
Registration Statement of each Investment Company, and any supplements thereto,
under the Securities Act of 1933, as amended ("1933 Act"), and the 1940 Act
("Registration Statement") (including compliance with the frequent trading and
redemption fee provisions, where applicable). Financial Intermediary shall not
be obligated to sell any certain number of Shares.
(b) Financial Intermediary shall not transmit any orders for investors that
fail to meet the minimum criteria for investment in Shares, as described in the
Registration Statement. Financial Intermediary shall distribute prospectuses and
reports to its customers in compliance with applicable legal requirements and as
otherwise requested by Xxxx Xxxxx.
(c) Financial Intermediary shall provide ongoing shareholder liaison
services to the shareholders of each Investment Company, including responding to
shareholder inquiries, providing shareholders with information on their
investments, and any other services now or hereafter deemed to be appropriate
subjects for the payment of "service fees" under Conduct Rule 2830 of the
National Association of Securities Dealers, Inc. ("NASD") (collectively,
"Shareholder Services").
(d) Subject to the prior written permission of Xxxx Xxxxx and approval by
each Investment Company's Board, Financial Intermediary may enter into
agreements with registered and qualified securities dealers and other entities
it may select for the performance of Shareholder Services, the form thereof to
be as mutually agreed upon and approved by Xxxx Xxxxx and Financial
Intermediary. In making agreements with such dealers, Financial Intermediary
shall act only as principal and not as agent for Xxxx Xxxxx or any Investment
Company.
(e) To facilitate redemption of Shares by shareholders, Financial
Intermediary is authorized but not required to repurchase Shares presented to it
by shareholders and its correspondent firms at the price determined in
accordance with, and in the manner set forth in, the appropriate Registration
Statement. Financial Intermediary is not authorized to repurchase Shares
presented to it when an Investment Company has suspended redemptions or
postponed for more than seven days the date of payment upon redemption, as
permitted under the 1940 Act.
(f) Financial Intermediary represents and warrants that (i) it is a member
in good standing of the NASD and agrees to abide by the Conduct Rules of the
NASD, (ii) it is registered as a broker-dealer with the Securities and Exchange
Commission, (iii) it will maintain any filings and licenses required by federal
and state laws to conduct the business contemplated under this Agreement, and
(iv) it will comply with all federal and state laws and regulations applicable
to the offer and sale of Shares.
(g) Financial Intermediary agrees to notify Xxxx Xxxxx immediately in the
event of (i) its expulsion or suspension from the NASD, or (ii) the institution
of an investigation or proceeding by any federal, state or self-regulatory
organization against Financial Intermediary alleging that Financial Intermediary
has violated any applicable federal or state law, rule or regulation or any rule
of the NASD arising out of its activities as a broker-dealer or in connection
with this Agreement, or which may otherwise affect in any material way its
ability to act in accordance with the terms of this Agreement. The Financial
Intermediary's expulsion from the NASD will automatically terminate this
Agreement immediately without notice. Suspension of the Financial Intermediary
from the NASD for violation of any applicable federal or state law, rule or
regulation or any rule of the NASD will terminate this Agreement effective
immediately upon Xxxx Xxxxx'x written notice of termination to the Financial
Intermediary.
(h) Financial Intermediary represents and warrants that (i) each employee
and agent of Financial Intermediary who shall engage in the offering or sale of
Shares is currently duly licensed under applicable federal and state laws and
regulations, and with the NASD, and (ii) Financial Intermediary shall not permit
any employee or agent to offer or sell Shares unless such person is duly
licensed under applicable federal and state laws and regulations, and with the
NASD.
(i) Financial Intermediary shall not (i) furnish any information or make
any representations concerning Shares of any Investment Company other than those
contained in the Investment Company's Registration Statement or in sales
literature or advertising that has been prepared or approved by Xxxx Xxxxx as
provided in paragraph 7, or (ii) offer or sell Shares in jurisdictions in which
they have not been qualified for offer and sale.
(j) Financial Intermediary is an institution subject to the Bank Secrecy
Act and the USA PATRIOT Act and any future amendments (together, the "AML Acts")
and is in material conformity, and will continue to be in material conformity,
with the AML Acts, the rules and regulations under the AML Acts, and the rules,
regulations and regulatory guidance of the Treasury Department, the Securities
and Exchange Commission, or any other applicable regulatory agency or
organization, including customer identification program requirements
(collectively, "AML Rules and Regulations"). Financial Intermediary further
represents and warrants that it will provide to the Funds and their service
providers any information that may be reasonably necessary for the Funds and
their service providers to fulfill their responsibilities relating to their
anti-money laundering programs. Financial Intermediary agrees that it will
provide the Funds and their service providers, upon request, with a
certification satisfactory to the Funds concerning the Financial Intermediary's
compliance with all applicable AML Rules and Regulations and any other
information reasonably requested by the Funds or their service providers to
assist with compliance with applicable AML Rules and Regulations.
