Rule 00x-0 Xxxxxxxxxxxx Xxxx xxx Xxxxxxxxx - Xxxx Xxxxxx Tax-Free Income Trust
Florida Series - Class A Shares
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of July 22, 2002
by and between LORD XXXXXX TAX-FREE INCOME TRUST, a Delaware business trust (the
"Fund"), on behalf of the FLORIDA SERIES (the "Series"), and LORD XXXXXX
DISTRIBUTOR LLC, a New York limited liability company (the "Distributor").
WHEREAS, the Fund is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "Act"); and
the Distributor is the exclusive selling agent of the Fund's shares of
beneficial interest, including the Series' Class A shares (the "Shares")
pursuant to the Distribution Agreement between the Fund and the Distributor,
dated as of the date hereof (the "Distribution Agreement").
WHEREAS, the Fund has entered into an Agreement and Plan of
Reorganization with the Lord Xxxxxx Tax-Free Income Trust, a Massachusetts
Business Trust (the "Predecessor Fund") dated May 17, 2002 providing for the
reorganization of the Predecessor Fund into the Fund.
WHEREAS, the Fund desires to adopt a Distribution Plan and Agreement
(the "Plan") for the Series with the Distributor, substantially similar to the
Predecessor Fund's Distribution Plan and Agreement for its Florida Series, as
permitted by Rule 12b-1 under the Act, pursuant to which the Series may make
certain payments to the Distributor to be used by the Distributor or paid to
institutions and persons permitted by applicable law and/or rules to receive
such payments ("Authorized Institutions") in connection with sales of Shares
and/or servicing of accounts of shareholders holding Shares.
WHEREAS, the Fund's Board of Trustees has determined that there is a
reasonable likelihood that the Plan will benefit the Series and the holders of
the Shares.
NOW, THEREFORE, in consideration of the mutual covenants and of other
good and valuable consideration, receipt of which is hereby acknowledged, and
subject to the provisions of paragraph 8 of this Plan, it is agreed as follows:
1. The Fund hereby authorizes the Distributor to enter into agreements
with Authorized Institutions (the "Agreements") which may provide for the
payment to such Authorized Institutions of distribution and service fees which
the Distributor receives from the Series in order to provide additional
incentives to such Authorized Institutions (i) to sell Shares and (ii) to
provide continuing information and investment services to their accounts holding
Shares and otherwise to encourage their accounts to remain invested in the
Shares.
2. The Fund also hereby authorizes the Distributor to use payments
received hereunder from the Series in order to (a) finance any activity which is
primarily intended to result in the sale of Shares and (b) provide continuing
information and investment services to shareholder accounts not serviced by
Authorized Institutions receiving a service fee from the Distributor hereunder
and otherwise to encourage such accounts to remain invested in the
Shares; provided that (i) any payments referred to in the foregoing clause (a)
shall not exceed the distribution fee permitted to be paid at the time under
paragraph 3 of this Plan and shall be authorized by the Board of Trustees of the
Fund by a vote of the kind referred to in paragraph 10 of this Plan and (ii) any
payments referred to in clause (b) shall not exceed the service fee permitted to
be paid at the time under paragraph 3 of this Plan.
3. The Series is authorized to pay the Distributor hereunder for
remittance to Authorized Institutions and/or use by the Distributor pursuant to
this Plan (a) service fees and (b) distribution fees, each at an annual rate not
to exceed .25 of 1% of the average annual net asset value of Shares outstanding,
except that service fees payable with respect to Shares that were initially
issued, or are attributable to shares that were initially issued, by the
Predecessor Fund prior to October 1, 1992 shall not exceed .15 of 1% of the
average net asset value of such Shares. The Board of Trustees of the Fund shall
from time to time determine the amounts, within the foregoing maximum amounts,
that the Series may pay the Distributor hereunder. Any such fees (which may be
waived by the Authorized Institutions in whole or in part) may be calculated and
paid quarterly or more frequently if approved by the Board of Trustees of the
Fund. Such determinations and approvals by the Board of Trustees shall be made
and given by votes of the kind referred to in paragraph 10 of this Plan.
Payments by holders of Shares to the Series of contingent deferred reimbursement
charges relating to distribution fees paid by the Series hereunder shall reduce
the amount of distribution fees for purposes of the annual 0.25% distribution
fee limit. The Distributor will monitor the payments hereunder and shall reduce
such payments or take such other steps as may be necessary to assure that (i)
the payments pursuant to this Plan shall be consistent with Article III, Section
26, subparagraphs (d)(2) and (5) of the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. with respect to investment companies
with asset-based sales charges and service fees, as the same may be in effect
from time to time and (ii) the Series shall not pay with respect to any
Authorized Institution service fees equal to more than .25 of 1% of the average
annual net asset value of Shares sold by (or attributable to Shares or shares
sold by) such Authorized Institution and held in an account covered by an
Agreement.
4. The net asset value of the Shares shall be determined as provided
in the Declaration of Trust of the Fund. If the Distributor waives all or a
portion of the fees which are to be paid by the Series hereunder, the
Distributor shall not be deemed to have waived its rights under this Agreement
to have the Series pay such fees in the future.
