DISTRIBUTION AGREEMENT
__________, 1997
Counsellors Securities Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
This is to confirm that, in consideration of the agreements hereinafter
contained, the undersigned, Warburg, Xxxxxx Trust II (the "Trust"), an open-end,
management investment company organized as a business trust under the laws of
the Commonwealth of Massachusetts, has agreed that Counsellors Securities Inc.
("Counsellors Securities") shall be, for the period of this Agreement, the
distributor of shares of beneficial interest of the Trust, par value $.001 per
share, of various series of the Trust that may be offered from time to time (the
"Shares").
1. Services as Distributor
-----------------------
1.1 Counsellors Securities will act as agent for the distribution of
the Shares covered by the Trust's registration statement on Form N-1A, under the
Securities Act of 1933, as amended (the "1933 Act"), and the Investment Company
Act of 1940, as amended (the "1940 Act") (the registration statement, together
with the prospectus (the "prospectus") and statement of additional information
(the "statement of additional information") included as part of the registration
statement, any amendments to the registration statement, and any supplements to,
or material incorporated by reference into the prospectus or statement of
additional information, being referred to collectively in this Agreement as the
"registration statement").
1.2 Counsellors Securities agrees to use appropriate efforts to solicit
orders for the sale of the Shares at such prices and on the terms and conditions
set forth in the registration statement and will undertake such advertising and
promotion as it believes is reasonable in connection with such solicitation.
1.3 All activities by Counsellors Securities as distributor of the
Shares shall comply with all applicable laws, rules and regulations, including,
without limitation, all rules and regulations made or adopted by the Securities
and Exchange
Commission (the "SEC") or by any securities association registered
under the Securities Exchange Act of 1934.
1.4 Counsellors Securities agrees to (a) provide one or more persons
during normal business hours to respond to telephone questions concerning the
Trust and its performance and (b) perform such other services as are described
in the registration statement to be performed by Counsellors Securities, without
limitation, distributing and receiving subscription order forms and receiving
written redemption requests.
1.5 Counsellors Securities acknowledges that, whenever in the judgment
of the Trust's officers such action is warranted for any reason, including,
without limitation, market, economic or political conditions, those officers may
decline to accept any orders for, or make any sales of, the Shares until such
time as those officers deem it advisable to accept such orders and to make such
sales.
1.6 Counsellors Securities will act only on its own behalf as principal
should it choose to enter into selling agreements with selected dealers or
others.
1.7 Counsellors Securities will transmit any orders received by it for
purchase or redemption of the Shares to State Street Bank and Trust Company
("State Street"), the Trust's transfer and dividend disbursing agent, or its
successor of which Counsellors Securities is notified in writing. The Trust will
promptly advise Counsellors Securities of the determination to cease accepting
orders or selling Shares or to recommence accepting orders or selling Shares.
The Trust (or its agent) will confirm orders for Shares placed through
Counsellors Securities upon their receipt, or in accordance with any exemptive
order of the SEC, and will make appropriate book entries pursuant to the
instructions of Counsellors Securities. Counsellors Securities agrees to cause
payment for Shares and instructions as to book entries to be delivered promptly
to the Trust (or its agent).
1.8 The outstanding Shares are subject to redemption as set forth in
the prospectus. The price to be paid to redeem the Shares will be determined as
set forth in the prospectus.
2. Duties of the Trust
-------------------
2.1 The Trust agrees at its own expense to execute any and all
documents, to furnish any and all information and to take any other actions that
may be reasonably necessary in connection with the sale of Shares in those
states that Counsellors Securities may designate.
2.2 The Trust shall furnish from time to time, for use in connection
with the sale of the Shares, such informational
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reports with respect to the Trust and the Shares as Counsellors
Securities may reasonably request, all of which shall be signed by one or more
of the Trust's duly authorized officers; and the Trust warrants that the
statements contained in any such reports, when so signed by one or more of the
Trust's officers, shall be true and correct. The Trust shall also furnish
Counsellors Securities upon request with: (a) annual audits of the Trust's books
and accounts made by independent public accountants regularly retained by the
Trust, (b) semiannual unaudited financial statements pertaining to the Trust,
(c) quarterly earnings statements prepared by the Trust, (d) a monthly itemized
list of the securities held by the Trust, (e) monthly balance sheets as soon as
practicable after the end of each month and (f) from time to time such
additional information regarding the Trust's financial condition as Counsellors
Securities may reasonably request.