3. Settlement and Delivery.
(a) Upon the date of this Agreement, Financial Intermediary will hold
itself available to receive orders, satisfactory to Financial Intermediary, Xxxx
Xxxxx, and the Investment Companies, for the purchase, redemption or exchange of
Shares ("Orders"), will accept such orders as of the time of receipt and will
promptly transmit such orders as are accepted to Xxxx Xxxxx. Except as otherwise
agreed by the parties, Financial Intermediary shall notify Xxxx Xxxxx by 4:00
p.m. Eastern Time daily of purchase orders to be executed that day. Purchase
orders shall be deemed effective at the time and in the manner set forth in the
Registration Statement.
(b) The offering price ("Offering Price") of Shares of each Investment
Company shall be the net asset value per share as next determined by the
Investment Company following receipt of an order at Financial Intermediary's
principal office, plus any applicable sales charge.
(c) Xxxx Xxxxx will not accept from Financial Intermediary any conditional
orders for Shares.
(d) If Financial Intermediary is a member of the National Securities
Clearing Corporation ("NSCC"), or otherwise has access the NSCC's Fund/Serv
system, Xxxx Xxxxx and the transfer agent for the Investment Companies
("Transfer Agent") are willing to accept electronic instructions issued by
Financial Intermediary through Fund/Serv (referred to as a "Fund/Serv
Instruction") for the ordering and redemption of Shares. Transactions will
settle in accordance with the procedures described in the NSCC Security Profile
to be completed by the Financial Intermediary.
(e) Financial Intermediary will be solely responsible for the accuracy of
each Fund/Serv Instruction, and the issuance of any Fund/Serv Instruction will
constitute Financial Intermediary's representation and warranty to Xxxx Xxxxx
and Transfer Agent that the instruction is accurate, complete, and issued as
duly authorized by the client whose Fund Shares are the subject of the Fund/Serv
Instruction.
(f) If Financial Intermediary does not have access to the NSCC's Fund/Serv
system, Financial Intermediary may settle transactions by payment of the full
purchase price to Xxxx Xxxxx in cash or Federal Funds. Financial Intermediary
will forward payments no later than 4:00 p.m. Eastern Time on the business day
following the day on which the order is received.
(g) On each purchase of Shares by Financial Intermediary from Xxxx Xxxxx,
the total sales charges, if any, shall be as stated in each Investment Company's
then-current prospectus. Such sales charges and discounts to dealers are subject
to reductions under a variety of circumstances as described in each Investment
Company's then-current prospectus. For any customer of Financial Intermediary to
obtain these reductions, Financial Intermediary must notify Xxxx Xxxxx when a
sale takes place that would qualify for the reduced charge. There is no sales
charge or discount to Financial Intermediary on the reinvestment of dividends or
other distributions.
(h) If payment for the Shares purchased is not received within the time
specified for such payments, the sale may be canceled forthwith without any
responsibility or liability on Xxxx Xxxxx'x part or on the part of any
Investment Company (in which case Financial Intermediary will be responsible for
any loss, including loss of profit, suffered by an Investment Company resulting
from Financial Intermediary's failure to make payment as aforesaid), or, at Xxxx
Xxxxx'x option, Xxxx Xxxxx may sell Shares ordered back to the Investment
Company or compensate the Investment Company for any losses (in either of which
case Xxxx Xxxxx may hold Financial Intermediary responsible for any loss,
including loss of profit, suffered by Xxxx Xxxxx resulting from Financial
Intermediary's failure to make payment as aforesaid).
(i) It is understood that each Investment Company reserves the right at any
time to withdraw all offerings, and to reject any specific order, of Shares of
that Investment Company by written notice to Xxxx Xxxxx.
(j) Redemptions or repurchases of Shares will be made at the net asset
value of such Shares, less any applicable deferred sales or redemption charges,
in accordance with the then-current prospectus of each Investment Company.