5. The Secretary of the Fund, or in his absence the Treasurer, is
hereby authorized to direct the disposition of monies paid or payable by Series
hereunder and shall provide to the Fund's Board of Trustees, and the Trustees
shall review at least quarterly, a written report of the amounts so expended
pursuant to this Plan and the purposes for which such expenditures were made.
6. Neither the Plan nor any other transaction between the parties
hereto pursuant to this Plan shall be invalidated or in any way affected by the
fact that any or all of the trustees, officers, shareholders, or other
representatives of the Fund are or may be "interested persons" of the
Distributor, or any successor or assignee thereof, or that any or all of the
directors, officers,
2
partners, members or other representatives of the Distributor are or may be
"interested persons" of the Fund, except as may otherwise be provided in the
Act.
7. The Distributor shall give the Fund the benefit of the
Distributor's best judgement and good faith efforts in rendering services under
this Plan. Other than to abide by the provisions hereof and render the services
called for hereunder in good faith, the Distributor assumes no responsibility
under this Plan and, having so acted, the Distributor shall not be held liable
or held accountable for any mistake of law or fact, or for any loss or damage
arising or resulting therefrom suffered by the Fund, the Series or any of the
shareholders, creditors, trustees, or officers of the Fund; provided however,
that nothing herein shall be deemed to protect the Distributor against any
liability to the Fund or the Series' shareholders by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties
hereunder, or by reason of the reckless disregard of its obligations and duties
hereunder.
8. This Plan shall become effective upon the date hereof and shall
continue in effect for a period of more than one year from that date only so
long as such continuance is specifically approved at least annually by a vote of
the Board of Trustees of the Fund, including the vote of a majority of the
trustees who are not "interested persons" of the Fund and who have no direct or
indirect financial interest in the operation of this Plan or in any agreement
related to this Plan, cast in person at a meeting called for the purpose of
voting on such renewal.
9. This Plan may be amended to increase materially the amount to be
spent by the Series hereunder above the maximum amounts referred to in paragraph
3 of this Plan without a shareholder vote in compliance with Rule 12b-1 and Rule
18f-3 under the Act as in effect at such time, and each material amendment must
be approved by a vote of the Board of Trustees of the Fund, including the vote
of a majority of the trustees who are not "interested persons" of the Fund and
who have no direct or indirect financial interest in the operation of this Plan
or in any agreement related to the Plan, cast in person at a meeting called for
the purpose of voting on such amendment. Amendments to this Plan which do not
increase materially the amount to be spent by the Series hereunder above the
maximum amounts referred to in paragraph 3 of this Plan may be made pursuant to
paragraph 10 of this Plan.
10. Amendments to this Plan other than material amendments of the kind
referred to in the foregoing paragraph 9 may be adopted by a vote of the Board
of Trustees of the Fund, including the vote of a majority of the trustees who
are not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan. The Board of Trustees of the Fund may, by such a vote, interpret this
Plan and make all determinations necessary or advisable for its administration.
11. This Plan may be terminated at any time without payment of any
penalty (a) by the vote of a majority of the trustees of the Fund who are not
"interested persons" of the Fund and have no direct or indirect financial
interest in the operation of this Plan or in any agreement related to the Plan,
or (b) by a shareholder vote in compliance with Rule 12b-1 and Rule 18f-3 under
the Act as in effect at such time. This Plan shall automatically terminate in
the event of its assignment.
3
12. So long as this Plan shall remain in effect, the selection and
nomination of those trustees of the Fund who are not "interested persons" of the
Fund are committed to the discretion of such disinterested trustees. The terms
"interested persons," "assignment" and "vote of a majority of the outstanding
voting securities" shall have the same meanings as those terms are defined in
the Act.
13. The obligations of the Fund and the Series, including those
imposed hereby, are not personally binding upon, nor shall resort be had to the
private property of, any of the Trustees, shareholders, officers, employees or
agents of the Fund or Series individually, but are binding only upon the assets
and property of the Series. Any and all personal liability, either at common law
or in equity, or by statute or constitution, of every such Trustee, shareholder,
officer, employee or agent for any breach of the Fund or Series of any
agreement, representation or warranty hereunder is hereby expressly waived as a
condition of and in consideration for the execution of this Agreement by the
Fund.
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and on its behalf by its duly authorized representative
as of the date first above written.
LORD XXXXXX TAX-FREE INCOME TRUST
By: /s/ Xxxxxxxxx X. Xxxxxxx
------------------------------------
Vice President
ATTEST:
/s/ Xxxxx Xxxxxx
----------------------------------------
Assistant Secretary
LORD XXXXXX DISTRIBUTOR LLC
By: LORD, XXXXXX & CO., Managing Member
------------------------------------
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Partner
4
Rule 00x-0 Xxxxxxxxxxxx Xxxx xxx Xxxxxxxxx - Xxxx Xxxxxx Tax-Free Income Trust
Georgia Series - Class A Shares
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of July 22, 2002
by and between LORD XXXXXX TAX-FREE INCOME TRUST, a Delaware business trust (the
"Fund"), on behalf of the GEORGIA SERIES (the "Series"), and LORD XXXXXX
DISTRIBUTOR LLC, a New York limited liability company (the "Distributor").