3. Representations and Warranties
------------------------------
The Trust represents to Counsellors Securities that all registration
statements, prospectuses and statements of additional information filed by the
Trust with the SEC under the 1933 Act and the 1940 Act with respect to the
Shares have been carefully prepared in conformity with the requirements of the
1933 Act, the 1940 Act and the rules and regulations of the SEC thereunder. As
used in this Agreement the terms "registration statement", "prospectus" and
"statement of additional information" shall mean any registration statement,
prospectus and statement of additional information filed by the Trust with
respect to the Shares with the SEC and any amendments and supplements thereto
which at any time shall have been filed with the SEC. The Trust represents and
warrants to Counsellors Securities that any registration statement with respect
to the Shares, or prospectus and statement of additional information contained
therein, when such registration statement becomes effective, will include all
statements required to be contained therein in conformity with the 1933 Act, the
1940 Act and the rules and regulations of the SEC; that all statements of fact
contained in any registration statement with respect to the Shares, prospectus
or statement of additional information will be true and correct when such
registration statement becomes effective; and that neither any registration
statement nor any prospectus or statement of additional information with respect
to the Shares 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 to
a purchaser of the Shares. Counsellors Securities 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 or
statement of additional information as, in the light of future developments,
may, in the opinion of Counsellors Securities' counsel, be necessary or
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advisable. If the Trust shall not propose such amendment or amendments
and/or supplement or supplements within fifteen (15) days after receipt by the
Trust of a written request from Counsellors Securities to do so, Counsellors
Securities may, at its option, terminate this Agreement. The Trust shall not
file any amendment to any registration statement or supplement to any prospectus
or statement of additional information without giving Counsellors Securities
reasonable notice thereof in advance; provided, however, that nothing contained
in this Agreement shall in any way limit the Trust's right to file at any time
such amendments to any registration statement and/or supplements to any
prospectus or statement of additional information with respect to the Shares, of
whatever character, as the Trust may deem advisable, such right being in all
respects absolute and unconditional.
4. Indemnification
---------------
4.1 The Trust agrees to indemnify, defend and hold Counsellors
Securities, its several officers and directors, and any person who controls
Counsellors Securities within the meaning of Section 15 of the 1933 Act, free
and harmless from and against any and all claims, demands, liabilities and
expenses (including the cost of investigating or defending such claims, demands
or liabilities and any counsel fees incurred in connection therewith) which
Counsellors Securities, its officers and directors, or any such controlling
person, may incur under the 1933 Act, the 1940 Act or common law or otherwise,
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in any registration statement, any prospectus or any
statement of additional information with respect to the Shares, 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 with respect to the Shares, or necessary to
make the statements in any of them not misleading; provided, however, that the
Trust's agreement to indemnify Counsellors Securities, its officers or
directors, and any such controlling person shall not be deemed to cover any
claims, demands, liabilities or expenses arising out of or based upon any
statements or representations made by Counsellors Securities or its
representatives or agents other than such statements and representations as are
contained in any registration statement, prospectus or statement of additional
information with respect to the Shares and in such financial and other
statements as are furnished to Counsellors Securities pursuant to paragraph 2.2
hereof; and further provided that the Trust's agreement to indemnify Counsellors
Securities and the Trust's representations and warranties hereinbefore set forth
in paragraph 3 shall not be deemed to cover any liability to the Trust or its
shareholders to which Counsellors Securities would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties, or by reason of Counsellors Securities' reckless disregard of its
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obligations and duties under this Agreement. The Trust's agreement to
indemnify Counsellors Securities, its officers and directors, and any such
controlling person, as aforesaid, is expressly conditioned upon the Trust's
being notified of any action brought against Counsellors Securities, its
officers or directors, or any such controlling person, such notification to be
given by letter or by telegram addressed to the Trust at its principal office in
New York, New York and sent to the Trust by the person against whom such action
is brought, within ten (10) days after the summons or other first legal process
shall have been served. The failure to so notify the Trust of any such action
shall not relieve the Trust from any liability that the Trust 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 Trust's indemnity agreement contained in this paragraph 4.1. The
Trust's indemnification agreement contained in this paragraph 4.1 and the
Trust'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 Counsellors Securities, its officers and directors, or any controlling
person, and shall survive the delivery of any of the Trust's shares. This
agreement of indemnity will inure exclusively to Counsellors Securities'
benefit, to the benefit of its several officers and directors, and their
respective estates, and to the benefit of the controlling persons and their
successors. The Trust agrees to notify Counsellors Securities promptly of the
commencement of any litigation or proceedings against the Trust or any of its
officers or directors in connection with the issuance and sale of any of the
Shares.
4.2 Counsellors Securities agrees to indemnify, defend and hold the
Trust, its several officers and trustees, and any person who controls the Trust
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
costs of investigating or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) that the Trust, its officers or
trustees or any such controlling person may incur under the 1933 Act, the 1940
Act or common law or otherwise, but only to the extent that such liability or
expense incurred by the Trust, its officers or trustees or such controlling
person resulting from such claims or demands shall arise out of or be based upon
(a) any unauthorized sales literature, advertisements, information, statements
or representations or (b) any untrue or alleged untrue statement of a material
fact contained in information furnished in writing by Counsellors Securities to
the Trust specifically for use in the 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 Counsellors Securities
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to the Trust and required to be stated in such answers or necessary to
make such information not misleading. Counsellors Securities' agreement to
indemnify the Trust, its officers and trustees, and any such controlling person,
as aforesaid, is expressly conditioned upon Counsellors Securities' being
notified of any action brought against the Trust, its officers or trustees, or
any such controlling person, such notification to be given by letter or telegram
addressed to Counsellors Securities at its principal office in New York, New
York and sent to Counsellors Securities by the person against whom such action
is brought, within ten (10) days after the summons or other first legal process
shall have been served. The failure to so notify Counsellors Securities of any
such action shall not relieve Counsellors Securities from any liability that
Counsellors Securities may have to the Trust, its officers or trustees, 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 Counsellors
Securities' indemnity agreement contained in this paragraph 4.2. Counsellors
Securities agrees to notify the Trust promptly of the commencement of any
litigation or proceedings against Counsellors Securities or any of its officers
or trustees in connection with the issuance and sale of any of the Shares.