Except as otherwise agreed by the parties, Financial Intermediary shall notify
Xxxx Xxxxx no later than 4:00 p.m. Eastern Time each business day of the number
of Shares of each Fund redeemed or repurchased by Financial Intermediary that
day. Financial Intermediary shall present Shares to Xxxx Xxxxx for payment by
4:00 p.m. Eastern Time on the following day.
4. Representations of Financial Intermediary Relating to Order
Placement. Financial Intermediary hereby represents and warrants that:
(e) Orders received by Financial Intermediary before
close of the New York Stock Exchange ("Exchange") on
any Business day shall not be aggregated with Orders
received at or after close of the Exchange.
(e) Financial Intermediary's internal systems for
processing and transmitting Orders are suitably
designed to prevent Orders received at or after close
of the Exchange on any Business Day from being
aggregated with Orders received before close of the
Exchange.
(e) To the extent required by the 1940 Act, and the rules
thereunder, Financial Intermediary agrees that any
records maintained by it pursuant to this Agreement
are the property of Xxxx Xxxxx and the Funds and will
be preserved, maintained, and made available in
accordance with the 1940 Act, and the rules
thereunder.
(e) Financial Intermediary will offer and sell the Shares
only in accordance with the terms and conditions of
the Prospectus and application for the purchase of
Shares (including compliance with the frequent
trading and redemption fee provisions, where
applicable), and Financial Intermediary will make no
representations not included in the Prospectus or in
any authorized supplemental material supplied by Xxxx
Xxxxx.
(e) Service Provider shall maintain insurance coverage at
all times that is reasonable and customary in light
of its duties hereunder.
5. Compensation.
(a) Each Investment Company's Board has adopted a Distribution
Plan pursuant to Rule 12b-1 of the 1940 Act (the "Plans") with respect to the
Financial Intermediary Shares. Under the terms of the Plans, Xxxx Xxxxx may be
entitled to compensation for distribution related services that it provides to
the Investment Companies, and Xxxx Xxxxx is permitted to pay all or a portion of
such compensation to entities that engage in or support the distribution of
Financial Intermediary Shares. For the services to be provided under this
Agreement and for so long as this Agreement remains in effect, Xxxx Xxxxx agrees
to pay Financial Intermediary in accordance with Schedule B.
(b) In the event Xxxx Xxxxx does not receive payment from an
Investment Company under the relevant Underwriting Agreement or Plan, or if such
Underwriting Agreement or Plan is canceled, Financial Intermediary agrees to
waive its right to receive compensation until such time, if ever, as Xxxx Xxxxx
receives payment.
6. Services Not Exclusive. The services furnished by Financial
Intermediary hereunder are not to be deemed exclusive, and Financial
Intermediary shall be free to furnish similar services to others so long as its
services under this Agreement are not impaired thereby. This Agreement also does
not preclude any other sales of Shares by or through Xxxx Xxxxx or any other
party.
7. Duties of Xxxx Xxxxx.
(a) Xxxx Xxxxx shall cooperate fully in the efforts of Financial
Intermediary to sell and arrange for the sale of Shares. Specifically, Xxxx
Xxxxx shall keep Financial Intermediary appropriately informed of each
Investment Company's affairs and shall make available to Financial Intermediary
copies of all public information, financial statements and other
non-confidential papers which Financial Intermediary may reasonably request for
use in connection with the distribution of Shares, including, without
limitation, copies of any audited financial statements prepared for the
Investment Companies and such reasonable number of copies of the most current
prospectuses, statements of additional information, and annual and interim
reports of the Investment Companies as Financial Intermediary may request.
(b) Xxxx Xxxxx shall comply with all state and federal laws and regulations
applicable to a distributor of Shares.
8. Advertising. Xxxx Xxxxx agrees to make available such sales and
advertising materials relating to the Shares as Xxxx Xxxxx in its discretion
determines appropriate. Financial Intermediary agrees to submit all sales and
advertising materials developed by it relating to each Fund or Shares to Xxxx
Xxxxx for approval. Financial Intermediary agrees not to publish or distribute
such materials without first receiving such approval in writing, as well as any
advance regulatory approval that may be required.
9. Records.
(a) Financial Intermediary agrees to maintain all records required by
applicable state and federal laws and regulations relating to the offer and sale
of Shares. Xxxx Xxxxx and its representatives shall have access to such records
during normal business hours for review or copying.
(b) Except as otherwise agreed by the parties, Financial Intermediary shall
provide Xxxx Xxxxx complete information regarding the name and record address of
each account holder for each Fund.