WHEREAS, the Fund is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "Act"); and
the Distributor is the exclusive selling agent of the Fund's shares of
beneficial interest, including the Series' Class A shares (the "Shares")
pursuant to the Distribution Agreement between the Fund and the Distributor,
dated as of the date hereof (the "Distribution Agreement").
WHEREAS, the Fund has entered into an Agreement and Plan of
Reorganization with the Lord Xxxxxx Tax-Free Income Trust, a Massachusetts
Business Trust (the "Predecessor Fund") dated May 17, 2002 providing for the
reorganization of the Predecessor Fund into the Fund.
WHEREAS, the Fund desires to adopt a Distribution Plan and Agreement
(the "Plan") for the Series with the Distributor, substantially similar to the
Predecessor Fund's Distribution Plan and Agreement for its Georgia Series, as
permitted by Rule 12b-1 under the Act, pursuant to which the Series may make
certain payments to the Distributor to be used by the Distributor or paid to
institutions and persons permitted by applicable law and/or rules to receive
such payments ("Authorized Institutions") in connection with sales of Shares
and/or servicing of accounts of shareholders holding Shares.
WHEREAS, the Fund's Board of Trustees has determined that there is a
reasonable likelihood that the Plan will benefit the Series and the holders of
the Shares.
NOW, THEREFORE, in consideration of the mutual covenants and of other
good and valuable consideration, receipt of which is hereby acknowledged, and
subject to the provisions of paragraph 8 of this Plan, it is agreed as follows:
1. The Fund hereby authorizes the Distributor to enter into agreements
with Authorized Institutions (the "Agreements") which may provide for the
payment to such Authorized Institutions of distribution and service fees which
the Distributor receives from the Series in order to provide additional
incentives to such Authorized Institutions (i) to sell Shares and (ii) to
provide continuing information and investment services to their accounts holding
Shares and otherwise to encourage their accounts to remain invested in the
Shares.
2. The Fund also hereby authorizes the Distributor to use payments
received hereunder from the Series in order to (a) finance any activity which is
primarily intended to result in the sale of Shares and (b) provide continuing
information and investment services to shareholder accounts not serviced by
Authorized Institutions receiving a service fee from the Distributor hereunder
and otherwise to encourage such accounts to remain invested in the
Shares; provided that (i) any payments referred to in the foregoing clause (a)
shall not exceed the distribution fee permitted to be paid at the time under
paragraph 3 of this Plan and shall be authorized by the Board of Trustees of the
Fund by a vote of the kind referred to in paragraph 10 of this Plan and (ii) any
payments referred to in clause (b) shall not exceed the service fee permitted to
be paid at the time under paragraph 3 of this Plan.
3. The Series is authorized to pay the Distributor hereunder for
remittance to Authorized Institutions and/or use by the Distributor pursuant to
this Plan (a) service fees and (b) distribution fees, each at an annual rate not
to exceed .25 of 1% of the average annual net asset value of Shares outstanding,
except that service fees payable with respect to Shares that were initially
issued, by the Predecessor Fund prior to the first day of the calendar quarter
subsequent to the Series' net assets reaching $100 million shall not exceed .15
of 1% of the average net asset value of such Shares. The Board of Trustees of
the Fund shall from time to time determine the amounts, within the foregoing
maximum amounts, that the Series may pay the Distributor hereunder. Any such
fees (which may be waived by the Authorized Institutions in whole or in part)
may be calculated and paid quarterly or more frequently if approved by the Board
of Trustees of the Fund. Such determinations and approvals by the Board of
Trustees shall be made and given by votes of the kind referred to in paragraph
10 of this Plan. Payments by holders of Shares to the Series of contingent
deferred reimbursement charges relating to distribution fees paid by the Series
hereunder shall reduce the amount of distribution fees for purposes of the
annual 0.25% distribution fee limit. The Distributor will monitor the payments
hereunder and shall reduce such payments or take such other steps as may be
necessary to assure that (i) the payments pursuant to this Plan shall be
consistent with Article III, Section 26, subparagraphs (d)(2) and (5) of the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
with respect to investment companies with asset-based sales charges and service
fees, as the same may be in effect from time to time and (ii) the Series shall
not pay with respect to any Authorized Institution service fees equal to more
than .25 of 1% of the average annual net asset value of Shares sold by (or
attributable to Shares or shares sold by) such Authorized Institution and held
in an account covered by an Agreement.
4. The net asset value of the Shares shall be determined as provided
in the Declaration of Trust of the Fund. If the Distributor waives all or a
portion of the fees which are to be paid by the Series hereunder, the
Distributor shall not be deemed to have waived its rights under this Agreement
to have the Series pay such fees in the future.
