Exhibit 5(a)
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made as of the 29th day of July, 1999 by and between the
open-end management investment company listed on Schedule A, attached hereto,
together with all other open-end management investment companies subsequently
established and made subject to this Agreement in accordance with Section 4.3
below (each a "Fund", collectively the "Funds") and Funds Distributor, Inc., a
Massachusetts corporation ("FDI").
WHEREAS, the common stock of the Fund is currently divided into a number
of separate series of shares, or funds, each corresponding to a distinct
portfolio of securities (each a "Series"), and many of which are also divided
into multiple classes of shares. For purposes of this Agreement the term
"Shares" shall mean the authorized shares of the relevant Series, if any, and
otherwise shall mean the Fund's authorized shares;
WHEREAS, FDI is registered as a broker-dealer with the Securities and
Exchange Commission ("SEC") under the Securities Exchange Act of 1934 (the "1934
Act") and is a member of the National Association of Securities Dealers, Inc.
(the "NASD");
WHEREAS, Nomura Asset Management U.S.A. Inc. (the "Manager") is the
registered investment adviser to the Fund pursuant to the Management Agreement
between the Manager and the Fund;
WHEREAS, the Board of Directors of the Fund wishes to engage FDI to act as
the distributor for the Fund and FDI is willing to render such service;
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
set forth below, the parties agree as follows:
1. Services as Distributor
1.1 FDI will act as agent for the distribution of Shares covered by, and
in accordance with, the registration statement and prospectus then in effect
under the Securities Act of 1933, as amended (the "1933 Act"), and will transmit
promptly any orders received by FDI for purchase or redemption of Shares to the
Transfer and Dividend Disbursing Agent for the Fund of which the Fund has
notified FDI in writing.
1.2 FDI agrees to use its best efforts to solicit orders for the sale of
Shares. It is contemplated that FDI may enter into sales or servicing agreements
with securities dealers, financial institutions and other industry
professionals, such as investment advisers, accountants and estate planning
firms, and in so doing FDI will act only on its own behalf as principal.
1.3 FDI shall act as distributor of Shares in compliance with all
applicable laws, rules and regulations, including, without limitations, the
Investment Company Act of 1940, as amended (the "1940 Act"), the 1933 Act, 1934
Act and the Rules of the NASD, the Fund's Articles of Incorporation and By-Laws.
FDI represents and warrants that it is a broker-dealer registered with the SEC
and that it is registered with the relevant securities regulatory agencies in
all fifty states, the District of Columbia and Puerto Rico. FDI also represents
and warrants that it is a member of the NASD.
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1.4 FDI shall file Fund advertisements, sales literature and other
marketing and sales related materials with the appropriate regulatory agencies
and shall obtain such approvals for their use as may be required by the SEC, the
NASD and/or state securities administrators.
1.5 Whenever in their judgment such action is warranted by unusual market,
economic or political conditions, or by abnormal circumstances of any kind
deemed by the parties hereto to render sales of a Fund's Shares not in the best
interest of the Fund, the parties hereto may decline to accept any orders for,
or make any sales of, any Shares until such time as those parties deem it
advisable to accept such orders and to make such sales and each party shall
advise promptly the other party of any such determination.
1.6 The Fund agrees to pay all costs and expenses in connection with the
registration of Shares under the 1933 Act and all expenses in connection with
maintaining facilities for the issue and transfer of Shares and for supplying
information, prices and other data to be furnished by the Fund hereunder, and
all expenses in connection with the preparation and printing of the Fund's
prospectuses and statements of additional information for regulatory purposes
and for distribution to shareholders; provided however, that the Fund shall not
pay any of the costs of advertising or promotion for the sale of Shares, except
as authorized by a plan adopted pursuant to Rule 12b-1 under the 1940 Act. FDI
shall also be entitled to compensation for FDI's services as provided in any
Distribution Plan adopted as to any Series and class of the Fund's Shares
pursuant to Rule 12b-1.
1.7 The Fund agrees to execute any and all documents and to furnish any
and all information and otherwise to take all actions which may be reasonably
necessary in the discretion of the Fund's officers in connection with the
qualification of Shares for sale in such states as FDI may designate to the Fund
and the Fund may approve, and the Fund agrees to pay all expenses which may be
incurred in connection with such qualification. FDI shall pay all expenses
connected with its own qualification as a dealer under state or Federal laws
and, except as otherwise specifically provided in this Agreement, all other
expenses incurred by FDI in connection with the sale of Shares as contemplated
in this Agreement.
