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Exhibit(e)(4)
DISTRIBUTION AGREEMENT
This Distribution Agreement is made as of September 15, 1997 between
PACIFIC HORIZON FUNDS, INC., a Maryland Corporation (herein called the
"Company"), and PROVIDENT DISTRIBUTORS, INC., (herein called "Distributor").
WHEREAS, the Company is an open-end, management investment company and is
so registered under the Investment Company Act of 1940; and
WHEREAS, the Company will offer and maintain multiple investment
portfolios as specified in its Registration Statement on Form N-1A (each
individually a "Fund" and collectively the "Funds"); and
WHEREAS, the Company desires to retain Distributor as distributor for the
Funds to provide for the sale, distribution and redemption of shares of common
stock of the Funds (herein collectively called "Shares"), and Distributor is
willing to render such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein the parties hereto agree as follows:
I. DELIVERY OF DOCUMENTS
The Company has delivered to Distributor copies of each of the following
documents and shall deliver to it all future amendments and supplements
thereto, if any:
(a) The Company's Charter and all amendments thereto (such Charter, as
presently in effect and as it shall from time to time be amended,
herein called the "Company Charter");
(b) Bylaws of the Company (such Bylaws, as presently in effect and as they
shall from time to time be amended, herein called the "Bylaws");
(c) Resolutions of the Board of Directors of the Company authorizing the
execution and delivery of this Agreement;
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(d) The Company's registration statement under the Securities Act of 1933,
as amended (the "1933 Act"), and the Investment Company Act of 1940,
as amended (the "1940 Act"), on Form N-1A as filed with the Securities
and Exchange Commission (the "Commission") relating to the Shares, and
all subsequent amendments thereto (said registration statement, as
presently in effect and as amended or supplemented from time to time,
is herein called the "Registration Statement");
(e) Notification of Registration of the Company under the 1940 Act on Form
N-8A as filed with the Commission; and
(f) Prospectuses and statements of additional information of the Company
and of the Funds (such prospectuses and statements of additional
information, as presently in effect and as they shall from time to
time be amended and supplemented, herein called individually the
"Prospectus" and collectively the "Prospectuses").
II. DISTRIBUTION
1. APPOINTMENT OF DISTRIBUTOR.
The Company hereby appoints Distributor as Distributor of the Funds' Shares
and Distributor hereby accepts such appointment and agrees to render the
services and duties set forth in this Section II. The Distributor shall for
all purposes herein be deemed to be an independent contractor and shall,
unless otherwise expressly provided herein or authorized by the Board of
Directors of the Company from time to time, have no authority to act for or
represent the Company in any way or otherwise be deemed its agent. The
services furnished by the Distributor hereunder are not deemed exclusive,
and the Distributor shall be free to furnish similar services to others so
long as its services under this Agreement are not impaired thereby.
2. SERVICES AND DUTIES.
(a) The Company agrees to sell through Distributor, as agent, from time to
time during the term of this Agreement, Shares of the Funds upon the
terms and at the current offering price as described in the applicable
Prospectus. Distributor shall act only on its own behalf as principal
in making agreements for the sale and redemption of Shares, and shall
sell Shares only at the offering price thereof as set forth in the
applicable Prospectus. Distributor shall devote its best efforts to
effect sales of Shares of each of the Funds, but shall not be
obligated to sell any certain number of Shares.
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(b) In all matters relating to the sale and redemption of Shares, Distributor
shall act in conformity with the Company's Charter, Bylaws and Prospectuses
and with the instructions and directions of the Board of Directors of the
Company, and shall conform to and comply with the requirements of the 1933
Act, the 1940 Act, the regulations of the NASD Regulations, Inc. and all
other applicable federal or state laws and regulations. In connection with
such sales, Distributor acknowledges and agrees that it is not authorized
to provide any information or make any representations other than as
contained in the Company's Registration Statement and Prospectuses and any
sales literature specifically approved by the Company. The Company shall
furnish from time to time, for use in connection with the sale of the
Shares, such information with respect to the Funds and the Shares as
Distributor may reasonably request.
(c) Except to the extent permitted by a plan adopted by the Company under Rule
12b-1 of the 1940 Act, Distributor shall bear the cost of (i) printing and
distributing any Prospectus (including any supplement thereto), and (ii)
preparing, printing and distributing any literature, advertisement or
material which is primarily intended to result in the sale of the Shares;
provided, however, that Distributor shall not be obligated to bear the
expenses incurred by the Company in connection with (1) the preparation and
printing of any supplement or amendment to any Registration Statement or
Prospectus necessary for the continued effective registration of the Shares
under the 1933 Act or any state securities laws; and (2) the printing and
distribution of any Prospectus, supplement or amendment thereto for
existing shareholders of the Fund described therein.