5. The Secretary of the Fund, or in his absence the Treasurer, is
hereby authorized to direct the disposition of monies paid or payable by Series
hereunder and shall provide to the Fund's Board of Trustees, and the Trustees
shall review at least quarterly, a written report of the amounts so expended
pursuant to this Plan and the purposes for which such expenditures were made.
6. Neither the Plan nor any other transaction between the parties
hereto pursuant to this Plan shall be invalidated or in any way affected by the
fact that any or all of the trustees, officers, shareholders, or other
representatives of the Fund are or may be "interested persons" of the
Distributor, or any successor or assignee thereof, or that any or all of the
directors, officers,
2
partners, members or other representatives of the Distributor are or may be
"interested persons" of the Fund, except as may otherwise be provided in the
Act.
7. The Distributor shall give the Fund the benefit of the
Distributor's best judgement and good faith efforts in rendering services under
this Plan. Other than to abide by the provisions hereof and render the services
called for hereunder in good faith, the Distributor assumes no responsibility
under this Plan and, having so acted, the Distributor shall not be held liable
or held accountable for any mistake of law or fact, or for any loss or damage
arising or resulting therefrom suffered by the Fund, the Series or any of the
shareholders, creditors, trustees, or officers of the Fund; provided however,
that nothing herein shall be deemed to protect the Distributor against any
liability to the Fund or the Series' shareholders by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties
hereunder, or by reason of the reckless disregard of its obligations and duties
hereunder.
8. This Plan shall become effective upon the date hereof and shall
continue in effect for a period of more than one year from that date only so
long as such continuance is specifically approved at least annually by a vote of
the Board of Trustees of the Fund, including the vote of a majority of the
trustees who are not "interested persons" of the Fund and who have no direct or
indirect financial interest in the operation of this Plan or in any agreement
related to this Plan, cast in person at a meeting called for the purpose of
voting on such renewal. Notwithstanding the foregoing no payments may be made by
the Series hereunder prior to or with respect to any period prior to the first
day of the calendar quarter subsequent to the Series' net assets reaching $100
million.
9. This Plan may be amended to increase materially the amount to be
spent by the Series hereunder above the maximum amounts referred to in paragraph
3 of this Plan without a shareholder vote in compliance with Rule 12b-1 and Rule
18f-3 under the Act as in effect at such time, and each material amendment must
be approved by a vote of the Board of Trustees of the Fund, including the vote
of a majority of the trustees who are not "interested persons" of the Fund and
who have no direct or indirect financial interest in the operation of this Plan
or in any agreement related to the Plan, cast in person at a meeting called for
the purpose of voting on such amendment. Amendments to this Plan which do not
increase materially the amount to be spent by the Series hereunder above the
maximum amounts referred to in paragraph 3 of this Plan may be made pursuant to
paragraph 10 of this Plan.
10. Amendments to this Plan other than material amendments of the kind
referred to in the foregoing paragraph 9 may be adopted by a vote of the Board
of Trustees of the Fund, including the vote of a majority of the trustees who
are not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan. The Board of Trustees of the Fund may, by such a vote, interpret this
Plan and make all determinations necessary or advisable for its administration.
11. This Plan may be terminated at any time without payment of any
penalty (a) by the vote of a majority of the trustees of the Fund who are not
"interested persons" of the Fund and have no direct or indirect financial
interest in the operation of this Plan or in any agreement related to the Plan,
or (b) by a shareholder vote in compliance with Rule 12b-1 and Rule 18f-3
3
under the Act as in effect at such time. This Plan shall automatically terminate
in the event of its assignment.
12. So long as this Plan shall remain in effect, the selection and
nomination of those trustees of the Fund who are not "interested persons" of the
Fund are committed to the discretion of such disinterested trustees. The terms
"interested persons," "assignment" and "vote of a majority of the outstanding
voting securities" shall have the same meanings as those terms are defined in
the Act.
13. The obligations of the Fund and the Series, including those
imposed hereby, are not personally binding upon, nor shall resort be had to the
private property of, any of the Trustees, shareholders, officers, employees or
agents of the Fund or Series individually, but are binding only upon the assets
and property of the Series. Any and all personal liability, either at common law
or in equity, or by statute or constitution, of every such Trustee, shareholder,
officer, employee or agent for any breach of the Fund or Series of any
agreement, representation or warranty hereunder is hereby expressly waived as a
condition of and in consideration for the execution of this Agreement by the
Fund.
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and on its behalf by its duly authorized representative
as of the date first above written.
LORD XXXXXX TAX-FREE INCOME TRUST
By: Xxxxxxxxx X. Xxxxxxx
------------------------------------
Vice President
ATTEST:
/s/ Xxxxx Xxxxxx
----------------------------------------
Assistant Secretary
LORD XXXXXX DISTRIBUTOR LLC
By: LORD, XXXXXX & CO., Managing Member
------------------------------------
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Partner
4
Rule 00x-0 Xxxxxxxxxxxx Xxxx xxx Xxxxxxxxx - Xxxx Xxxxxx Tax-Free Income Trust
Michigan Series - Class A Shares
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of July 22, 2002
by and between LORD XXXXXX TAX-FREE INCOME TRUST, a Delaware business trust (the
"Fund"), on behalf of the MICHIGAN SERIES (the "Series"), and LORD XXXXXX
DISTRIBUTOR LLC, a New York limited liability company (the "Distributor").