1.8 The Fund shall furnish FDI from time to time, for use in connection
with the sale of Shares, such information with respect to the Fund or any
relevant Series and the Shares as FDI may reasonably request, all of which shall
be signed by one or more of the Fund's duly authorized officers; and the Fund
warrants that the statements contained in any such information, when so signed
by the Fund's officers, shall be true and correct. The Fund also shall furnish
FDI upon request with: (a) semi-annual reports and annual audited reports of the
Fund's books and accounts made by independent public accountants regularly
retained by the Fund, (b) quarterly earnings statements prepared by the Fund,
(c) a monthly itemized list of the securities in the Fund's or, if applicable,
each Series' portfolio, (d) monthly balance sheets as soon as practicable after
the end of each month, and (e) from time to time such additional information
regarding the Fund's financial condition as FDI may reasonably request.
1.9 The Fund represents to FDI that all registration statements and
prospectuses filed by the Fund with the SEC under the 1933 Act and under the
1940 Act with respect to the Shares have been carefully prepared in conformity
with the requirements of said Acts and rules and regulations of the SEC
thereunder. As used in this Agreement the terms "registration statement" and
"prospectus" shall mean any registration statement and prospectus, including the
statement
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of additional information incorporated by reference therein, filed with the SEC
and any amendments and supplements thereto which at any time shall have been
filed with said Commission. The Fund represents and warrants to FDI that any
registration statement and prospectus, when such registration statement becomes
effective, will contain all statements required to be stated therein in
conformity with said Acts and the rules and regulations of said Commission; that
all statements of fact contained in any such registration statement and
prospectus will be true and correct when such registration statement becomes
effective; and that neither any registration statement nor any prospectus when
such registration statement becomes effective will include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. The Fund
may, but shall not be obligated to, propose from time to time such amendment or
amendments to any registration statement and such supplement or supplements to
any prospectus as, in the light of future developments, may, in the opinion of
the Fund's counsel, be necessary or advisable. If the Fund shall not propose
such amendment or amendments and/or supplement or supplements within fifteen
days after receipt by the Fund of a written request from FDI to do so, FDI may,
at its option, terminate this Agreement or decline to make offers of the Fund's
securities until such amendments are made. The Fund shall not file any amendment
to any registration statement or supplement to any prospectus without giving FDI
reasonable notice thereof in advance; provided, however, that nothing contained
in this Agreement shall in any way limit the Fund's right to file at any time
such amendments to any registration statement and/or supplements to any
prospectus, of whatever character, as the Fund may deem advisable, such right
being in all respects absolute and unconditional.
1.10 The Fund authorizes FDI and any dealers with whom FDI has entered
into dealer agreements to use any prospectus in the form furnished by the Fund
in connection with the sale of Shares. The Fund agrees to indemnify, defend and
hold FDI, its several officers and directors, and any person who controls FDI
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
reasonable cost of investigating or defending such claims, demands or
liabilities and any reasonable counsel fees incurred in connection therewith)
which FDI, its officers and directors, or any such controlling persons, may
incur under the 1933 Act, the 1940 Act, or common law or otherwise, arising out
of or on the basis of any untrue statement, or alleged untrue statement, of a
material fact required to be stated in either any registration statement or any
prospectus or any statement of additional information, or arising out of or
based upon any omission, or alleged omission, to state a material fact required
to be stated in any registration statement, any prospectus or any statement of
additional information or necessary to make the statements in any of them not
misleading, except that the Fund's agreement to indemnify FDI, its officers or
directors, and any such controlling person will not be deemed to cover any such
claim, demand, liability or expense to the extent that it arises out of or is
based upon any such untrue statement, alleged untrue statement, omission or
alleged omission made in any registration statement, any prospectus or any
statement of additional information in reliance upon information furnished by
FDI, its officers, directors or any such controlling person to the Fund or its
representatives for use in the preparation thereof, and except that the Fund's
agreement to indemnify FDI and the Fund's representations and warranties set out
in paragraph 1.9 of this Agreement will not be deemed to cover any liability to
the Fund or its shareholders to which FDI 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 ("Disqualifying Conduct"). The Fund's agreement to
indemnify FDI, its officers and directors, and any such controlling person, as
aforesaid, is expressly conditioned upon the Fund's being
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notified of any action brought against FDI, its officers or directors, or any
such controlling person, such notification to be given by letter, by facsimile
or by telegram addressed to the Fund at its address set forth above within a
reasonable period of time after the summons or other first legal process shall