(c) Financial Intermediary agrees to obtain from its customers any taxpayer
identification number certification required under the Internal Revenue Code and
any applicable Treasury regulations, and to provide Xxxx Xxxxx or its designee
with timely written notice of any failure to obtain such taxpayer identification
number certification in order to enable the implementation of any required
backup withholding.
10. Expenses of Financial Intermediary.
(a) Financial Intermediary shall bear all costs that it incurs in selling,
redeeming and repurchasing Shares and in complying with the terms and conditions
of this Agreement, including, but not limited to, costs and expenses of (i)
preparing, printing, and distributing any materials not prepared by the
Investment Companies or Xxxx Xxxxx and other materials used by Financial
Intermediary in connection with its offering of Shares for sale to the public,
(ii) any expenses of approved advertising incurred by Financial Intermediary in
connection with such offering, (iii) the expenses of registration or
qualification of Financial Intermediary as a dealer or broker under federal or
state laws and the expenses of continuing such registration or qualification,
and (iv) all compensation paid to Financial Intermediary's investment executives
or other employees and others, as well as all expenses of Financial
Intermediary, its investment executives and employees and others. Financial
Intermediary shall bear such additional costs and expenses as it and Xxxx Xxxxx
may agree upon, such agreement to be evidenced in a writing signed by both
parties.
(b) Financial Intermediary shall not incur, nor does it have the authority
to incur, any debts or obligations on behalf of Xxxx Xxxxx or any Investment
Company.
11. Confidentiality.
(a) Financial Intermediary represents and warrants that the security of its
computer system is commercially reasonable and that Financial Intermediary will
prevent any illegal or injurious activities of persons (including persons
outside of Financial Intermediary) attempting to access a computer system
maintained or operated by or on behalf of Xxxx Xxxxx or the Investment Companies
through Financial Intermediary's computer system.
(b) Financial Intermediary agrees to protect the proprietary nature of any
software provided to it by Xxxx Xxxxx and will not provide access to such
software other than to representatives of Financial Intermediary acting under
this Agreement. Both parties to this Agreement agree that all non-public
records, information, and data relating to the business of the other that are
exchanged or negotiated pursuant to this Agreement or in carrying out this
Agreement shall remain confidential, and shall not be voluntarily disclosed by
either party without the prior written consent of the other party, except as may
be required by law or by such party to carry out this Agreement or an order of a
court, governmental agency, or regulatory body.
12. Indemnification.
(a) Xxxx Xxxxx agrees to indemnify, defend, and hold Financial
Intermediary, its officers and directors, and any person who controls Financial
Intermediary within the meaning of Section 15 of the 1933 Act, free and harmless
from and against any and all claims, demands, liabilities, and expenses
(including the cost of investigating or defending such claims, demands, or
liabilities and any reasonable counsel fees incurred in connection therewith)
which Financial Intermediary, its officers, directors, or any such controlling
person may incur under the 1933 Act, under common law or otherwise (i) arising
out of or based upon any breach by Xxxx Xxxxx of this Agreement, (ii) arising
out of or based upon any alleged untrue statement of a material fact contained
in the Registration Statement of any Investment Company, (iii) arising out of or
based upon any alleged omission to state a material fact required to be stated
in the Registration Statement thereof or necessary to make the statements in the
Registration Statement thereof not misleading, or (iv) arising out of any sales
or advertising materials with respect to Shares provided by Xxxx Xxxxx to
Financial Intermediary. However, this indemnity agreement shall not apply to any
claims, demands, liabilities, or expenses that arise out of or are based upon
any such untrue statement or omission made in reliance upon and in conformity
with information furnished by or on behalf of Financial Intermediary to Xxxx
Xxxxx, any Investment Company, or the Investment Companies' counsel; and further
provided, that in no event shall anything contained herein be so construed as to
protect Financial Intermediary against any liability to Xxxx Xxxxx, any
Investment Company or the shareholders of any Investment Company to which
Financial Intermediary 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 under this Agreement or
otherwise.