WHEREAS, the Fund is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "Act"); and
the Distributor is the exclusive selling agent of the Fund's shares of
beneficial interest, including the Series' Class A shares (the "Shares")
pursuant to the Distribution Agreement between the Fund and the Distributor,
dated as of the date hereof (the "Distribution Agreement").
WHEREAS, the Fund has entered into an Agreement and Plan of
Reorganization with the Lord Xxxxxx Tax-Free Income Trust, a Massachusetts
Business Trust (the "Predecessor Fund") dated May 17, 2002 providing for the
reorganization of the Predecessor Fund into the Fund.
WHEREAS, the Fund desires to adopt a Distribution Plan and Agreement
(the "Plan") for the Series with the Distributor, substantially similar to the
Predecessor Fund's Distribution Plan and Agreement for its Michigan Series, as
permitted by Rule 12b-1 under the Act, pursuant to which the Series may make
certain payments to the Distributor to be used by the Distributor or paid to
institutions and persons permitted by applicable law and/or rules to receive
such payments ("Authorized Institutions") in connection with sales of Shares
and/or servicing of accounts of shareholders holding Shares.
WHEREAS, the Fund's Board of Trustees has determined that there is a
reasonable likelihood that the Plan will benefit the Series and the holders of
the Shares.
NOW, THEREFORE, in consideration of the mutual covenants and of other
good and valuable consideration, receipt of which is hereby acknowledged, and
subject to the provisions of paragraph 8 of this Plan, it is agreed as follows:
1. The Fund hereby authorizes the Distributor to enter into agreements
with Authorized Institutions (the "Agreements") which may provide for the
payment to such Authorized Institutions of distribution and service fees which
the Distributor receives from the Series in order to provide additional
incentives to such Authorized Institutions (i) to sell Shares and (ii) to
provide continuing information and investment services to their accounts holding
Shares and otherwise to encourage their accounts to remain invested in the
Shares.
2. The Fund also hereby authorizes the Distributor to use payments
received hereunder from the Series in order to (a) finance any activity which is
primarily intended to result in the sale of Shares and (b) provide continuing
information and investment services to shareholder accounts not serviced by
Authorized Institutions receiving a service fee from the Distributor hereunder
and otherwise to encourage such accounts to remain invested in the
Shares; provided that (i) any payments referred to in the foregoing clause (a)
shall not exceed the distribution fee permitted to be paid at the time under
paragraph 3 of this Plan and shall be authorized by the Board of Trustees of the
Fund by a vote of the kind referred to in paragraph 10 of this Plan and (ii) any
payments referred to in clause (b) shall not exceed the service fee permitted to
be paid at the time under paragraph 3 of this Plan.
3. The Series is authorized to pay the Distributor hereunder for
remittance to Authorized Institutions and/or use by the Distributor pursuant to
this Plan (a) service fees and (b) distribution fees, each at an annual rate not
to exceed .25 of 1% of the average annual net asset value of Shares outstanding,
except that service fees payable with respect to Shares that were initially
issued, by the Predecessor Fund prior to the first day of the calendar quarter
subsequent to the Series' net assets reaching $100 million shall not exceed .15
of 1% of the average net asset value of such Shares. The Board of Trustees of
the Fund shall from time to time determine the amounts, within the foregoing
maximum amounts, that the Series may pay the Distributor hereunder. Any such
fees (which may be waived by the Authorized Institutions in whole or in part)
may be calculated and paid quarterly or more frequently if approved by the Board
of Trustees of the Fund. Such determinations and approvals by the Board of
Trustees shall be made and given by votes of the kind referred to in paragraph
10 of this Plan. Payments by holders of Shares to the Series of contingent
deferred reimbursement charges relating to distribution fees paid by the Series
hereunder shall reduce the amount of distribution fees for purposes of the
annual 0.25% distribution fee limit. The Distributor will monitor the payments
hereunder and shall reduce such payments or take such other steps as may be
necessary to assure that (i) the payments pursuant to this Plan shall be
consistent with Article III, Section 26, subparagraphs (d)(2) and (5) of the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
with respect to investment companies with asset-based sales charges and service
fees, as the same may be in effect from time to time and (ii) the Series shall
not pay with respect to any Authorized Institution service fees equal to more
than .25 of 1% of the average annual net asset value of Shares sold by (or
attributable to Shares or shares sold by) such Authorized Institution and held
in an account covered by an Agreement.
4. The net asset value of the Shares shall be determined as provided
in the Declaration of Trust of the Fund. If the Distributor waives all or a
portion of the fees which are to be paid by the Series hereunder, the
Distributor shall not be deemed to have waived its rights under this Agreement
to have the Series pay such fees in the future.