4.3 In case any action shall be brought against any indemnified party
under paragraph 4.1 or 4.2, and it shall timely notify the indemnifying party of
the commencement thereof, the indemnifying party shall be entitled to
participate in, and, to the extent that it shall wish to do so, to assume the
defense thereof with counsel satisfactory to such indemnified party. If the
indemnifying party opts to assume the defense of such action, the indemnifying
party will not be liable to the indemnified party for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof other than (a) reasonable costs of investigation or the
furnishing of documents or witnesses and (b) all reasonable fees and expenses of
separate counsel to such indemnified party if (i) the indemnifying party and the
indemnified party shall have agreed to the retention of such counsel or (ii) the
indemnified party shall have concluded reasonably that representation of the
indemnifying party and the indemnified party by the same counsel would be
inappropriate due to actual or potential differing interests between them in the
conduct of the defense of such action.
5. Limitation of Liability
-----------------------
The Trust and the Adviser agree that the obligations of the Trust under
this Agreement will not be binding upon any of the Trustees, shareholders,
nominees, officers, employees or agents, whether past, present or future, of the
Trust, individually, but are binding only upon the assets and property of the
Portfolio, as provided in the Declaration of Trust. The execution and delivery
of this Agreement have been authorized by
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the Trustees of the Trust, and signed by an authorized officer of the
Trust, acting as such, and neither the authorization by the Trustees nor the
execution and delivery by the officer will be deemed to have been made by any of
them individually or to impose any liability on any of them personally, but will
bind only the trust property of the Portfolio as provided in the Declaration of
Trust. No series of the Trust, including the Portfolio, will be liable for any
claims against any other series.
6. Effectiveness of Registration
-----------------------------
None of the Shares shall be offered by either Counsellors Securities or
the Trust under any of the provisions of this Agreement and no orders for the
purchase or sale of the Shares shall be accepted by the Trust if and so long as
the effectiveness of the registration statement shall be suspended under any of
the provisions of the 1933 Act or if and so long as the prospectus is not on
file with the SEC; provided, however, that nothing contained in this paragraph 5
shall in any way restrict or have an application to or bearing upon the Trust's
obligation to repurchase its shares from any shareholder in accordance with the
provisions of the prospectus or statement of additional information.
7. Notice to Counsellors Securities
--------------------------------
The Trust agrees to advise Counsellors Securities immediately in
writing:
(a) of any request by the SEC for amendments to the registration
statement, prospectus or statement of additional information then in effect
with respect to the Shares 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, prospectus or
statement of additional information then in effect with respect to the
Shares or the initiation of any proceeding for that purpose;
(c) of the happening of any event that makes untrue any statement
of a material fact made in the registration statement, prospectus or
statement of additional information then in effect with respect to the
Shares or that requires the making of a change in such registration
statement, prospectus or statement of additional information in order to
make the statements therein not misleading; and
(d) of all actions of the SEC with respect to any amendment to any
registration statement, prospectus or statement of additional information
with respect to the Shares which may from time to time be filed with the
SEC.
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8. Term of Agreement
-----------------
This Agreement shall continue until April 17, 1998 and thereafter shall
continue automatically for successive annual periods ending on April 17th of
each year, provided such continuance is specifically approved at least annually
by (a) a vote of a majority of the Trust's Board of Trustees or (b) a vote of a
majority (as defined in the 0000 Xxx) of each of the outstanding Shares,
respectively, provided that the continuance is also approved by a vote of a
majority of the Trust's Trustees who are not interested persons (as defined in
the 0000 Xxx) of the Trust or any party to this Agreement ("Qualified
Trustees"), by vote cast in person at a meeting called for the purpose of voting
on such approval. This Agreement is terminable with respect to the Trust without
penalty (a) on sixty (60) days' written notice, by a vote of a majority of the
Trust's Qualified Trustees or by vote of a majority (as defined in the 0000 Xxx)
of the outstanding Shares, or (b) on ninety (90) days' written notice by
Counsellors Securities. This Agreement will also terminate automatically in the
event of its assignment (as defined in the 1940 Act).
9. Amendments
----------
This Agreement may be amended by the parties only if the amendment is
specifically approved by (a) the Trust's Board of Trustees or by vote of a
majority of the outstanding Shares, and (b) by a vote of a majority of the
Qualified Trustees, cast in person at a meeting called for the purpose of voting
on the approval.
Please confirm that the foregoing is in accordance with your
understanding by indicating your acceptance hereof at the place below indicated,
whereupon it shall become a binding agreement between us.
Very truly yours,
WARBURG, XXXXXX TRUST II
By:
---------------------------------
Name:
Title:
Accepted:`
COUNSELLORS SECURITIES INC.
By:
-------------------------
Name:
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