have been served. The failure so to notify the Fund of any such action shall not
relieve the Fund from any liability which the Fund may have to the person
against whom such action is brought by reason of any such untrue, or alleged
untrue, statement or omission, or alleged omission, otherwise than on account of
the Fund's indemnity agreement contained in this paragraph 1.10. The Fund will
be entitled to assume the defense of any suit brought to enforce any such claim,
demand or liability, but, in such case, such defense shall be conducted by
counsel of good standing chosen by the Fund and approved by FDI. In the event
the Fund elects to assume the defense of any such suit and retain counsel of
good standing approved by FDI, the defendant or defendants in such suit shall
bear the fees and expenses of any additional counsel retained by any of them;
but in case the Fund does not elect to assume the defense of any such suit, the
Fund will reimburse FDI, its officers and directors, or the controlling person
or persons named as defendant or defendants in such suit, for the reasonable
fees and expenses of any counsel retained by FDI or them. The Fund's
indemnification agreement contained in this paragraph 1.10 and the Fund's
representations and warranties in this Agreement shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
FDI, its officers and directors, or any controlling person, and shall survive
the delivery of any Shares. This agreement of indemnity will inure exclusively
to FDI's benefit, to the benefit of FDI's several officers and directors, and
their respective estates, and to the benefit of any controlling persons and
their successors. The Fund agrees promptly to notify FDI of the commencement of
any litigation or proceedings against the Fund or any of its officers or Board
members in connection with the issue and sale of Shares.
1.11 FDI agrees to indemnify, defend and hold the Fund, its several
officers and Board members, and any person who controls the Fund 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 reasonable cost of
investigating or defending such claims, demands or liabilities and any
reasonable counsel fees incurred in connection therewith) which the Fund, its
officers or Board members, or any such controlling person, may incur under the
1933 Act, the 1940 Act, or under common law or otherwise, but only to the extent
that such liability or expense incurred by the Fund, its officers or Board
members, or such controlling person resulting from such claims or demands, (a)
shall arise out of or be based upon any unauthorized sales literature,
advertisements, information, statements or representations or any Disqualifying
Conduct in connection with the offering and sale of any Shares, or (b) shall
arise out of or be based upon any untrue, or alleged untrue, statement of a
material fact contained in information furnished in writing by FDI to the Fund
specifically for use in the Fund's registration statement and used in the
answers to any of the items of the registration statement or in the
corresponding statements made in the prospectus or statement of additional
information, or shall arise out of or be based upon any omission, or alleged
omission, to state a material fact in connection with such information furnished
in writing by FDI to the Fund and required to be stated in such answers or
necessary to make such information not misleading. FDI's agreement to indemnify
the Fund, its officers and Board members, and any such controlling person, as
aforesaid, is expressly conditioned upon FDI being notified of any action
brought against the Fund, its officers or Board members, or any such controlling
person, such notification to be given by letter, by facsimile or by telegram
addressed to FDI at its address set forth above within a reasonable period of
time after the summons or other first legal process shall have been served. FDI
shall have the right to control the defense of such action, with counsel of its
own choosing, satisfactory to the Fund, if
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such action is based solely upon such alleged misstatement or omission on FDI's
part, and in any other event the Fund, its officers or Board members, or such
controlling person shall each have the right to participate in the defense or
preparation of the defense of any such action. The failure so to notify FDI of
any such action shall not relieve FDI from any liability which FDI may have to
the Fund, its officers or Board members, or to such controlling person by reason
of any such untrue, or alleged untrue, statement or omission, or alleged
omission, otherwise than on account of FDI's indemnity agreement contained in
this paragraph 1.11. This agreement of indemnity will inure exclusively to the
Fund's benefit, to the benefit of the Fund's officers and Board members, and
their respective estates, and to the benefit of any controlling persons and
their successors. FDI agrees promptly to notify the Fund of the commencement of
any litigation or proceedings against FDI or any of its officers or directors in
connection with the issue and sale of Shares.
1.12 No Shares shall be offered by either FDI or the Fund under any of the
provisions of this Agreement and no orders for the purchase or sale of such
Shares hereunder shall be accepted by the Fund if and so long as the
effectiveness of the registration statement then in effect or any necessary
amendments thereto shall be suspended under any of the provisions of the 1933
Act or if and so long as a current prospectus as required by Section 10 of said
Act, as amended, is not on file with the SEC; provided, however, that nothing
contained in this paragraph 1.12 shall in any way restrict or have an
application to or bearing upon the Fund's obligation to repurchase any Shares
from any shareholder in accordance with the provisions of the Fund's prospectus
or charter documents.