(d) The Company, or any agent of the Company designated in writing by the
Company, shall be promptly advised of all purchase orders for Shares
received by the Distributor.
(e) The Distributor shall provide the services of certain persons who may be
appointed as officers of the Company by the Company's Board of Directors.
(f) It is understood that certain expenses to be incurred in connection with
the shares may be paid as provided in a shareholder service plan or similar
plan adopted by the Company. The Distributor agrees to be responsible for
the operation of such plan in accordance with the terms thereof.
(g) The Company shall have the right at any time to inspect the records of the
Company (including work papers and the other related documents) in the
possession of the Distributor.
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3. SALES AND REDEMPTIONS.
(a) Shares of the Company are to be sold by the Distributor to shareholders at
the offering price as set forth in the Prospectuses then in effect.
(b) The Company shall pay all costs and expenses in connection with the
registration of the Shares under the 1933 Act, and all expenses in
connection with maintaining facilities for the issue and transfer of the
Shares and for supplying information, prices and other data to be furnished
by the Company hereunder, and all expenses in connection with preparing,
printing and distributing the Prospectuses except as set forth in
subsection 2(c) of Section II hereof or in any other agreement entered into
by the Company.
(c) The Company shall execute all documents, furnish all information and
otherwise take all actions which may be reasonably necessary in the
discretion of the Company's officers in connection with the qualification
of the Shares for sale in such states as Distributor may designate to the
Company and the Company may approve, and the Company shall pay all filing
fees which may be incurred in connection with such qualification.
Distributor shall pay all expenses connected with its qualification as a
dealer under state or federal laws and, except as otherwise specifically
provided in this Agreement, all other expenses incurred by Distributor in
connection with the sale of the Shares as contemplated in this Agreement.
(d) Any of the outstanding Shares of the Company may be tendered for redemption
at any time, and the Company agrees to repurchase or redeem the Shares so
tendered in accordance with the Company's Charter, Bylaws and Prospectuses.
The price to be paid to redeem or repurchase the Shares shall be equal to
the net asset value per Share determined as set forth in the applicable
Prospectus (the "redemption price"). All payments by the Company hereunder
shall be made in the manner set forth in Section 3(e) below.
(e) The proceeds of any redemption of shares shall be paid by the Company (or
its agent) in accordance with the applicable provisions of the applicable
Prospectus.
(f) The Company shall have the right to suspend the sale of Shares of any Fund
at any time in response to conditions in the securities markets or
otherwise, and to suspend the redemption of Shares of any Fund at any time
as permitted by the 1940 Act or the rules of the Commission ("Rules").
(g) The Company reserves the right to reject in its discretion any order for
Shares.
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III. LIMITATIONS OF LIABILITY
Distributor shall not be liable for any error of judgment or mistake of law
or for any loss suffered by the Company or any Fund in connection with the
matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or negligence on its part in the performance
of its duties or from reckless disregard by it of its obligations and
duties under this Agreement.
IV. CONFIDENTIALITY
Distributor shall treat confidentially and as proprietary information of
the Company all records and other information relative to the Company and
the Funds and prior or present shareholders or those persons or entities
who respond to Distributor's inquiries concerning investment in the
Company, and shall not use such records and information for any purpose
other than the performance of its responsibilities and duties hereunder or
under any other agreement with the Company, except after prior notification
to and approval in writing by the Company, which approval shall not be
unreasonably withheld and may not be withheld where Distributor may be
exposed to civil or criminal contempt proceedings for failure to comply,
when Distributor is requested to divulge such information by duly
constituted authorities, or when Distributor is so requested by the
Company.
V. INDEMNIFICATION
1. COMPANY REPRESENTATIONS
The Company represents and warrants to Distributor that (a) it is duly
organized as a Maryland Corporation and is and at all times will remain
duly authorized to enter into and perform this Agreement, and (b) at all
times the Registration Statement and Prospectuses will in all material
respects conform to the applicable requirements of the 1933 Act and the
Rules and will not include any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading, except that no representation or warranty in
this subsection shall apply to statements or omissions made in reliance
upon and in conformity with written information furnished to the Company by
or on behalf of and with respect to Distributor expressly for use in the
Registration Statement or Prospectuses.