5. The Secretary of the Fund, or in his absence the Treasurer, is
hereby authorized to direct the disposition of monies paid or payable by Series
hereunder and shall provide to the Fund's Board of Trustees, and the Trustees
shall review at least quarterly, a written report of the amounts so expended
pursuant to this Plan and the purposes for which such expenditures were made.
6. Neither the Plan nor any other transaction between the parties
hereto pursuant to this Plan shall be invalidated or in any way affected by the
fact that any or all of the trustees, officers, shareholders, or other
representatives of the Fund are or may be "interested persons" of the
Distributor, or any successor or assignee thereof, or that any or all of the
directors, officers,
2
partners, members or other representatives of the Distributor are or may be
"interested persons" of the Fund, except as may otherwise be provided in the
Act.
7. The Distributor shall give the Fund the benefit of the
Distributor's best judgement and good faith efforts in rendering services under
this Plan. Other than to abide by the provisions hereof and render the services
called for hereunder in good faith, the Distributor assumes no responsibility
under this Plan and, having so acted, the Distributor shall not be held liable
or held accountable for any mistake of law or fact, or for any loss or damage
arising or resulting therefrom suffered by the Fund, the Series or any of the
shareholders, creditors, trustees, or officers of the Fund; provided however,
that nothing herein shall be deemed to protect the Distributor against any
liability to the Fund or the Series' shareholders by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties
hereunder, or by reason of the reckless disregard of its obligations and duties
hereunder.
8. This Plan shall become effective upon the date hereof and shall
continue in effect for a period of more than one year from that date only so
long as such continuance is specifically approved at least annually by a vote of
the Board of Trustees of the Fund, including the vote of a majority of the
trustees who are not "interested persons" of the Fund and who have no direct or
indirect financial interest in the operation of this Plan or in any agreement
related to this Plan, cast in person at a meeting called for the purpose of
voting on such renewal. Notwithstanding the foregoing no payments may be made by
the Series hereunder prior to or with respect to any period prior to the first
day of the calendar quarter subsequent to the Series' net assets reaching $100
million.
9. This Plan may be amended to increase materially the amount to be
spent by the Series hereunder above the maximum amounts referred to in paragraph
3 of this Plan without a shareholder vote in compliance with Rule 12b-1 and Rule
18f-3 under the Act as in effect at such time, and each material amendment must
be approved by a vote of the Board of Trustees of the Fund, including the vote
of a majority of the trustees who are not "interested persons" of the Fund and
who have no direct or indirect financial interest in the operation of this Plan
or in any agreement related to the Plan, cast in person at a meeting called for
the purpose of voting on such amendment. Amendments to this Plan which do not
increase materially the amount to be spent by the Series hereunder above the
maximum amounts referred to in paragraph 3 of this Plan may be made pursuant to
paragraph 10 of this Plan.
10. Amendments to this Plan other than material amendments of the kind
referred to in the foregoing paragraph 9 may be adopted by a vote of the Board
of Trustees of the Fund, including the vote of a majority of the trustees who
are not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan. The Board of Trustees of the Fund may, by such a vote, interpret this
Plan and make all determinations necessary or advisable for its administration.
11. This Plan may be terminated at any time without payment of any
penalty (a) by the vote of a majority of the trustees of the Fund who are not
"interested persons" of the Fund and have not direct or indirect financial
interest in the operation of this Plan or in any agreement related to the Plan,
or (b) by a shareholder vote in compliance with Rule 12b-1 and Rule 18f-3
3
under the Act as in effect at such time. This Plan shall automatically terminate
in the event of its assignment.
12. So long as this Plan shall remain in effect, the selection and
nomination of those trustees of the Fund who are not "interested persons" of the
Fund are committed to the discretion of such disinterested trustees. The terms
"interested persons," "assignment" and "vote of a majority of the outstanding
voting securities" shall have the same meanings as those terms are defined in
the Act.
13. The obligations of the Fund and the Series, including those
imposed hereby, are not personally binding upon, nor shall resort be had to the
private property of, any of the Trustees, shareholders, officers, employees or
agents of the Fund or Series individually, but are binding only upon the assets
and property of the Series. Any and all personal liability, either at common law
or in equity, or by statute or constitution, of every such Trustee, shareholder,
officer, employee or agent for any breach of the Fund or Series of any
agreement, representation or warranty hereunder is hereby expressly waived as a
condition of and in consideration for the execution of this Agreement by the
Fund.
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and on its behalf by its duly authorized representative
as of the date first above written.
LORD XXXXXX TAX-FREE INCOME TRUST
By: /s/ Xxxxxxxxx X. Xxxxxxx
------------------------------------
Vice President
ATTEST:
/s/ Xxxxx Xxxxxx
----------------------------------------
Assistant Secretary
LORD XXXXXX DISTRIBUTOR LLC
By: LORD, XXXXXX & CO., Managing Member
------------------------------------
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Partner
4
Rule 00x-0 Xxxxxxxxxxxx Xxxx xxx Xxxxxxxxx - Xxxx Xxxxxx Tax-Free Income Trust
Pennsylvania Series - Class A Shares
RULE 12b-1 DISTRIBUTION PLAN AND AGREEMENT dated as of July 22, 2002
by and between LORD XXXXXX TAX-FREE INCOME TRUST, a Delaware business trust (the
"Fund"), on behalf of the PENNSYLVANIA SERIES (the "Series"), and LORD XXXXXX
DISTRIBUTOR LLC, a New York limited liability company (the "Distributor").