1.13 The Fund agrees to advise FDI immediately in writing:
(a) of any request by the SEC for amendments to the registration
statement or prospectus then in effect or for additional information;
(b) in the event of the issuance by the SEC of any stop order
suspending the effectiveness of the registration statement or prospectus
then in effect or the initiation of any proceeding for that purpose;
(c) of the happening of any event which makes untrue any statement
of a material fact made in the registration statement or prospectus then
in effect or which requires the making of a change in such registration
statement or prospectus in order to make the statements therein not
misleading; and
(d) of all actions of the SEC with respect to any amendments to any
registration statement or prospectus which may from time to time be filed
with the SEC.
2. Offering Price
Shares of any class of the Fund offered for sale by FDI shall be offered
at a price per share (the "Offering Price") approximately equal to (a) the net
asset value (determined in the manner set forth in the Fund's charter documents)
plus (b) a sales charge, if any and except to those persons set forth in the
then-current prospectus, which shall be the percentage of the Offering Price of
such Shares as set forth in the Fund's then-current prospectus. The Offering
Price, if not an exact multiple of one cent, shall be adjusted to the nearest
cent. In addition, Shares of any class of the Fund offered for sale by FDI may
be subject to a contingent deferred
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sales charge as set forth in the Fund's then-current prospectus. FDI shall be
entitled to receive any sales charge or contingent deferred sales charge in
respect of the Shares. Any payments to dealers shall be governed by a separate
agreement between FDI and such dealer and the Fund's then-current prospectus.
3. Term
This Agreement shall become effective with respect to the Fund as of the
date hereof and will continue for an initial two-year term and will continue
thereafter so long as such continuance is specifically approved at least
annually (i) by the Fund's Board or (ii) by a vote of a majority of the Shares
of the Fund or the relevant Series, as the case may be, provided that in either
event its continuance also is approved by a majority of the Board members who
are not "interested persons" of any party to this Agreement, by vote cast in
person at a meeting called for the purpose of voting on such approval. This
Agreement is terminable with respect to a Fund, without penalty, on not less
than sixty days' notice, by the Fund's Board of Directors, by vote of a majority
of the outstanding voting securities of such Fund, or by FDI. This Agreement
will automatically and immediately terminate in the event of its "assignment."
(As used in this Agreement, the terms "majority of the outstanding voting
securities," "interested person" and "assignment" shall have the same meanings
as such terms have in the 1940 Act). FDI agrees to notify the Fund immediately
upon the event of its expulsion or suspension by the NASD. This Agreement will
automatically and immediately terminate in the event of FDI's expulsion or
suspension by the NASD.
4. Miscellaneous
4.1 The Fund recognizes that, except to the extent otherwise agreed to by
the parties hereto, FDI's directors, officers and employees may from time to
time serve as directors, trustees, officers and employees of corporations and
business trusts (including other investment companies), and that FDI or FDI's
affiliates may enter into distribution or other agreements with other
corporations and trusts.
4.2 No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which an enforcement of the change, waiver, discharge or termination is
sought.
4.3 This Agreement and the Schedules forming a part hereof may be amended
at any time by a writing signed by each of the parties hereto. In the event that
the Board members of any additional funds indicate by vote that such funds are
to be made parties to this Agreement, whether such funds were in existence at
the time of the effective date of this Agreement or subsequently formed,
Schedule A hereto shall be amended to reflect the addition of such new funds and
such new funds shall thereafter become parties hereto. In the event that any of
the Funds listed on Schedule A terminates its registration as a management
investment company, or otherwise ceases operations, Schedule A shall be amended
to reflect the deletion of such Fund and its various classes.
4.4 This Agreement shall be governed by the internal laws of The
Commonwealth of Massachusetts without giving effect to principles of conflicts
of laws.
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4.5 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.
IN WITNESS WHEREOF, the parties have executed this Agreement by a duly
authorized representative of the parties hereto.
NOMURA PACIFIC BASIN FUND, INC.
By: ____________________________
Name: Xxxx X. Xxxxxxx
Title: Vice President
FUNDS DISTRIBUTOR, INC.
By: ________________________________
Name: _____________________________
Title: ______________________________
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SCHEDULE A
FUNDS
NOMURA PACIFIC BASIN FUND, INC.
(Pacific Basin Portfolio)
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