(b) Financial Intermediary agrees to indemnify, defend, and hold Xxxx Xxxxx
and its officers and directors, each Investment Company, its officers and
directors, and any person who controls Xxxx Xxxxx or any Investment Company
within the meaning of Section 15 of the 1933 Act, free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
cost of investigating or defending against such claims, demands or liabilities
and any reasonable counsel fees incurred in connection therewith) which Xxxx
Xxxxx, its officers or directors, the Investment Company, its officers or
directors, or any such controlling person may incur under the 1933 Act, under
common law or otherwise (i) arising out of or based upon any breach by Financial
Intermediary or its affiliates, officers, directors, employees or agents of any
provision of this Agreement, (ii) arising out of or based upon any untrue
statement of a material fact contained in information furnished by Financial
Intermediary or its affiliates, officers, directors, employees or agents to Xxxx
Xxxxx, an Investment Company or an Investment Company's counsel, (iii) arising
out of or based upon any failure by Financial Intermediary or its affiliates,
officers, directors, employees or agents to provide a material fact in
connection with information provided by or on behalf of Financial Intermediary,
(iv) arising out of any agreement between Financial Intermediary or its
affiliates, officers, directors, employees or agents and any retail dealer (if
applicable), (v) arising out of any sales or advertising material used by
Financial Intermediary or its affiliates, officers, directors, employees or
agents in connection with this Agreement, (vi) arising out of any act or
omission, whether or not negligent, reckless or intentional, by the Financial
Intermediary or its affiliates, officers, directors, employees or agents in
connection with Financial Intermediary's sales or marketing activities under
this Agreement, or in connection with any redemption or repurchase of Shares,
(vii) arising out of the failure of Financial Intermediary or its affiliates,
officers, directors, employees or agents to comply with all applicable state and
federal securities laws, rules and regulations in force from time to time, or
(viii) any negligent act or omission of Financial Intermediary, its affiliates,
officers, directors, employees or its agents relating to a Fund/Serv
Instruction.
13. Duration and Termination.
(a) This Agreement may be terminated with respect to any Investment Company
or Fund thereof at any time, without the payment of any penalty, by vote of the
Investment Company's Board, by vote of a majority of those members of such Board
who are not "interested persons" of that Investment Company as defined in the
1940 Act, or by vote of a majority of the outstanding voting securities of an
Investment Company or Fund on 30 days' written notice to Xxxx Xxxxx and
Financial Intermediary.
(b) This Agreement may be terminated at any time, without the payment of
any penalty, by either party, upon the giving of 30 days' written notice to the
other party.
(c) This Agreement will terminate automatically in the event of its
assignment. This Agreement will terminate automatically with respect to any
Investment Company in the event that the Underwriting Agreement or Plan with
respect to such Investment Company is terminated. The indemnification provisions
contained in this Agreement shall survive the termination of this Agreement.
14. Amendment of this Agreement. Xxxx Xxxxx may amend this Agreement at
any time by written notice to Financial Intermediary, and Financial
Intermediary's placing of an order or acceptance of payment of any kind
following receipt of such notice shall constitute Financial Intermediary's
acceptance of such amendment.
15. Use of Names. Neither party shall use the name of the other party
in any manner without the other party's written consent, except as required by
any applicable federal or state law, rule or regulation, and except pursuant to
any mutually agreed upon promotional programs.
16. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Maryland and the 1940 Act. To the extent that the
applicable laws of the State of Maryland conflict with the applicable provisions
of the 1940 Act, the latter shall control.
17. Notice. Notice under this Agreement shall be deemed to have been
given on the date it is received in writing by the other party.
18. Agreement to Arbitrate. In the event that the parties to this
Agreement have any dispute arising from a breach of this Agreement or arising
from the Agreement itself, the parties agree that the dispute shall be submitted
to arbitration pursuant to the NASD Code of Arbitration Procedure. Such
arbitration shall be in Baltimore, Maryland. Judgment upon any award rendered by
the arbitration may be entered in any court having jurisdiction.
19. Parties Not Partners. This Agreement shall not be construed to
constitute a partnership, joint venture, or agency between Financial
Intermediary and Xxxx Xxxxx or any Investment Company, nor to create an
employer-employee relationship between Xxxx Xxxxx and Financial Intermediary.
Financial Intermediary acknowledges that it is an independent contractor, that
its business is its own and entirely separate from that of Xxxx Xxxxx and the
Investment Companies, and that it will not deal with or represent itself to the
public in any other way.
20. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision 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. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors. As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"interested person" and "assignment" shall have the same meaning as such terms
have in the 1940 Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated as of the day and year first written
above.
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated ____________________________
(Financial Intermediary)
By: _______________________________ By:______________________________
Name:_______________________________ Name:_____________________________
Title:______________________________ Title: _____________________________
SCHEDULE A - FUNDS
SCHEDULE B - COMPENSATION