WHEREAS, the Fund is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "Act"); and
the Distributor is the exclusive selling agent of the Fund's shares of
beneficial interest, including the Series' Class A shares (the "Shares")
pursuant to the Distribution Agreement between the Fund and the Distributor,
dated as of the date hereof (the "Distribution Agreement").
WHEREAS, the Fund has entered into an Agreement and Plan of
Reorganization with the Lord Xxxxxx Tax-Free Income Trust, a Massachusetts
Business Trust (the "Predecessor Fund") dated May 17, 2002 providing for the
reorganization of the Predecessor Fund into the Fund.
WHEREAS, the Fund desires to adopt a Distribution Plan and Agreement
(the "Plan") for the Series with the Distributor, substantially similar to the
Predecessor Fund's Distribution Plan and Agreement for its Pennsylvania Series
permitted by Rule 12b-1 under the Act, pursuant to which the Series may make
certain payments to the Distributor to be used by the Distributor or paid to
institutions and persons permitted by applicable law and/or rules to receive
such payments ("Authorized Institutions") in connection with sales of Shares
and/or servicing of accounts of shareholders holding Shares.
WHEREAS, the Fund's Board of Trustees has determined that there is a
reasonable likelihood that the Plan will benefit the Series and the holders of
the Shares.
NOW, THEREFORE, in consideration of the mutual covenants and of other
good and valuable consideration, receipt of which is hereby acknowledged, and
subject to the provisions of paragraph 8 of this Plan, it is agreed as follows:
1. The Fund hereby authorizes the Distributor to enter into agreements
with Authorized Institutions (the "Agreements") which may provide for the
payment to such Authorized Institutions of distribution and service fees which
the Distributor receives from the Series in order to provide additional
incentives to such Authorized Institutions (i) to sell Shares and (ii) to
provide continuing information and investment services to their accounts holding
Shares and otherwise to encourage their accounts to remain invested in the
Shares.
2. The Fund also hereby authorizes the Distributor to use payments
received hereunder from the Series in order to (a) finance any activity which is
primarily intended to result in the sale of Shares and (b) provide continuing
information and investment services to shareholder accounts not serviced by
Authorized Institutions receiving a service fee from the Distributor hereunder
and otherwise to encourage such accounts to remain invested in the
Shares; provided that (i) any payments referred to in the foregoing clause (a)
shall not exceed the distribution fee permitted to be paid at the time under
paragraph 3 of this Plan and shall be authorized by the Board of Trustees of the
Fund by a vote of the kind referred to in paragraph 10 of this Plan and (ii) any
payments referred to in clause (b) shall not exceed the service fee permitted to
be paid at the time under paragraph 3 of this Plan.
3. The Series is authorized to pay the Distributor hereunder for
remittance to Authorized Institutions and/or use by the Distributor pursuant to
this Plan (a) service fees and (b) distribution fees, each at an annual rate not
to exceed .25 of 1% of the average annual net asset value of Shares outstanding,
except that service fees payable with respect to Shares that were initially
issued, by the Predecessor Fund prior to the first day of the calendar quarter
subsequent to the Series' net assets reaching $100 million shall not exceed .15
of 1% of the average net asset value of such Shares. The Board of Trustees of
the Fund shall from time to time determine the amounts, within the foregoing
maximum amounts, that the Series may pay the Distributor hereunder. Any such
fees (which may be waived by the Authorized Institutions in whole or in part)
may be calculated and paid quarterly or more frequently if approved by the Board
of Trustees of the Fund. Such determinations and approvals by the Board of
Trustees shall be made and given by votes of the kind referred to in paragraph
10 of this Plan. Payments by holders of Shares to the Series of contingent
deferred reimbursement charges relating to distribution fees paid by the Series
hereunder shall reduce the amount of distribution fees for purposes of the
annual 0.25% distribution fee limit. The Distributor will monitor the payments
hereunder and shall reduce such payments or take such other steps as may be
necessary to assure that (i) the payments pursuant to this Plan shall be
consistent with Article III, Section 26, subparagraphs (d)(2) and (5) of the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
with respect to investment companies with asset-based sales charges and service
fees, as the same may be in effect from time to time and (ii) the Series shall
not pay with respect to any Authorized Institution service fees equal to more
than .25 of 1% of the average annual net asset value of Shares sold by (or
attributable to Shares or shares sold by) such Authorized Institution and held
in an account covered by an Agreement.
4. The net asset value of the Shares shall be determined as provided
in the Declaration of Trust of the Fund. If the Distributor waives all or a
portion of the fees which are to be paid by the Series hereunder, the
Distributor shall not be deemed to have waived its rights under this Agreement
to have the Series pay such fees in the future.