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2. DISTRIBUTOR REPRESENTATIONS.
Distributor represents and warrants to the Company that (a) it is duly organized
as a Delaware corporation and is and at all times will remain duly authorized
and licensed to carry out its services as contemplated herein (b) at all times
any written information furnished to the Company by or on behalf of Distributor
expressly for use in the Registration Statement or Prospectuses will not include
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading and (d)
Distributor is at all times during the term of this Agreement a registered
broker-dealer under the Securities Exchange Act of 1934.
3. COMPANY INDEMNIFICATION.
The Company shall indemnify, defend and hold harmless Distributor, its several
officers and directors, and any person who controls Distributor within the
meaning of Section 15 of the 1933 Act, from and against any losses, claims,
damages or liabilities, joint or several, to which any of them may become
subject under the 1933 Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) arise out of, or
are based upon, any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, the Prospectuses or any
application or other document executed by or on behalf of the Company, or arise
out of, or are based upon, information furnished by or on behalf of the Company
filed in any state in order to qualify the Shares under the securities or blue
sky laws thereof ("Blue Sky Application"), or arise out of, or are based upon,
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
shall reimburse Distributor, its several officers and partners, and any person
who controls Distributor within the meaning of Section 15 of the 1933 Act, for
any legal or other expenses reasonably incurred by any of them in investigating,
defending or preparing to defend any such action, proceeding or claim; provided,
however, that the Company shall not be liable in any case to the extent that
such loss, claim, damage or liability arises out of, or is based upon, any
untrue statement, alleged untrue statement, or omission or alleged omission made
or information in the Registration Statement, the Prospectuses, any Blue Sky
Application or any application or other document executed by or on behalf of the
Company in reliance upon and in conformity with written information furnished to
the Company by or on behalf of and with respect to Distributor specifically for
inclusion therein.
The Company shall not indemnify any person pursuant to this subsection 3 of
Section VI hereof unless the court or other body before which the proceeding
was brought has rendered a final decision on the merits that such person was
not liable
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by reason of his willful misfeasance, bad faith or negligence in the performance
of his duties, or his reckless disregard of obligations and duties, under this
Agreement ("disabling conduct") or, in the absence of such a decision, a
reasonable determination (based upon a review of the facts) that such person was
not liable by reason of disabling conduct has been made by the vote of a
majority of a quorum of directors of the Company who are neither "interested
persons" of the Company (as defined in the 0000 Xxx) nor parties to the
proceeding, or by an independent legal counsel in a written opinion.
Each Fund shall advance attorneys' fees and other expenses incurred by any
person in defending any claim, demand, action or suit which is the subject of a
claim for indemnification pursuant to this subsection 3 of Section VI hereof, so
long as:
(a) such person shall undertake to repay all such advances unless it is
ultimately determined that he is entitled to indemnification hereunder; and
(b) such person shall provide security for such undertaking, or the Fund shall
be insured against losses arising by reason of any lawful advances, or a
majority of a quorum of the disinterested, non-party directors of the
Company (or an independent legal counsel in a written opinion) shall
determine based on a review of readily available facts (as opposed to a
full trial-type inquiry) that there is reason to believe that such person
ultimately will be found entitled to indemnification hereunder.
4. DISTRIBUTOR INDEMNIFICATION.
Distributor shall indemnify, defend and hold harmless the Company, each Fund,
the Company's several officers and directors and any person who controls the
Company or any Fund within the meaning of Section 15 of the 1933 Act, from and
against any losses, claims, damages or liabilities, joint or several, to which
any of them may become subject under the 1933 Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of, or are based upon, any breach of its representations and
warranties in subsection 2 of Section VI or its agreements in subsection 2 of
Section II hereof, or which arise out of, or are based upon, any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Prospectuses, or any application or other document
executed by or on behalf of the Company, or arise out of, or are based upon
information furnished by the Distributor filed in any Blue Sky Application, or
arise out of, or are based upon, the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, which statement or omission was made in
reliance upon and in conformity with information furnished to the Company or any
of its several officers and trustees by or on behalf of and
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with respect to Distributor specifically for inclusion therein, and shall
reimburse the Company, each Fund, the Company's several officers and
directors, and any person who controls the Company or any Fund within the
meaning of Section 15 of the 1933 Act, for any legal or other expenses
reasonably incurred by any of them in investigating, defending or preparing
to defend any such action, proceeding or claim.