5. The Secretary of the Fund, or in his absence the Treasurer, is
hereby authorized to direct the disposition of monies paid or payable by Series
hereunder and shall provide to the Fund's Board of Trustees, and the Trustees
shall review at least quarterly, a written report of the amounts so expended
pursuant to this Plan and the purposes for which such expenditures were made.
6. Neither the Plan nor any other transaction between the parties
hereto pursuant to this Plan shall be invalidated or in any way affected by the
fact that any or all of the trustees, officers, shareholders, or other
representatives of the Fund are or may be "interested persons" of the
Distributor, or any successor or assignee thereof, or that any or all of the
directors, officers,
2
partners, members or other representatives of the Distributor are or may be
"interested persons" of the Fund, except as may otherwise be provided in the
Act.
7. The Distributor shall give the Fund the benefit of the
Distributor's best judgement and good faith efforts in rendering services under
this Plan. Other than to abide by the provisions hereof and render the services
called for hereunder in good faith, the Distributor assumes no responsibility
under this Plan and, having so acted, the Distributor shall not be held liable
or held accountable for any mistake of law or fact, or for any loss or damage
arising or resulting therefrom suffered by the Fund, the Series or any of the
shareholders, creditors, trustees, or officers of the Fund; provided however,
that nothing herein shall be deemed to protect the Distributor against any
liability to the Fund or the Series' shareholders by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties
hereunder, or by reason of the reckless disregard of its obligations and duties
hereunder.
8. This Plan shall become effective upon the date hereof and shall
continue in effect for a period of more than one year from that date only so
long as such continuance is specifically approved at least annually by a vote of
the Board of Trustees of the Fund, including the vote of a majority of the
trustees who are not "interested persons" of the Fund and who have no direct or
indirect financial interest in the operation of this Plan or in any agreement
related to this Plan, cast in person at a meeting called for the purpose of
voting on such renewal. Notwithstanding the foregoing no payments may be made by
the Series hereunder prior to or with respect to any period prior to the first
day of the calendar quarter subsequent to the Series' net assets reaching $100
million.
9. This Plan may be amended to increase materially the amount to be
spent by the Series hereunder above the maximum amounts referred to in paragraph
3 of this Plan without a shareholder vote in compliance with Rule 12b-1 and Rule
18f-3 under the Act as in effect at such time, and each material amendment must
be approved by a vote of the Board of Trustees of the Fund, including the vote
of a majority of the trustees who are not "interested persons" of the Fund and
who have no direct or indirect financial interest in the operation of this Plan
or in any agreement related to the Plan, cast in person at a meeting called for
the purpose of voting on such amendment. Amendments to this Plan which do not
increase materially the amount to be spent by the Series hereunder above the
maximum amounts referred to in paragraph 3 of this Plan may be made pursuant to
paragraph 10 of this Plan.
10. Amendments to this Plan other than material amendments of the kind
referred to in the foregoing paragraph 9 may be adopted by a vote of the Board
of Trustees of the Fund, including the vote of a majority of the trustees who
are not "interested persons" of the Fund and who have no direct or indirect
financial interest in the operation of this Plan or in any agreement related to
this Plan. The Board of Trustees of the Fund may, by such a vote, interpret this
Plan and make all determinations necessary or advisable for its administration.
11. This Plan may be terminated at any time without payment of any
penalty (a) by the vote of a majority of the trustees of the Fund who are not
"interested persons" of the Fund and have no direct or indirect financial
interest in the operation of this Plan or in any agreement related to the Plan,
or (b) by a shareholder vote in compliance with Rule 12b-1 and Rule 18f-3
3
under the Act as in effect at such time. This Plan shall automatically terminate
in the event of its assignment.
12. So long as this Plan shall remain in effect, the selection and
nomination of those trustees of the Fund who are not "interested persons" of the
Fund are committed to the discretion of such disinterested trustees. The terms
"interested persons," "assignment" and "vote of a majority of the outstanding
voting securities" shall have the same meanings as those terms are defined in
the Act.
13. The obligations of the Fund and the Series, including those
imposed hereby, are not personally binding upon, nor shall resort be had to the
private property of, any of the Trustees, shareholders, officers, employees or
agents of the Fund or Series individually, but are binding only upon the assets
and property of the Series. Any and all personal liability, either at common law
or in equity, or by statute or constitution, of every such Trustee, shareholder,
officer, employee or agent for any breach of the Fund or Series of any
agreement, representation or warranty hereunder is hereby expressly waived as a
condition of and in consideration for the execution of this Agreement by the
Fund.
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and on its behalf by its duly authorized representative
as of the date first above written.
LORD XXXXXX TAX-FREE INCOME TRUST
By: /s/ Xxxxxxxxx X. Xxxxxxx
------------------------------------
Vice President
ATTEST:
/s/ Xxxxx Xxxxxx
----------------------------------------
Assistant Secretary
LORD XXXXXX DISTRIBUTOR LLC
By: LORD, XXXXXX & CO., Managing Member
------------------------------------
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Partner
4