5. GENERAL INDEMNITY PROVISIONS.
No indemnifying party shall be liable under its indemnity agreement
contained in subsection 3 or 4 of Section VI hereof with respect to any
claim made against such indemnifying party unless the indemnified party
shall have notified the indemnifying party in writing within a reasonable
time after the summons or other first legal process giving information of
the nature of the claim shall have been served upon the indemnified party
(or after the indemnified party shall have received notice of such service
on any designated agent), but failure to notify the indemnifying party of
any such claim shall not relieve it from any liability which it may
otherwise have to the indemnified party. The indemnifying party shall be
entitled to participate at its own expense in the defense or, if it so
elects, to assume the defense of any suit brought to enforce any such
liability, and if the indemnifying party elects to assume the defense, such
defense shall be conducted by counsel chosen by it and reasonably
satisfactory to the indemnified party. In the event the indemnifying party
elects to assume the defense of any such suit and retain such counsel, the
indemnified party shall bear the fees and expenses of any additional
counsel retained by the indemnified party.
VI. DURATION AND TERMINATION
This Agreement shall become effective as of the date hereof and, unless
sooner terminated as provided herein, shall continue in effect with respect
to each Fund until October 31, 1998. Thereafter, if not terminated, this
Agreement shall continue automatically for successive terms of one year,
provided that such continuance is specifically approved at least annually
(a) by a vote of a majority of those members of the Board of Directors of
the Company who are not parties to this Agreement or "interested persons"
of any such party, cast in person at a meeting called for the purpose of
voting on such approval, and (b) by the Board of Directors of the Company
or by vote of a "majority of the outstanding voting securities" of the
Funds as to which the Agreement is effective; provided, however, that this
Agreement may be terminated by the Company at any time, without the payment
of any penalty, by vote of a majority of the entire Board of Directors of
the Company or by a vote of a "majority of the outstanding voting
securities" of such Funds on sixty (60) days' prior written notice to
Distributor or by Distributor at any time, without the payment of any
penalty, on ninety (90) days' prior written notice to the Company. This
Agreement
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shall 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. Any documents,
records or work papers prepared by the Distributor on behalf of the
Company in order to maintain the regulatory records of the Funds shall
become the property of the Company. In the event of termination, the
Distributor shall promptly, upon written request, turn over such
documents, records or work papers to the Company.
VII. AMENDMENT OF THIS AGREEMENT
No provision of the Agreement may be changed, waived, discharged or
terminated except by an instrument in writing signed by the party against
whom an enforcement of the change, waiver, discharge or termination is
sought.
VIII. NOTICES
Notices of any kind to be given to the Company hereunder by Distributor
shall be in writing and shall be duly given if mailed or delivered to the
Company at:
Xx. Xxxxxxxxx Pings
c/o Association of American Universities
0000 Xxx Xxxx Xxxxxx, XX, Xxxxx 000
Xxxxxxxxxx, XX 00000
or such other address or to such individual as shall be so specified by
the one party to the other party.
With a copy to:
W. Xxxxx XxXxxxxx, III
Philadelphia National Bank Building
Drinker Xxxxxx & Xxxxx LLP
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
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Notices of any kind to be given to Distributor hereunder by the Company
shall be in writing and shall be duly given if mailed or delivered to
Distributor at:
Xxxxxx Xxxxxxx
Provident Distributors, Inc.
Four Falls Corporate Center, 0xx Xxxxx
Xxxx Xxxxxxxxxxxx, XX 00000-0000
or such other address or to such individual as shall be so specified by the
one party to the other party.
IX. MISCELLANEOUS
The obligations of each Fund under this Agreement shall be the several (and
not joint or joint and several) obligations of each Fund. 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. Subject to the provisions
of Section VI hereof, this Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
shall be governed by Delaware law (without regard to principles of
conflicts of law); provided, however, that nothing herein shall be
construed in a manner inconsistent with the 1940 Act or any rule or
regulation of the Commission thereunder. This Agreement may be executed in
two or more parts which together shall constitute a single agreement.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
PACIFIC HORIZON FUNDS, INC.
A MARYLAND CORPORATION
By: /s/ Xxxxxxxxx Pings
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President
PROVIDENT DISTRIBUTORS, INC.
By: /s/ Xxxxxx Xxxxxxx
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Chief Executive Officer
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